Dmitry Volkov Ph.D, Founder and CEO of Social Discovery Group, has shared a new article entitled ‘How To Bootstrap A Unicorn: Self-Financing Your Startup’. He details the changing nature of fundraising and his advice for bootstrapping.
In a new article, Volkov starts by highlighting that raising finances is more difficult than ever. As startups may struggle to secure investment from VCs, or may not be ready for that next step, he points out that the alternative is bootstrapping.
The Social Discovery Group CEO continues by highlighting that in 2022, there was a significant drop in the amount of funding being given to startups. The cause of which being “higher interest rates and historic inflation, ongoing supply chain challenges, the global disruption caused by the Russian invasion of Ukraine, and the lingering impacts of Covid-19 lockdowns”.
With this mind, Volkov highlights the four T’s of bootstrapping: TAM, team, tech and traction. He says “these are your most important areas of focus to establish your product”.
He highlights Total Addressable Market (TAM), saying that startups need to understand the market they’re in and the problem they’re trying to solve. This will allow companies to determine scalability and understand their total revenue potential.
Volkov also mentions the importance of finding a great team, noting that unicorn companies are often home to more than one founder. Additionally, in terms of traction, he advises that companies measure and grow their KPIs, while being as quantitative as possible.
Finally, the tech, starting with a platform’s minimum viable product (MVP). Volkov shares that this early product should garner important feedback, and “don’t be afraid to launch fast, fail fast and iterate quickly”.
At the heart of bootstrapping is “finding and recognizing your unfair advantage”, he summarises, sharing insights from his own experience as a startup founder.