I have been following Indian startup ecosystem for few years now. I have built multiple products as well done services work till 2011. Till now I haven't raised outside money as almost all the products were never resource or operations intensive.
Nowadays, there is nothing wrong in raising outside funding as that is how you build big and fast businesses and considering how costly it is getting to even start a business let alone run it, it makes sense to do it to hedge your risk but still, ideally you want to bootstrap for as long as possible.
This will give you an understanding of the fundamentals of businesses and finances. You need to learn how to build things, how to manage people, how to find early customers, etc., before you really start contacting investors. Another thing is, by bootstrapping and being profitable, you will have much higher chances of being chased by investors and to get higher valuation.
Start from your own home – Some of India’s biggest product startups started from founders bedroom (directi, fusioncharts). Working from your own house gives you huge advantage of working distraction free and without thinking about growth, expenses, and profit. Once you set up an office, have few people around you and with hundreds of thing to worry about, you will not be able to think freely and do things fast. Starting from home often gives you extreme leverage to try all what you can and want to. You can always convert a part of your home into makeshift office, which you can use for meetings or to talk to clients. All the money that you will be saving from office rent can be utilised into building a better product and getting more customers.
Do as much as you can including coding, sales, and marketing – Every successful product startup founder I have met, there was this pattern. They understand technology stack as well as how to get users and customers. Before building a team and raising money, they completed the full cycle of product development and sales.They know because they did initial programming, user onboarding, marketing, selling and support, something which is very important. I strongly feel that even if you are not a great developer (I am also not a really good developer and often copy/paste code) learn and understand the technology stack as it will help you a lot to make the right decisions. Similarly, understanding sales and marketing is equally important. If you are bootstrapping, make sure the core team of co-founders do all this by themselves. It doesn’t matter how small and trivial the task is, do it once and then you can delegate to others.
Find free and cheap resources instead of paying full – Before paying, I always try to find if I can get it for free. There are so many startup resources available and there are good chances that you can get everything for free (at least for few months). For example, through The Morpheus and f6s startup site, I got 12 months free rackspace hosting worth $1000 and oLark premium for three months.Search for startup deals and offers in Google and you should be able to find plenty. Do search for coupons and discounts too as most of the SaaS companies do extend trials through coupons. I had also hired a freelancer from Philippines in 2013 for well below the market price and he helped me a lot in testing the product, so keep using freelancers too if you can get the work done fast and cheap.
Look for free marketing – Nothing will burn your finances faster than you starting to spend money on marketing when your product is not finished. This I learnt the hard way, as I foolishly lost money on marketing when the product sucked and wasn’t even complete. Contrary, by luck I got covered by The Hindu newspaper, which eventually got us lot of signups (the product eventually didn’t take off). It was a pretty good experience in importance of free marketing. Even right now, my post How I got 1100+ SaaS user is the most linked and talked about blog post which brings lot of traffic and has helped me to network with lot of people in the field of startup.With our current product AeroLeads, we keep looking for free marketing channels. For example, I did a podcast interview last week which has thus far got over 1200+ listeners. Though this may not be a big number, it still helps you build a brand and increase your product visibility.
Avoid big and unnecessary expenses – Don't rush forming a private limited company, issuing stock certificates and those legal agreements. They can be done after few months too. If you are short on money, you better put only that into building or marketing and sales.
Many startups also spend money on costly furniture, merchandise, etc. Again nothing wrong with that but you can do this later once you have some revenue.