Is Bootstrapping Becoming Sexy Again?
Published in 2009, this chronicle by @newsit details the mechanics of building a profitable, self-funded business without venture backing.
Core Principles for Independent Builders:
Charging customers from day one acts as the ultimate filter for building software that solves genuine, high-urgency problems.
Keeping fixed overhead low and leveraging lean infrastructure allows founders to stay alive until market tailwinds kick in.
Small, repetitive improvements in customer retention and conversion rates yield massive returns over multi-year horizons.
Community Debate Themes:
The community focused on B2B customer acquisition channels, cold email vs SEO distribution, and balancing full-time employment with side-project development.
CATEGORY Bootstrapping & MRR →
HISTORICAL ERA Web 2.0 Genesis (2007–2013)
COMMUNITY SCORE 27 points
TOTAL DISCUSSIONS 21 comments
Bootstrapping was never sexy. It's not sexy now. What's going on is that most VC firms have no idea how to actually identify themes or teams in which to invest and times like this expose them.
Unlike Dan, I'd love to get funding, even as we have a revenue model that doesn't require scale to get profitability. What VC funding does is dual risk mitigation - money reduces my personal risk of paying the bills and the very act of investing in the company makes the opportunity less risky by providing a cushion to try and make a few mistakes. I am, and most entrepreneurs, are grateful to bear less risk so that they can focus on making a great product.
At the end of the day, however, I'm well aware that eBay didn't need a dime of the Benchmark money they took, and that allows me to say no to the scrubs that come a-knocking.
It really surprises me how many companies seek VC funding. I can't imagine giving away part of my business.
I understand that for some businesses to work they need to start off big, but IMHO loads of YC and other VC backed businesses just aren't in that boat.
Maybe I'm a different kind of business person though. My goal is to build a small business that will sustain me and my family and get me out of the office grind - seems like a much more realistic and attainable goal than the "go big and exit with millions" strategy :)
Out of all the people that have filtered through the Hackers and Founders Meetup this past year, the only people that I know of that took funding were the 2 Y Combinator companies we had speak at an event last fall.
As far as I know, only one member has been actively looking for funding for an enterprise app. It may be selection bias. But, the rest of us are bootstrapping.
It's nice to own 100% of your company and turn a profit, especially given the current economy, but you really need to have faith in the 'less is better' philosophy.
The pace of development feels excruciatingly slow when you have to multitask on everything. I sometimes wish I had someone's else millions to speed things up a bit.
"Gone are the days when entrepreneurs boasted at cocktail parties"
Surely there is at least some negative correlation between "Good Ideas" and "Things Boasted at Cocktail Parties." The mythical (and hypothetical) cocktail party that pops up in everyone's mind once and a while is always a block on logical thinking.