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ConvertKit: How Nathan Barry Bootstrapped an Email Marketing Business (indiehackers.com)
289 points by nickhould on Mar 6, 2017 | hide | past | favorite | 120 comments



> concierge migrations

This was a hack I used on an eventually failed software venture. We were in an incubator and had about $10k and the start of a pivot. We hired 3 contractors to build an MVP in about 2 weeks. We focused on the core functionality of the product. Since we used Rails we also were able to use a module that gave us a nice admin UI around our data model. This let us do the data entry for pilot members while we got feedback on the core product. Since we were providing a way for vendors to sell products with complex facets (prices in multiple currencies, descriptions in multiple languages, complex product availability etc) we could control the data entry and also avoid building complex wizard UIs for users that surely would be given up on with our limited value prop at the time.

Thinking back on that hack I think it is definitely something I'd do again.


Cool to hear others are using the process, even in the past :)

Wrote a bit more about what migrations were like for us here: https://artplusmarketing.com/the-silver-bullet-in-convertkit...


Congrats - I've been following Nathan's journey for a few years now. I am not a customer of his web app, as his product was not built for what I do, but nevertheless I have been reading his annual 'report cards' and have bought a couple of his e-books.

Just curious for those that are lambasting his methods of marketing - how do you sell or market your products or services? Are you even involved in the marketing & sales aspect of a business, or is your role just coding, devops, finance or other?


Where are his e-books? Would love to check out what he's written about.

Edit: Here: http://nathanbarry.com/authority/


That is one of them! :) To be honest, I bought "Authority" but never got around to reading it - I am not an ebook author myself so just put it aside until one day I decide to write a book.

The other books of his that I found very useful (and inspirational) are "The App Design Handbook" and "Designing Web Applications". They are here: http://nathanbarry.com/books/


I love his book "Authority" (not affiliated with the author, just got a lot of value from it). It states that one of the best moves to make a claim of expertise is writing a book, and contains a framework to write a book about something you know in ~3 months.

http://nathanbarry.com/authority/


I can confirm.

I co-wrote a book on "growth hacking" (https://secretsaucenow.com), which really serves as a hand-held, step-by-step guide to user acquisition. (I originally called it "user acquisition" but unfortunately "growth hacking" performed 4x better in A/B tests). It was really hard to do, but wow. Sometimes the self-promotional marketing feels kind of cheesy to me, but man, it's so worth it.

First there's the cash. We've sold over $120,000 worth in the past 9 months, and did it direct without any publisher, so that's all straight into our pockets (after fees). I now have 2-3 people reaching out per week asking me if I can work for them, including big/successful YC companies.

I'm turning all of those down, but I feel like if I ever needed a job again or wanted to go freelance I could do it 100x easier because of a book.

I'm pretty proud of the book; I think the book is really good, and so far as I've found it's the only actionable Internet marketing guide out there. I put a ton of thought, effort, and energy into it. But I had no idea that a book could have such an effect in a day and age that's seemingly flooded with this kind of information.


Second time in a week I've seen you post about this(not a dig). Not quite sure there is the same sort of market for 120k in eBook sales for programming books, but your success definitely helps me hold hope my pre-sale continues to gain traction.


Talk to the people who wrote the first book on Meteor.js. I know they pulled in over $500k.

That's probably a unique case because in the beginning the documentation was so bad, but especially in new and esoteric programming languages/methods $50 is no big deal, and there are lots of willing buyers. I'd bet the HaskellBook authors pulled in 100k+ too.


True, but that seemed like a really trending market. Anyway, do you know if there are any articles, etc about their experiences?


This is not meant to be a dig but just an observation for you to think about. Your last two comments are about how it isn't or shouldn't be possible to make money.

It's true that market opportunities are hard to find, but you'll never find one if all you see is the "yes, buts". You miss 100% of the shots you don't take.


No offense taken. I'm just trying to have a healthy optimism about writing, marketing and selling a book. 500k and 120k in sales seems like outliers. Would just be great to hear more about those experiences though.


Outlier results come only from methodically searching for, taking chances on, embracing, and building on outliers.

Search for the things that no one else sees or has the vision or boldness to turn into an outlandish success.

Take a chance. Live a little. Dig deep down for your inner crazy.


Not that I'm aware of


I found the GumRoad Case Study on the meteor book:

https://s3.amazonaws.com/gumroad/blog/DiscoverMeteorCaseStud...


Adam Wathan (PHP + Laravel stuff) had a $100k book launch - http://www.productpeople.tv/81

I know a half dozen other authors of technical/programming books who have probably made between $50k to $100k over the life of their books.


I wouldn't be so sure. Programming has a distinct advantage: people can make money from programming skills. And also, people can save money on programming costs if a book teaches them/their programmer enough knowledge that outside talent isn't required.

So there's a lot more money potential for the average programming book than there is for the average novel. (Bestselling novels make much more, but only a few books get that status)


The thing about business/education/training books is that they don't have to be priced like conventional non-fiction books. You sell them on the value they provide.

If you give me a system that will help me become a full-time programmer in 12 months, making $75/hour, then I'll gladly give you hundreds of dollars for the book.

Out of 100, at least 3 people will see that value. If you charge $50/month for the book/course, and have a list of 3,000 people, you are effectively looking at a full-time income


The fact that you can't buy the book alone for $20 or so - but instead have to buy some sort of premium package that starts at $179 - is a definite put off for me, and also makes me wonder whether the content of the book is that deep/interesting, or if it's a trick to get the buyer so involved emotionally with the purchase that they'll end up believing it was absolutely worth it.

I get that by selling $300 book bundles, he only needs to sell 1/15th of what he'd need to sell if the book were $20; and that of the people who would buy the $20 book, there are probably more than 6% of them who will buy the $300 book; but it's still pretty offputting.

I'm certainly glad that I didn't have to buy K&R's C book as a $200 package complete with "file templates" and an "audio book" and "an exclusive skype session with the authors who will give you personal feedback on your C program"!


Here, $29: https://www.amazon.com/Authority-Become-Following-Financial-...

I read it in 2013, and it's probably earned me at least $100,000. That's being veeeery conservative.

Not everyone will have that experience, of course. I had an existing book series, and Authority gave me an idea for how to repurpose it into a larger business.

As for the package on his site: he probably wants to avoid support. You get a lot of it with a $20 price point, and as he wrote in the article, he's focussing on converkit. Whereas with the amazon listing, amazon handles all customer support.

(I learned that lesson with my own books. My amazon royalties are smaller than my overall business, but I'm still very glad to get them, because there's basically zero admin work required.)


Heh, I found your comment from 2013: https://news.ycombinator.com/item?id=5746020


Wow, thank you! Literally a life changing comment/purchase.


I ordered the book on Amazon after reading your and a few others' comments.

I'm also interested in the 90 day plan. Unfortunately, it is only available through the $299 package, which I don't feel comfortable paying for.


In your position, I'd get the book, read it, evaluate, and then consider whether to get the larger package.

Basically, if it seems likely to lead to a profitable idea, then $299 is trivial. If it doesn't, then just the book will be fine.

For me, it was clear from reading the book that I had an idea I should pursue. You'll probably either get that from the book, or not. If you do have something to launch, then you'll have a better idea if the rest of the package is worth it.


Weird, it isn't available for Kindle.


Ironically that's covered in the book. Raise prices until a drop-off - although I always thought that rule was for B2B not B2C - consumers are far more picky over the price.


I got it for $79 in July, 2015. Not cheap also.


Reviews are pretty mixed on Good Reads:

https://www.goodreads.com/book/show/18070394-authority


Check out the reviews on Amazon as well: https://www.amazon.com/Authority-Become-Following-Financial-...


Some of those reviews don't pass the smell test

http://fakespot.com/product/authority-become-an-expert-build...


i was interested, so i clicked through to the page ... and there's no way to just buy the book! the best i can do is a $180 package with the book and a bunch of other stuff i do not want. so i went to see if it's on amazon, and there is a hardcover edition there, but no kindle edition, despite the packages on the author's site all including ebooks. not sure if it's a deliberate barrier-to-entry (as in, "if you're not going to take the time to go through the video courses etc. too the book will do you no good") but it seemed like an odd set of decisions to me.


There used to be "just a book" option before at $49 if I remember correctly, that's when I bought it. So I'm pretty sure Nathan's decision to remove that option is intentional, or an experiment of sorts.

The book is really good; however, I would not have bought it then if I had had to pay $180. Is it worth it? Yes, if you're 100% absolutely certain that you want to create a business around a book.


Yeah, It was an experiment I started running when I focused on ConvertKit. So far it's increased revenue, but it obviously has the side effect of fewer purchases.



there's no ebook on amazon, just the hardcover


There's also this: https://gumroad.com/l/authority


You can get the audio book for $15 there.


Just asking - you were curious, but now you are not because the book is not available in the form you like best?


i'm still curious; i just know i have a ton of new paper books sitting unread in my bookshelf because whenever i go to start a new one i do it on my kindle, so i've resolved to buy new books in ebook format only. i might still buy the paper book at some point, but it's lower-priority now.

(at a higher level, i'd like to write a book sometime, but it's competing with everything else i'd like to do sometime)


Huh. "Buy my (assuredly terrible, amateurish, e-)book!" or "sign up for a free PDF copy of my book!" is one of the quickest ways to lower my opinion of a person (or website). Immediately digs a giant hole that they then have to climb out of to convince me they're not scumbag get-rich-quick scam artists or one of their hangers-on or imitators, assuming I don't just close the tab immediately on seeing that kind of thing.

Exception if there's a clear association with a real publisher and/or university, obviously.


So, wait, anyone who writes an eBook and would like to sell it is a scumbag? Unless there is a clear association with a real publisher or university? Is this opinion specific to marketing or do you hold the same disdain to programming books as well?


My observation has been that there's a strong correlation between "buy my ebook!" in a website sidebar and someone ticking boxes on some scumbag marketing process which they probably learned from someone using scumbag marketing processes to sell their ebook and lessons in the sidebar of their website about how to get rich quick selling ebooks and lessons. Apparently it works, but I'd prefer to avoid the whole mess, aside from using it as a strong signal to Beware everything else on the site.


Everything is a skill. Writing is a skill. Marketing is a skill. Some people will pay to read a book about the skill. Said writers would like to make money from writing said books.

I would think it would be fairly known if someone's books are snake oil. Just my opinion, though. Scumbag seems like a harsh judgement.


Marketing makes you a scumbag. Got it


Wow, this is pretty astounding. Congrats Nathan.

Personally though, I don't get how this kind of marketing strategy works. I unsubscribe SO FAST from things that seem like mass emails that it just wouldn't work on me. I suppose I'm a huge exception to the general public? I'm even surprised when I look over at my girlfriend's gmail how many promotions she has (not in a separate tab).


ConvertKit targets professional bloggers, podcasters, and other content creators. Generally, people who subscribe to these types of newsletters are there for the content. Getting it automatically via email is a huge perk compared to having to remember on your own and then proactively go out and find it.

For example, Indie Hackers (the site that hosts this interview) has grown to about 8000 email subscribers in the past 6 months. My newsletter has 52% open rates and very low unsubscribe rates.

Even more extreme, Ben Thompson at Stratechery has upwards of 2000 people paying him $10/month to get his private newsletter.


Yep, like everyone is saying ConvertKit is about following content creators you get a lot of value or entertainment from. We tend to get better open rates and deliverability across the board because we exclude a lot of the traditional businesses that would use email marketing poorly (purely for sales).


That's a killer advantage Nathan! I hope it holds true as the business grows.


Others have responded but I'll throw in another way to look at it. They aren't subscribing to an email list per se, the are signing up to get reminders when a content provider--that they are already interested in viewing the content from--releases said content.

It's more of a notification via email than the email itself.


Did you sign up for them? That's a big difference.

I have a ton of spam promotions that come when I join a service. I want the service, not the marketing!

But sometimes I want to follow what someone says, so I sign up. I read that stuff very attentively.

Services like convertkit tend to be used for the latter use cas: deliberate signups by interested people.


> I'm even surprised when I look over at my girlfriend's gmail how many promotions she has (not in a separate tab).

That sample gives you a potential of 50% of the market, and in my experience you are the exception and she is the rule, adjust accordingly.


Haha I know, I know, terrible stats practice. Just saying.


Great interview. Most people would have given up after two years of zero growth and paltry revenue.


Almost every company ever took two to three years to establish themselves. It's not all that incredible.

That simply distinguishes every successful business ever (with a few lucky exceptions) from the ones that failed because their owners gave up too early.

Two years is about a minimum that you should be prepared to dedicate to your newborn business if you are at all serious about it.

I've written a bit about this here:

https://jacquesmattheij.com/it-takes-three-years-to-build-a-...


Love this. I think early on I had the same idea as the commenter above—that 2-3 years without results is the anomaly and means it's time to move on.

Hopefully we can tell more stories to show that two years really should be your minimum commitment to just get traction.


Echo'ed. SaaS founder here. We had two years of slow growth before the product/market fit hit and now, years later, we're generating millions in revenue. #1 piece of advice I give to SaaS founders is to watch the talk, "The Long Slow SaaS Ramp of Death" by CEO of Constant Contact. All good cooking takes time!


This talk is so good.


Just tweeted your link, let's see how fast we can get your from $600K to $1M and up ;)

Best of luck!


> That simply distinguishes every successful business ever (with a few lucky exceptions) from the ones that failed because their owners gave up too early.

How do you know when to give up though? I've developed a great product, spent 4 years working on it and still only make enough to cover hosting bills. I'm toying with the idea of Throwing in the towel, but I'm plagued with "what ifs".


4 Years is getting to the point of having to admit defeat, though there are examples of companies that hit their stride that late or even later. The biggest - and most important to me - indicator is if there is a trend or if it is flatlining. If there is a trend and you have the stamina keep going, if it is flatlining or even declining it might be the point to throw the towel in, but first have a chat with some other people to see if they can spot something obvious (but not obvious to you!) that you might do to improve things.


Yup. My precarious period was juuuust under three years. It's eerily consistent, from other stories I've heard.


It's probably not a favorable idea here, but luck probably plays a large part in converting from X to Y a month. Of course, perseverance over a two-year period increases your chances, so it still has a ton of value.


    > Since we haven't raised money and aren't planning on a
    > big exit, I want to continue to pay myself well through
    > distributions so that offers to buy the company continue
    > to be easy to decline.
That's my favorite line from the post. People in the middle stages of building a long-term business have this tendency to think it's somehow wrong to take some portion of the profit for yourself - most believe it should be reinvested or redistributed.

This doesn't take into account that claiming a portion as yours is an investment - it's an investment to secure your own continued long-term interest in the project.

Clearly you wouldn't do it to the point where the company is suffering - but to the point where maybe you're just not growing as fast? Or have to do to add some features? Often a worthwhile tradeoff.


Very clever, this is actually a sales pitch for the product more than a 'news story'. Props for using the success to further drive success.


If you're reading about the founder of a company, chances are you're reading content marketing for that founder's company.

If you're listening to a podcast with a company founder as a guest — you're listening to content marketing.

If you're attending a free event, webinar or watching a youtube video where company founders are talking about stuff — you're watching content marketing.

I'm not saying this is bad. Content marketing basically converts at some rate relative to the value that consumers get from it so there is some merit to that. As long as people realize what their consuming, seems fine.


Dir. of Engineering at ConvertKit here. We're hiring![1]

Nathan is super smart, genuine, honest and generous. Our culture is a reflection of his personality, which makes ConvertKit a fantastic company to work for.

[1]: https://weworkremotely.com/jobs/4266-senior-rails-engineer


Former coworker of Nathan here. Will concur that he is smart and fun to work with.


I had no idea "professional bloggers" were such a lucrative market.


It is; the trick is to sell expensive shit to the "aspiring professional bloggers" demographic.

Just like the best way to live off a 4 hour work week is to write a book about how you too can live off a 4 hour work week.


Marketing is such a powerful thing.

For instance I pay $60 CAD / month to intercom.io for a website that isn't even built.

THAT's powerful. Made me pay for shit I don't even use (but going to real soon....I keep telling myself that)


impulse purchase are a real bitch... although I don't think I've ever heard intercom.io described as an impulse buy before...

Seriously though. If you've ever built a company, there will be times when you wish you had that extra $60 sitting in your account. Cancel until you are ready.


I feel pretty stupid that my impulse purchases are now SaaS subscriptions.

Intercom's marketing is doing something right clearly.


Damn, we do the same. Their marketing truly is powerful that we pay for something we'll need "real soon"


Most bloggers already use some sort of email marketing software. Having used Mailchimp, I can say that it falls into the category of software that solves the problem but isn't delightful to use. In addition to that, it lacks several features that could make automation easier, so you're pretty much out of options if you want to automate a series of emails.

Convertkit grew remarkably well because it tapped into the right problems. I think people often underestimate how giant of market "email marketing" is.


I'm aware that market is possibly the best kind of fitness evaluator for what kind of ideas the world needs - but every time I see smart people getting excited about making good money by doing what's been done so many times before makes me sad. These kind of stories should be a hopeful example for people who are not yet able to make a comfortable living, but as a community we shouldn't glorify them nearly as much as we do at the moment.


Congrats on the success Nathan! I was at your workshop in Boston back in 2013, and read Authority in 2013. It inspired me to launch https://lsathacks.com (I had an existing book series).

I've now released video courses on the site, things are going very well revenue wise, and I'm on a steady path of much further growth. I honestly don't know what would have happened had I not read Authority back when I did.

Very inspiring to see what you've done with Convertkit, and it's making me consider more direct sales.

p.s. Here's an early writeup you did, in case you don't remember. http://nathanbarry.com/authority-case-studies/


Hey Graeme! Good to hear from you. Send me an email. I'd love to hear specifics on how the book and course sales are doing now!


Note to myself: I need to build a tool for bloggers.


Nathan, thanks for telling your story! I'd like to hear what your take is on something I thought when reading this article. One factor in ConvertKit's success is that RSS is still sort of broken.

My thinking is that a big benefit of the service is that I can sign up for my favorite blogger or YouTuber to email me when they post something new, rather than checking the page a couple times a week and finding nothing new half the time. I've never found an effect RSS service for myself and I suspect many, many others feel the same. If we had, the content providers we love would reply on that instead of being a potential customer for you.


That's true. What's odd to me is that I'm not actually sure why or how RSS is broken, but bloggers are finding again and again that the engagement happens on the email list. Even though objectively RSS should be a much better experience. It just hasn't connected with bloggers and readers in the same way that email does.


I loathe cold sales e-mails/calls myself, but this almost makes me want to hire sales people for Improvely.


People don't do it because they don't loath cold callers themselves they do it because it works.

One example: when I was selling licensed software I don't think I ever managed more than $100K in annual sales (which to me seemed easy money). Enter Marco, my first employee.

Before the year was out we had nice sales documentation to go with the products, the beginnings of a brand and $600K in sales...


Can you please share a bit more details what exactly Marco did? I'm about to hire our first sales/marketing person so anything that helps understand what such people do is greatly appreciated. Thanks.


He sat me down for three days to interview me what the product(s) did (there were three of them: webcam, rtslave and webpay), made an A4 sheet with notes about market, product, USPs and features. Then each of those became a little brochure and a web-page to go with it.

He then found out where our potential customers hung out and started a conversation with them, asked if he could mail them an information package and when given permission did so.

Everything looked pretty spiffy (for the time), website and documentation linked up in a very recognizable way (a little family of buttons with a common theme adapted for each product).

before Marco:

http://web.archive.org/web/19961229205008/http://mattheij.nl...

After:

http://web.archive.org/web/19980507122555/http://mattheij.nl...

I don't have any samples of that documentation any more, but it's long ago.

Essentially Marco 'packaged' the product in a way that made sense to potential users, where I was totally relying on happy customers telling other potential customers (which worked, but I failed to recognize that many of our customers saw our product as their competitive edge and they would rather keep that to themselves).

Interesting turn to the story: we still work together.


Thank you! PS. The point about keeping to themselves is spot on.


Interesting, what was your product?


I pioneered streaming video to the browser, so the primordial 'webcam' server software (initially SGI only, later also on the PC), a piece of software to 'reflect' a single stream to many users (which you could cascade, sort of a primitive CDN for video) and a module that allowed pay-per view and a system to do the actual pay-per-view transactions. All this happened between 1995 and 1998, at which point the product became free by tying it to a service (camarades.com), which I shut down on Jan. 1st this year.


Oh, so that's who you are! I had only noticed high quality posts from your account, thanks for sharing you're knowledge all this time :)


Fantastic.


I think it depends a lot on how specific you are. I hate generic cold emails as well, so I've always struggled with this. My theory is to just personalize as much as possible. And more importantly, only reach out to relevant potential customers.

Though anyone who sends the third email after no response with something like "did you get squished by an elephant or eaten by an alligator? Because I can't think of any other reason you haven't replied" is instantly dead to me.


his blog has an ssl issue on firefox


Someone else mentioned this. Is there a link that is going to https that should be http?


I'm an idiot


Did you read the article you linked beyond the first paragraph?


Haha, the comment has since been edited (I'm guessing) but it must have linked to your post about how ConvertKit raised $1.8M.

I'm guessing this because I too spent a very confused 30 seconds before realizing I just got trolled. Well played.


Yep, it was a link to this article (http://nathanbarry.com/investment/) about "how ConvertKit raised $1.8m from a large group of angel investors".

Just read more than the title before commenting. ;)


«Bootstrapped» with 55k$ and an already succesful business is not exactly boostrapping to me.

This achievement is very impressive nonetheless. Growing a business even in a known environment is very hard, I know it first hand.

It's especially interesting that he shares numbers, some I'd love to be able to do but money is particularly taboo in my field. Having your accountant and banker tell you that your numbers are actually very good compared to others despite being under the target you set to yourself is especially comforting.

Having your banker call you and congratulate you because you're now largely cash flow positive is exhilarating.


> «Bootstrapped» with 55k$ and an already succesful business is not exactly boostrapping to me.

That's exactly what it is. $55K is next to nothing for starting any kind of company, even if you quit your job and start as a freelancer (arguably the simplest kind of company) you'll need some capital to catch you if you have a dry spell.

Business that get started on $0 are extremely rare.


It is ten times the median savings an american family has [1]

Once again I am not diminishing his accomplishments. I started my own company with the same amount of money but never claimed to have "bootstrapped"it.

We on HN live in a bubble that amazes me. I know first hand how much it costs to start a company and how hard it is to raise a 1M€ (I heard it is as hard as raising 10M$ in the valley, but never tried to raise in the US so take that with a grain of salt!). I also know it is much, much harder to get your first 1M€ of revenue. Like one of my business angel once told me "il nest de bon argent que celui du client": the only good kind of money is the customer's.

[1]http://www.cnbc.com/2016/09/12/heres-how-much-the-average-am...


> It is ten times the median savings an american family has

The median American family is not trying to start a business.

Also: if you can't manage your own funds and save please don't start a company, it will most likely not work and create misery for yourself and others.

> Once again I am not diminishing his accomplishments. I started my own company with the same amount of money but never claimed to have "bootstrapped"it.

Well, that's a problem of definition more than anything else. If you want to use the term bootstrapping as starting with nothing that's fine by me but I do note that even the word assumes the presence of boots and straps.

The key question is if the money was yours or not. If it wasn't then you weren't bootstrapping.

> We on HN live in a bubble that amazes me.

No, you choose to use terms in ways that are different from the rest of us. That's not a bubble, that's a terms issue. This can make communication hard.

> I know first hand how much it costs to start a company and how hard it is to raise a 1M€ (I heard it is as hard as raising 10M$ in the valley, but never tried to raise in the US so take that with a grain of salt!).

That depends. There is a lot of 'stupid money' floating around.

Besides, raising money is explicitly not part of bootstrapping.

> I also know it is much, much harder to get your first 1M€ of revenue.

Yes, that's true.

> Like one of my business angel once told me "il nest de bon argent que celui du client": the only good kind of money is the customer's.

Yes, that's good advice, but it comes from an investor.


Please bear with me, I am not trying to be a smart-ass like many seem to think, these are honest questions and I think that they also come from using a foreign language and coming from a different culture. I think you're right in calling that a problem of definition.

I agree with everything you said about money and investors management. I'd just add that "stupid money" probably isn't the good kind of money :-)

At least I know that I would have made a mistake accepting a large amount of that kind of money. Choosing a smaller amount coming from people I trusted more probably helped me a lot in my beginnings.

Now to my honest follow-up question: let's say a billionaire puts his 1B$ into a new venture, would you call that "boostrapping" as well?


> let's say a billionaire puts his 1B$ into a new venture, would you call that "boostrapping" as well?

Depending on how he got the billion and whether or not there is outside investment involved, possibly yes, but the term is usually used for small amounts of money (say < $100k or so). But that's a technicality.

But truth be told very few people are in that luxurious position and those that are will almost never risk all (or even a substantial part) of their private capital on an entirely new venture. So that's highly hypothetical and would take the better part of several decades before you'd be in a position to execute that phase of your bootstrap. Elon Musk comes close but even he routinely uses outside capital and so is not really bootstrapping (though I'm not aware of anybody else that is so willing to put most or all of his own money into new ventures).

Bootstrapping comes from the imagery of pulling yourself up by your bootstraps.

You come into the world naked, without substantial inherited money, you become employed somewhere, you save some money, maybe do some side jobs, one day you jump ship and go full time into your own business and your savings provide your runway. That's the textbook definition of a bootstrapped business.

It tends to produce small to mid-sized companies ($100K to $10M) in revenues and anywhere from one to 50 or so employees. It's the most sure-fire path to any kind of independence for skilled workers and has a totally different risk profile from a business that takes on outside investment. (Larger risks of failure, potentially larger returns)


Agree that is entirely hypothetical and Elon Musk is an interesting example. I know he is sometimes risking a very large proportion of his private capital on his new ventures, but I would never have called that "bootstrapping".

(Once again, let me re-iterate that I have understood that "my" definition of boostrapping is not correct)

To me, a billionaire going all out on a new project is in a better financial, business & social position. "hey look, Elon Musk has launched a new thing, took his own billion to build it, must be awesome like his past ventures" compared to "hey, here is that John Doe we never heard of with his project he built in his home. To me, with financial capital comes social capital. When you invest all your money in a project, if it's 1B$ your social status "highly affluent guy with connections up to the white house and every Fortune 500 companies" does not change and is immensely useful. If it's your 5k€ your social capital is low and will get from "successful salaried software developer" to "the noodles-eating guy who didn't have a shower in 4 days". Guess which one is most likely to win deals?


If you don't get deals because you don't shower then that's a solved problem since Roman times and you should only blame yourself ;)

Other than that, yes, billionaires have some advantages that us ordinary mortals do not have. But to stick with Elon Musk, he wasn't born a billionaire (but he did go to a private school, but that's not unheard of in SA).

Once you're past $1M net worth or so the game gets easier, sometimes a lot easier. But $1M vs $1B doesn't make much of a difference if the business tanks and you've invested all of your capital in your own business.

And that's the main reason you don't see billionaires usually spending all their money on their own projects: they spread the risk around to avoid possibly losing it all.


> If you don't get deals because you don't shower then that's a solved problem since Roman times and you should only blame yourself ;)

Absolutely!

> Once you're past $1M net worth or so the game gets easier, sometimes a lot easier.

I sometimes feel that difficulty of doing business is halved with very order of magnitude, being friends with business owners whose net worth are between 10k€ and 50M€. My 50M€ friend has access to things my 10k€ wouldn't even believe exists.

50M€ is "let me talk to the ministry chief of staff about this. I'll also talk to the CEO of a fortune 500 company about this mild inconvenience"

10k€ is queuing at the city building in the hope that maybe someone will do something about the closed road leading to your shop.

> But $1M vs $1B doesn't make much of a difference if the business tanks and you've invested all of your capital in your own business.

> And that's the main reason you don't see billionaires usually spending all their money on their own projects: they spread the risk around to avoid possibly losing it all.


You seem to misunderstand what the word "bootstrapped" means and I don't mean disrespect. Just because he put $55K of his own money does not make it any less bootstrapped. In fact, that is the definition of bootstrapped. He used his own money. He did it fulltime. You seem to have this notion that to bootstrap a business, you have to start from $0 or perhaps a very small amount.

DISCLAIMER: I bootstrapped a business with similar amount to his but nowhere near his level of success (embarassing but happy with what I have done so far in 2.5 years). We are a much smaller team though so yes, I have not spent too much on growth yet.


Just a quick definition: http://www.investopedia.com/terms/b/bootstrap.asp

> Bootstrap is a situation in which an entrepreneur starts a company with little capital. An individual is said to be boot strapping when he or she attempts to found and build a company from personal finances or from the operating revenues of the new company.


Huh, this is the first time I've heard it suggested that putting all of your savings into a company is not bootstrapping. And to add some detail, it was $5k initially, then $50k when it was time to focus on growth.


are you kidding me? This guy is the definition of bootstrapped. How do you think he got that $55K? He was bootstrapping design courses - I've been following this guy for a few years.


In fact (don't know full facts, but I too have been reading his blog for some time), I think he was a designer (of mobile apps and web sites, maybe had dev skills too), then wrote a few books for a while (on areas where he had skills, like design, later on other areas too), then used the earnings from that to start Convertkit. IIRC he even mentions this approach in one of his blog posts. Bootstrapping all the way, seems like, to me :)


I am absolutely not claiming he didn't work very hard to start his company or earning his money.

I am neither claiming he's bad or wrong or anything like that. Like jacquesm said it's probably more of a problem of definition between a dominant one and mine (in other words, looks like I am wrong). I have seen people starting companies with nothing, not even a roof on their heads. I started a company with the amazing comfort of 50k€. I am working hard to make my company a success, but I command the efforts of the guys I have seen eating noodles for years before their company finally took off. We are talking living way below the poverty line here, which is not what I lived when I started a company with 50k€


Given how easy it is these days for a developer to make €50k (e.g. by contracting on a day rate fee for a company), there really is no need to eat noodles for years. You do work for 6 months, save up €50k, and live frugally (but not crazy frugal) for a while.


Let's say 500€ daily rate (which is probably average in France with a very large standard deviation between Paris and deserted zones and factoring varying daily rates which are domain specific and experience related. No way a junior RoR freelance would make 500€ in Massif Central for instance. Likewise, 500 is low for an experienced data science freelance working in banking in Paris). 206500=60k€ gross

After social contributions, 30k€ net revenue in France (actually a little more but I take the liberty to round that down).

In large cities, 33% of revenue for housing is not uncommon. We're left with 20k€, of which we have to substract revenue taxes (rule of thumb in that revenue range, about 1 month revenue per year) so here 5k€. 15k€ for 6 months. living frugally you can probably save 2/3 so you can save 10k€ in 6 months.

Assuming these ratio, it would take 2.5 years of steady, near fulltime employment as a contractor to save these 50k and go all out on your project.


1. Assuming you keep it in a company, and actually are smart about releasing it when you need it, so you don't have to pay all the tax upfront.


"keep it in a company" at least in France won't really help you, as social contributions are collected every 3 months.

They are very good at hounding you to pay (and inversely keen on giving you back any overpaid amount ;-) ) so the incorporation does not really help here. You still owe them about half the gross revenue.


Sounds like a good reason not to bootstrap a company in France!


Yeah thats what bootstrapping is, having enough money to sustain yourself and capitalize the business without outside investors.


There will also be a bit of a taboo around talking about money, but this site (indiehackers) make it a point of talking about numbers. It's great information, and we should be trying to tear that taboo down.


This absolutely falls in the 'bootstrapped' category, as long as these are not $55k of VC money, but your own.


The book sales created enough profits to bootstrap the email business.

To stretch the analogy it like the Power Supply bootstrapping the BIOS bootstraping the Operating System loader.




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