Comments on: Bootstrappers Beware

By: Steve Huson

Steve Huson — Thu, 05 Feb 2009 06:10:46 +0000

Tony – Great depiction of the financial challenges and personal investment in bootstrapping. I had the good fortune of being in one successful, bootstrapped company, coming into the business after it had cleared the 2nd bar. It had the benefit of being focused ona vertical market with large clients, where clients would pay for customization and consulting as a part of the mix initially, with software as a service the end product. I've seen many fail at that model – never successfully developing the product, only delivering the consulting – but this one did succeed with that model.

By: Steve Huson

Steve Huson — Wed, 04 Feb 2009 22:10:46 +0000

By: Steve Cospolich

Steve Cospolich — Mon, 22 Sep 2008 15:28:55 +0000

Excellent post. So much of that hits home. All four co-founders of my startup are working a full-time 'day job'. Hitting bar #3 will be the eureka moment for sure.

By: Jerrnej

Jerrnej — Tue, 24 Jun 2008 08:55:43 +0000

Thank you, Tony! It's so true. Looking at the “startup- rockstars” many of us are too much focused on buying a ticket to Gran Canaria in 3 months after the launch of the business rather than on focusing on the business itself

By: Mark Maunder

Mark Maunder — Mon, 23 Jun 2008 04:55:21 +0000

Besides nytimes, rescuetime has been well covered by several (arguably more relevant) publications. Kudos to Tony and Team for the amazing progress they've made in a relatively short period of time.

By: Spencer Fry

Spencer Fry — Sat, 21 Jun 2008 16:57:08 +0000

I like how you divided it into three bars. The different levels are widely neglected by people bootstrapping their own company. Simply having revenue doesn't equate to being able to pay the bills AND pay yourself.

By: jhancock

jhancock — Sat, 21 Jun 2008 06:52:03 +0000

amen brother!!! My startup is http://shellshadow.com.
We are just coming out of what turned out to be a long R&D phase and will start aggressive marketing in a few weeks.
I fully expect a 12-18 month cycle to get enough users to reach the second bar. Sure, selling to a bigger software company that has enough foresight in your product is a nice dream. But you can't count on that. You have to slog your way through and be able to survive a long long time on your own.

By: Erik Dungan

Erik Dungan — Sat, 21 Jun 2008 02:58:59 +0000

Good post.

I co-own a small web/saas firm and we've cleared all 3 bars at this point (we're about 4 years old).

One thing I'd like to throw in–if you're trying to bootstrap a startup, you can go a long way by focusing on a niche market and need. That's what we have done, and its worked great. I'd even argue that 37signals started this way with their first product (Basecamp was built for designers and consultants). If you find a niche market with a need, it makes it easy to define your requirements and promote to your target market.

Building a consumer-focused or horizontal saas startup is a nice idea, and getting written up in TechCrunch is a nice ego-boost–but its really hard to turn a profit, especially if your self-funded.

By: jbyers

jbyers — Sat, 21 Jun 2008 02:40:05 +0000

Great post, I think you've hit it dead on. Entrepreneurs are an optimistic sort, and the misestimation of how long it will take to get over the bar of profitability — with salaries — is a killer. I'd guess this above all else will scuttle a lot of small startups who are otherwise benefiting from very low costs.

By: webwright

webwright — Sat, 21 Jun 2008 01:21:05 +0000

probably worthy of another post. We started free to work out most of
the bugs and because it started out as more of a project than a
business…