We got asked to share our thoughts on how we approach "bootstrapping" the business a few times this week, so in this week's Origins, I want to do exactly that.
I'll take you through the framework we use to grow a business independent of external capital by self-funding it and being smart about expenses.
1. Keep the day job (can’t stress enough the importance and benefits of this point)
We are still working full-time as developers during the day and switch to DULO in the evenings and weekends.
2. Self-fund the R&D
We developed and produced our first collection with savings. We invested about 20k to make about 700 performance dress shirts for our first batch.
Looking back, it could've been much less, given the initial demand + having a smaller inventory will let you iterate on the product faster.
During development, create more samples and give them away to start generating feedback, an early audience/user base, and in general, a buzz around your product prior to launch. Many of these first "testers" will become your first customers.
3. Ship the whole inventory to your house = no recurring costs for storage/warehouse/fulfillment centers.
4. Fulfill all orders personally ($20 printer + some paper). Might as well include a handwritten note while you are at it.
5. By sticking to point 1, you now have a somewhat unlimited runway.
6. Spend what you earn (good rule in general).
7. Price your product at at least 3x the production cost, this way you can spend what you earn for any marketing efforts (including sending out free product) + the other profits will be going into funding the next production batch, for AT LEAST the same quantity (you don't need profits for now (refer to point 1), you're building that vital early audience/community/fans)
8. Rinse and repeat. The process will scale itself.
9. Rely on self-produced content (could be a separate blog post, let us know), word of mouth (make sure your product always over delivers), collaborations and giving away stuff as your marketing ammunition and in general in spreading the word about your product.
10. Keep your day job, until you don't need/want to (the timing of this would strongly vary per person/goals/ambitions/discipline)
Now, all you need to do is to sell (duh), but that's where you get to learn marketing, branding, distribution and content creation without the stress of a limited runway or investors breathing down your neck.
Would love to clarify anything or answer ANY other questions about our process.