3 Companies You Should Emulate If You Want to Bootstrap Your Business
Why it's okay to say 'no' to venture capital money.
There is plenty of hype in startup circles these days. But despite the whispered sightings of mythical beasts, there are no make-believe creatures that I know of. So, can we stop talking about unicorns?
I want to hear about workhorses. Here are a few companies that found success by bootstrapping their own business.
The email marketing software company began as a side project for founders Ben Chestnut and Dan Kurzius, and it did not take off until the partners quit their full-time jobs to focus exclusively on the company in 2007.
Since then, they have grown massively without any outside funding. In fact, they have repeatedly turned down venture capitalist offers so they can focus on serving their customers.
In a New York Times interview, Chestnut said, “Everybody we talked to said, ‘You’re sitting on a gold mine, and if you pivot to enterprise, you could be huge.’ But something in our gut always said that didn’t feel right.”
If you have never heard of eClinicalWorks, that's because it doesn't grab salacious headlines on tech blogs. However, the company has actually been around since 1999 and is one of the pioneers of electronic health records. It has remained private since that time -- something CEO Girish Navani has vowed to never change since bootstrapping the company himself.
By remaining untethered to investors, the company says it is able to “listen to what our customers say and respond to their needs.”
No celebrity investors or expensive TV campaigns for this mattress startup. Co-founder Ron Rudzin began the company with his own money. He focused on building a healthy infrastructure and a product customers would love before worrying about name recognition.
While its growth has been slower than its rival, Saatva still amassed millions in revenue in 2016. Rudzin attributes the success to bootstrapping. In a New York Times interview, Rudsin said, “People who raise money, rather than be self-funded, tend to spend wildly because it’s other people’s money and they throw a bunch of stuff on the wall and see what sticks. I don’t do it that way. I’m much more meticulous and efficient. I might go a little slower, but in the end I believe I win.”
It is possible to build a product customers love without empty promises and hype machines. That is why I advise the company founders to avoid the venture trap if they can. I know the billion-dollar beast is exciting to read about, but let me repeat: Unicorns are not real.
Let's retire the unicorn talk and start a conversation about how to create meaningful value for real people.