It can be very challenging to bootstrap your startup. Today we would like to tell you all about our story of successfully doing so, and becoming a market leader of our industry in the region.
Starting a business is connected to taking a lot of risks and making tough decisions, especially in the tech startup world.
It is hard to build a reliable team, develop the product, and find a steady stream of revenue that will ensure the growth of your business. One mistake could end up costing you lots of time and money. But, it is even harder to get through these challenges while bootstrapping your business.
We are a Georgian online identity verification solution, Kvalifika, and today we would like to tell you all about the challenges we’ve faced to bootstrap our company, successfully work with 20+ enterprise customers, and become a market leader in the Caucasus region.
We offer remote identity verification software. Our solutions help companies across various industries to verify their use’s identities in real-time to build trust and meet AML & KYC compliance.
Our bootstrapping journey has been very interesting. But before we dive deep into the story and learnings, let us tell you a bit more about the startup landscape in Georgia.
The Georgian startup ecosystem has been actively formed in the last couple of years. Several organisations are launching their support programs with the mission to help your entrepreneurs develop their ideas and get started.
However, there are no world-famous startup success stories from Georgia yet, which makes it hard to develop the culture in this country. More specifically, fundraising represents the biggest roadblock for startup initiatives in Tbilisi. It is clear that the market needs more enlightenment, and the lack of knowledge is one of the drawbacks that need improvement.
If startups want to get invested here, mainly state programs offer help. Winners of various projects can count on financing, and some banks also act as investors. Startups mainly develop their ideas based on incubators, but it is very hard to find investors to scale the business further.
After the proper research on the Georgian market, it was a no-brainer for us to validate our idea and get customers as soon as possible. We participated in the international startup accelerators such as 500startups and Berkley Skydeck, which gave us good mentorship and helped us develop our vision.
All four of us, as cofounders, had a personal experience in the tech startup world. We have been involved in this industry since 2015 with various projects and initiatives. So, the landscape was quite familiar for us, which was a great advantage.
However, we still needed funding to implement our ideas and scale the product. There was a massive need for an online identity verification platform in the Caucasus market.
Active communication with early adopters and understanding their problems motivated us to tackle this industry and develop our product with a bootstrapping strategy. It was challenging to get started, but with the right mindset, we were able to start executing the plan.
As a result, the strategy worked. We managed to grow the team, help over 20 companies verify their customers, and become market leaders in the first two years. But all this growth didn’t come without a few roadblocks, challenges, and tough mistakes along the way.
There were several challenges that came with our decision to bootstrap Kvalifika and rely on clients.
We had limited resources to hire and manage the team, raise brand awareness, and ensure the product value at the same time. Generally, entrepreneurs face quite a few challenges that demand critical decisions in these situations.
Let’s walk through the most challenging parts of bootstrapping our business:
The companies built on new business models require a lot of upfront capital to get off the ground. This was the case in our story as well. But, as mentioned previously, the Georgian startup ecosystem is relatively new to this world and needs more experience.
It is important to have a sales force to educate the market and buyers that our product is something that they need. It requires you to have a huge R&D team building the product to be able to scale and sell it to the market.
As startup founders, we need to understand that brand awareness is essential because it is the very first step in the marketing funnel. Especially when bootstrapping a business. It is crucial to eventually acquire users, which is a hard thing to do without developing a brand.
In the beginning, it was challenging to focus on developing a product and building a brand at the same time. We needed to increase our content visibility, target the right audience, and have an accurate brand perception.
A strong team is a critical requirement for building a successful company. Venture capitalist Mark Suster has said that 70% of his decision to invest in a startup is based on the quality of the early team.
With the limited resources, it was very challenging for us to choose the right people with the right attitude to join our team and work on the mission together.
Besides all the challenges we've faced, bootstrapping our business at a very early stage taught us some valuable lessons. It helped us clearly understand the market's needs and develop the vision that helped us become market leaders in the Caucasus region.
Here are some advantages that come with bootstrapping your business:
Going with the bootstrapping strategy gives you full control of your business. In our case, it was an advantage because we were able to make moment-to-moment decisions about how our company would run, what policies should we put in place, and who to hire.
Probably the biggest advantage of bootstrapping in the early stage was the time we saved from engaging with investors. Starting out with our budget and resources gave us the flexibility to decide how to use our time and focus on growth.
The only way to survive as a business while bootstrapping is to have a positive cash flow. This might be the reason why so many bootstrapped companies tend to fail.
In our case, this was a motivating factor to focus on client satisfaction and develop our product in the best possible way. It pushed us to build a business model that brought positive impact right away. Our team was concentrated on growth.
Finally, our journey of bootstrapping Kvalifika was full of ups and downs, challenges, and interesting startup experiences. Our team worked hard every day to achieve these results and effectively help companies in the Caucasus region to build trust with their customers.
We constantly look for ways to improve our processes and scale our business even more. Now we are concentrated on growth more than ever. We are ready to take on new challenges by exploring new markets, forming new partnerships, and stepping into new industries.
These processes arise new business opportunities for our partners and us. It is a great time for investors to jump on board. We are open to sharing our experiences and plans. If you’re interested, send us an email at: firstname.lastname@example.org and let’s have a chat!
CEO & Co-founder of Kvalifika