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It's a "fast and messy" method of producing good show horses for your stable.

You take a high papered stud (*Star, **Star) and breed it to 50 yellow and/or red papered mares. Then you geld the colts for the show barn using Breeding Advice (BA) or Strict Breeding Advice (SBA) and paper the fillies. Next month, repeat the process with the same mares. And the month after that as well. Then the next month you replace the lowest mares with the fillies you bred. Just keep repeating the process until you start getting colts that pass BA/SBA. You'll eventually get a colt that comparison tests as superior to your starting stud. That is your new bootstrap stud.

You can do Bootstrapping without inbreeding. You would just need to use a different high papered *Star or **Star stallion for each group of mares. You should get similar results.

I will mention, that many players on the game avoid inbreeding as a personal preference, but there are also many players who don't care and inbreed regularly. There is no negative effect of inbreeding built into the game. Foals with inbred pedigrees can be the same quality as foals with no inbreeding in their pedigree.

I don't visit the Wiki much, and I know the Wiki is still a work in progress, but it has lots of great information on many aspects of the game. Including bootstrapping. You can find it under Resources in the Left Sidebar, "Member Created Wiki"