Bootstrapping Pitfalls: 6 Ways to Kill Your ECommerce Startup

by Allen Burt
May 8, 2015

Deciding to bootstrap your company is a decision that gets plenty of debate from the talking heads in startup-land. The are many pros and cons to both raising funding for your startup, or deciding to bootstrap to profitability. I’ll save that debate for another day.

Today, I want to zero in on those businesses that have made the deliberate decision to bootstrap their growth. There are lots of ways to acquire customers, sell products, get press and grow your company. But most companies don’t fail due to a lack of options to grow. They fail because of major mistakes made by the founding team, or by running out of money (often both at the exact same time).

In this article I will share with you 6 sure-fire mistakes that will kill your e-commerce startup before it even gets started. These are all real-world examples, and some of them are from my own experience!

product validation strategy for startups

1. Drinking your own Kool-Aid: Not validating your product/business with paying customers.

It’s easy to fall into tunnel-vision. Sometimes when developing a product or service to sell online, founders are adamant that simply building the “next best thing” will ultimately drive traffic and customers. The hard lesson most first time entrepreneurs learn is that building a cool product or brand will not drive customers UNLESS they are solving a real-world problem.

Maybe the product does solve a real-world problem. But, can everyone else understand that it does? Just because you think it’s “cool” and worth money does not mean the general public will stumble upon your product, agree with you, and make a purchase.

The first goal with any new business is to find a way to validate your assumptions as soon as possible. Ideally, you do this by finding people who will show up to your site and make a purchase. There is no better validation then early revenue!

sales strategy tips for startups

2. Not recognizing that sales are everything: Don’t skimp on your sales and market plans pre-launch

Ask any successful entrepreneur with 2 or more companies under their belt what the most important thing a founder can do in the early stages of their company is, and they will say:

“Get in front of potential customers and SELL your product”.

Sales are everything, and without them your startup will die. And if you are bootstrapping, it will die VERY quickly.

Peter Thiel says if “you’ve invented something new but you haven’t invented an effective way to sell it, you have a bad business—no matter how good the product.”

Sales doesn’t have to limit you to the old notion of a door-to-door salesman, or 10 hour days of cold calls and offshore sales team. Sales refers to any method you can utilize to get your product in front of target customers.

A recent example can be seen with the buzz-worthy internal communication platform, Slack, which is valued at 1B and only 2 years old.

When they were ready to release to the public, Slack depended heavily on traditional media strategy but didn’t underestimate the pull of their own internal influencers. Founder Stewart Butterfield said that the traditional media was only 20% of the recipe for success. “The other 80% is people posting about that article. I almost never go to news sites — it’s overwhelming how much content is out there. But I will pay attention to what my friends are picking up and sharing.”

In other words, the Slack team took advantage of their personal networks to get people talking about their product and acquire their first customers. By combining traditional media efforts (e.g. press releases and articles) and leveraging their own social pull, Slack had 8,000 beta requests on their launch day. In two weeks, they were at 15,000.

Related: How My Ecommerce Startup Got Featured In WIRED & the LA Times, and Acquired Our First Customers

Slack may seem like an unlikely comparison for your startup, but their company shared the problem you’re now facing: how to sell your product/service that you know solves a real problem, but no one has heard of it yet. How can you get the word out?

Here’s a guide we recommend (and use ourselves) from Quicksprout. It will help you address questions like:

  • What is my core message?
  • Through which channels will I communicate this message?
  • Am I focusing only on sales?
  • What is my Purple Cow?

This guide is a great place to start, and even has a template download. Fill out the spreadsheet and use it to solidify your launch strategy, because no matter how great your product is, if you don’t get the word out you will fail.

marekting strategy tips for startups

3. Not developing a predictable funnel for acquiring & retaining users

90% of all startups fail. (Fortune) How, then, do you survive and make it to that happy 10%? According to Keith Rabois, most startups fail because they don’t have the ability to acquire and retain users:

“In the real world cutting through the clutter of the 3,000 advertisements per day that the average American is bombarded by is extraordinarily difficult.  There are only 24 hours in a day and most are already claimed by family obligations, work, sleep and existing entertainment options; even if you get a user’s attention your new product needs to be so compelling that he is willing to forego something else he is already invested in.” (source)

At Offmap, we had great success using PR in the early days to attract new customers. The problem is that PR is NOT a sustainable and predictable path for acquiring new customers. It can provide a great boost to traffic and help build your brand, but can’t bring in a steady flow of new users to keep your business growing.

Before you launch, make sure you’ve identified at least 4 or 5 channels that you are going to attack and build out to become predictable and repeatable channels for acquiring new users. The better you can measure these, the better you can benchmark your growth projections.

One area in which we excelled at Offmap was customer retention. We consistently measured open rates for our email campaigns at 2-3x the industry average, and were successful at turning customers into repeat buyers (especially given the high ticket price of our products). We achieved these results by making sure we provided incredibly high value content to our user base in our email campaigns, and by focusing on providing products that perfectly met the demands of our customers.

The best strategy for retaining customers is an excellent product, combined with targeted and high value communications (email, tweets, social media, etc.)

value proposition strategy for startups

4. Poor Value Proposition

Building the right product means nothing if you can’t communicate its value to the customer. Part of your pre-launch strategy should be shaping the message around your product or service. This is your value proposition. Creating a value proposition is essential to boosting conversion rates and communicating to customers why they should buy your product.

In my previous startup,, I needed to develop a value proposition on my product (affordable, high-quality independent vacation packages, led by your smartphone). My strategy in delivering this message was the following:

  • For every trip package we made direct comparisons to the price points of competitors to showcase how affordable ours were.
  • Design a beautiful website and internal pages that showcased the amenities, activities, and features of the trips to highlight the quality of the product.
  • Provide an example of our iPad/iPhone guide for each trip, so users could experience the freedom of traveling independently.
  • Provide a transparent breakdown of how we priced our trips, to show customers that our low prices were a product of us reinventing the industry and not a product of us cutting corners.

When Offmap launched, our team had a clear value proposition. We used messaging on our landing page, throughout our blog posts, in every piece of PR, and in our social messages to convey our product’s value.

Spend some time optimizing your value proposition. You can mimic my strategy above and address each bullet point. Here are a few reminders of what makes a good value proposition:

value proposition Neil Patel

5. Listen to Too Many Opinions

Since you started this process, how many people have given you their 2 cents about how you should run your business? Your mom. Your best friend. Your long-lost college buddy who suddenly appears out of nowhere with some “expert” advice.

It’s perfectly normal.

Being able to wade through the BS is something that defines a successful entrepreneur. Learning when to listen and who to listen to are lessons that, sometimes, we learn the hard way.

Related: How I Killed My Startup

However, there are preventative measures you can take to help prepare yourself to make the best decision in listening and taking advice. In his book “Start With Why”, Simon Sinek writes about something he calls the Celery Test to illustrate this.

He asks you to imagine you’re at a dinner party. You begin to receive opinions from various accomplished people on what things you need in your organization: M&M’s, rice milk, celery, Oreos. The next day you go to the supermarket and spend a lot of time walking the aisles, considering each product. You buy everything suggested. Now you’ve wasted a lot of time and money.

Sinek then asks you to picture yourself from the outside perspective: If someone were to see you, the business owner, with M&M’s, rice milk, celery and oreos in your arms, they wouldn’t know what kind of business you are running. Are you supposed to be a healthy company? Are you indulging in sweets? Why do you have those products?

Start With Why Simon Sinek's Golden Circle

The concept of the Celery Test is to identify your company’s “why” – once this is established, making a decision on what and who to listen to will be a no-brainer. If your “why” is “I’m a health company,” you can feel confident in listening to the person who told you to buy the celery. Their advice might be what you need in order to succeed.

Another way to think about it:
Unless the person giving you the advice is currently doing, or has previously accomplished, that in which you want to achieve, politely accept their advice and immediately throw it away.

6. Refuse to Hustle

Launching an ecommerce business requires a lot of planning and preparation. However, it can be done quickly, even in a month’s time.

Related: How To Launch an Ecommerce Business in 30 Days

One element that seems to separate successful startups from those that fizzle out is the amount of time put into it by the founder. Some call it hustle. Others call it hunger. Some don’t even see it as a distinction: extreme work ethic is the only way in their eyes.

hustle strategy for startups

Paul Graham cites startups desire to “not get their hands dirty” as one of the main reasons startups fail:

“If you’re going to attract users, you’ll probably have to get up from your computer and go find some. It’s unpleasant work, but if you can make yourself do it you have a much greater chance of succeeding…If you want to start a startup, you have to face the fact that you can’t just hack. At least one hacker will have to spend some of the time doing business stuff.” (source)

With, I was operating the majority of the project on my own. I had no choice but to dip into areas that I didn’t know or didn’t have experience in. Pushing through a learning curve in areas like test-driven development (TDD) and understanding the basics of platform development demanded insane hours from me. I had many a sleepless night.

Though Offmap didn’t succeed, the value derived from these late nights has undoubtedly positioned me to produce a more successful product in my current and future business ventures. I recently read an article about Mark Cuban’s only regret:

“You’ve got to grind to be successful and my regrets have come from [times when] I didn’t grind hard enough or maybe there was somebody out there outworking me…That’s just not acceptable.” (source)

Do what you need to do in order to feel like you’ve given your startup the best chance in succeeding that you can. My strategy with Offmap was to outline 3 important things I needed to do every, single day. Allowing myself to focus on a few, important items kept my momentum going and I wasn’t bogged down with focusing on small, unimportant tasks.

“Just work like hell. If other people are putting 40 hour work weeks and you’re putting in 100 hour work weeks, even if you’re doing the same thing, you know that you will achieve in four months what it takes them a year to achieve.” – Elon Musk

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All images courtesy Flickr Creative Commons

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Allen Burt Allen Burt is the CEO & Founder of Blue Stout. A design and development agency that builds applications to power commerce and drive user engagement. Follow him on Twitter.