Getting by with a little help from your friends

Simon Firth
29 May 2009

THIS morning, I met my friend Sharon at Fraiche, Steve Jobs' favourite yoghurt shop, to talk about the social media campaign she's developing for a new book on working families.

Last week, I was helping my brother-in-law Scott name his new biomedical design firm. A week or two before that, my friend Steve ran by me the elevator pitch for his new online start-up.

Go back a month, and I was having lunch with Anne from my kids' playgroup, and reviewing early designs for a new product line she's creating for parents.

No, I'm no Valley guru. I'm just an occasional participant in an activity that's a key ingredient in the Valley's entrepreneurial sauce: bootstrapping.

To bootstrap a company is to get it going at the absolute minimum initial cost, which means paying as little as possible for feedback and advice, which in turn means tapping into your networks of family and friends as much as you can.

They won't charge you for their help, after all. They also want you to succeed and they'll help you iron the kinks out of your idea before you start looking for real investors and customers.

Best of all, in the Valley, they won't feel as if they have been taken advantage of. This, we all know, is how everyone works.

Once the idea's solid, you can tap your networks again, this time for people with real money to risk - angels, as we call them.

After that, you can get serious with venture funding and hire all the marketing, legal, branding and social media consultants you want.

Back at the early stage, though, there's a kind of karmic economics at play. If I ever need feedback on a start-up pitch, a design consultation, someone to cast a first eye over a business plan, all those valuable services and more will be available to me, too, for free.

* MASSIVE relief here after OpenTable pulled off the first locally born initial public offering in more than a year. Even better, its stock has so far stayed above the opening price. But we also know that headlines like "OpenTable IPO harkens back to dot-com boom" (that one courtesy of MarketWatch) are pushing it.

* ONE good thing about the current recession: area commuter traffic is down by 12% in the last year. Some of us remember the area-wide, all-day gridlock of the last boom. Can we avoid more of the same next time things pick up?