Bootstrapping from Arizona to $10 Million: Joshua Strebel, CEO of Pagely (Part 5)

Sramana Mitra: Interesting. Talk to me a bit about doing this in Tucson, Arizona. What are the dynamics? What is the community like and to what extent are you leveraging that community’s pros and cons?

Joshua Strebel: In the early days, we were based in Phoenix first. We moved to Tucson about four years ago. Arizona, as a whole, has a burgeoning and a very vibrant technology entrepreneurship community. They’re not Austin, Silicon Valley, or Seattle. I think it works in our favor though.

I like to use this analogy. The desert is harsh and hot. Resources are scarce. Cacti learned to soak in the water when it comes, then hold onto it to get through the whole year. I think that’s a lot like how companies are built in Arizona. They’re sustainable, smaller, and wiser. They really focus on making the most of the resources they have.

Whereas I think companies out in the major tech centers are awash of cash and fail fast. They’re going to burn through millions of dollars. It’s just not like that in Arizona. I think, as a whole, the community is very much focused on sustainability and product-market fit early on and really building a business rather than trying to get to the next round of funding.

That environment suits my wife and I as founders. We think that your focus as a business should be on the customer and on the product, and not on getting your next round or getting an exit for your investors. We prefer the dynamics of being a customer-focused company versus a Board of Directors focused company.

Sramana Mitra: This is, by the way, very much the philosophy of 1Mby1M. We’re very supportive of bootstrapping. We’re very supportive of more diverse geographies through which companies are coming up. It’s not just the hubs like the Silicon Valleys and the Seattle. We are very much in favor of capital-efficient entrepreneurship as opposed to washing companies with capital.

If you can manage it and if your growth deserves or warrants that kind of capital, that’s one thing. There are certain kinds of fat startups that require many years of engineering to build a very complex product. That’s fine. That’s one kind of entrepreneurship, but there’s a lot of gratuitous fundraising that goes on in Silicon Valley. Those are cautionary tales in our books.

Joshua Strebel: I would agree a 1000%. Maybe three out of a hundred business ideas will work well with a whole bunch of rocket fuel in those expectations. I think the other 97 have no business chasing that capital. They should just do it slower, sustainably, and build from the ground up.

Sramana Mitra: Yes. You gave two extra percentages as we say over 99% of the businesses are non-venture fundable. Our definition of entrepreneurship equals customer, revenues, and profit. Financing and exit are optional.

Joshua Strebel: In our culture and the business culture, we’ve been trained to think that going VC is the only way to do it. Case in point, I went back and talked to my alma mater. I went back to my university and gave a little presentation to the business class. Nine out of ten of them said, “I get this great idea. I can’t wait to get funded. I’m going to be the next Mark Zuckerberg.” I said, “No, you’re not.” It doesn’t work as easy as the movies.

Sramana Mitra: I’ve been pushing this concept for more than a decade now. Actually more like 12 years and I’ve written books on these. I have a LinkedIn course that has thousands of thousands of views on this topic. So yes, it’s important. But it still hasn’t gotten through partly because there are all these carriers of the other message whether it’s the media or the business school professors teaching fundraising, and not the fundamentals of business building. Thank you for your time.

This segment is part 5 in the series : Bootstrapping from Arizona to $10 Million: Joshua Strebel, CEO of Pagely
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