If you believe what you read in the news about businesses like Uber and Shazam, the life of a start-up entrepreneur is all about securing lots of money from venture capitalists and then conquering the world. The truth for most of us is very different. While it makes perfect sense for certain types of businesses who need to scale very quickly to pursue large amounts of funding from VCs, there is another path to grow a successful business from a standing start. It’s the path we’ve chosen at Dressipi: bootstrapping.
This term bootstrapping refers to businesses that focus on building their products and services using the minimum of financial resources. Essentially it means that we’ve taken the decision to raise only the money we absolutely need to develop Dressipi and try to be as capital efficient as possible whilst we are proving out the business model. We keep our team tight, our central costs low and rely on word of mouth, reputation and good old shoe leather – which seems fitting for a fashion business – to spread the word about what we do.
As strategies for growing a start-up go it’s not particularly glamorous (we certainly can’t afford a slide for our new office) and it’s definitely not easy. But we do passionately believe it’s the right strategy for us in the longer term. Companies with lots of VC funding do have some big advantages. They can buy their way into the right events, pay developers lavishly, sponsor conferences, pay for advertising. Additionally, they also get the signal boost of being the business that raised X million to change an industry. If they’ve had a big funding round, the assumption is that you have to take them seriously. But there are downsides that convinced us it wasn’t the right approach for us. Highly capitalised start-ups can end up giving away control over the direction of their business and, depending on the VC, can end up be driven by their fund requirements rather than what is necessarily right for the business. Being in a particularly nascent industry, we felt it was important to really understand where we delivered the most value before we started taking large amounts of cash. When it came down to it, we wanted the control that comes of owning a bigger share of the Dressipi. We wanted to be able to decide for ourselves, when the time was right, whether we should grow organically or take on a Series-A investment. So we plumped for self- determination over spending power.
I won’t pretend that it hasn’t been really hard sometimes. Relying on direct approaches to retailers to build our sales pipeline, rather than a softer mix of sponsorship, conference appearances and round-table dinners means I’m sure there are a few retailers who are convinced I’m a stalker. We’ve hustled hard, worked hard, succeeded in some places and in others we’ve been knocked back and learned not to take it personally. Along the way we’ve built a product and a list of customers of which we can be
truly proud. What’s more we can say we did it ourselves – which is certainly more satisfying than an office with a slide.