5 ms·

Five Years a (Bootstrapped) Founder

92 points by rmason 5y ago

eatonphil 5y ago
Great read, thanks for sharing. Particularly reading about founder stress is cathartic.
codegeek 5y ago
As a bootstrapped founder, the whole post resonated a lot. In fact, I felt like I was him in many situations that he was describing (e.g. something breaking on a Friday with angry customers while your wife is pissed at you for not helping her with stuff).
- ezekg 5y ago
  Agreed. I felt this in my soul: > Lying in bed that night, I couldn't sleep. I was exasperated—seemingly everybody was mad at me… And typically, in the midst of it, I’d add myself to that list of “everybody.”
- theflyinghorse 5y ago
  I shamefully remember sneaking out at night after she'd fall asleep to work on an issue in secret.
tomdekan 5y ago
Really enjoyed reading. This also resonated with me as a bootstrapped founder.
jasfi 5y ago
Definitely, an MVP of a broader vision might get a "who cares" reaction. However, how much time/money will it take to get to the broader vision? There's no simple answer.
ilamont 5y ago
The opportunity cost is a big deal, and will gnaw at you the longer you're bootstrapping (+ consulting, which is typical) without making up the difference with sale of the company or an even bigger salary.
- dangero 5y ago
  This is true for all startup founders even if not bootstrapping because startup founders are generally advised to take tiny salaries in exchange for long term equity. Even if not bootstrapping, they are bootstrapping by supplementing their personal life with savings or trading off on quality of life (no travel vacations etc). As tech salaries have ballooned in the last few years, the opportunity cost has gone out of whack -- if you go read message boards of what people are making at FAANGs, the odds are stacked against the startup founder / bootstrapper living on ramen for 5 years because the FAANG salary makes millionaires with 100% probability. For any 5 year startup to make up for that it most likely needs to exit at 30M or greater which puts the founder in top 2% territory.
_benj 5y ago
Thanks for sharing that story! I’ve been using outseta (free) for the last couple of months as I build a product using it and it has been pretty straightforward, and has really pushed me from my inefficient “build-it-yourself” to “just buy it and save months of development work!” I find really interesting how you found out that most of what you do is customer support instead of marketing, since for me marketing is the thing I don’t know how to do, and honestly the thing that terrifies me… :) Good luck in the rest of the journey!
dougSF70 5y ago
Bootstrapping is tough, especially when you finally build a product and get a paying customer only to read about founders raising $mn without an MVP. Comparison with FAANG jobs are meaningless to some degree because the value of freedom and creating a business is so much greater than the value of a comp package. Also, corporate BS. As a founder you only have to deal with your own BS!
- ramraj07 5y ago
  Could you clarify what you’re saying? Are you saying bootstrapping is better or vc funding is better?
  - dougSF70 5y ago
    Bootstrapping is better unless your start up is capital intensive.
  - codegeek 5y ago
    "better" is subjective. Bootstrapped gives you more control over the business but it also makes it harder to expand once you have product market fit (exceptions are always there). Bootstrapped means you most likely have yourself or may be another co-founder who have to share the burden of all the challenges and downsides. Bootstrapped means you probably cannot pay the best money to top talent and unless you are in an upcoming/hot space, you will have trouble attracting the best talent. VC funding brings tons of its own challenges. Right off the bat, you now have a pressure to deliver a fast paced/hockey stick growth or your investors won't make money. Making money for investors becomes a higher or at least same priority as making revenue for the company in general. You now have to answer to people you would rather not in many cases. Not to mention the public scrutiny it brings. However, the plus of VC backed is that you have money to attract top talent and can offer a lot of incentives that are harder as a bootstrapped company. I think everyone should do their 1st company bootstrapped (I am biased obviously). This will force you to be frugal with spending habits while trying to optimize revenue with least waste. It will also make you come up with creative ways to survive/grow and find product market fit. The downside is that you may run out of money or never reach enough traction as you may not be able to build a great team quick enough in cases. I would say it depends on your goal. If you want to grow super fast and build a billion dollar company, you definitely want to go the VC route. If you want to start something that replaces your job and then may be grow a bit more with a small team, bootstrapped is the way to go. Sometimes a bootstrapped business can become VC backed and vice versa.
gnicholas 5y ago
> Giving everybody equity on the same terms as the founders Do most employees want the sort of high-risk, high-reward equity that founders have? I would think employees wouldn’t want to have so much risk, especially because they don’t control the company.
TameAntelope 5y ago
I wonder what percentage of "bootstrapping" ends up being a fear of diving into the world of venture capital rather than a rational choice that makes the most sense for a growing organization. There's a simplicity to bootstrapping, for sure, but how many bootstrapped startups could, objectively, grow faster and meet their goals more easily with outside funding?
- dougSF70 5y ago
  Yes you are probably right, there is a fear of the VC world. I certainly feel it. Being over 50, no one really wants to invest. Possibly because I am looking building products that could sustain a profitable businesses rather than 1000x moonshots. Since the economics of VC funds require that every investment could return the fund, investing in an early stage profitable business suggests no dramatic upside. It is also a full time job, raising money, and in currently have one role that is the equivalent of 3 jobs...so it feels more sensible to build the business than raise money. But I am a fool for thinking that.
  - TameAntelope 5y ago
    There’s a lot of FUD in what you’ve written here, but that’s fine. I don’t mean to try and push anything on you, but I just think you’d be pleasantly surprised if you could find someone who could help you navigate these waters. Outside of SV in particular there are funds who buck just about every trend you can think of.
    - dougSF70 5y ago
      I agree, but so far we have found no one willing to help in this way.
- ramraj07 5y ago
  It’s up to you to make the judgement call - it’s not that hard to predict what VCs would want your product to become if they get involved, and it’s up to you to decide if that’s the direction you want to take for your vision. If what you want to do is incongruous with what you think the typical investor would want you to do to get their ROI, then bootstrapping might be valuable. Or you know you could be more deliberate in your search for investors (just be sure they are not saying something today with other intentions for tomorrow).

92 points by rmason 5y ago

Great read, thanks for sharing. Particularly reading about founder stress is cathartic.

As a bootstrapped founder, the whole post resonated a lot. In fact, I felt like I was him in many situations that he was describing (e.g. something breaking on a Friday with angry customers while your wife is pissed at you for not helping her with stuff).

ezekg 5y ago
Agreed. I felt this in my soul: > Lying in bed that night, I couldn't sleep. I was exasperated—seemingly everybody was mad at me… And typically, in the midst of it, I’d add myself to that list of “everybody.”
theflyinghorse 5y ago
I shamefully remember sneaking out at night after she'd fall asleep to work on an issue in secret.

tomdekan 5y ago

Really enjoyed reading. This also resonated with me as a bootstrapped founder.

jasfi 5y ago

Definitely, an MVP of a broader vision might get a "who cares" reaction. However, how much time/money will it take to get to the broader vision? There's no simple answer.

ilamont 5y ago

The opportunity cost is a big deal, and will gnaw at you the longer you're bootstrapping (+ consulting, which is typical) without making up the difference with sale of the company or an even bigger salary.

dangero 5y ago
This is true for all startup founders even if not bootstrapping because startup founders are generally advised to take tiny salaries in exchange for long term equity. Even if not bootstrapping, they are bootstrapping by supplementing their personal life with savings or trading off on quality of life (no travel vacations etc). As tech salaries have ballooned in the last few years, the opportunity cost has gone out of whack -- if you go read message boards of what people are making at FAANGs, the odds are stacked against the startup founder / bootstrapper living on ramen for 5 years because the FAANG salary makes millionaires with 100% probability. For any 5 year startup to make up for that it most likely needs to exit at 30M or greater which puts the founder in top 2% territory.

_benj 5y ago

Thanks for sharing that story! I’ve been using outseta (free) for the last couple of months as I build a product using it and it has been pretty straightforward, and has really pushed me from my inefficient “build-it-yourself” to “just buy it and save months of development work!” I find really interesting how you found out that most of what you do is customer support instead of marketing, since for me marketing is the thing I don’t know how to do, and honestly the thing that terrifies me… :) Good luck in the rest of the journey!

dougSF70 5y ago

Bootstrapping is tough, especially when you finally build a product and get a paying customer only to read about founders raising $mn without an MVP. Comparison with FAANG jobs are meaningless to some degree because the value of freedom and creating a business is so much greater than the value of a comp package. Also, corporate BS. As a founder you only have to deal with your own BS!

ramraj07 5y ago
Could you clarify what you’re saying? Are you saying bootstrapping is better or vc funding is better?
- dougSF70 5y ago
  Bootstrapping is better unless your start up is capital intensive.
- codegeek 5y ago
  "better" is subjective. Bootstrapped gives you more control over the business but it also makes it harder to expand once you have product market fit (exceptions are always there). Bootstrapped means you most likely have yourself or may be another co-founder who have to share the burden of all the challenges and downsides. Bootstrapped means you probably cannot pay the best money to top talent and unless you are in an upcoming/hot space, you will have trouble attracting the best talent. VC funding brings tons of its own challenges. Right off the bat, you now have a pressure to deliver a fast paced/hockey stick growth or your investors won't make money. Making money for investors becomes a higher or at least same priority as making revenue for the company in general. You now have to answer to people you would rather not in many cases. Not to mention the public scrutiny it brings. However, the plus of VC backed is that you have money to attract top talent and can offer a lot of incentives that are harder as a bootstrapped company. I think everyone should do their 1st company bootstrapped (I am biased obviously). This will force you to be frugal with spending habits while trying to optimize revenue with least waste. It will also make you come up with creative ways to survive/grow and find product market fit. The downside is that you may run out of money or never reach enough traction as you may not be able to build a great team quick enough in cases. I would say it depends on your goal. If you want to grow super fast and build a billion dollar company, you definitely want to go the VC route. If you want to start something that replaces your job and then may be grow a bit more with a small team, bootstrapped is the way to go. Sometimes a bootstrapped business can become VC backed and vice versa.

gnicholas 5y ago

> Giving everybody equity on the same terms as the founders Do most employees want the sort of high-risk, high-reward equity that founders have? I would think employees wouldn’t want to have so much risk, especially because they don’t control the company.

TameAntelope 5y ago

I wonder what percentage of "bootstrapping" ends up being a fear of diving into the world of venture capital rather than a rational choice that makes the most sense for a growing organization. There's a simplicity to bootstrapping, for sure, but how many bootstrapped startups could, objectively, grow faster and meet their goals more easily with outside funding?

dougSF70 5y ago
Yes you are probably right, there is a fear of the VC world. I certainly feel it. Being over 50, no one really wants to invest. Possibly because I am looking building products that could sustain a profitable businesses rather than 1000x moonshots. Since the economics of VC funds require that every investment could return the fund, investing in an early stage profitable business suggests no dramatic upside. It is also a full time job, raising money, and in currently have one role that is the equivalent of 3 jobs...so it feels more sensible to build the business than raise money. But I am a fool for thinking that.
- TameAntelope 5y ago
  There’s a lot of FUD in what you’ve written here, but that’s fine. I don’t mean to try and push anything on you, but I just think you’d be pleasantly surprised if you could find someone who could help you navigate these waters. Outside of SV in particular there are funds who buck just about every trend you can think of.
  - dougSF70 5y ago
    I agree, but so far we have found no one willing to help in this way.
ramraj07 5y ago
It’s up to you to make the judgement call - it’s not that hard to predict what VCs would want your product to become if they get involved, and it’s up to you to decide if that’s the direction you want to take for your vision. If what you want to do is incongruous with what you think the typical investor would want you to do to get their ROI, then bootstrapping might be valuable. Or you know you could be more deliberate in your search for investors (just be sure they are not saying something today with other intentions for tomorrow).