How I Did It: One Startup's Bootstrapping Battle
In early 2009 the New York City economy was turbulent to say the least. The finance industry was imploding, jobs were being lost by the tens of thousands, consumer confidence was nearing and all-time low and unemployment was at its highest rate in decades.
Being somewhat naive to the implications of these macro-level factors on businesses, I chose to forgo my six-figure salary and invest my life savings into a startup idea called Entrepreneur Week.
A Good Idea Meets Economic Reality
As a digital media and events company we had simple thesis: The economic downturn created incredible opportunities for aspiring and early-stage entrepreneurs, resulting in an increased need for actionable, high quality and relevant content -- such as panels, keynotes, roundtables, mentoring sessions, educational resources and networking events -- in a forum that could be trusted.
We also believed the more locally targeted the content was, the easier it would be to build an engaged and scalable community, which would eventually anchor and solidify that particular entrepreneurial ecosystem.
During hundreds of in-person meetings over our first five months with angel investors, venture capitalists, government officials, thought leaders, and serial entrepreneurs around the country, we received overwhelmingly positive feedback on our value proposition to the marketplace. It was a bull’s-eye, or so we thought.
However, an idea can be good in theory, but other factors come into play when it's time to execute.
Case in point: We neglected to account for the lack of access to capital to scale our vision due to the economic downturn. We realized, very quickly, that we would have to bootstrap Entrepreneur Week for the vision to see the light of day.
This news was simultaneously enlightening and humbling. It’s an example of how truly rare it is for an entrepreneur to beat the odds. We may have had the right talent, timing and value proposition, but it still wasn't enough as far as investors were concerned because of the state of the economy.
Winning the Bootstrapping Battle
In the face of this tough news, the team understood what we needed to do -- bootstrap the company even more than originally planned, to the tune of at least $350,000, to mitigate much of the variable marketing and infrastructure costs. We accomplished our goal using three strategies:
Get a Buy-In: The first thing I did as CEO was get a buy-in from the rest of the senior management team that, for one year, none of us would take a salary. If money was an issue for any of us, we’d loan it to one another in the short-term or beg our family and friends. We were all fairly young with no families or mortgage payments to worry about. This decision saved Entrepreneur Week roughly $160,000 its first year.
Create Leverage: We developed a multi-faceted 90-day action plan that interwove a focused approach to online and offline networking. Our bet was if we focused on meeting the right people at the right organizations to connect with strategic partners, advisors and mentors, we could create 10:1 leverage with access to in-kind donations of PR and marketing materials, printing, web design, event space, as well as other things we needed. The strategy paid off mightily, saving Entrepreneur Week more than $200,000 our first year.
Go Virtual: The toughest decision for us as a company was when we decided to go virtual for one year -- a logistical and communication nightmare. The 15-person team worked from home, or out of my apartment. I housed interns on my couches in the living room and managers in the spare bedrooms, and we held strategy sessions on my patio once per week.
It was insane, but having an strong commitment from the team made all the difference in the world, and we saved roughly $65,000 that first year without expenses such as office space, heating, computers, and desks.
Although not every company is afforded the flexibility and committed talent that I have been fortunate to experience, this is just one example of a framework on how to bootstrap, think outside the box and cut costs. Every situation is different and every CEO faces unique and complex challenges.
When I started, Entrepreneur Week was a small idea with a big vision. We had 40 speakers and 600 attendees. Today, Entrepreneur Week hosts hundreds of speakers and thousands of attendees around America and is currently launching a global expansion into 25 cities around the world.
Gary Whitehill is the founder of New York Entrepreneur Week (NYEW), The Relentless Foundation and Whitehill International, each of which reflect his entrepreneurial drive and relentless energy. Thriving in challenging environments where he can uncover, extrapolate outward from and leverage all the pieces that maximize business impact, Gary’s energy is devoted to helping entrepreneurs prove to themselves and to the world that they can achieve anything they want.
The Young Entrepreneur Council (YEC) is an invite-only nonprofit organization comprised of the country's most promising young entrepreneurs. The YEC promotes entrepreneurship as a solution to youth unemployment and underemployment and provides its members with access to tools, mentoring, and resources that support each stage of a business's development and growth.
