When I stumbled upon Meaghan Oulmet’s article on the POV (point of view) camera company GoPro, I jumped in with both feet. Myself and three or four others were introduced to GoPro by a colleague of ours; along with a mention in the book Tuned In, by Craig Stull, Phil Myers, and David Meerman Scott.
If you’ve never heard of the GoPro, you don’t ski, surf, scuba dive, or even ride a motorcycle like I do. Kayakers, skiers, and skydivers (to name just a few) wear these high-quality little cameras strapped to their bodies or attached to their boards or boats (my Harley wears mine) to the tune of about 3.5 million fans on Facebook and celebrity endorsements from pro athletes and filmmakers.
I was surprised to learn that a company like GoPro, with a product that resonates within the market to the degree it does, was bootstrapped by its founder Nick Woodman. “Maybe you can’t grow as quickly as you’d like to,” he says in an interview with Oulmet, “but an advantage is that you only have yourself to answer to. You can style your business and your approach exactly the way you want to. You don’t have the pressure of outside investors that you’re beholden to who want to weigh in on how you’re building your business.”
Woodman likes the creative freedom bootstrapping gave him to get GoPro on its feet.
GoPro’s customers are definitely big advocates of the brand, and the company’s best sales people (that’s how my friends and I discovered the little digital camera that fits in the palm of my hand). He also credits the popularity of YouTube in the company’s success. The original GoPro camera was a 35mm film camera. In 2004, when the camera was introduced, YouTube hadn’t really become a big thing yet.
“It wasn’t until the spring of 2007 that our customers became interested in video,” says Woodman. “So before 2007, we didn’t have the notion that people would capture and share footage that could virally grow GoPro through guerrilla word-of-mouth marketing. YouTube changed all of that. Suddenly people wanted to capture and share video. We realized that if we enabled them to do it with professional quality, then a GoPro would be something they would use regularly to create content. It was a classic case of being in the right place at the right time, of being a camera developer at a time when social media networks took off. We had very lucky timing and have benefited massively from it.”
GoPro isn’t the first company to bootstrap their growth. These days, unless you’ve got the potential to be the next Facebook or Instagram, it’s unlikely you’ll find much luck with venture capitalists. Most small business owners have little choice than to bootstrap. I financed my business years ago with a second mortgage and credit card debt. Fortunately for many small business owners today, there are a number of options to fund working capital or finance growth. Although still a good option, business owners aren’t dependent on their local banker anymore to find the money they need to develop new products and services, grow, and hire people.
For many small business owners, the aversion to alternative financing like merchant cash advance loans or factoring are more of a handicap than hearing “NO” from their banker.
Running a small business isn’t for the faint hearted. I always paid my employees first, then my vendors. If there was anything left, I would take something home. As you might guess, there were times when my credit took a ding or two as Peter paid Paul—I don’t think I was that unique. Unfortunately, the bank wants a credit score of 650, two or three years in business, and a fat bankroll before they will take anyone asking for a small business loan seriously. I often wonder how many good ideas (like the GoPro) run out of steam before they meet the criteria their bank is looking for.
Alternatives to the bank provide great options to young businesses, business owners with less-than-stellar credit, and owners who actually need a loan (my Dad always used to complain that if he had the bankroll his banker wanted him to have, he wouldn’t need a loan). And, often something like factoring or accounts receivable financing provides a great bridge while a small business owner is waiting for a traditional small business loan to get funded. Often days or weeks instead of months.
Click HERE if you’re interested in learning about some of the other options available to fund working capital or finance growth.
Small business evangelist and veteran of over 30 years in the trenches of Main Street business, Ty makes small business best practices, tips and advice accessible by weaving personal experiences, historical references and other anecdotes into relevant discussions about leading people, managing a business and what it takes to be successful. Ty also shares his passion for small business every week on Forbes.com.