Bootstrapping in the age of robots

Categories BiBli

I’ve had the good fortune to be a part of some amazing startups. If you are connected with me on LinkedIn you likely know some of those stories.

I can’t confirm the exact details but I recently heard that a $25,000 angel investment in Uber is now worth more than $50M. Very few investments can offer that kind of upside. I think therein lies the dream of angel investing.

But the fact of the matter is that investing in a startup is pretty much pure speculation. It either works and is wildly successful and creates massive wealth, or you lose it all. Sure there are variables but it really comes down to the maturity of the market and a management teams ability to hit a proverbial nerve with their offering – before someone else can.

I think this is why recently I have seen more and more investors wanting to see some real traction before they even take a look, or choosing to invest via an accelerator which provide entrepreneurs a guided pathway for their product development and growth.

It seems like another issue is that the IPO market is tough and thus private acquisitions are down. There’s not a ton of liquidity for private companies – other than each successive round of financing and so even the best angel investment can linger in limbo for years. We think that’s likely not the case for the high-growth robotics market but it’s definitely an issue right now.

I’ve spent a good portion of my life pitching half-finished products and barely functional companies to skeptical customers and investors. That is the nature of early stage entrepreneurship.

I love to specialize in new product development and enterprise building. I flourish in that early stage where you are trying to establish a clear value proposition, understand your market and gain traction via early prototypes and beta customers.

As a result I can bootstrap with the best of them. Bootstrapping is great because it forces you to innovate inexpensively. It forces you to stay lean and flexible until the point where your product is truly resonating with customers. It’s not for everyone but also a very free and organic way to build a company. Here are a few tips:

5 Ways You Can Bootstrap

1. Keep your job. Many of you make decent money at your day job. If you can save in some other areas of your life you might find you have plenty of money to fund your own initial development.

2. Credit. If you aren’t willing to invest and take risk you shouldn’t ask others to. I am not suggesting you run up a big Amex tab before you get close to revenue but start now managing and building your personal and business credit every chance you get.

3. Crowdsourcing. Even if your final product isn’t done you should be able to think of a campaign or product that you can start to sell now. It’s also a great way to get social media followers, feedback and early adopters.

4. Services. Chances are your product isn’t done but that doesn’t mean you can’t sell services that relate to your market while you build. There is nothing wrong with this just don’t lose sight of your ultimate end-goal product offering.

5. Grants. There are many local, state and federal grants available. They are typically quite a bit of work to apply for but you are smart and what else do you have to do?? Check out Grants.gov for examples. They also sort of force you to plan your business at a very granular level.

Sometimes getting the $5 or $10 or $20M in funding too early can really be a handicap. It forces a company to push into a market and break it open even if the market or product isn’t ready. Remember A VC needs a big return on that $5M investment for their model to work so their only goal is going to be to help you get huge or go home. Don’t raise VC money to double your company. Raise VC money when you are ready to explode.

Going huge is great, but only when it’s actually being driven by customer demand.

The nice thing about companies who go out first and get the big money early is that they help to build the markets for the boot strappers. A lot of times the customers don’t even know what they need because it’s such a new market. A funded competitor can put millions into educating and building a customer segment only to have a more nimble competitor come along and ravish the market with a slightly better product. Big money sets a company on a trajectory that is hard to change.

This is the honest truth. In 20 years I have NEVER experienced anything like ROBAUTO. This company just grows seemingly regardless of what I do to try to push it along. I can’t really take any credit for that rather I think it’s simply the result of utilizing a very customer-centric design process since day 1. We have always and will continue to base our product development roadmap on real customer needs and feedback.

Several years in I never would have imagined that it would have reached so many people already. This summer our small team of students, teachers, volunteers and engineers are working on the first 100 prototypes, many of which are pre-sold or part of initial pilots.

In addition to our 100 robot production goal we’re working on events that will reach more than 10,000 students in 3 states by this fall as well as expanding the Artificial Autism research in collaboration with the University of Colorado.

This is the issue: Hardware, materials, production space and equipment all have hard costs. Build hardware isn’t like software where you can sit and iterate for only the cost of a latte and your Macbook. Robots cost money. There reaches a point where you can’t just bootstrap. We’re not ready to move manufacturing to China or run a Super Bowl ad but we are at the point where lots of people are asking for our product.

And so for the first time in several years we’re going after capital.

We’re not ready for Venture Capital. While the market is huge, revenue has not sufficiently ramped to warrant that kind of capital.

What we are going to do is raise $100k to build, test and learn from the first 100 paying customers.

There’s a chance it bombs. Robots are hard. There are lots of very large companies in the marketplace. Education is a tough market and autism is even harder. Manufacturing is expensive and unforgiving.

But what we’re seeing is that there is an incredible demand for our low-cost truly intelligent BiBli robotics platform. There are lots of robot toys and a few high-dollar research robots but nothing for the average student, parent or caregiver. We have some work to do still, but we’re close.

There isn’t yet ‘an iPad’ of robotics. We want to create robots that are easy, low-cost and incredibly advanced. We want 3rd and 4th graders to understand A.I. and machine learning, not just legos and remote control. We want them to help us solve the human-robot challenges of this century. Even with millions in funding we can’t match the innovation of hundreds of end users.

If it works, ROBAUTO changes the world. Hundreds and then thousands of students, scientists, makers and educators will be using the BiBli platform to reinvent IoT and robotics. Breakthroughs will happen. Iterations will spawn.

Wealth will be created.

We’re excited to announce we’re getting ready to start looking for one new partner and investor. We have a very talented engineering team as well as extensive experience scaling however we need some production seed money and a strategic partner to help us in the areas where we are lacking expertise. We want just one new partner because that’s all we need and we want to truly leverage his or her contributions before we expand further.

Ideally he or she would bring some strategic value to the organization in addition to helping fund this next production leap.

We need help building out our retail channel, product marketing, A.I. architecture and operations and manufacturing.

Bootstrapping has been fun, but it’s time not to build a bunch of robots and we’re just about ready to go to that next level!