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Biz Strategy Beyond Gates & Jobs
Maheen Hamid
9/12/2012 12:47 AM EDT
Market validation
Nothing is more powerful than paying customers saying that they are excited about your product and the value it brings. If you have this kind of market validation early in your business cycle, you should make heavy investments early in areas necessary to continue innovating and bringing a commercial product to market. For tech firms, it's clearly in human resources. For other types of businesses, it might be in machinery or something we haven't considered.
There is value in keeping customers engaged with your product and having their excitement grow as you can now afford to introduce new features to your product on a regular basis. This will help with creating an early, loyal and installed customer base that becomes excellent references for late adopters for your product.
If this market validation is slow in coming, it is a smart business move to bootstrap until you have learned enough about selling your product.
Financial efficiency
How good are you with your cash management? You need not look further than your personal financial planning to have a gauge of your cash management skills. If you are confident in being able to establish good cash accumulating strategies, then bootstrapping is a viable strategy for your business, provided that all aforementioned conditions are also met. If you know that you are not confident about your cash management, but have strong convictions about your product, then raise money early and build an execution team around you while you chase your passions.
As Bill Gates and Steve Jobs proved, high-tech entrepreneurs can take different strategic approaches to become successful. No one can give you a fool-proof prescription on what to do for your success. Instead, several indigenous factors will define which strategy will work for you. Whichever path you choose, stick to it, follow through with everything you have and there is a higher likelihood that you will get over to the other side of the chasm of uncertainty.
Maheen Hamid is the chief financial officer and a co-founder of Breker Verification Systems, a Mountain View, Calif.-based EDA firm that provides verification software for system-chips.
Related stories:
Nothing is more powerful than paying customers saying that they are excited about your product and the value it brings. If you have this kind of market validation early in your business cycle, you should make heavy investments early in areas necessary to continue innovating and bringing a commercial product to market. For tech firms, it's clearly in human resources. For other types of businesses, it might be in machinery or something we haven't considered.
There is value in keeping customers engaged with your product and having their excitement grow as you can now afford to introduce new features to your product on a regular basis. This will help with creating an early, loyal and installed customer base that becomes excellent references for late adopters for your product.
If this market validation is slow in coming, it is a smart business move to bootstrap until you have learned enough about selling your product.
Financial efficiency
How good are you with your cash management? You need not look further than your personal financial planning to have a gauge of your cash management skills. If you are confident in being able to establish good cash accumulating strategies, then bootstrapping is a viable strategy for your business, provided that all aforementioned conditions are also met. If you know that you are not confident about your cash management, but have strong convictions about your product, then raise money early and build an execution team around you while you chase your passions.
As Bill Gates and Steve Jobs proved, high-tech entrepreneurs can take different strategic approaches to become successful. No one can give you a fool-proof prescription on what to do for your success. Instead, several indigenous factors will define which strategy will work for you. Whichever path you choose, stick to it, follow through with everything you have and there is a higher likelihood that you will get over to the other side of the chasm of uncertainty.
Maheen Hamid is the chief financial officer and a co-founder of Breker Verification Systems, a Mountain View, Calif.-based EDA firm that provides verification software for system-chips.
Related stories:
- Bootstrapping as a business strategy
- Managing change
- EDA's entrepreneurial capital
- E-books and audio: are you listening?
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