Frameworks and Tips for Bootstrapping Sustainably
Editor’s Note: This article is based on an interview with Anthony Eden, CEO of DNSimple–a DNS domain registrar focused on automation. They provide API endpoints that allow companies to automatically register and manage their DNS.
Anthony Eden started DNSimple as a side-hustle with his brother in 2010.
He has had to navigate challenges the entire way as a bootstrapper, starting with his brother’s departure from the business early on to pursue other interests.
Anthony bought out his brother in 2014 and focused on building DNSimple into what it is today. We chatted about how he did it.
Frameworks for Building a Culture of Work-Life Balance
His focus after his brother left was systemization. This was especially important because DNSimple has been a remote-first company from day one.
Frameworks are the physical manifestation of a system. It is the actual documentation one follows to achieve its designed objectives. The ShapeUp and OKR frameworks are the two primary systems we talked about.
The Shape Up Framework From Base Camp
The Shape Up framework breaks down the development process into two stages: shaping and building.
The shaping stage defines the experience the customer will have in rough flow outlines. You are looking for challenges and any rabbit holes that may occur.
The transition phase is where executives and key stakeholders “bet” on the best flow ideation.
The building phase is where you actually develop a shippable product.
One thing Anthony spoke about in the context of the Shape Up framework is the importance of having good processes and also setting time constraints for what you are trying to accomplish.
Shaping is constrained to a timeframe of six weeks, and the building is six weeks plus a cool-down period of two weeks. Anthony does this so his team can be shaping new projects while developers are building the shaped projects from the last cycle.
The only reason he can do this successfully is through a real-time knowledge of financial resources.
Flight Financial can help you with a monthly recurring process for financial reporting. This includes setting clear goals and tracking your progress towards your goals based on your chosen timeframe.
The OKR Framework
The OKR framework is better for the more audacious, long-term goals.
OKR stands for objectives and key results.
Your objective is your reason for doing something. For example, Anthony wants to have systems that are so efficient that they let him and his employees maximize their work-life balance.
Once you have your reason, it is vital to have key results to ensure you are on track to hit your objective. These results need to be quantifiable and measurable, which is where key performance indicators come into play.
Key Performance Indicators
KPIs help ensure you are tracking progress towards your results regularly. We work with you to deeply understand your business and objectives, which allows us to help implement appropriate KPIs to have a steady and sustainable business.
Tips for Balanced Growth
Most people get burnt out from a constant push towards growth when the speed is set to as fast as possible.
Anthony stressed that he balances predefined times of pushing for growth with cool-down periods to allow his teams to recharge mentally and reset. It is one reason he has avoided venture capital, as their nature is to push a founder to grow as rapidly as possible for extended periods of time.
Bootstrapping Sustainably
Bootstrapping is not an easy process. There are a few must-haves to sustain a bootstrapped business.
1 - Charge From Day One
The first is you must charge from day one. This might seem obvious, especially if you are a seven-figure SaaS or online business owner, but you have to charge for your services.
How do you know that the price you are charging is right? Is it based on the needs of your business today and the goals of your business tomorrow? Check out our blog post on common pricing mistakes for additional guidance on how to effectively price your offering: 4 Common Mistakes with SaaS Pricing: How to Avoid These Costly Errors (flight.financial).
If you need assistance, we can help you implement a monthly business review process that will review various financial metrics for your business. Leveraging this data will help you determine the appropriate pricing of your products or services.
2 - Focus on Who Your Service Helps Most
This goes hand in hand with number one, but number two is to know exactly who that product or service helps the most.
Anthony has kept DNSimple hyper-focused on DNS and domains through its 12 years of existence because his customer’s core pains are focused around those areas. Solving customer problems is the guiding light of all successful bootstrapped businesses.
3 - Build Highly Efficient Systems for Everything
The third is your systems must be highly efficient. Collaborative work through highly efficient communication is the core ethos of Anthony’s remote-first company culture. Financial forecasting is the foundation of an efficient system.
Anthony was using manual spreadsheets to calculate growth rates, model cash flow, and look at monthly recurring revenue.
That is certainly one way to do things if you want to get your hands around the numbers and really understand what is going on.
However, one problem with this is that the busy business owner and executive doesn’t have time to do such a time-consuming process. It is also subject to errors and only as effective as the data coming in. Garbage in usually equates to garbage out.
We help you on the bookkeeping side of things to ensure you have reliable financial data. We take the manual tasks off your plate by implementing CFO-quality financial performance management processes, move these processes into the cloud, and make the processes semi-automated and recurring each month to help you dig deep into your company’s financials for actionable insights you can use to achieve your goals.
4 - Optimize the Staff You Have Before Hiring More People
One reason Anthony was so obsessed with his financial forecasting is he never wanted to be in the position where he hired too many people and couldn’t afford to pay them because of a lack of revenue or cash.
This focus gave him the confidence to make hires because he knew he had plenty of cash flow and a predictable growth forecast.
Due to this hiring style, Anthony didn’t have to let anyone go during the Pandemic
Having a reliable rolling forecast gives you the confidence to make smart hiring decisions for your business that align with and facilitate your growth plan and reduce your risk of winding up cash-strapped and over-staffed..
5 - Become a Master of Delegation
Optimizing one’s staff comes down to optimizing one’s delegation capabilities. If a system is functionally sound, then delegation is knowing the optimal strategic time and method to deploy such a system, so the executor is best equipped to maximize results.
Holding onto things for too long is a kiss of death for many entrepreneurs. It is easy to feel like you are the only one who can complete a particular task.
You have to get a point of utter confidence, though. Hire people who are clearly better than you in whatever area you hire. Look for people who have a different working style than you.
Your systems are the safety nets that help your team complete tasks delegated to them.
What Motivates You as a Business Owner?
We need to figure out what motivates us and then follow those motivations in order to be happy.
If you are motivated by working a lot of hours to grow your business, that is great, but it is essential to recognize that it doesn't motivate every business owner or executive. Many business owners and executives want a company they can be proud of, and that can support their lifestyle. These individuals work to live, rather than living to work.
They want to spend time with their family and friends, pursue their hobbies, and participate in other things that contribute to the richness of life.
Flight Financial takes the essential but time-consuming financial tasks that are best left to a CFO off of your plate so you can spend less time working and more time living.
Start your journey towards a new life for your business with a free 25-minute discovery call.