Bootstrapper Economics
I was walking around my house yesterday and had a flash of inspiration. It may be nothing or it could be a new award winning economic model. The goal of economics is to take complicated situations in our society and break them down into simple frameworks. For instance, you know intuitively (and they teach in economics) that price tends to relate to quality, the $50,000 car is better quality than the $18,000 car (or at least you hope so). Economists graph that real world commonality as such:
If those holds true in all scenarios. Than an entrepreneur who is attempting to bootstrap would have all low quality products and services and therefor would not be able to start anything valuable. However, we know that is not the case. The bootstrapping entrepreneur is able to do more with less.
This is what I feel is a more accurate economic depiction (completely thought of and developed by me, so this could be completely inaccurate) of the bootstrappers world. They are able to pay less to still get high quality products and services to start their business. The reason they can do so is they bring value and have a “bootstrapper IQ”. For instance, instead of paying $50,000 for the nice high quality car, the bootstrapper negotiates with the dealership and gets the car for significantly less (or free) because they provide a substitute value to the dealership (perhaps free advertising, services in kind, deferred compensation, or some other trick of the bootstrapper). Bootstrappers know how to leverage what they have in order to minimize the cash outlays they need to make to get their business off the ground, the real bootstrapper probably would realize they didn’t need the $50k car to begin with…
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