Bootstrapping (2019)

I'm currently building a company in the mold described in this article (slow and steady). So a couple of firsthand observations.

First, I think every business has a natural speed. There are some businesses that can be made to grow really fast. Others, no matter how much marketing spend/growth hacking you throw at it, just aren't going to grow quickly enough to be truly venture fundable. I've seen a lot of these businesses started and they flame out quickly when the founders raise a ton of VC, build this huge staffed-up company, end up with a cost structure their revenues can't support, then don't hit the growth numbers their funding requires. Fast forward 18 months, the company is sold for parts and everyone walks away with nothing (especially if there's a huge liquidation preference overhang). That said, I do think some types of business (esp with strong network effects) need VC.

Another major factor is whether the founders are craftspeople who enjoy making great products, or are more the kind of people who want to make as much money as quickly as possible and "exit".

I think the biggest obstacle I'm going to hit is hiring. These companies don't profile as traditional "hot" VC companies which will bring certain unique challenges around hiring. I'll figure it out.

Great article, thanks for sharing.

Not sure how widely held this view is, but for me the main appeal to bootstrapping is that I don't have to wait until the company is acquired or until I IPO to feel like I've "made it".

I would feel like I've made it if I can make the same salary I would otherwise make as a developer building something I actually care about AND possess a degree of ownership over it that feels more real. Everything else from that point is just bonus.

Being involved in a VC-backed startup probably makes way more sense if you really, really like wealth and money. It's probably the rational course of action. I don't want a ton of money though, nor be wholly guided by what's rational or logical. I just want to really live.

But the world is a very different place now. Unprecedented amounts of venture capital money are now available to promising startups, regardless of stage and location

This should be taken with a massive grain of salt and skepticism. Capital is available to those who are either 1 or 2 degrees separated from the VC community. In my experience, the VC community is incredibly hostile and skeptics themselves, only entertaining leads that are at the very minimum, luke-warm. If you're a founder just starting out with no connection to the VC community, you're gonna have a really rough time just getting a meeting, let alone a term sheet. It's kind of ironic but again, this is my experience.

I think the last sentence summarizes the unspoken assumption in the article:

it takes incredible amounts of courage, grit, discipline and patience to build a major company without outside financing

Maybe I've been spending too much time on Indiehackers, but I don't think many bootstrappers are trying to build "a major company", in the vein of huge, VC-funded businesses. I think the end goal for many indie hackers is a company that pays like a great job, but with less work and more autonomy and fulfillment (a "lifestyle business") - not one that puts a "dent in the universe".

I bootstrapped my business because I think that the venture capitalist model is unethical. Digital services should be accountable to their users, not exploitative of them - and VC moves accountability elsewhere and uses exploitation to deliver the returns VCs demand. Bootstrapping - earning money directly from paying customers - means that the line of accountability is drawn directly to those who would be affected by your decisions, and incentivizes you to work in their best interests.

Sure, it might take longer, but at least I can sleep at night.