How NerdWallet Makes Headlines Without Landing Big VC Bucks
If you're not raising bookoo venture-capital bucks, it can often feel like you're the only one who cares about your startup.
At the San Francisco-based startup NerdWallet, a company providing price-comparison tools for financial products, the CEO and I have been plowing our own money and the company's earnings back into the business for the last four years. Today, we have nearly 40 employees, we're profitable and growing fast.
Some might hail this as success, but with San Francisco's startup ecosystem so focused on funded companies, no one seems to care. We might as well be pariahs.
It's tough to build a company with no outside help, yet self-funding is how a lot of startups launch. While it can be extremely fulfilling to have complete control of your business, we've dealt with a myriad of challenges.
Check out the following three major bootstrap obstacles we've run across and how to overcome them:
1. No one's going to toot your horn for you.
While all tech-media outlets seem to have an auto-publish button for every press release that comes out of major VC firms, bootstrapped companies seem to go to the auto-delete pile. To get around this press issue, one of the first things we realized is the importance of active marketing and PR.
Not long ago, we were one of a handful of companies that understood the implications of the new credit-card law that passed into law in 2009. The media soon picked up that we could be a resource. So, while we weren't promoting our products, we got a lot of attention for being on top of the news and offering a different spin on how the new laws would affect people's lives. If you are able to offer a unique angle, utilize it with the press and be a go-to source.
Also, aspiring entrepreneurs take heart -- most startups that get tons of press still face the same struggles as you. Building a company without financial help forces you to focus on what's important -- developing a sustainable business model from the beginning, building a product people can't live without and focusing on providing long-term value to your customers.
2. Resumes don't exactly fly in.
Another major struggle of a self-funded startup is recruiting. At the beginning, when no one has heard of you and you don't have an investor's blessing, it's significantly harder to convince strangers to take a risk on your company.
We managed to work around this by leaning heavily on our personal networks. We hit up everyone we could think of from our college lives, our previous jobs and friends of friends. We were shameless.
And while the Facebooks and Googles of the world were in an escalating arms race for the same limited pool of people in Silicon Valley, we looked beyond its gold-rimmed borders to other parts of the U.S. for hiring.
Thankfully, it worked, as we were able to grow our team by having talent relocate to San Francisco. And better yet, it got easier. Now when we introduce candidates to the team and the culture we've built, it's a much easier sell.
3. Don't expect any free drinks.
These days, venture-backed startup founders in San Francisco get celebrity treatment. Bootstrapped companies? Not so much.
At the beginning of your startup adventure, you'll probably go to networking events and startup parties, where you'll try to rub elbows and integrate into the startup scene. But as soon as people realize you don't work for Dropbox and you're not the founder of a photo-sharing app with millions in seed funding, they'll likely lose interest.
My advice? If you don't get any value out of the events, skip them. You're better off back home building a business, than trying to fit in.
If you need to troubleshoot something, reach out to people personally who have taken on similar challenges and ask them for advice. It doesn't matter what industry they're in. Anyone who's had to manage people, oversee an organization and build or sell a product will have valuable input that could help you.
While there are certainly challenges to self-funding your company, there are also huge benefits. We control our company in its entirety, which means we're never forced to compromise our mission in order to satisfy our investors. And for us, that's always been worth the struggle.
What are other obstacles bootstrapped companies face? Let us know how entrepreneurs might overcome them in the comments below.
Jake Gibson is the co-founder and advisor of NerdWallet, a startup focused on offering price-comparison tools for financial products. Prior to joining the company, Gibson did a long stint at JPMorgan Chase, where he traded derivatives and managed new automated trading technologies.