A case for bootstrapping

@dane.korsi

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Splattrseen in 8 videos →

Why it worked

The video offers a contrarian take on startup funding, resonating with founders who may be hesitant about external investment. The specific anecdote about negotiating a massive discount for essential data provides a tangible and relatable example of the benefits of bootstrapping.

Summary

The speaker advises against raising money for startups, sharing how their own company, Splattr, negotiated a significantly lower data provider cost by highlighting their bootstrapped status. They emphasize that maintaining this bootstrapped image gives startups leverage in negotiations.

Structure

1Advise against raising money
2Share Splattr's data provider negotiation
3Explain the discount obtained
4Discuss the impact of being bootstrapped on negotiations
5Conclude that bootstrapping provides negotiation power

Product placement

Splattr: ACTS - it is the startup the speaker is discussing, and its business operations (data acquisition) are the subject of the video. Removing it would change the video's topic. None

Original caption

#startup #vc #investors #techtok

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On-screen text

A case for bootstrapping IF YOU'RE LOOKING ON IF YOUR MONEY OR NOT, DON'T. MY STARTUP, SPLATTR, JUST STARTED WORKING DATA PROVIDER, A DATA PROVIDER SOME OF THE THE WORLD. THEIR NORMAL PRICING FOR WHAT WE JUST BOUGHT ABOUT $100,000 A MONTH. IN OUR PRICING NEGOTIATIONS, THOUGH, WE'RE A STARTUP, LIKE AN INITIAL 40% DISCOUNT. AND AT THAT THAT IT'S STILL TO WHAT WE AND SO THEY QUESTIONS ABOUT HOW RAISED. AFTER TELLING THEM ANY MONEY AND KEPT NEGOTIATING DOWN ON PRICE, GETTING ALL OF A LITTLE OVER $1,000 A MONTH. IF YOU STAY BOOTSTRAPPED AND YOU NEVER POST ANY VANITY METRICS, SO NOBODY HAS SUCCESSFUL YOUR STARTUP IS. THE CARDS IN TERMS OF NEGOTIATIONS ON WHAT YOU CAN ACTUALLY AFFORD. EVERY SINGLE TIME A SALES REP, THEY HAVE ASKED WE'VE RAISED MONEY OR NOT. AND BEING ABLE WE'RE FULLY BOOTSTRAPPED, IT'S STILL EARLY NEED SOME HELP, HAS HELPED US EVERY SINGLE TIME.

Transcript

If you're looking for a sign on if your startup should raise money or not, don't. My startup splitter just started working with a different data provider and this is a data provider that works with some of the biggest companies in the world. Their normal pricing for what we just bought would have been about $100,000 a month. In our pricing negotiations though, we mentioned that we were a startup which got us like an initial 40% discount. And at that point we said that it's still not even close to what we could afford and so they started asking us questions about how much money we raised. After telling him we haven't raised any money and kept negotiating down on price, We ended up getting all of this data for a little over $1,000 a month. If you stay bootstrapped and you never post any vanity metrics, so nobody has any clue how successful your startup is, you hold all the cards in terms of negotiations on what you can actually afford. Every single time we've talked to a sales rep, they have asked the question if we've raised money or not and being able to say we haven't, we're fully bootstrapped, it's still early days and we're going to need some help, has helped us every single time.