Bootstrapping and Growth Based Businesses

Mark Hopkins from Mashable is proud to share how Mashable is thriving in this down times.  And it’s worth noting here in my blog becuase he’s talking about how bootstrapping helped them.

Bootstrapping and Growth Based Businesses: Bootstrapping a business (or as we used to call it years ago, making your business “growth based”) is one sure-fire way to build a sustainable business under these circumstances. Of course, if they nay-sayers are all right, we’ll all have no credit to speak of and it could be our only option for new businesses for a while, but if a business is able to make due on their own they can come out the other side much stronger.

Even before the catastrophic times of the last week or two the more folks I talked to both at events and via contacts made for story pitches at Mashable, it seemed I was hearing more about folks shunning the angel funding and venture capital route for the bootstrapped method.

It requires a more sharp business mind at the outset of the business than your typical VC-backed startup. There are a lot more pitfalls in a growth-based business, too, since you’re operating without a net most of the time.  Whereas in the instance of a venture backed firm, if you’ve made a gross miscalculation, I’ve heard many stories of where the business plan they started with has been modified beyond recognition to continue through the many rounds of financing. With a bootstrapped business, you’re still required to be nimble and responsive to market changes, but you’ve got less chance to get it wrong before you’re out of business.

In the end, the rewards are greater since you haven’t halved your business a few dozen times with the many investors, and if at the end of the day you have something successful, you’ve got greater freedom and share of the spoils.

Well, Mark actually share 5 Web 2.0 Businessess thriving in these down times and there are a lot to learn from his article. You can read more about this in Mashable.Com.