Struggling to Raise $$? Who Says You Need $$?By http://profile.typepad.com/1237764140s22740 // October 8, 2010 in Bootstrapping
Today's post is a relay to an interesting Q&A on the Xconomy blog between Gregory Huang and Zappos CEO Tony Hsieh.
Here's the bit I really liked:
X: What is your philosophy about blending one’s personal life with business?
TH: Well, I think they should be the same. That’s the great thing—if you just start doing stuff you’re actually passionate about, then it’ll somehow magically blend together. Especially in today’s world where anyone can start their own website or whatever.
X: That’s all well and good, but what about the entrepreneur who is struggling to raise money and make ends meet?
TH: I think there’s a lot of assumptions built into that question. Like that you need money. Maybe it was true 10 or 15 years ago. At LinkExchange in ‘96, we were spending probably $50,000 a month for servers and high speed internet and all that. You get better connectivity and computing power today for $50 a month.
I like the nerve of Huang's second question and the equanimity of Hsieh's answer.
Bootstrapping can also be thought of as the art of managing when to raise outside capital, an art of timing. You bootstrap so that you may act not a minute before you perceive an acceptable match between investor perception of risk, on the one hand, and insider assessment of how much upside is too much to sell, on the other.