Getting funded by a VC isn’t the only definition of success in business.
Neither is doing a series A, B or Z.
We know it’s hard to believe especially based on the prevailing narrative by the media on VC backed companies in tech hubs around the world, but it’s true.
Success as a startup comes in various formats but it usually means becoming profitable, scoring more and more customers and a rising revenue base.
It’s quite refreshing, and encouraging, to know that there are quite a number of companies that refused to take external investor money, preferring to bootstrap their companies to success.
And succeed they did.
Here are 10 of them.
While Zuckerberg had the luxury of having a personal computer on which to programme Facebook, companies like Dell had considerably greater overhead in their desire to design and ultimately manufacture PCs.
So while the $1,000 in expansion-capital Michael Dell received from his family to drop out of college at University of Texas at Austin where he had already founded PC Limited might seem like a hyperbole form of bootstrapping, consider how that small family loan was soon turned into $30 million in four short years. Dell’s “human capital” came in the form of his visionary understanding of the computing process that he gleaned in part from his dorm-room enterprise selling IBM PC-compatible computers made from stock parts.
What Dell showed was that he was able to look both at the past successes of other techpreneurs like Bill Gates and Steve Jobs and realise that there was still a section of the market open to him. And by turning to his family instead of VCs, Dell allowed himself to grow truly independent as Dell became a major player in the computing market in the late 1990s and 2000s.
Mailchimp is an online email marketing solution to manage contacts, send emails and track results.
Mailchimp has grown a reputation for succeeding by going against the grain. No venture capital, no Bay Area presence, no crazy burn rate: MailChimp’s founders built the company slowly by anticipating customers’ needs and following their instincts. Early last year, Mailchimp posted some numbers on their blog while undergoing server spring cleaning - and they say it all. Here's a sample: In 2009, they had 100k users; in 2012, they had 1.2 million users in 158 countries. And another, for good measure: They deliver 2 billion emails per month (and are still growing)!
Incredible.
3. Github
Github is that type of startups that bootstrapped for a long time and proved their businesses before taking outside capital.
Founded by Tom Preston-Werner, Chris Wanstrath, and PJ Hyett in 2008,
Github is a software development platform where users can share their work on projects with others. Think of it as the Wikipedia for programmers.
In 2008, Tom Preston-Werner, turned down $300,000 from Microsoft in order to go full-time on GitHub. 4 years later, Github landed a $100 investment from Andreeseen Horowitz. 5 years later, GitHub hit the 4 million user mark.
According to Preston-Werner, the company cost a few thousand dollars to set up and became profitable "the day we opened and started charging for subscriptions." In the early days, Github didn't have offices. Instead, the four full-time team members worked remotely and used coffee shops to meet a couple of times a week.
4. Braintree
Braintree performs online and mobile payments for companies around the globe.
Right from the start, Braintree founder Bryan Johnson decided to stick to the premium, rather than freemium, model. Turns out, customers are willing to pay for good service, and in 2010 Braintree generated $4.5m in revenue, in addition to doubling its customer base. Braintree was acquired by PayPal in 2013 for a reported $800 million.
Fun fact: 99% of their customers come through word-of-mouth.
Sara Blakely first came up with her now-famous women's undergarment when she was getting dressed for a party. Unable to find a form-fitting piece to wear under her white slacks, she decided to cut off the feet of her control top pantyhose. At 27, Blakely launched her Atlanta-based business using all $5,000 of her personal savings. She even wrote a patent application and filed it herself to save on legal fees. To date, she still owns 100 percent of Spanx--which had an estimated $400 million in 2016 sales--and hasn't taken a penny from outside investors.
37Signals is a web application company that produces simple, focused software.
It's hard to pick just one reason why 37Signals is so amazing. One of these reasons would be that, to date, the company's talented partners, Jason Fried and David Heinemeier Hansson (or DHH), have co-written three bestselling books: Getting Real, Rework, and Remote. These books continue to be an inspiration to forward-looking entrepreneurs and business owners worldwide. Another would be that DHH, you know, created an entire web development framework called Ruby on Rails.
AppSumo is a daily deals website that promotes great products to make work fun.
AppSumo shot off like a rocket from the get-go, growing to 500,000 customers in just 18 months. Of course, this is not so surprising, since the founder is none other than Noah Kagan, formerly employee number 30 at Facebook.
Woothemes is a WordPress theme and plugin provider with tons of free and commercial products available to jumpstart your website.
The founding trio - Adii Pienaar, Mark Forrester, and Magnus Jepson - started off as a virtual team. Today, half of the team works remotely from various European locations, while the other half is located in the Cape Town office. From 2008 till 2011, they were generating revenue consistently, with a 10-15% month-on-month growth.
TechCrunch is every techpreneur’s favorite online magazine reporting on technology opinions, news, and analysis.
Founded by Mike Arrington and Keith Teare in 2005, TechCrunch has become one of the most-read tech websites in the world. When AOL purchased it in 2010 for ~ $30 million, Arrington reportedly owned 85% of his bootstrapped company.
The design site was bootstrapped for six years before founders
Scott Belsky and Matias Corea raised $6.5 million. It took four years for the first 1 million projects to be uploaded on the site. Two million published projects have been viewed more than 1 billion times on Behance; 75 million views occurred in just 30 days.
Conclusion
Let’s close with
these words from Jason Fried,
"Look at what the top stories are, and they’re all about raising money, how many employees they have, and these are metrics that don’t matter. What matters is: Are you profitable? Are you building something great? Are you taking care of your people? Are you treating your customers well?"
Amen to that.
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