"Strategy is all about commitment. If what you're doing isn't irrevocable, then you don't have a strategy -- because anyone can do it... I've always wanted to treat life like I was an invading army and there was no turning back." -- Troy Tyler, entrepreneur, leader in solar and business systems.
Bill Gates immortalized the "sell and then build" mantra by selling a version of BASIC to Altair before it was even written. Then Gates worked tirelessly with Paul Allen and Monte Davidoff to develop it, and Microsoft was born. Steve Jobs at Apple was also famous for changing the digital landscape forever with his innovative solutions because his belief was that, "If you build it, they will come."
Two icons of the computer age, both wildly successful, with polar opposite approaches. What works?
Many factors will affect where you will be in the spectrum of approaches. Number one: is your product revolutionary or evolutionary? Do you have a first-mover advantage on the kind of product you are bringing to market? That is, do you have the advantage of being the first occupant of a market segment?
If your market research proves that your product is game changing and an outlier in the solution space in your target market, you are bringing to market a revolutionary product that can afford you more of a choice for an execution strategy. The more innovative the product, the longer the time you can choose to bootstrap while you teach yourself how to sell the product most effectively.
Evolutionary products (products that improve upon those already in the marketplace) are harder to bootstrap for long because there are existing competitive pressures and, often, the hurdles to market entry are low.
Let's focus on factors affecting the choice of execution strategy for a revolutionary product.
If you are impatient and have a high-risk threshold, you will want to raise more funds early to give you the financial wiggle room to learn from your mistakes and yet make forward progress. There is the possibility that higher risks will yield higher returns in the long run.
The bootstrapping strategy, on the other hand, often requires patience and takes more time to capture the full value of your solution. It is also better for those of you with a lower risk threshold because it allows you to mitigate your execution and market risks as you go along, allowing you time to periodically reassess your situation.
Don't be influenced by what pundits say the "right" thing to do is. Your risk appetite is what it is. Whichever point of the spectrum you choose, always be honest with yourself and look hard at why you are making the choices you are making. As an example, if you recognize that your lack of a risk appetite is holding you back from the strategy that is more beneficial for the growth of your business, then I would advise that you find a partner who will complement you.