Bootstrapping to $13 Million from the UK: David Lloyd, CEO of The Intern Group (Part 1)

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

I am very bullish about market opportunities that are large enough to build sizable businesses but not large enough such that VCs end up funding numerous competing companies. This case study shows you how a niche player with a $150 million TAM is growing nicely without outside financing.

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?

David Lloyd: I’m from the UK. I was born in London. I spent the first 22 years of my life in London before spending >>>

6 Investor Podcasts and Linking Bootstrapping to Financing

I’m a huge proponent of bootstrapped entrepreneurship. Having worked within the Silicon Valley startup ecosystem for all these years, I’ve observed with interest the development of different ecosystems in different parts of the world. Bootstrapping happens to be one of the really important ways that startup ecosystems come up. You get a few startups that become successful in a bootstrapped manner and then the investments start.

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Bootstrapping from Indiana: Passageways CEO Paroon Chadha (Part 7)

Paroon Chadha: There is a nuanced point that I’m trying to make here. I love Chris like a brother. He has worked with me for 10 years. I don’t think there will be another person who’ll ever be smarter than him. At the same time, what we needed at that time was not something we could have done together.

What we did after was to build a true SaaS subscription mentality. The marketing, sales, and tooling had to be done differently. In general, there’s a lot of evolution that happened. I had that to really leverage as well.

Sramana Mitra: Last question is about what you said about buying your other shareholders out. They took their money and left. Could you elaborate on that? You haven’t exited and you haven’t taken any financing except for that $100,000. What financial engineering did you do to give your co-founders exits?

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Bootstrapping from Indiana: Passageways CEO Paroon Chadha (Part 6)

Sramana Mitra: It sounds like when you did the cloud strategy, you almost did it with a different product. Even though the technology was the same, the positioning was quite different. The board technology was for the cloud software.

Paroon Chadha: As an organization, we made the jump from being a Windows company to a web company, and from a web company to a cloud company, from a cloud company to a mobile company, then from mobile into social; there’re not a lot of companies that can do that. There’s a reason for it. People who build that technology and who come up with that strategy have a firm world view. You have to destroy your own world to get to the next level. >>>

Bootstrapping from Indiana: Passageways CEO Paroon Chadha (Part 5)

Paroon Chadha: We started to see some cross-pollination. We were pulling some leads that we didn’t really plan for. It was a little bit organic. We needed to move out of financial because the financial sector was stalling. We found ourselves selling in hospitals with some success.

Then we ran into a very interesting founder challenge. They were more personal in nature than anything else. Chris took some time off. We needed to make a move. The product that we >>>

Bootstrapping from Indiana: Passageways CEO Paroon Chadha (Part 4)

Paroon Chadha: If one has to learn a business, you’d rather start out from where your foundation is good. Raising capital and accelerating based on your balance sheet is a thing you can do anytime. If you have a solid core business, it’ll happen. The reverse of that is not possible.

If you fund your initial journey, but you don’t have a business model figured out yet, then you still don’t know whether you’re a business or not. We were profitable from year one. We never raised more money. Up until this point, I am still working completely in the bootstrapped mode. Now we are about 65 employees. Hopefully, we’ll get to 100 by the end >>>

Bootstrapping from Indiana: Passageways CEO Paroon Chadha (Part 3)

Sramana Mitra: This was 150 users through that credit union customer?

Paroon Chadha: Yes.

Sramana Mitra: You had one anchor customer and you had a software that was receiving feedback from the beginning.

Paroon Chadha: Chris was writing code, and I was out selling. We didn’t fear anything at that time. I wish I could be like that again. We really went in and looked for funding and customers. Our finance professor was the Chairman of the Purdue Federal >>>

Bootstrapping from Indiana: Passageways CEO Paroon Chadha (Part 2)

Paroon Chadha: You are never going to be surrounded by so many super smart and super open people in your life. When you’re at school, there are a lot of engineers and computer scientists. There are a lot of people who are good at math. You can pretty much come up with any idea and if you try hard enough, you can find two or three people who will start meeting around that idea.

Forming a company is a real possibility. I realized that going into school and I really started to look for a good way to do this. My co-founder Christopher Beltran was an undergraduate. We were part of an e-commerce club. In 1999, Yahoo! and eBay were the two hot companies. Yahoo! was a portal company in the consumer space and eBay was an auction engine.

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