Slow and Steady Wins the Race
by Michael Matesic
Those new to the world of entrepreneurship may sometimes operate from the premise that there is only one path to startup success, and that path must lead immediately and directly to venture capital funding.
But while a fast, furious infusion of investment dollars can propel a product quickly to market and is the dream of most startups, not everyone is so fortunate. For those who are not, the time and effort that is ultimately invested in ensuring success can also reap great dividends--lessons learned, experience gained, and the confidence that comes with attaining self-sufficiency.
They learn, by necessity, to take a long-view of their company's road to viability, and in doing so gain the patience and steadiness needed to ride out the dramatic ups and downs of entrepreneurship. They can stick it out through times of trial and error, knowing their business will be stable enough to remain solvent and profitable while they make the necessary adjustments along the way.
At Idea Foundry, we refer to entrepreneurs who know that “slow and steady can also win the race” as bootstrappers. These are folks who pick themselves up time after time to keep their companies moving forward, who value and focus their efforts on steady revenue generation that enables them to be self-sustaining when outside funding is slow in coming. While bootstrappers might not be first to cross the “success” finish line, they are rewarded along the way--and in the end--with the ability to chart their own course and control their own destiny.
Mike Schellhase, CEO of InspectTech, is a bootstrapper.
InspectTech provides software to government agencies and consultants to help perform safety inspections of transportation systems. It was formally founded in early 2003, but had been discussed and formulated well in advance of that date. InspectTech was in the Idea Foundry program for startups during its early stages, but has since become a strong and successful provider of its unique services.
That doesn't mean the road wasn't a little bumpy along the way, though, as Schellhase attests.
“We had a couple of periods where we had to do some serious re-examining of what we were, where we were headed, and what the market looked like and wanted,” he recalled. “InspectTech started out providing bridge inspection software only. Idea Foundry performed a market analysis to gauge where our product fit, and found that the market we were targeting wasn't big enough to meet our goals.
“From that point, we started looking at alternative markets for this software,” Schellhase said. “It caused a major rethinking of what we were trying to do. Now we provide inspection software to perform inspections of sound walls, tunnels, retaining walls, and many more applications in found in the transportation construction industry.”
Another example of how InspectTech had to face some hard truths about itself and its ability to grow concerned capital needs, especially early on. Once the company had completed its program period with Idea Foundry, where we had provided mentoring and startup financing, we advised Schellhase that in order to acquire follow-on funding, he needed to continue to grow the company by increasing market traction. He put the advice to work.
“The nature of our business and our client base of government agencies is for projects to take a little while to get funded and implemented, so we decided our time was better spent going out and selling aggressively to multiple prospects instead of pursuing investors,” Schellhase said. “We did so well on our own that we didn't need outside financing after all.”
As a result, InspectTech was able to occupy offices in the Terminal Building on the South Side since mid-2007 and has grown from two founders to nine employees, most of whom are full-time. By being realistic about their prospects and market strategies, applying some difficult lessons along the way, and taking it upon themselves to build their business without relying on outside financing, Schellhase and InspectTech have demonstrated bootstrapping at its best and experienced entrepreneurship in a most rewarding way.
Start Me Up appears monthly in the print edition of TEQ Magazine.