5 Quick Tips for Better Bootstrapping From SXSW
If you've ever clicked on a link to see a picture posted on a site like reddit, Twitter or Facebook, more than likely it was hosted on imgur (pronounced "image-er"), one of the most popular image-hosting services on the web. At SXSW Interactive, founder and CEO Alan Schaaf and COO Matt Strader presented the San Francisco-based company as a case study for how to successfully bootstrap a startup.
Here are Schaaf and Strader's five tips for launching a tech company without seeking outside investors:
1. Leverage a community you're already involved in.
Schaaf created imgur in 2009 out of his college dorm room because he was active on reddit and thought there wasn't a good way to share pictures. He decided to create an image host that "didn't suck," he said -- one where a user could anonymously and simply upload an image, and be able to share a link to any web platform. It publicly launched as a post on reddit, and for the first six months imgur was able to operate on user donations alone.
2. Develop multiple revenue streams as early as possible.
Strader said he knew the initial donations were going to dry up, so from the beginning he thought about ways imgur could make money. The solution: online advertising in the form of banner ads -- one per gallery page. Schaaf and Strader partnered with online advertising firm Rubicon Project, which they said has brought in dozens of new ad channels and makes up the largest percentage of their overall revenue.
But Schaaf and Strader didn't want to rely on just one revenue stream. So, in 2010, they created imgur Pro, a paid yearly subscription that gives members more hosting space, higher quality image uploads and no ads. The site has also started implementing commercial hosting for larger websites, most notably for sections of Yahoo! Sports. Additionally, Schaaf and Strader launched an imgur store, with branded items such as shirts.
3. Learn rapidly and improve.
A disadvantage to not having professional investors is that every problem that arises has to be solved by the founders, or outsourced at cost. In the beginning, Schaaf admitted he didn't know everything about image hosting but discovered he was was able to diagnose and fix bugs or technical glitches by scouring Google until he found a solution.
4. Build a team with a balanced skillset.
Schaaf, the engineer, and Strader, the marketer, attribute the success of imgur to their complimentary skills, despite having different types of personalities. In too many cases, a startup can be technologically sound but incapable of selling itself to users, or vice versa, they said.
5. Stay lean.
With 10 full-time employees, imgur is still a lean company. Schaaf and Strader describe their headquarters as modest, and they hire only when it financially makes sense. When it doesn't, imgur will bring on part-time workers to help with workflow.
Schaaf and Strader said that staying lean and not having outside investors has enabled them to do what they want, be less formal (there's no board of directors to report to) and move at their own pace. "Not slow," Strader said, "just deliberate."
Entrepreneur Editors' Picks
Online Scams Are More Sophisticated Than Ever. Here's How to Shop Safely on Black Friday and Cyber Monday, According to a Cyber Intelligence Expert.
This Guy Saved Barbie From Cultural Extinction. He Did It by Asking One Big Question.
The Top 5 Hot Franchise Categories for 2023, According to One Industry Expert
Why Can't We Resist Black Friday and Cyber Monday? A Behavioral Economist Explains the Psychological Forces That Make Sales Irresistible.
I Couldn't Sleep. I Obsessed Over My Failures. Then I Found the Weirdest Cure.
This Pitch Scored a $250,000 Investment — But It Almost Didn't Happen
Employees Were Demanded to Go Home. Here's How We Invite Them to Come Back.