Bootstrap or Startup?

This week, yet another founder called for help, torn between continuing bootstrapped or going out to raise funds.

I told him there are two questions he needs to answer himself - but first, a short allegory:

Imagine the business world as a multi-lane highway:

In the right lane – ride nonprofits and social ventures 🛺, slow and cautious.

In the middle lanes – standard businesses, at various speeds and risk levels: from small family businesses in compact cars 🚗 to heavy public corporations in big trucks 🚛, that can’t maneuver quickly, but can easily run you over.

And then there’s the bootstrapper - a gutsy motorcycle 🏍️, weaving between the cars.

With the right driving, it can even overtake the fastest vehicles. It can take shortcuts off-road and find hidden paths.

But it’s the only bike he’s got - if he slips, it’s game over.

So he’s extra careful in the turns and pays attention to every warning sign.

In the left lane - are VC-funded startups, driving Formula One cars 🏎️.

The driver wears a helmet and is surrounded by airbags, connected to a team of experts in his earpiece.

Because the VC didn’t put just one car on the road - they launched ten! And they tell the drivers: “Don’t touch the brakes. If you crash - it’s okay, as long as one of you finishes first 🏆.” They’ll also make sure that if you drive well, there’s another car waiting for you in the next race.

The two questions a founder must answer:

1️⃣ Who are you?

Do you want to be the rider in full control of his fate, who loves his bike, plays it safe in the turns, and finds his own route?

Or are you the driver who enjoys the earpiece support, is committed to maximum speed, and is willing to crash if needed - because there’s no point in second place (and there’s always another race)?

2️⃣ What’s your market?

Who are your competitors? How attractive is it to investors?

Because if the road is full of Formula cars, they’ll eat your chopper for breakfast.

But your motorbike can veer off into side roads, into markets racecars will never reach - and there, you are the king 👑.