Ten Years of Bootstrapping: Lessons Learned

TEN years of bootstrapping. This just got removed from the title for some reason. Good thing Gabriel García Márquez didn't have the same editor.

Wow. This is interesting on its own, as others mentioned, but it's really interesting to me personally, as the co-founder of a bootstrapped local real estate referral company.

One thing I didn't see mentioned much was the 2008 housing crisis, which was disastrous for us. We were in acquisition talks in late 2007 which were suddenly canceled, seemingly in anticipation of the horrors to come. Our revenues were devastated and I went back to consulting for several years. Basically, our site was on autopilot until January of this year, when the real estate market showed signs of long-term strength and we started our current development drive.

We're still bootstrapping off consulting revenue, so it hasn't exactly been fast-paced, sadly. Let me say, still running a business you started after Startup School 2005 gives you a much different perspective than the usual startup narrative. When you bootstrap, you can press pause instead of eject. You're not on fire, so you don't turn to ashes the instant you run out of fuel, but you sure do have to keep smoldering.

For those who aren't familiar, I would describe real estate startups as being similar to a closed game of chess. Lots of long-term possibilities and plans, but not a lot of good moves available. The market is sharded, guarded, scattered and smothered.

We haven't explored (or had an opportunity for) an agency conversion, so it's really interesting to read this account, thanks. Instead, we are trying to rework our regional site into a niche national site. I'll share how it goes, hopefully before our company's own tenth anniversary. Congratulations and thanks again for writing this history.

Good story, great lessons for entrepreneurship.

The big thing I couldn't help noticing was how inefficient the real estate industry is. There's so much regulations and people taking a huge slice out of the consumers pocket.

Even the notion of ownership by consumers is at odds with modern times, after all, we hackers are finding it too onerous to even maintain physical servers and off-loading that to the cloud, while most people are still plopping down huge sums of money and mortgages to lay claim to small patches of land, in a clumsy procedure where we fork over almost a tenth of that large sum to people who provide little value (real estate agents, lawyers, city fees).

PG should put out a call to kill real estate like he did with hollywood. There's huge profits for hackers if we wrestle it away from the current players (bank, agent, lawyers), and a lot of good for consumers.

AirBnb's a good start, further steps might be to unify it with Uber, Shopify, SpoonRocket, Exec, and Mechanical Turk and reduce consumers experience down to a few button presses. There's a big opportunity for a company to offer complete life management in an app.

Excellent post.

Entrepreneurship is hard. You, the entrepreneur, can easily become your own worst enemy. In many ways it is a mental game far more so than anything else. The tech scene sometimes highlights the "built it over a weekend" stories. It is easy for the uninitiated to get a feeling that they, too, ought to be able to spin something up over a weekend or a few days and have success. The truth is that overwhelming majority of entrepreneurial ventures look far more like what Dave Gooden describes than the "look Ma, I built a business in seven days" crowd.

The other element of note here is that your business doesn't have to be sexy in order to succeed. There are plenty of people out there doing very, very well, with businesses that lots of techies would not even think of approaching.

And, of course, a big exit is not the only definition of success.

Wow...Lesson #1 is SOOO on-point. I think that is what is missing from the free-to-paid conversion narrative.

The only people that will convert from free to paid is those that have received value. SaaS apps need to start paying attention to the 'value indicators', and provide an upgrade path on that - rather than a time limit.

This is one of the reasons that companies that charge per transaction are so awesome - because the only time you pay, is when you make money (which is the implicit value there).

This concept needs to be blown into a blog post - I just may do it - because this is so important and so easy to miss.

Your conversion rate may suck, not because your product sucks....but because your internal value metrics suck. You aren't measuring the right thing.

In my mind the founders could have really sped up the process by figuring out something that added new or even true value to their users. By going the route of simply aggregating listing info and posting information easily accessible on other sites, they relegated themselves to being just another real estate listing website.

Their growth was then limited to how many phone calls and connections they make - in other words, no one was beating down their doors to list on their site and only after years of growing this way did they command some semblance of a home buyer audience that made it worth while for the sellers.

The model these guys implemented is tried and tired and brings nothing new to the table. That's why they resorted to the traditional broker model in the end.