Startups that have bootstrapped their way to profitability

http://beatrixapp.com/blog/12-amazing-bootstrapped-companies.html

by uptown • 12 years ago

133 63 12 years ago

Companies aren't even bothering trying to make their blog articles relevant anymore. 'Here's 10 Ways To Drive Pageviews To Your App' might have been the better article.

BIackSwan• 12 years ago

Its not properly researched. Github is VC backed now [1][2].

[1] http://gigaom.com/2012/07/09/github-finally-raises-funding-1... [2] - http://techcrunch.com/2012/07/09/github-pours-energies-into-...

james33• 12 years ago

True, but GitHub was bootstrapped for a long time and only raised VC after they had been wildly successful for quite some time.

fookyong3• 12 years ago

a few of the companies in this list went on to raise rounds - but they bootstrapped their way to a Series A (or later).

grimtrigger• 12 years ago

Most seem to be B2B with a focus on independent workers and small companies. Is that a bias of the author, or a lesson for anyone trying to bootstrap their own company? My hunch is that its the latter: if you target small companies and independents, you're hitting a sweet spot of buyers who don't expect a sales/support team but also have dollars to fork over for good products.

uptown• 12 years ago

There's likely also far-less bureaucracy involved with subscribing for a service. Larger companies sometimes require competitive bidding before integrating a service, whereas a smaller organization may be willing to adopt a service after a much shorter review.

error54• 12 years ago

Not a very good or well researched article. They left out many popular bootstrapped companies such as Imgur, one of the most popular image sharing services on the net or the fact that Github has VC money now.

fookyong3• 12 years ago

imgur is a great service, but theirs is not really the kind of example an aspiring bootstrapper can follow.

"become the defacto image platform for reddit" makes you an outlier in the bootstrapping world I think. I think it's just much more useful to look at examples where the model is reusable - make B2B software for a specific market, and charge money for it.

somewhatjustin2• 12 years ago

The article is about "Startups that have bootstrapped their way to profitability", not "startups that are bootstrapping", so Github does belong on the list.

But I do agree with your Imgur suggestion, that would've been an excellent addition.

dazbradbury• 12 years ago

For anyone looking for some inspiration across the pond in the UK, we're a bootstrapped company that started with just the two of us (OpenRent - Launched in 2012 [1]).

We're currently letting in the thousands of properties each month, saving tenants and landlords huge amounts of money - and we're certainly still growing (both in raw properties let each month, and revenue)!

Clearly there are avenues to success for VC backed companies, as well as those going it alone, so not sure what can be drawn from this article other than a bit of inspiration...

[1] https://www.openrent.co.uk

taphangum• 12 years ago

Hey, this looks amazing! Will definitely be using it in future!

oneplusone• 12 years ago

Freshbooks is not bootstrapped.

mijustin2• 12 years ago

FreshBooks, which now has 110 employees, is part of a rare breed of technology companies that has achieved success without the help of venture capitalists

http://go.bloomberg.com/tech-deals/2012-11-26-no-vc-freshboo...

bijanv• 12 years ago

Adding to this list is EventMobi[1]. We help over 4000+ events & conferences in 25+ countries create cross-platform apps for their attendees.

We've grown our team to about 35 people across our Toronto (HQ), Berlin and Virginia offices and are planning to grow to about 60 people by years end.

We just hit our 4th birthday a week ago, and are now expanding to providing the complete toolset for event planners to help make planning, running, and gather data about events easier.

[1]http://www.eventmobi.com

alberth2• 12 years ago

What classifies as "bootstrapped" these days?

Because many of the companies on the list have taken VC/Angel money.

The following have taken VC/Angel money:

- Github [1]

- 37signals [2]

- BigCommerce [3]

- BrainTree [4]

[1] http://www.crunchbase.com/company/github [2] http://www.crunchbase.com/company/37signals [3] https://angel.co/bigcommerce [4] http://www.crunchbase.com/company/braintree-payment-solution...

fookyong3• 12 years ago

taking a funding round after you've done millions of dollars in revenue via bootstrapping, doesn't suddenly make your bootstrapping experience redundant.

perhaps the correct title should be "companies who bootstrapped themselves to success" but it's not quite as catchy ;)

mijustin2• 12 years ago

I don't think Bezos investing in 37signals qualifies as normal VC/Angel money. He took a small personal ownership stake in the company - it's likely he can't "sell" that stock, and that he makes very little from it (compared to his other investments).

http://37signals.com/svn/archives2/bezos_expeditions_invests...

alberth2• 12 years ago

37signals is paying Bezos a regular dividend, as peer DHH comments [1]. Regardless of the terms of the agreement, 37signals still took outside money.

[1] http://37signals.com/svn/posts/2565-acquisition-condolences?...

j455• 12 years ago

Bootstrapping is a self-funded startup that makes money from real paying customers, often from Day 1, or close to it.

Bootstrapping hasn't changed.. one test to being bootstrapped is: If they didn't get funding, would they run out of money and have to shut down?

It's not uncommon for a bootstrapped startup, which has baked 'making money' into the bread from the beginning, to accept funding to grow faster once they have a business model that's already making money. They already have a repeatable and scalable _business model_. Without funding, bootstrapped startups would continue to exist, and would most probably keep growing, though.

my_username_is_• 12 years ago

So is any startup that has a sustainable business model from day one considered bootstrapped?

jusben13692• 12 years ago

I would argue that these companies represent "Companies that realized they needed to raise funding to remain competitive"

A lot of startups that taking early funding could take this route too but realize that's not the most optimal path to success?

ryanbrunner• 12 years ago

One thing I've always been curious about is how investing in a company like 37signals makes sense for an investor. I obviously don't know everything about their future plans, but it doesn't seem to me to be a company that's focused on generating an exit for an investor - they seem committed to staying at least relatively small, and a buyout doesn't seem very realistic. How would an investor expect to get a return on their investment?

hyperpape• 12 years ago

Given that 37 signals had been around for seven years when they took money from Bezos, you certainly can't conclude that they're not bootstrapped. Everything depends on how much money it was, how they used it, why they needed it, etc, but it does look like they built a sustainable business by that time.

RealGeek• 12 years ago

These companies were bootstrapped for the first few years and were profitable with 7 to 8 figures revenue. The eventually raised money at growth stage, and the founders were able to take some money off the table without selling the company.

callmeed• 12 years ago

Yeah, this is not a good blog post. I feel like the author did some basic Google'ing for content without doing much due diligence or checking dates.

Also, I've seen Carbonmade come up in lists before [1], but I wouldn't ever list them in any current list of bootstrapped companies. Their homepage hasn't changed much in 3 years [2], their traffic appears to be headed south [3], and frankly I don't know any professional creative who uses their service for their portfolio (anecdotal I know, but I work in the industry). No offense to anyone at Carbonmade, but I think you can find much better examples of bootstrapped companies in the photo/creative world (SmugMug for example).

[1] http://www.softwarebyrob.com/2011/09/01/ten-highly-successfu...

[2] https://web.archive.org/web/20110129083114/http://carbonmade...

[3] http://www.alexa.com/siteinfo/carbonmade.com

austinstorm• 12 years ago

Yeah, if you're going to call all of these bootstrapped you could include Wordpress, which is dramatically more successful than the ones on the list.

chmullig• 12 years ago

Braintree was acquired by eBay, after several rounds of VC including a $35M Series A.......

chromaton3• 12 years ago

What strikes me is the geographic diversity of this list. If you look at the classic startup with young founders and big VC investments, they're almost all in Silicon Valley or San Francisco. But this list shows that you can start a business in anywhere with a reasonable tech scene.

1 Carbonmade: Chicago

2 Github: San Francisco

3 Clicky: Portland, OR

4 WooThemes: Cape Town, SA

5 AppSumo: Austin

6 Mailchimp: Atlanta

7 37Signals: Chicago

8 Envato: Melbourne, Australia

9 Litmus: Boston

10 Bigcommerce: Austin

11 Braintree: Silicon Valley

12 Freshbooks: Toronto

j455• 12 years ago

Great list. Shows having the ability to make money as a core part of the startup from day 1 can provide opportunity anywhere.

semerda• 12 years ago

Bigcommerce is Australian too. Notice on their website in the footer it is a "Pty. Ltd." co. Aussie!

Great to see 2 out of the 12 Aussie companies :-)

hpagey• 12 years ago

Would like to add two more companies to the list.

13. Pardot, Atlanta (Bought by ExactTarget for 95 m, ET was subsequently bought by Salesforce.com) 14. AirWatch, Atlanta ( Recently bought by Vmware for 1.54 B dollars, AW did raise a huge VC growth round but it was much later its lifetime)

jtbigwoo• 12 years ago

The locations aren't a coincidence.

-The culture in SV is very much centered on scaling quickly and taking a bunch of VC money to do it. If you're in Chicago or Atlanta, there's not that same sort of culture.

-Unless a company spends a ton of time in California seeking VC money, SV VC's aren't going to get to know companies outside of SV. There's already so much activity right on their doorsteps that there's little incentive or time to go elsewhere. Even ycombinator, which accepts applicants worldwide, makes applicants come to California to interview and work.

-The VC's that exist in other places don't usually focus on software/internet space like SV VC's do.

So founders outside of SV, NY, and Boston act more like they're starting a restaurant or a clothing store. They expect that they'll have to quickly build a profitable business before expanding too much. Nobody is going to say to a first-time restaurant owner, "We'll expect that your first 20 locations won't make any money, but once you get to 100 we'll all be rich."

(The economies of scale in software are different than restaurants, of course, so there's often valid reasons for software companies to expand as quickly as possible, that's just not an option without lots of outside money.)

EvanMiller• 12 years ago

Braintree is a Chicago company.

Adrian Holovaty (of Django fame) recently caused a stir here when he argued in front of a group of investors that Chicago is an ideal place for bootstrappers:

http://www.holovaty.com/writing/chicago-bootstrapping/

chromaton3• 12 years ago

It's a little hard to judge some of the locations. Their careers page says "Why we love Chicago, the Bay Area and New York".

https://www.braintreepayments.com/careers

But they've also got this on many of their pages: "Braintree is a registered ISO/MSP of Wells Fargo Bank, N.A., Walnut Creek, CA". I'm not sure if this location refers to Braintree or to Wells Fargo.

chromaton3• 12 years ago

Braintree: Their careers page says "Why we love Chicago, the Bay Area and New York".

https://www.braintreepayments.com/careers

WooThemes: This is the most geographically non-traditional of the lot.

http://www.woothemes.com/about/

"started in 2008 as 3 WordPress enthusiasts who met online, from 3 different countries"

http://www.woothemes.com/careers/

"WooThemes is a distributed team spanning 7 countries"

BigCommerce: offices in Sydney and Austin:

http://www.bigcommerce.com/about-us/

Litmus: Offices in Boston and London

http://litmus.com/contact

mbesto• 12 years ago

I'd argue it's considerably easier to bootstrap outside of SV.

AznHisoka• 12 years ago

"Pretty impressive for an application that was built in a dorm room by founder Paul Farnell, with just a used computer and a few hundred bucks (and over a single weekend at that)"

Not to take anything away from Litmus, but I highly doubt the entire Litmus app was written in 1 weekend. This is something I'd expect Techcrunch to write.

theseoafs• 12 years ago

Github is a web-based hosting service for software development projects that use the Git revision control system. Say what? Think of it as the Wikipedia for programmers.

Wow, what a tremendously poor description of Github.

Diamons• 12 years ago

What's the better description?

morganherlocker• 12 years ago

"Google Docs for code" is something that most people would understand.

wellboy• 12 years ago

Grindr was as well and I think still is bootstrapped to 5M+ users. Pretty impressive as a solomo app.

taf2• 12 years ago

And CallTrackingMetrics :D

shameless plug obviously but in this day and age - there are a lot of self funded companies on the internet right?

you just need to start writing code and answering the phone.

sayemm• 12 years ago

It's missing 2 really big ones...

- Craigslist: http://www.businessinsider.com/2008/4/craigslist-valuation-8...

- Plenty of Fish: http://plentyoffish.wordpress.com/2012/10/04/digital-100-mos...

gavanwoolery• 12 years ago

Not particularly noteworthy compared to the listed companies, but my brother's company Appstem has taken $0 of funding now grosses in the range of $1-3 million annually (I don't know what their books say, I only have a general idea of how much they take in per contract and pay out). They don't make a single given product like most software startups (though they do have at least one in the pipeline that I know of) - I guess they are sort of like the early version of 37 Signals in that respect.

mdellabitta• 12 years ago

http://www.squarespace.com was bootstrapped.

up_and_up• 12 years ago

37Signals has been interviewing profitable bootstrapped companies for years now. There are indepth articles about each one available here: http://37signals.com/bootstrapped

asah• 12 years ago

It's all a matter of degree: virtually all successful companies take convertible debt, venture debt and other options along the way. We call ourselves bootstrapped but the founders took no salaries, put in $100+K and took $200+K from angels to hit profitability with a team of 30 and signing up 12,000 companies.

maywoo• 12 years ago

Gliffy is bootstrapped http://www.zdnet.com/gliffy-bootstrapped-in-san-francisco-70... We're funded entirely by our customers and we're also hiring! :) http://www.gliffy.com/index-h.php

livestyle• 12 years ago

I currently work at bootstrapped, distributed and profitable startup.

This year we did appx $15mm in rev.

http://www.inc.com/profile/buysellads (member of the Inc. 500)

frankdenbow• 12 years ago

Squarespace is a great example: they raised a round only after many years of building a solid customer base (started by a lone designer/dev in his dorm room).

inthewoods• 12 years ago

Also missed Wayfair - ecommerce website bootstrapped to around $700m in revenue before they took a first round of funding.

rdoherty• 12 years ago

SmugMug was bootstrapped, never took any VC. Family owned and operated! http://www.smugmug.com/

airjd• 12 years ago

Most companies are first heard, but looks great.

paraschopra• 12 years ago

We (Wingify / Visual Website Optimizer) are completely bootstrapped.

Startups that have bootstrapped their way to profitability

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