
Startups that have bootstrapped their way to profitability - uptown
http://beatrixapp.com/blog/12-amazing-bootstrapped-companies.html
======
alberth
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](http://www.crunchbase.com/company/github)
[2]
[http://www.crunchbase.com/company/37signals](http://www.crunchbase.com/company/37signals)
[3] [https://angel.co/bigcommerce](https://angel.co/bigcommerce) [4]
[http://www.crunchbase.com/company/braintree-payment-
solution...](http://www.crunchbase.com/company/braintree-payment-solutions)

~~~
j45
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.

~~~
ryanbrunner
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?

~~~
beat
More to the point, why would 37signals ever _want_ to take investor money,
much less _need_ it? Surely, the founders are wealthy enough now that getting
more would just be bouncing the rubble (see Jason Cohen's "Rich vs King"), so
money is unlikely to motivate them. And from reading Jason Fried's extensive
writings, it's very clear that they're more interested in making a company
that's a truly excellent place/way to work than they are with making a company
big.

The _only_ reason to take investor money is to grow the business faster than
you can with cash flow alone - or to sell it in order to become wealthy and/or
go on to the next big idea. The 37signals apparently don't want either of
those things.

I can imagine a line of venture capitalists basically begging for them to take
some investment, and them just refusing.

~~~
arikrak
DHH discusse that here:
[http://youtu.be/fPrvnlvnu-k?t=1h12m11s](http://youtu.be/fPrvnlvnu-k?t=1h12m11s)

He says it was just to take some money off the table, and should _encourage_
the founders to stay in the game.

------
chromaton
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

~~~
EvanMiller
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/](http://www.holovaty.com/writing/chicago-bootstrapping/)

~~~
chromaton
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](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.

------
dazbradbury
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](https://www.openrent.co.uk)

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

------
sayemm
It's missing 2 really big ones...

\- Craigslist: [http://www.businessinsider.com/2008/4/craigslist-
valuation-8...](http://www.businessinsider.com/2008/4/craigslist-
valuation-80-million-in-2008-revenue-worth-5-billion)

\- Plenty of Fish:
[http://plentyoffish.wordpress.com/2012/10/04/digital-100-mos...](http://plentyoffish.wordpress.com/2012/10/04/digital-100-most-
valuable-boot-strapped-company)

------
grimtrigger
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
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
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.

~~~
fookyong
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.

------
oldstrangers
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.

------
bijanv
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](http://www.eventmobi.com)

------
AznHisoka
"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.

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

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

------
gavanwoolery
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.

------
rdoherty
SmugMug was bootstrapped, never took any VC. Family owned and operated!
[http://www.smugmug.com/](http://www.smugmug.com/)

------
maywoo
Gliffy is bootstrapped [http://www.zdnet.com/gliffy-bootstrapped-in-san-
francisco-70...](http://www.zdnet.com/gliffy-bootstrapped-in-san-
francisco-7000007976/) We're funded entirely by our customers and we're also
hiring! :)
[http://www.gliffy.com/index-h.php](http://www.gliffy.com/index-h.php)

------
asah
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.

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

------
livestyle
I currently work at bootstrapped, distributed and profitable startup.

This year we did appx $15mm in rev.

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

------
theseoafs
> 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
What's the better description?

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

------
taf2
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.

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

------
mdellabitta
[http://www.squarespace.com](http://www.squarespace.com) was bootstrapped.

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

------
airjd
Most companies are first heard, but looks great.

------
oneplusone
Freshbooks is not bootstrapped.

~~~
mijustin
> _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...](http://go.bloomberg.com/tech-deals/2012-11-26-no-vc-freshbooks-
ceo-sees-risk-capital-as-too-risky/)

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

[1] - [http://gigaom.com/2012/07/09/github-finally-raises-
funding-1...](http://gigaom.com/2012/07/09/github-finally-raises-
funding-100m-from-andreessen-horowitz/) [2] -
[http://techcrunch.com/2012/07/09/github-pours-energies-
into-...](http://techcrunch.com/2012/07/09/github-pours-energies-into-
enterprise-raises-100-million-from-power-vc-andreesen-horowitz/)

~~~
james33
True, but GitHub was bootstrapped for a long time and only raised VC after
they had been wildly successful for quite some time.

