Best of Bootstrapping: Bootstrap First, Raise Money Later

If you haven’t already, please study our Bootstrapping Course and Investor Introductions page. 

I wrote a book called Billion Dollar Unicorns a few years back. Writing this book took me through the extensive process of talking to entrepreneurs who have built tech companies with valuations above a billion dollars. While there is a tremendous amount of serendipity involved in any extraordinary success story, one recurring theme comes up in these case studies. I am particularly excited to share this nugget because it applies broadly to all classes of entrepreneurial ventures.

Bootstrap first, raise money later.

That’s what Fred Luddy did when he founded ServiceNow back in 2005. Leveraging his domain knowledge and expertise in IT ServiceDesk software, he rapidly acquired 12 customers before raising funding. Initially, he started charging $25 per seat and the 12 customers paid up. He raised $2.5 million in venture capital WITH 12 customers, and ample validation.

Soon they clocked $850,000 in revenues in their first year as a real company. In 2010, they had grown to $45 million annual revenue run rate with 350 enterprise customers. They ended fiscal 2013 with revenues of $424.7 million.

Prior to listing on the NYSE in 2012, ServiceNow was venture funded with $83.7 million in investments received from JMI equity, Greylock Partners, and Sequoia Capital. They raised $162 million in their IPO. Soon after listing, ServiceNow had touched a valuation of $3 billion. Since then, the stock has skyrocketed. It is currently trading at $234.03 with a market capitalization of $41.96 billion. Clearly, a mega hit Unicorn that started, however, by bootstrapping first.

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Featured Videos

Thursday, April 21 – 572nd 1Mby1M Mentoring Roundtable for Entrepreneurs

Entrepreneurs are invited to the 572nd FREE online 1Mby1M Mentoring Roundtable on Thursday, April 21, 2022, at 8 a.m. PDT/11 a.m. EDT/5 p.m. CEST/8:30 p.m. India IST.

If you are a serious entrepreneur, register to “pitch” and sell your business idea. You’ll receive straightforward feedback, advice on next steps, and answers to any of your questions. Others can register to “attend” to watch, learn, and interact through the online chat.

You can learn more here and REGISTER TO PITCH OR ATTEND HERE. Register and you will receive the recording by email, even if you are unable to attend. Please share with any entrepreneurs in your circle who may be interested. All are welcome!

Solo Founder to Funded FinTech Startup Scaling Rapidly: Torpago CEO Brent Jackson (Part 1)

Brent was a solo founder starting up a Fintech company. Read on how he put one foot before the other to navigate his journey.

Sramana Mitra: Let’s start at the very beginning of your journey. Where are you from? Where were you born, raised, and in what kind of background?

Video FAQs

From Developer to Successful Entrepreneur with Exit: ACCELQ CEO Mahendra Alladi (Part 2)

Sramana Mitra: What year did you start?

Mahendra Alladi: From 2006 to 2007, we were doing services. With HP, there was also a bit of a services element. I was really representing HP to their customers. There, I had a much bigger exposure. That opened up my understanding of this domain.

Sramana Mitra: How did you get into HP?

Best of Bootstrapping: Excess is NOT a Requirement for Success

If you haven’t already, please study our Bootstrapping Course and Investor Introductions page. 

Let’s do a thought experiment.

List all the things you want to do with your life if you had additional resources.

How many of these require additional money?

How much additional money do you need to acquire to afford these things?

How many of these require additional time?

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From Developer to Successful Entrepreneur with Exit: ACCELQ CEO Mahendra Alladi (Part 1)

Mahendra transitioned from a developer to a successful entrepreneur with his first company, exited it, and then started ACCELQ. ACCELQ already has 200 customers and is a profitable, bootstrapped company growing fast. A wonderful and inspiring story!

Sramana Mitra: Let’s start at the very beginning of your journey. Where are you from? Where were you born, raised, and in what kind of background?

From Developer to Serial Entrepreneur: Hevo Data CEO Manish Jethani (Part 7)

Sramana Mitra: How long did it take you to come up with a product?

Manish Jethani: This is very interesting. We signed an agreement with one customer that if we deliver that product, they will pay us $50,000.

Sramana Mitra: What kind of customer?

Manish Jethani: This was the largest food-tech delivery company in India. They were scaling hyper-fast. They didn’t have a team. After we got such strong validation, we started building the product. From my past learning, it was obvious that unless we have a very strong intent from the customer, we’re not going to build the product. The first version was out in four months. It didn’t have a lot of functionality. It wasn’t self-serve yet.

Catching Up On Readings: Post-Pandemic E-commerce

This feature from The Wall Street Journal looks at how consumers are finding a new balance between online and in-person shopping post the pandemic. In March, online spending dropped by 3.3%, the first year-over-year decline since November 2013 while spending in bricks-and-mortar stores was 11.2%. For this week’s posts, click on the paragraph links.