Sramana Mitra: In 1Mby1M, we have a rolling admission. Anyone can join at any time. There’s no three-month program. There’s no concept of graduation. We’re building companies. What would you graduate from? We don’t believe in graduation from an accelerator really.
I think these are important points, important differentiators, and important markers to pay attention to. The other thing I would point out here is, I think both Arka and 1Mby1M have a shared philosophy of bootstrapped entrepreneurship. $200,000 is not $200 million. You can’t throw money around. You have to be very capital efficient. You have to spend the money that you have access to very carefully and very conservatively and on the right things.
This is where laser-sharp positioning kicks in gear. If you don’t have a very good positioning, if you do what we call spray-and-pray, you’re going to run out of $200,000 in a nanosecond. That’s not helpful. That doesn’t qualify you for more funding. That’s going to make you unfundable.
The $200,000 that you have access to through an Arka relationship, for example, you’re going to have to use that very carefully. You’re going to have to deploy that very carefully. You’re going to have to achieve concrete customer wins and concrete customer milestones. That’s very much the philosophy of bootstrapping. I’ll let you talk about that.
Yash Hemaraj: Absolutely. To your point, contributors for success is the first three to four hires that you’ll make within any business. When you’re cash strapped and when you’re taking a bootstrapped approach, you can’t entice people with just the salary component. You’ll have to bring people on board based on a mission and based on the vision that you have set as the founder of the company.
That mission-oriented approach contributes to a better culture within the startup itself – deliver better results. When founders stake such a bootstrapped approach to building the companies in the initial stages, it enables them to build a very cohesive unit of the initial four to five people or four to five employees or four to five contributors. I think that will set up the company for success. That’s one of the big advantages in my opinion of taking a bootstrapped approach.
Sramana Mitra: There’s one other very major advantage. If you’ve been following some of the articles that we’ve published recently and have circulated through the newsletter and on LinkedIn, it is the opportunity for Bootstrapping to Exit. If you have a small capital-efficient startup that you have built to a certain level of product-market fit, you can achieve wonderful exits because the truth is, most things happen in the sub $50 million range.
We just did a story on Freshworks. They’ve done nine acquisitions and all nine acquisitions are capital efficient or bootstrapped startups. They’ve acquired nine of these and we did a story on this analyzing what’s happening.