Starting a business is an exciting and ambitious venture, but it’s not easy.
Many entrepreneurs dream of securing substantial funding to give their venture a flying start, but not all startups succeed in this pursuit.
In such cases, entrepreneurs often turn to bootstrapping, which comes with its challenges and requires unique skills and strategies.
What is Bootstrapping?
The term “bootstrapping” is inspired by the saying “pulling oneself up by one’s bootstraps,” referring to achieving success or improvement through one’s own efforts. In the context of startups, bootstrapping refers to starting and building a business with minimal external funding or financial resources. Instead of seeking substantial investments from external sources like venture capitalists or angel investors, the goal of a bootstrapped startup is to be self-sufficient.
Currently, many entrepreneurs are deviating from the traditional path of seeking external funding for various reasons and are opting for bootstrapping instead. As a result, successful bootstrapped startups are now becoming more common. One example of such a success story is Druppelachtig (dropshipping and delivery), an Amsterdam-based automated dropshipping solution that specializes in finding and connecting the right customers for suppliers and brands.
To delve deeper into the mission, bootstrapping strategy, and challenges of Droppery, Silicon Canals interviewed Marco Mulder, the visionary CEO and founder of the company. In addition, Mulder offers valuable insights for aspiring entrepreneurs.
The Birth of Droppery
Marco Mulder, who has been in the e-commerce industry for nearly a decade, noticed a recurring problem. Mulder states that many wholesalers, suppliers, and brands offer retailers an automation option through a “Custom Portal.” However, this approach has various limitations and challenges.
“There were often two options: Option 1: As a retailer, build your own integration with the supplier’s API. Developers typically charge €1500 to €2000, and then you only have product and inventory synchronization from one CMS and one supplier. The order automation isn’t even taken into account here, meaning retailers still have to manually input orders via a B2B portal during the day,” Mulder continues.
“Option 2 is an Excel or CSV file where you then have to map all products in your own CMS and also have the images sent via WeTransfer to subsequently provide these products with images,” he adds.
Druppelachtig aims to address these challenges with a solution. Over time, the COVID-19 crisis further highlighted the need for brands and suppliers to expand their sales channels beyond marketplaces.
“Marketplaces mainly benefit from this, but you’re not growing organically and building your brand awareness in the long term if these places are your only sales channel,” Mulder shares.
“Due to these developments, we have thought more about developments in society. Brands always need to be present through direct channels and retailers; otherwise, you will never grow. The number of selling parties through marketplaces continues to rise, and there’s no point in having 10 selling parties on one marketplace to sell your brand,” Mulder states.
Droppery recognized this shift in the industry and attempted to connect suppliers with new online retailers, both nationally and internationally. “This was the main reason for us to add the matchmaking aspect, connecting suppliers with new online retailers, both nationally and internationally, to foster as much organic growth and as many reliable partnerships as possible,” Mulder notes.
Facilitating Communication
Droppery serves as middleware and facilitates communication and automation between suppliers and online retailers. Droppery’s comprehensive platform enables end-to-end management of product data, inventory, and orders. Droppery also introduced a matchmaking solution that connects suppliers and retailers and expands their sales networks.
“With our software, long and expensive processes are unnecessary, as we have already built most integrations. Whether it’s an existing or new supplier, retailers can plug in within five minutes and submit a request to their chosen supplier(s),” Mulder explains.
This approach gives suppliers full control over their business partnerships and terms while relieving them of the burden of constantly providing data and inventory updates.
“Suppliers can easily scale their retail network in the desired regions, as we now have retailers in 16 different countries,” he adds.
“One example is Bazar Bizar, which has organized itself very well and built a network in 16 different countries, a streamlined process for all D2C customers, and very little maintenance since everything runs automatically,” he cites.
Bootstrapping: Challenges
Bootstrapping offers entrepreneurs independence and control over their business, but it also brings a multitude of challenges. Speaking about the challenges, Mulder says, “When you start a startup, you should be aware that you won’t earn anything for the first few months to a year and need to invest in the growth of the company.”
“This brings many challenges and requires you to be creative to keep growing. Furthermore, it’s crucial that everyone you work with recognizes the urgency and is willing to go for it; otherwise, you won’t get far,” he continues.
“A year ago, we added a new CCO to the team, Cathelijne Mooren. Thanks to Cathelijne’s contribution to the team, we achieved significant growth,” Mulder adds.
When asked about his recipe for success, Mulder jokes, “A good cook doesn’t share their secret recipe.”
Bootstrapping: Pros and Cons
According to Mulder, the process of bootstrapping has its advantages and disadvantages.
“If you have confidence in your own business, you can determine the right strategy for yourself, your direction, and your course. That provides flexibility.”
“The downside is that for a certain period, you don’t have financial security, and you have to provide that yourself. If you can’t handle that pressure or have too little knowledge of the market, I advise entrepreneurs with a good idea to seek an investor immediately,” he adds.
Mulder’s Strategy for Building a Cohesive Team
According to Mulder, Droppery offers its employees the highest level of flexibility in performing their tasks, allowing them to negotiate how they work together.
Moreover, significant investments are made in the development of the team, ensuring their growth and progress within the company, he says.
“In addition to hard work, we also find it important to invest in enjoyable activities for the team, for example, when a goal is achieved. This way, we try to build and maintain a close bond within the team,” Mulder states.
On Effectively Allocating Resources
Regarding effective resource allocation, Mulder shares, “Being able to multitask is an important factor, but by blocking time and working in a structured way, you can manage your time very efficiently.”
“Based on your priorities, you then determine what you can do when customers or partners are unavailable. For instance, from 9:30 AM to 5:00 PM, we want to have as many contact moments with customers as possible,” he adds.
“All other matters that don’t require customer contact, such as administrative work, strategy development, and all other tasks, can happen before and after those hours,” he states.
Mulder’s Advice for Startups
Mulder also provided valuable advice for aspiring entrepreneurs looking to start their business.
He says, “Stay focused on the end goal and the solution you found with your company. If the first strategy doesn’t work, switch to another strategy. Make sure you always have multiple ideas within your business model to achieve your goals.”
Roadmap
Droppery has a mission to improve the entire D2C supply chain for suppliers and brands based on data processing. “It’s all about supply and demand; the better the offerings from the brands and suppliers that are connected, the more great retailers will join Droppery. For this reason, we also focus on as many useful integrations as possible to make the network as qualitative as possible in different countries in Europe,” Mulder shares.
Droppery also plans to roll out the logistics network to further enable international expansion, which suppliers often haven’t set up yet.
Suppliers are usually set up for purchase orders. We use the logistics process to ensure that B2B orders can also be delivered to the consumer. This way, Droppery will further support brands in their cross-border strategy,” he concludes.
