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Appendix A. Bonus Material

How to Build a Low-Burn Startup

I’ve bootstrapped my company for the past seven years and learned a lot about bootstrapping from Bijoy Goswami, founder of Bootstrap Austin. Bijoy doesn’t limit the definition of bootstrapping to the more commonly held one about building a company without external funding, but rather views bootstrapping as a philosophy summarized as “Right action, right time.”

This mantra applies just as well to Lean Startups as it does to bootstrapped startups:

At every stage of the startup, there are a set of actions that are “right” for the startup, in that they maximize return on time, money, and effort. A lean/bootstrapped entrepreneur ignores all else.

While bootstrapping and Lean Startup techniques are not just limited to funding, funding is one of the first problems entrepreneurs tackle, which can lead to waste.

Why Premature Fundraising Is a Form of Waste

There are several reasons why premature funding can lead to waste:

Getting funded is not validation.

Seed stage investors are just as bad at guessing what products will succeed as you are. Without any product validation to rely on, they hedge their bets against your team’s track record and storytelling ability. So, while getting funded at this stage is a testament to your team-building and pitching skills, it isn’t product validation.

Without validation, you have no leverage.

More important, without validation, you don’t have product/market credibility, which typically comes at a price—reflected ...

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