Why Bootstrapping Is Better than an Accelerator Program

NOTE FROM YOUR EDITOR: Sometimes you get an email that’s so right, that so captures what you’ve been trying to create for years that you just can’t help but dance and squeal with glee. That’s how I felt when I saw this very powerful story on the 30×500 mailing list. I feel honored to help James learn to bootstrap.

Guest Post james jeffers

THIS POST BY: 30×500 alum JAMES JEFFERS

It is almost 2 years to the day that I was accepted, along with a partner, into a technology accelerator program. I’ll make a long story very short — we burned through $20,000 and had nothing to show for it.

I spent a long time beating myself up over the experience. My wife, who was initially leery of my participation since our family would forgo 6 months of income while I worked in the program, kept telling me “Well, at least you learned something.”

Yes, I did learn how NOT to succeed with someone else’s money. But only very recently did I discover I learned something even better. I learned that creating a viable business is not just finding really talented people and adding money. From what I’ve seen, it seems like every venture capitalist believes that that is in fact the magic formula.

I’m sure that approach (great people + money) can produce results. But it’s not a recipe that always works. More often than not, you get what we got — nothing.

Now, of course, I am paying someone else to learn how to create repeatable, learnable methods for creating real, viable businesses. And I mean a business in the most real sense: creating something of value, and trading that value for value. That means, of course, charging money for eliminating pain or helping people with their business.

This approach NEVER occurs to the funded team. They are looking to solve a huge problem by randomly choosing solutions, and then trying like mad to find problems. Which problems are picked are almost always chosen by HiPPO (Highest Paid Person’s Opinion) or cult of personality. Then, of course, there are the slides (or the “deck”) from which you must pitch, pitch, pitch, always hunting for the next round of money to keep going. Working on solving a real problem for real business people? Forget it, you better practice your pitch!

The accelerator doesn’t look for audiences — to them, the whole world is the audience. Gestalt is the community communication. It’s shocking to look back and realize my intuition was true – no one knew what the hell they were doing. Success was as much luck – hitting just the right combination of magical idea and current trend. Showing viable, money making results was not considered important – showing “traction” was.

Did you gain 12000 more users this month? FANTASTIC! Did those users make you any money? “Well, no.” Oh, did they cost you a ton of money? “Well, yes… but look at our traction!” What utter rot!

Don’t ever feel that you are missing something by not being 22, up to your eyeballs in the latest technologies, working 20 hours a day at some hot little startup, mentored by former one-hit-wonder CEOs or slickster VC types.

You know what you should feel like you are missing? Total control over your life, including how and what you work on.

Don’t be in the race to grow big and fast, so you can become like the next human dumping ground. The world doesn’t need another tragedy built on HR orgs and technological fiefdoms. It needs a million more real businesses, creating joy and making money.

“We were taught nothing about how to build a real business.”

AMY: Wow. What was the backstory to this email? What triggered it?

JAMES: Backstory? Not much to say other than my wife was in Slovakia and I was alone late at night, contemplating the fate of the free world. I suppose I was also thinking about my history, where I had been, where I wanted to go. I might have also nipped some brandy.

It just struck me that as wanna-be-entrepreneurs , we put of a lot of time trying to get into that accelerator. And when we were accepted our focus switched from customer discovery to an elaborate game of “find the investor.”

In the meantime, we were taught nothing about how to build a real business [in the accelerator]. The default assumption was that you would just figure it out. No one had a clear method. Every mentor who had done it before had no system for showing how to do it. The people who ran the program (and I remain friends with the director) also had no agenda for showing us how do it.

So, for my purposes, 30×500 was the first place I’d found where not only mindset but specific tactics were taught. And each step was broken down, too.

Should you attend 30×500?

AMY: If you could give 1 sentence of advice to somebody on the fence about taking 30×500, what would it be?

JAMES: If you want to learn how to create products and sell them, then 30×500 is an excellent place to start. Also, if you are good at bullshitting yourself, 30×500 is a great place to unlearn it.

30×500 reopens March 28th, 3 pm Eastern time.

This story by James was beautifully timed, but I didn’t ask him to write it; I wasn’t even sniffing around the alumni list trying to get some launch content. Nope. This email, like so many others, was totally unsolicited. To my mind, that makes it even better. There was no external incentive for James to write it. I didn’t promise special favors or even that I’d be grateful.

He wrote it because he felt it.

That’s why I love my job.

A while ago, 30×500 alumni Brennan said that I was the midwife to his business. I helped bring it into the world.

That’s a slightly awkward, messy thing to say. It’s raw. I like it, because you know what else is slightly awkward, messy, and raw? Creating a real business with real income.

And if you’re ready for that — for the slightly awkward, messy, raw reality of stacking the bricks and building your own financial independence from the sweat & blood upwards — and you’re a designer or developer with the skills to create, then you should seriously consider taking 30×500.

If you’re serious about making it happen, I’m serious about helping you.

The only way to enroll in 30×500 is by entering your name & email address right here:

Get our 7-day no-BS guide to common startup mistakes… and how you can avoid them. And be first in line to apply for the next 30x500. Drop your name in the box!

The Details:

Class starts April 17th & 18th, 3 - 5 pm Eastern time. Admission is $1650 for just the 2-day Bootcamp; $1950 for the Bootcamp, a follow-up office hours chat, and the videos & materials from the Product Launch Roundtable online conference; and $2450 for the Bootcamp, the follow-up office hours chat, the videos & materials from the Launch Roundtable, and 4 weeks of guided exercises and weekly chats to help you start executing from day 1. Nauseating amounts of detail here.

Doors open March 28th, 3 pm Eastern time. Well, I say “doors open” but I mean “the doors to the application process open.” You have to apply (so I can help you decide if it’s right for you.)

The application process is first-come, first-serve — last time, most of the seats were taken by folks who applied in the first two hours.

So get on the list. I’ll see you in class!

Discussion

  1. Taylor Brooks

    Not all accelerators are the same and the title of this post implies that bootstrapping and going through an accelerator are mutually exclusive.

    My company was accelerated by Capital Factory in Austin, TX and I wouldn’t trade the experience for a minute.

    Capital Factory is a different; they push you to bootstrap and to fund the business from profits. It also helps that all the mentors are themselves, entrepreneurs working on their own startups (WP Engine, OtherInbox, etc.)

    Reply
    • Amy

      That sounds pretty great. But as you said yourself, “Capital Factory is different” — what’s described above is typical :)

      Reply
  2. Nick

    Refreshing to read this. I’m currently in a tech incubator and although I don’t think mine is nearly as bad as James’, it’s clear that tech incubators have a VC agenda. The whole process is backwards. First you have some idea, usually in some fashionable area (at the moment they are education, geolocation, gamification), then as James said you work on your pitch, then you raise funding (multiple times), try to get millions of users (none of which pay you), and then sell to some large company. All of this happens without making any money, and even the angels and VC’s which invest expect most of the companies they invest in to fail. Market > Pain > Solution > Bootstrap > Profit for me thanks, all while staying in charge of my company.

    Reply
    • Adrian

      @Nick said: “[You] try to get millions of users (none of which pay you), and then sell to some large company. All of this happens without making any money.”

      But if you sell to a large company you are making money! The customer is the large company. Clearly this business plan can work, but it’s a bit of a crapshoot and the odds of success are minimal at best. It certainly isn’t for me either.

      Reply
  3. Bob Jansen

    Great read. Good to see the experience of a former tech-incubator participant set off to a bootstrapping (challenge?). Recently I talked to some people who participated in tech incubators and coached some as well. It was shocking that most of them didn’t think about customers in any fashion. Not even know who might pay for the product.

    Wrote a post about that yesterday ‘Most startups are expensive hobbies’ http://blog.firmhouse.com/most-startups-are-expensive-hobbies Interesting to see there are some similarities here!

    Good luck with the class.

    Reply
  4. Dmitri Zaitsev

    Refreshing to see an island of sanity in the ocean of insanity and reminds me my own experience.

    I’ve been courted by a (high ranked) accelerator to give me funding with the goal to make my project “ready for the next investment round”!

    When I asked, “what about making it profitable?”, it was dismissed saying “that is implied in becoming fundable”!

    Glad I didn’t play by their rules, and this post is a nice confirmation!

    Reply

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