Editor's Note: Earlier this week, Cincy Inno debuted the first entry in its "Bootstrapping in Cincinnati" series, where we heard from tech entrepreneurs Bo Howell and Alec Cheung, co-founders of the 2018-born CCO Technology, on what it's like to raise their own funds (without venture capital) in the Queen City. Today, we're highlighting the perspective of another Cincinnati bootstrapper, Ariana Ross of Actually Good.
"Bootstrapping a startup means starting lean and without the help of outside capital," a Forbes article on the concept states. "It means continuing to fuel growth internally from cash flow produced by the business."
For Ross, it made the most sense as she built her one-year-old company, a subscription video platform that supports and showcases rising video comedians.
Ross's bootstrapping journey began in 2017, when she moved to Cincinnati for her entrepreneurial fellowship with Venture for America.
During that time, she combined her passion for comedy videos with the frustration she felt upon discovering how hard it was for creators to make a fair wage online.
"I've recruited four comedy groups to create exclusive videos for our platform, and they are provided fair payment and a substantial production budget to experiment with new ideas," she said. "Their fans pay a subscription fee to access all the videos on our platform."
"As you research the space, get to know your customers, and test the market, you will figure out the best route for you to take with regards to funding."
However, the startup kicked off with "absolutely no money in the bank" but a lot of passion for the idea. Comedians whom Ross interviewed also expressed a deep need for a product she was interested in creating.
"I decided I needed to figure out a way to just gather enough money to build our minimum viable product, and bring on an initial lineup of creators — before I even started considering finding investors," she said.
Ross made the choice right around the time that Venture for America's annual crowdfunding competition was on the horizon — an event that has VFA fellows see who can raise the most on Indiegogo for their respective startups. Ross budgeted and established a competition goal of $12,000, which she raised in a month, earning her third place in the competition.
Ross was able to put her earnings to good use.
"We've managed to stretch that money super far and have used it to build our MVP, which we launched last October, and hire comedians to make videos," Ross said. "We're testing some new marketing strategies this spring and I'm very happy we've taken this iterative, data-driven approach, rather than dumping a whole lot of money into a product I don't know if people even want."
Her experience in the competition, coupled with the one-on-one guidance Ross received through VFA, helped her to continue to lean into bootstrapping.
"I think I'm more in the camp right now that you should grind it out and find your product-market fit before you get extra money and become beholden to investors," she explained. "I'm glad I've taken this route so far because it has allowed me to explore the very saturated market for subscription video, and has eliminated pressure to do certain things because that's the way they've always been done."
What she does in the future, however, depends on how Actually Good continues to perform. If its popularity exploded on a macro scale, then venture capital might be the right choice.
The Cincy ecosystem offers opportunities for those looking for it, even if it's just mentorship, Ross added. However, she said she's seen most startups raise money outside the QC.
"My impression is that VCs in other cities give larger checks than those in Cincinnati, so a company trying to grow really fast is usually more likely to look elsewhere."
Regardless, Ross said that the best advice she has for startup founders just getting started is to "figure out the fastest, cheapest way to create the most basic version of the thing you want to sell," she said.
User feedback can help dictate how a startup uses its money, and what it needs next.
"If people actually buy your really basic thing, you're on to something," Ross explained. "As you research the space, get to know your customers, and test the market, you will figure out the best route for you to take with regards to funding.
At the end of the day, funding as a metric doesn't necessarily measure success.
"Any time other people validate you feels like a win," Ross said. "However, I think in a lot of cases, you can do it on your own, and raising millions of dollars doesn't necessarily mean you've made a profound impact on the lives of your users. That's what I'm more focused on, and at the moment, that doesn't really require venture capital."
