Bootstrapping a Comet

I’ve worked with many HR suppliers over the years that are trying to launch and grow their businesses with nothing more than cotton balls, paper clips and buffalo nickels. Hey, if McGuyver can save the world with those items, why can’t these folks build a business?

They are all smart and savvy entrepreneurs, many of whom have pretty cool ideas for the HR marketplace. Unfortunately some aren’t around anymore, and many still struggle to develop a viable revenue model. But, they’re struggling (while a few do succeed) without any outside investment help.

Last week I read an interesting article titled Penny-pinching entrepreneurs changing world of venture capital (you have to register to read current content) from the San Jose Mercury News. It got me thinking of how things have changed from a decade ago when it comes to starting a business.

The article starts off by discussing how “burn rates” for VC-funded companies were incredibly high and how many simply “flamed out” (i.e.,, Webvan, the recruitment services company I used to work for years ago – sigh…).

But today "the operative phrase is 'bootstrapping.' In 'Web 2.0,' a term reflecting the medium's maturation into a dynamic, cost-effective business platform, penny-pinching entrepreneurs simply don't need venture funding as much as they used to. The landscape of the brave new Web has changed radically, with start-ups sprouting daily and clout shifting from VCs to entrepreneurs. The cost of launching a business has plummeted, driven down by the advances in the 'open source' software movement, outsourcing and the potency of Web-based marketing. Further complicating life for VCs is the acquisitive appetite of deep-pocket firms like Google, Yahoo, Microsoft and eBay, all shopping for companies."

Which is also true about the consolidation that continues in the HR marketplace - First Advantage, Workstream, Watson Wyatt, Kenexa, Ceridian, and many more (look for our latest M&A and Earnings update coming soon).

So now the deal is to build your company first, launch a new HR-related product or service you hope will take off and grow, and then maybe you visit the VCs, angels, and other potential investors and/or buyers if that’s your game plan. Or, if you don’t have your sight set on a near-term liquidity event, grow your business for the long haul as our founder and president Mark Willaman and staff have done, without hassling with those “meddling kids.”

And even when you’ve built and launched the “thing” that “buzzes” – don’t forget that you have to have a long-term business plan that includes “the potency of Web-based marketing.” Everything we do at HRmarketer revolves around the power of online marketing (please hold hands and repeat after me – the power of sea and sky converge at to generate publicity, traffic and leads).

A great quote (and post) I read on DEMOletter that sums it all up is from Arya Barirani, the current director of marketing for HP Software:

“A launch is like a comet. It’s the bright explosion of activity that captures all the attention. But it’s the tail of the comet that is so important.”


Posted by Kevin Grossman

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