TMBA 460: Are We Being Honest About the True Cost of Bootstrapping a Business?

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Today we are examining a discussion that Dan and Ian have been having behind the scenes of this podcast for years.

These conversations revolve around a question that everyone who is considering an entrepreneurial lifestyle needs to hear: What are the real costs of bootstrapping a business?

The truth is – it’s often much more expensive and complicated than writers and “thought leaders” let on. It can steal so much of our time, opportunities for relationships, and sometimes our own health and well being.

Justin Jackson knows this better than most. Justin is a well-known podcaster with a track record of shows like Product People, Build Your SaaS, and MegaMaker. He has also recently launched an integrated podcast service called Transistor.fm.

Justin has been addressing some of these more “taboo” entrepreneurial concepts on his blog. A recent piece called The Bootstrapper’s Paradox caused quite a kerfuffle.

On today’s episode, Justin shares his thoughts on those hidden costs. He also challenges some of the narratives that legendary figures in the movement have built around themselves and opens up about his own struggles with mental health as an entrepreneur.

Transcript

Listen to this week’s show and learn:

  • The moment Justin knew that he had to get out of the retail business. (5:17)
  • How Justin realized that he was suffering from depression and what made him decide to seek help. (16:14)
  • The most common false narratives around bootstrapping. (24:55)
  • How the rules for starting a business are different when you’re older. (41:46)
  • Why bootstrapping isn’t a meritocracy. (54:24)

Mentioned in the episode:

This week’s sponsor:

This week’s episode is brought to you by Empire Flippers. Empire Flippers are the leading specialists in helping entrepreneurs buy, sell, and invest in online businesses. Whether you are looking to buy or sell, Empire Flippers’ dedicated team will make sure you are supported at every step of the process. As a very special gift, the Empire Flippers are offering a free business valuation (A $300 value) exclusively to listeners of this show. All you have to do is visit EmpireFlippers.com/TMBA for more details.

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Published on 09.27.18
  • You’re giving the best years of your life, but by giving your creative energies to your Muse, is there a better way to spend it?

  • It can be time well spent, but we often don’t consider the true costs of giving up all that time, energy, and focus.

    I think the point Des Traynor is making is that you need to “count that cost” when you’re starting something up.

  • The money investment in bootstrapping is underestimated Dan and Ian but really guys; the attention and energy AKA work aspect is even more glossed over. Bootstrapping from Day #1 as a blogger I can honestly say I spent most of the last 10 years of my life building my brand. Sure I mucked up for many years. But especially for the last 2-3 years, goodness I gave my life to blogging. Of course the freedom of circling the globe through blogging and teaching others to do the same has been easily worth the effort but you give your life to your biz…especially if bootstrapping. Rocking message guys.

  • I really enjoyed listening in to this conversation. There are a lot of entrepreneur success stories where major factors (timing, connections, luck) are glossed over. Hard work and smarts can only get you so far.

  • Great episode Dan and Justin. You’re basically speaking directly to where I’m at.

    “If you had the option to go back and do it all again, given the costs, would you do it?”

    This nails it. The answer for me is a definite NO.

    Learning to raise capital, take out loans, etc –> these are essential skills for every entrepreneur, bootstrapper or otherwise.

    With every new business I start now, from day one I have a plan and timeframe for raising outside capital.

  • Raising money is a fully time job. I just raised $1.5M from two VC’s and had been raising money from Angels for 6 months before that. It’s all worked out and we’re building a great team and product- but I was just pitching like crazy.
    Connections, luck, timing- they all really matter.
    We help cryptocurrency investors with their taxes.
    We were able to get Angel funding in late Dec 2017- pure luck.
    Our VC’s both just raised funds and were really looking to get into blockchain.

  • So, take this conversation and all it encompasses – all of those 16 hour days, 7 day weeks, living on noodles, saying no to socialising, money stress, etc…and consider it from the point of view of someone buying businesses.

    They are buying your trial and error. Your testing. Your sleepless nights. They’re spending $x on something that will get them a y% return.

    And it’s not to say what they are doing is also without risk, but it’s definitely a different type of risk.

  • Jim Brown

    Just finished this episode and had to mention MailChimp. Built in Atlanta by Ben Chestnut, they’ve been at it for 17 years. The first 3-4 years, he didn’t work on it full time because he needed income (from a job).

    He’s now worth more than $1Billion and has never taken any investor money.

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