Bootstrapping Bootstrap
Igor Kharitonenkov and Andy Brooks, co-founders of Bootstrap Compost, wanted to expand their business. Like most entrepreneurs, they felt that getting financing was the easiest way to accelerate their growth trajectory. They presented at the Slow MoneyShowcase and inquired about a loan with Sprout Lenders.
A few weeks ago, I ran into Igor at SBN’s B2B networking event; we had lost touch since he didn’t end up submitting a Sprout loan application. I was intrigued to learn that soon after the showcase they decided to forego financing and literally bootstrap their business. Many entrepreneurs I’ve met are forced into this decision because they can’t get the financing they need. But to do this intentionally? I needed to know more.
Bootstrap collects hundreds of pounds of food scraps from local businesses and residents daily, and processes it into finished compost. In three years of operation, they’ve kept over 300,000 pounds of food waste out of landfills, and generated 150,000 pounds of compost that’s been redistributed to subscribers and donated to local farms and community gardens. Had the food scraps ended up in a landfill, they would have produced approximately 300,000 pounds of unstable methane into the atmosphere, a greenhouse gas 20 times as potent as the carbon dioxide produced by composting’s combustion process. Bootstrap’s goal is to rebuild the link between eating food and growing food, which includes educating about the basics of composting, its environmental impact, and participating in community events.
Bootstrap’s motto, like the model of composting, is to give back to the community what they take from the community. Beyond a simple exchange of food scraps for compost, the social component is core to the business’s mission as a triple-bottom-line company (link to previous article about triple bottom line). They’re mindful of their environmental impact, making 15% of their deliveries by bike; emphasize caring for their employees and clients, by regularly giving back finished compost for their customers’ use; and are slowly but surely building a sustainably profitable business, by charging a subscription fee for their collection services.
The company’s growth has been impressive – from a handful of clients in January 2011 to more than 600 residential clients today, as well as dozens of commercial clients. And they did it all with without financing.
When Andy and Igor participated in MassChallenge, Massachusetts’ world-class business accelerator, they came to the conclusion that looking for funding was a full-time job in itself. “We realized that we could spend all our time looking for investors, or spend that time making the company as great as possible,“ Igor says. Bootstrap has, at times, made the strategic choice to “turn off the faucet”, in order to focus on development and improving the quality of the service. This, in turn, would bring in more customers and improve their cash flow. Igor explains: “we would rather keep 45 current customers happy before bringing 20 new customers on board.” By sticking to this ethos of quality over quantity, Bootstrap added about a dozen customers per month during the first year, and has doubled each year since then.
Among Igor’s priorities is creating efficiencies that improve the service and make customers happier: recent introductions range from finding easier-to-use lids on the buckets for compost pickups, to adding compostable liners, to launching automatic billing. “The response has been tremendous,” Igor says.
Since the beginning, Bootstrap has been focused on creating a sustainable business; now that they’ve proven the model, a number of new opportunities for growth are emerging. Massachusetts’ upcoming waste ban, for instance, means that hundreds of businesses will be looking for an anaerobic digester to process their food waste. “It would be great if Bootstrap were a part of that, and could continue our community-minded mission –– and continue donating compost to folks who really need it,” says Igor. The waste ban will certainly drive up interest as more businesses, and their employees, become familiar with composting. Other ideas include expanding the service to other cities, or starting a retail compost-supply arm. And who knows? Perhaps as they look to grow to the next stage, they’ll be looking for growth funding again.
Whatever Bootstrap’s next steps are, Igor emphasizes that their mission is here to stay, and growing ever-more ambitious: “we’re trying to redefine the food system and trying to empower local community agriculture.” He points out that only 3% of the wasted food in America gets composted: what if we were able to use 50-60% of it? Public policy like Massachusetts’ waste ban aside, Igor is convinced that social entrepreneurship has the power to make a significant impact. “I believe in consumers being able to redefine our economy and our environment,” he says.
If you’re interested in sending your scraps to Bootstrap, Igor has extended a special offer to JSFC Newsletter subscribers. Just mention this newsletter when you sign up, and they’ll get you started with two free pickups.
