The Case For Launching Your Startup With $0

I’ve met so many entrepreneurs now who immediately take the route of looking for seed investment or angel investors when launching their startup. Although startup capital is incredibly helpful in boosting a startup’s ability to garner initial sales and build a customer base — there are actually a lot of benefits to taking the opposing route of $0 in startup investment. A $0 launch isn’t for everyone, but is possible for many online service-based, and product-based businesses. 

Lock Down Your Market

There’s no better lesson in identifying the market that will purchase your products/services than trying to sell it with a $0 marketing budget. The beauty of locking down your market with $0 is that you’re forced to focus more on gaining an organic following rather than relying on paid acquisition. As a result, you develop a stronger understanding of where to find these audiences, how to connect with them, and convert them when needed. When you’re heavily dependent on paid acquisition, it may be harder to develop such an intimate understanding of your target market because you’re never forced to hack your shoppers’ behaviors.

Demand Before Inventory

Tim Ferris’ 4-Hour Work Week does a great job of mapping out a step-by-step process through which a startup can sell a product without making a sizable upfront inventory investment. By leveraging drop shipping, a business can gauge demand without inventory, allowing startups with $0 startup capital to take measured risks and not invest in selling a product that seemingly has no interest.

When you have startup capital to burn through, you may not be in the head space to discover ingenious ways to test product-market fit before purchasing inventory or manufacturing your product.

Recover When Shi*t Hits The Fan

There is no question that starting with no investment capital makes it a longer process for a startup to gain traction and grow — without financial capital to speed up user acquisition, growing a following can develop at a snail’s pace. However in exchange, entrepreneurs who do not have startup capital to play with learn how to market and sell under any scenario. The grit that they develop from selling constantly (and getting rejected constantly) turns into priceless wisdom that they can leverage to continuously grow their customer base and sales at strategic times. This formula that they end up figuring out also helps them bounce back quickly when something goes wrong — whether it’s the entry of a big competitor or a financial setback, startups that know how to sell can rely on their own devices to recover, rather than asking for more investment to put out fires.

So if you’re an entrepreneur with a $0 launch, or are self-funding your startup through your income from your day job, know that there’s plenty of long-term payoffs and wisdom that you’ll be acquiring in exchange for that angel investment.

Sophia Sunwoo