Jun
20
In Paul Allen and Rick Farr’s class yesterday, they discussed some of the characteristics and statistics of good businesses for bootstrapping.
- Growing Market (at least 10 percent annually)
- Note: of all businesses, 60 percent survive. In a market that isn’t growing, only 20 percent survive. In a market that is growing, 80 percent survive. It is simply harder to take customers from existing businesses than it is to find new customers.
- High Margins (for Internet and Software companies, a company can’t survive bootstrapping with lower than 60 percent margins).
- Customize your product for a few and charge a ton for it. Retain the rights and then rebrand it and sell it to a larger market.