Bootstrapping

One of the most interesting things about Peter Thiel is his challenge to people to not feel trapped in a straight jacket.  Yet, most founders I meet still are focused on the status quo model of product traction -> angel/seed -> VC -> IPO/M&A.  For an industry that prides itself on disruption, it seems that this is the road to travel.

Whenever I mention the bootstrapped model of Craigslist, people are surprised.  We all know what it is but its business model is not discussed.  Possibly because it didn’t make investors super rich.

I am curious what the founders and investors in the community think about the bootstrap model.  Are there other great examples of companies going independent outside the standard template?

I would love to hear feedback on Twitter @charlesjo. Or better, join us on SSG Slack: Invites http://bit.ly/joinssg + info http://bit.ly/coolssg

7 thoughts on “Bootstrapping

  1. One of my favorite companies here in Seattle is a bootstrapped company (BitTitan), amazing product, founder, and team. If you can truly bootstrap a great business, this is more magical than any unicorn will ever be.

    1. I strongly recommend Jessica Livingston’s book “Founders at Work”. She is co-founder of Y-Combinator. She interviewed 40 founders of major startups. Many different ways to do a startup. A consistent thread is the trouble (and disasters) of dealing with VCs. If you can bootstrap without VCs, you’ll maintain control and avoid many management problems.

  2. > “… the status quo model of product traction -> angel/seed -> VC -> IPO/M&A. For an industry that prides itself on disruption, it seems that this is the road to travel.”

    Interesting point. Products are innovative, but not the business model. CraigsList was lucky in that 1) Craig didn’t intend to make money 2) he had a pretty good income from his day job 3) it started making $100m/yr.

    Most developer whom I know don’t have any of those three, so they need angel money to start.

    An alternative? A global launch of an MVP with freemium billing. If the product is good, it should start generating sufficient revenue right away, which allows further development without angels, VCs, etc.

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