When I began my journey with starting FlowFeet, I was concerned with how I would be able to grow the business without significant funds. Being a start up (aka: early stage company) meant I needed to be wise with the way I spent my money, but also ensure that the money I was spending would bring in revenue or results for my business.
A fellow entrepreneur I follow online Mike Keating, who is launching a men’s skin care company called MODRN MAN, always writes about two methodologies; growth hacking and bootstrapping.
While both concepts are applicable to start-ups or businesses looking to get more value from their limited dollars, there are key differences between the two.
Let me take some time to break down the difference between growth hacking and bootstrapping so you can decide which method best aligns with your situation and business goals.
What is Growth Hacking?
Growth hacking is methodology focused on a series of marketing experiments to find efficient and effective ways to grow your business. A major goal of growth hacking is to build and engage your user base to convert them into return customers at a low cost.
A few common growth hacking techniques include:
- Using market research websites and tools to maximize your startup's knowledge of both your customers, and your competition (even using Craigslist to get survey responses for free)
- Social media tools that will automatically post content for you to keep you at the top of your customers's Newsfeeds (Socialcloudsuite.com is a great tool to help with this)
- Utilizing free graphic design programs to cut out the cost of hiring professional graphics teams (Piktochart is an awesome tool for graphic design and doesn’t require a ton of skill to use)
What is Bootstrapping?
"Pull yourself up by your bootstraps." It's a common idiom, but what does it mean in the world of startups? The bootstrap methodology focuses on lean growth and often times refers to financing your startup with no outside help. It also focuses on efficiently utilizing the resources you currently have as well as acquiring new resources in a cost effective manner.
While this can be difficult to accomplish at times, it does mean more ownership of your business with less people to answer too (this includes banks, investors, and friends/family).
A few common boostrapping techniques include:
- Finding talent through Internships, partnerships (equity/profit share), or other means that doesn’t require a full compensated salary
- Using free apps, free trials, and other affordable ways to benefit your business without paying full price
- Managing your own PR through social media, business networking, and building relationships from within as opposed to going out to start new ones
What's the Difference, and What Does it Mean for You?
While both growth hacking and boot strapping are beneficial for your business, it isn’t an either or scenario. Both growth hacking and bootstrapping can be deployed to help your business grow in an affordable way.
Below is a brief outline of the key differences between the two:
- Growth hacking is specifically focused on improving your business's growth metrics
- Bootstrapping is a no-frills, no-outside-investors approach to getting your startup off the ground
Which One is Right for Your Business?
By now you may be asking yourself, "Should I use bootstrapping or growth hacking to grow my business?"
Bootstrapping certainly isn't the right (or viable) option for every startup; without capital of your own, it is a hard road. Growth hacking, on the other hand, can consist of many smaller, less-expensive actions.
Quite simply, it depends on your business. Due to its often experimental nature, growth hacking is widely considered to be somewhat riskier than bootstrapping. However, if you find techniques and experiments that don't require much money, growth hacking can be an essential tool for a bootstrapped startup or business.
In the end, I recommend a combination of both techniques--you may not be able to completely self-fund your business, but you can incorporate the ideas and principles of a bootstrapped business. The more efficient, lean, and debt-free you are, the more room you'll have to grow and expand your reach as the years go by.
- Bootstrapping means not taking out loans or finding investors for your startup. It's difficult, but in the long run, gives you more control and ownership.
- Growth Hacking techniques change all the time--as new apps and tools are developed, they have wider and wider applications to give your business a strong social media presence, at a fraction of the cost of traditional advertising.
- It's not necessarily a question of "growth hacking vs. bootstrapping"; the two are both tools that, in different situations, can be profitable and efficient ways for startups to grow
- In the end, both strategies will give you the right mindset for your startup--namely, that you should be lean, efficient, and as independently-funded as possible.
I hope this information is helpful to other fellow entrepreneurs who are committed to making their dreams a reality and getting their business off the ground.