Waking up on the backseat of my Volkswagen Jetta on a frosty morning in late 2015, I check the time. It’s 5 a.m. I pull out of the Walmart parking lot and head to my gym, 24 Hour Fitness. After a quick shower, I’m ready to start work, surfing the Bay Area’s Wi-Fi hotspots. From around 6 a.m. until 11 at night, I’m perched in the backseat of my car, coding my new website.
On October 10, 2015, I cleared out my Mountain View apartment, packing the necessary essentials into my car, and made it my new home for the next six months. I know it sounds extreme–and it was. But my half-year of self-imposed penury wasn’t some sort of lifestyle experiment, or just playing tourist with constraints that other people face indefinitely because they have to.
For me, it was simply a practical measure: I dreamt of creating an online sports-apparel platform, but had sharply limited means to realize that dream. What I did have, though, was a willingness to dramatically cut back my living costs and give it my all until time and money ran out–or whichever came first.
After all, bootstrapped startups are a part of Silicon Valley’s culture–by one measure, around four in five are self-funded. Of course, launching a new business from the backseat of your sedan is less common. But I had a hunch I could do it, whereas the odds of getting my startup off the ground while hemorrhaging money on rent and utilities would dramatically lower my odds of succeeding. Some entrepreneurs ditch the U.S. altogether in order to finance their new ventures. For me, stripping back my expenses while staying tapped in to the Valley’s resources seemed the better option.
Without a doubt, my approach probably isn’t the answer for every founder, but it did teach me a few lessons that have helped me–and my company–survive an ever-more-forbidding startup environment.
A peak of VC funding in 2015 has spawned a startup scene characterized by capital-rich new businesses and a culture of excessive perks. But the funding has since begun to tighten. Many companies that failed to live up to high expectations have seen big devaluations from nervous investors. These wounded unicorns have been forced to rethink unnecessary costs. Dropbox, for example, recently cut spending, revoking its free shuttle and limiting its meal service. Frugality is on the rise, even at the top.
At the lower echelons of the entrepreneurial world, of course, it’s just a fact of life. When you start a new business you need to live within your means–you can’t bank on future profits and borrowed investments. During my time in the car, I budgeted down to just $200 a month. This covered my most basic expenses, namely for food and my 24-hour gym membership (particularly for the showers), as I made use of free Wi-Fi connections around the city.
Living within tighter means won’t pay off if you don’t tap into the networks that are already available to you. That includes free networking events, which for me included VLAB, SV Newtech, and the various tech-focused events Stanford University hosted with startup founders and VCs, all in the Bay Area. Alternatively, check out Meetup, Eventbrite, and Facebook’s location-based event search tool for upcoming networking opportunities.
Lean on the support of friends or old colleagues, too. I enlisted the help of a friend who worked with me to develop our product. This made a big difference, since it sped up the time it took to launch quickly and start turning a profit. Saving money is only half the battle–it matters what you do while you’re living on the cheap, and leveraging your network is key to that.
Even the leanest startups still need to make a handful of investments. Some are unavoidable, while others are advisable, potentially driving strong ROI or positive longer-term effects.
According to the World Bank’s Doing Business report, the administrative costs of launching a new business in the U.S. top out at around $750 on average. This gets your company’s name registered along with an operating agreement and certification. In my experience, we also had to pay for servers and customer support, and we invested a small amount into marketing our project.
There are tools like Hubspot CRM, MailChimp, and others to help organize your customer contacts and email campaigning in those early days. We spent around $100–$150 per campaign on Google and Facebook ads. Google Adwords delivered the best results for us; we used it to test customer responses to new features and gain insight on how different audiences interacted with the product.
In retrospect, I would have focused more on sales much earlier on. It’s really important to tell people about your product and get them excited about it–even before launching. I’ve realized there’s no need to wait for having the perfect product, though; you just need to launch ASAP and then constantly improve it through ongoing iterations.
There are a number of great tools that are either free to use or offer free trial periods. We used FreshDesk for customer service interactions, SendGrid for email marketing, and Trello to manage our internal product schedule and planning. Make sure to focus your efforts, prioritize your roadmap, and make sure you invest at the right time in order to get the most out of it while the clock is ticking.
Throwing your all into a new venture means giving yourself no alternative. I knew I had a short period to put my head down and launch the site–there was no other choice, and I didn’t want to live out of my VW forever. When you take a leap of faith, you’re forced to deliver.
This may be surprising to hear in an era that’s witnessed the rise of the part-time entrepreneur and side-gigging. But if you ask me, there’s a risk there of spreading yourself too thin and failing to commit. Sometimes it may even mean you don’t totally trust in your business–and if that’s the case, why should your customers? If you really want to get things off the ground, you can’t just dabble. But once you’re all in, you’ve got to set milestones. That could mean scheduling an investor meeting, contacting an incubator or accelerator, or publicizing a hard launch date or presentation.
Applying for attendance at a conference or startup event, such as TechCrunch Disrupt, is a great way to get your product in front of industry experts and grab some good media coverage, too. If you don’t get accepted, don’t fret; keep in mind just 2.5% of applicants make it into Disrupt Startup Battlefield. Still, the least you can do is prepare a date for your Product Hunt launch in order to turn the heat up on yourself. Then follow that up by sharing your story on HackerNews with a bigger audience. Just make sure you’re realistic with your targets so you don’t get burned.
After six months of icy winter sleeps and hot summer days cooped up in my car, the launch was finally complete. People starting talking about the new company, and we started to see some traction. I moved into a new apartment and was ready to face the world again.
Since then, my experiment has become a piece of our founding narrative, and I hope it communicates something to our customers and new hires about who we are as a company–and our determination to bet it all on something worthwhile. After all, adding your own personal story to your business launch helps differentiate your brand and catch your customer’s eye.
But more than that, the experience showed me how important tight budgeting and an ambitious timetable can be. If you really want to succeed, you don’t necessarily need to stop paying rent and start showering at your gym. But just about every entrepreneur will need to strip back costs and focus all their energy on launching the best product they can in a short period of time. That’s what bootstrapping is all about, but it applies just as much to self-funded startups as those that have received VC investments.
Whatever you do, take full advantage of resources, no matter what they may be. You just need enough gas in your tank to keep you going.