CakeMail is now three years old. This is the fourth company that I’ve bootstrapped, and I thought I would share 10 lessons I’ve learned along the way. Note that I never raised angel or VC money for my companies, so I’m only speaking in the context of bootstrapped companies.
Get a partner
Running a business is hard. Find somebody that is complementary to yourself. Having a partner increases chances of success, helps to remain psychologically sane and feels less lonely.
Keep your books in order
Make sure your books are well maintained from day 1. Don’t do it yourself though – you are far too busy for it and you’ll end up neglecting them. You may not have any employees, you may not be paying yourself yet, but if you can’t afford to hire someone else to maintain your books, don’t start a company. Ask for monthly income statements as soon as possible after the month closes. If you don’t know how much money you made or lost last month, this is a problem. The only thing that is worse than losing money is losing money and not knowing how fast and how much you are losing.
Don’t invent the business model
Don’t try to start something if you don’t know how you will make money. The first thing to do is figure out all your growth and profitability economics. If you can’t make sense of it on paper, the likelihood of failure is far too great. There is far too many unknowns to afford to leave that question open.
Be profitable at a small scale
Can your business be profitable with 2 employees and just a few clients? Or does it have to have 50 employees and tons of clients? The smaller your team and faster you can be profitable, the more likely it is that you will remain alive and have a solid ground to grow on.
Be the best at what you do
If your goal is not to build the best ___(fill the blank)___ in the world, you are either not ambitious enough or your competitors are too powerful.
Hire smart people and trust them
Hire only people that are smarter and better than you at what they are doing. Your employees are the ones that should tell you what and how things must be done. Every new employee must increase the overall IQ of your company, not just its capacity to do what it is doing. Your job as the entrepreneur is to set the context for your employees to perform at their best and let them shine.
Don’t operate yourself
Try to get out of as much of the day-to-day operations as you can, as early as possible. As soon as you can stop working “in” the company (dealing with day-to-day fires), you can start working “on” the company (doing strategy). And as soon as you start working “on” the company (doing strategy), you will realize what you should be really working on when you are back working “in” the company (doing tactics).
Don’t build just for your local market. I know it feels easier and more natural, but the potential of small markets is just too small. If what you offer is good, you’ll find buyers across the world. Plus, it’s easy to be local when you are a global company, but not the other way around.
Measure as much as you can. Every time you start measuring and analysing new data you’ll find insightful patterns you were not suspecting. A few things worth measuring: web traffic, conversion funnel, cost per acquisition, lifetime value of customer, product feature usage, API usage, profitability, customer satisfaction, etc. Read more about metrics.
Don’t sell – make it easy for people to buy instead
This is something we’re currently working on at CakeMail. How easy it is for potential customers to buy what you offer? How can you make it easier?
By Francois Lane, CakeMail CEO & Co-Founder. Follow Francois on twitter at @cakemail_ceo.