For aspiring business owners, bootstrapping either sounds like a fantastic idea, or an awful one, but nonetheless it’s one all new founders are likely to consider.
Often bootstrapped businesses can struggle, and many fail, but there’s also numerous successfully bootstrapped businesses that are today making millions.
For a small sample of some of them, here’s seven from the SmartCompany archives.
According to the founder of service operations startup AffinityLive Geoff McQueen, bootstrapping a startup is the Australian way. He told StartupSmart in a 2015 interview that Australians excel at the concept thanks to living in an environment where funding is scarce.
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“Aussies are renowned bootstrappers, we have a rep in the Bay area in the startup scene for being the kind of people that will walk through walls for our startups,” he said at the time.
“It fits right in with that American cliché, how they view Australians as growing up in a country where everything is trying to kill you. I think our entrepreneurs know all about that.”
The startup was founded in 2012, and in 2015 it raised a $2 million funding round from Blackbird Ventures and Rothenberg Ventures.
Also founded in 2012, MyDeal is an online marketplace in the same vein as eBay or Amazon. Founder Sean Senvirtne told SmartCompany in 2016 the business was 100% bootstrapped between 2012 to 2015, at which that point it took on some investment.
“Building a bootstrapped business is a nightmare; I don’t think about the issues I have run into, it’s more like the issues I haven’t ran into. You need to be able to squeeze the dollar to the absolute limit, because you don’t have the venture capital funding to go back to. But if you do this, it builds a better business as it keeps you hungry and nimble,” Senvirtne said at the time.
“Businesses that get $10-15 million in funding can tend to just sit around and wonder what to do with the money and they lose a lot of focus. When bootstrapping, you need to be able to pivot from one thing to another very very quickly and find out what works and what doesn’t.”
Emily Yue and Bridget Loudon’s consultant marketplace startup Expert360 was launched in 2013, and took on $1 million in funding in early 2014. However, before that point the two had built and ran the business entirely off credit cards.
The former management consultants said at the time the transition to being startup founders was a challenging one.
“Coming from a resource-rich environment to a lean startup, it’s totally different. You have to totally change your mindset and how you make decisions from the tiny ones right through to the big ones,” Loudon said at the time.
“We had to get laser-focused. Anything that’s not on the immediate launch and growth agenda you have to drop. We were bootstrapped from the beginning, and nothing teaches you to be lean like running a business on your credit card for six months!”
A startup that hit $750,000 in turnover in its first year after launching in 2014, Outfit bootstrapped itself for three years before taking on $1 million in investment in 2017.
Outfit, which creates a solution for enterprises to make easy, Canva-like marketing materials, held off raising funds until founder Bruce Stronge knew he could get it right.
“We wanted to bootstrap until we knew what the formula was,” he told SmartCompany last year.
A recent entrant into Australia’s business landscape, regtech company Checkbox has been pulling in numerous wins, landing a $1.77 million funding round and winning the annual pitching competition at last year’s StartCon conference, along with the 2017 Westpac Innovation Challenge.
Founder Evan Wong says he and his co-founders had poured “quite a lot of money” into the venture and had not been taking a salary from the business during its early years.
“We’re investing in product development, the business architecture and the infrastructure of the team. That’s what’s going to set us up for the next stage, which is scaling,” he says.
“If you scale prematurely, you can kill yourself scaling.”
According to Workfast co-founder and chief executive Tim Nieuwenhuis, the first thing a bootstrapped business should do is release an unfinished product.
“Don’t release your product fully done,” he told SmartCompany in March 2017.
“Create a website, put a 1300 number there, do advertising and see how many people call. Don’t just create a landing page, create a website [and] take the time to make it look like a real business that’s up and running.”
Workfast, an online platform that lets businesses hire workers at short notice around Australia, hit $1 million in revenue in the first two months of launching.
It cost Appscore founder Alex Louey and co-founder Nick Bell just $3,000 to start their app development business, which now has a revenue of $25 million.
Louey told SmartCompany last year he and his co-founder were just sitting having a beer when they said “let’s build a company together”.
“We started brainstorming about what we could do, and at that point apps were just in their infancy. We thought with our experience in digital and tech we could move into that space,” he said at the time.
“That as easy as it gets. We had an idea, and we rolled with it and started the company off 3000 bucks.”