1.

Definition of Bootstrapping Business

The general concept of Bootstrapping connects to "a self-starting process that is supposed
to proceed without external input." In business, Bootstrapping means financing the
growth of the company from the available cash flows produced by a viable business
model. Bootstrapping requires the mastery of the key customers driving growth.
This means using customers as the primary source of cash to grow the business. The
bootstrapping process is critical when building up a new company as it enables us to
reach product/market fit without relying on external money, which might distract the
founders from the customer development journey.
2. Why do some entrepreneurs use bootstrapping?
Bootstrapping is a great way to grow a business organically as it gets financed by the
customers. Indeed, bootstrapping is about fine-tuning a business based on its key
customers. And as a business grows without outside funding and investments, founders
can keep control over the equity, strategy, and vision of the organization.
3. Four types of start-up
 Existing markets:
Usually well-defined with existing customers and well-known competitors. This is
straightforward, and in this kind of market, there isn't necessarily a dominant player or
monopoly.
 Re-segmented markets:
When a market, for instance, is taken over by one or a few companies (monopoly or
duopoly), re-segmentation is the way to go. Thus you enter by addressing a need that
other dominating businesses can't tackle. In this way, you can distinguish your brand
(think of the case in which you target a specific niche of that existing market). We
discussed several times how DuckDuckGo entered the search engine market quite late,
and when Google was already a monopoly by targeting a specific niche, users who cared
about privacy.
 Clone markets:
This is about copying existing business models to transpose them either in other markets
(think of how Baidu built its fortune in China due to the impossibility for Google to take
off). Or taking a successful business model in a market and transpose it into an adjacent
one. Think of the "uberization" of several industries.
 New markets:
In this scenario, your solution is such a novelty that is very hard to identify a potential
customer or competitor.
Now, if you find yourself to be in a new market, or you're trying to clone an existing
business model in a clone market, where regulations might make it capital intensive to
enter. bootstrapping is not the way to go.
That's because the market type and therefore the territory will determine the kind of
company that you can build, at least in the short.
4. Key takeaways
 Bootstrapping is about building and growing a business by having customers as
key investors in the business. In short, your business is so fine-tuned around
customers that it can grow organically and with high margins, thus financed by
them.
 The bootstrapper is an entrepreneur at all effects. She/he doesn't think of a
freelancer but ad an entrepreneur able to build a scalable business. A bootstrapper
cal starts as a solopreneur but if the business becomes scalable to bootstrapper will
evolve the business model.
 Bootstrapping often starts by identifying profitable niches, or microniches and add
value from there.