
Bootstrapping Is A False Prophet - dnwalters
http://techdrawl.com/News-Post/Fresh-Voices/Bootstrapping-Is-A-False-Prophet
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nostrademons
"Bottom line, you can’t create a large, sustainable company without external
funding. Think I’m wrong? Name me five bootstrapped companies of national
significance."

Microsoft, Wal-Mart, Cargill, American Tobacco (now known as R.J. Reynolds),
and McDonalds.

A lot of the other assertions in the article are questionable. Doubling-down
on Ruby on Rails to power a scalable business? But I think the article's core
point is a real problem: too many businesses are "me too" copies with very
little innovative technology of their own. I really wish we could see more
Googles, Amazons, and BitTorrents instead of an endless parade of social news
sites.

~~~
wmf
The point seems to be that when bootstrapping, the only thing you _can_ build
is a me-too business.

And BitTorrent is amazing technology, but I wouldn't celebrate it as a
business. In fact, how are they still in business?

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celiadyer
In Atlanta, startups wear "bootstrap-financed" like a badge of honor but I
argue that unless you have a strong technologist co-founder and a really
talented founding team generally, you simply must get funding to build a team
to get serious traction. However, the angels and big VC firms here are looking
for the huge deals of old and B2B plays. I know of no local angels here who
invest in the consumer internet or real time data space other than a couple of
really small investments made following Shotput Ventures.

Look how differently investing operates in the Valley (to which Atlanta has
now lost at least 3 very promising entrepreneurs in the last 2 years). Look at
super angels like Ron Conway of SV Angel LLC who has invested in 40-50 plays
in the real time data space this year: <http://www.crunchbase.com/person/ron-
conway>. These are relatively small deals, capital light -- but they do
require some rounds of investment and are not bootstrapped.

It isn't just Atlanta. Boston and other cities outside of the Valley lose
entrepreneurs for money, too. An example is WePay, whose founders are Boston
College grads who didn't get into Tech Stars Boston but were accepted at Y
Combinator last summer to test their beta product. After Demo Day, they
recruited a couple more team members from the east coast and relocated to Palo
Alto. They've recently raised a $1.65M round from August Capital, Ron Conway,
Max Levchin (a founder of PayPal) and an A-list of other investors in their
space.

Maybe a few startups survive bootstrapping and flourish, but most are just
"strapped" and fold.

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mindcrime
I'ts hardly fair to ask to see 5 companies who have already grown from
bootstrap stage to "national prominence" as a lot of the conditions that have
helped create this "bootstrap friendly" environment are still fairly young.
Open Source software, relatively inexpensive hosting / cloud computing, rapid
development using "convention over configuration" frameworks, etc. are all
part of the ecosystem that have led people to believe that you can build a
technology company without outside funding.

I'd argue that most everybody noticing the confluence of those forces, and
starting to build a company, have not yet had time to grow their company to a
large size and level of prominence.

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dnwalters
Point well taken. I was intending more technology companies, so I'd concede
Microsoft. I wonder if opportunities like that are still viable. There might
be a licensing strategy to super company play left... I'd also add Zappos to
the list of good examples of how to build a business. A people- and service-
driven take on the done-to-death e-commerce market. Tony is a beast.

