Guy Kawasaki opens The Art of Bootstrapping with this dire assessment:
Someone once told me that the probability of an entrepreneur getting venture capital is the same as getting struck by lightning while standing at the bottom of a swimming pool on a sunny day. This may be too optimistic.
That’s why “the key to success is bootstrapping”:
The term comes from the German legend of Baron Münchhausen pulling himself out of the sea by pulling on his own bootstraps.
He recommends forecasting from the bottom up:
Most entrepreneurs do a top-down forecast: “There are 150 million cars in America. It sure seems reasonable that we can get a mere 1% of car owners to use install our satellite radio systems. That’s 1.5 million systems in the first year.” The bottom-up forecast goes like this: “We can open up ten installation facilities in the first year. On an average day, they can install ten systems. So our first year sales will be 10 facilities x 10 systems x 240 days = 24,000 satellite radio systems. 24,000 is a long way from the conservative 1.5 million systems in the top-down approach. Guess which number is more likely to happen.