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Bootstrapping,  What is it?

Many successful corporation such as HP, Microsoft, Dell, Apple, eBay, and Google have done it. To put it in a simple term it is basically to start a company with very little capital. In some point of an entrepreneur life, one must need to do a bootstrapping in some sort. Whether it is in the beginning of the startup company or at later time or even forever if you are not able to raised enough capital for the type of business that you are doing.

The ability to bootstrap is a critical success factor for every entrepreneur. It is not about just coming up with great idea and finding venture capital, but every entrepreneur must be able to operate the company successfully with limited capital.

There are 4 basic models of bootstrapping:
1. The garage model, with very little capital the best place to start is somewhere you do not need to spend much money to operate such as in the garage of your buddy or your own. If you have day job do not quit just yet, it is probably good idea to stick with the job and use the money from your job to finance your start up during night time or in the weekends.

2. University bootstrap model, it does not feel quite like bootstrapping, but there are many company that are doing a technology development in the university either as graduate under or faculty under university grant or government grant and slowly start to develop a relationship with outside commercial world. So under the university environment you start to bootstrap the company in that environment before you emerge and become an operating company.

3. Service to product model, generally company start up as a consulting company, and in the course of that consulting process develop a productize technology which then they can leverage their selling model by selling a product rather than by selling a service.

4. Customer outsourcing model, where a larger company outsource their particular component of technology, and you as developing organization will be able to develop and at the same time own the knowledge and expertise in order to sell it out in the market. You need to make sure you have the contract agreement that allow you to do so.

Hendry Chang (the8online team) - team of enthusiast internet entrepreneurs. For more about internet business tips and ideas, please visit us at http://www.the8online.com