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Some of the top NYU startups participate in the NYU Summer Launchpad accelerator program. In this series, we will introduce you to one team a week so that you can get to know the 2020 cohort.
This blog post was written by Phantila Phataraprasit (Law '20) and Caitlin Ellen (Stern '22), co-founders of Sabai Design.
Bootstrapping for an e-commerce is not for the faint of heart - you will have to do a lot of the heavy lifting along the way, and things will not be perfect. As opposed to software/tech companies in which much of the costs are talent related (and thus, being experienced in the field can save you money), e-commerce requires many start up and fixed costs that are quite unavoidable. But if that is something you decide to embark on, here are some tips and tricks that helped us as we went through the journey of starting an e-commerce company with no external funding!
- Figure out what your MVP (minimum viable product) is. Of course, so much of that will be informed by your customer research, which is a project that never ends (the gospel per the NYU Entrepreneurial Institute, and us!). Repeatedly test your hypotheses through affordable means such as a fake website, Instagram account, and customer interviews. Once you have a clearer vision of your customers’ needs, you will have a clearer idea of your own product goals. Figure out what the minimum requirements are for you to reach those goals, as you don’t want to go all in yet. It is very likely you’ll need to continue tweaking your product as you go. Knowing your MVP will help you to shape your pitch and your finances as well as your plan to get from idea to reality.
- Figure out how much money it will take to get there. What is required on the development front, on the manufacturing front, and all marketing/branding/PR needs? If you don’t break this down, you can end up spending more than you expected and not be prepared for it. Personally, most of our funding went towards the development of the product and basic marketing needs to help us get off the ground. Decide where you can skimp and where you can’t and make a best and worst case scenario budget. Having a good sense of your finances will be key.
- Look at your options. Are you going to look to family and friends for money? Do you want to do a kickstarter campaign? Do you want to look towards alumni/school grants and offerings there? We were able to raise over $50,000 dollars through awards and funding opportunities in our network, which was crucial to our success. What route will work best with your goals? What are your strong suits? No matter the route, you’ll need to prepare your vision to be presentable to the outside world - so make sure your pitch is airtight!
Once you’ve raised the funds, be prepared to do a lot of grunt work. With none of the cash to cushion the experience, it will be quite a ride. But at the end of the day, you’ll likely be able to retain more ownership and control and will be truly in control of your company and its future. While not for everyone, we’ve found bootstrapping quite rewarding, and would certainly push people towards that option if they feel it could be right for them!