Can You Bootstrap a Unicorn Start-up?
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Can a bootstrapped brand be worth a billion dollars? Well, that depends entirely on what you do with the brand.
A Brand is a Living Idea – Idea with a Soul
An idea is intangible yet when it is transformed into a viable business model, it becomes a tangible reality. It is then that a brand comes alive. As the idea proceeds, it expresses the potential of the brand value. This further gets integrated into the every other aspect that helps bring a brand to life. A unicorn brand grows both visibly and operationally. This leads to additional business opportunities for the entrepreneur.
Numerous start-ups are launched every single day and a recent IBM-Oxford study states that more than 90% of Indian start-ups fail in the first five years itself. Many may have survived this, if only their visions were not the billion-dollar one, as a grandiose dream often becomes their nemesis.
In most cases, change in an entrepreneur’s thought process comes with the money that flows in and the changes that are noted in the VC/PE’s vision of the invested business. This often changes the business trajectory from giving a great product or service to growth-at–all-costs.
Bootstrapping Requires Utilizing Accrued Resources
I have known many wonderful start-ups in food-tech, health-tech and other such domains, which had a wonderful business idea, fulfilling an enormous gap in the market. But those were not scalable in the manner that was demanded by the investor. I know of one entrepreneur, who went through several unsuccessful rounds of attempted funding, thus wasting the major part of a year in the process and leaving a potential business unattended.
Yet another such investor-seeking entrepreneur was pushed to make his business plan show a 50-fold growth in realistic projections, as it just did not make sense for the VC/PE investors to look at any normal numbers. Hence, with all not going great with the investor-funded potential-unicorns, it becomes imperative for us to review the potential of a bootstrapped one.
The simple answer to that is — Yes! It’s possible. But it is with the caveat that it is not easy. No bootstrapped business will ever tell you that any phase of the business growth is easy. Bootstrapping requires utilizing accrued and often meager resources to build a business. To take it to a billion-dollar valuation will take resources of a different kind, without the aid of external lucre. The way such businesses can reach this large size, is by collaboration and the use of technology. In one way, Facebook, Google, Amazon and several such businesses became large without very large investors in the initial stages of their journeys.
Understand Your Brand and Understand Your Consumers
It is evident that without a dedicated following there is no business, but even with a following, it is not necessary that there may be a good revenue model. Sounds surprising? Consider that today there are global business giants with billions of dedicated followers, e.g. WhatsApp, who are still struggling to find sustainable revenue models.
Let us therefore get down to the basics of reaching incredible size when bootstrapped. When it comes to really knowing what will sustain and grow your new venture into a unicorn start-up, it all comes down to two essential factors — understanding your brand and understanding your consumers.
This comes to play when one begins to understand their buying propensity, i.e. the consumers’ keenness to buy. This proprietary model of TRA Research is mainly comprised of a brand’s trust and its desirability quotient bestowed by consumers. Both of these important brand aspects are scientifically evaluated through primary researches and when combined they determine a consumer’s interest to buy any product or service.
Look into Smaller Aspects to Make the Brand Last Financially and Ethically
Concentrating on the Buying Propensity Model will not only educate start-ups to recognize their main focus areas but will also illustrate how one can work towards generating higher returns and customer satisfaction. The Buying Propensity Model takes you several layers deep and reaches a visceral realm, where you begin to get a glimpse at the soul of your brand.
Such revelations will help one seek out the distinct individuality of their startup. For that reason, a startup will have to look into the smaller aspects that work towards making a brand last not just financially but ethically as well, in order to bootstrap them into a unicorn start-up.
The startup may be visible or invisible, it may be understood or not, but the startup is born with the birth of the idea itself. Unicorn or Steed, - a ‘living’ idea carries in it a natural potential to spawn and inspire generations of brands.