Bootstrapping Is Hard — But Still Easier Than Venture Capital
10,000 people. When numbers get past a certain point, it can be hard to make those figures tangible. Seeing the announcements of layoffs week after week, with thousands of people being let go at a time boggles the mind. I thought of a wedding I recently attended with just shy of 200 guests. Multiplying that room by 50 and turning those happy smiles into deep sadness? If you think about it long enough it could make you cry.
Losses and layoffs are always painful — but even more so when you know that it probably did not need to happen.
I shared some of what I see as the reality behind those veiled excuses shrouding recent layoff announcements. The reaction from the LinkedIn community to that post was explosive — so many comments from folks who have experienced the many different sides of this recent fallout, like this one: “I always felt like a fool for not taking all the free money and growing beyond my means, but now I feel like a winner.”
Building a software company should not have to be a zero-sum game. But it has felt that way for a long time. Founders who dared to deliver value for their colleagues, customers, and community — making the choice to put people and profit first — were often ignored in favor of the hype machine. Sustainable growth is not as exciting as a flashy billion-dollar valuation.
Attention went to the companies that chased growth at all costs, raised as much money as possible, and secured preposterously high valuations. But venture or private equity money is never free. Investors are making a bet on your company (and many others at the same time), hoping for a big return within a few years. You only care about one business: yours.
I want to keep reminding people that there is an alternative to the upside-down VC hypergrowth rollercoaster. And really, the principles of bootstrapping are not new — this is how great businesses have always started and scaled. You focus on solving a real problem, something that people are willing to buy. You operate within your means and the organization expands as your profit does. You eschew waste. The goal is not to appeal to outside interests willing to give you money to grow. The goal is to build a meaningful company that makes money and creates value for all involved.
Bootstrapping is hard — building something lasting that can sustain its own growth takes immense effort and intentionality. But it is still easier than having a banker as a boss.
Autonomy is strength. Profit is freedom. Software companies in particular do not need an extraordinary amount of capital to get started. Choosing to bootstrap and grow organically is a direct challenge to the uber-waste and greed that got us into the problems in tech today. You can still build a $100-million business in a relatively short period of time like we did at Aha! — without taking a penny of funding.
Would you rather:
Work for a banker or for your customers, colleagues, and the community you live in?
Hustle to meet someone else’s goals or set your own growth trajectory?
Focus on raising money or on what you are building and selling?
Hire according to true needs or to suggest success?
Tell your authentic story or what you think other people want to hear?
Most founders want to build something they and others love. Bootstrapping is the best way to do that in a way that is authentic to you — so you can follow your passion to its ultimate end.
I do not enjoy drama. I find it counterproductive and even hurtful. Very high highs and very low lows can distract you from what you are truly working towards. The more money you raise, the more you feel like you have to spend. (And the more you need to make people happy.) Accepting fantastical sums of money to stave off an unsustainable burn rate that you felt compelled to reach — hiring and spending wildly — is just fundamentally backward. And in the end, real people suffer.
There will definitely be hard days and emotional moments when you bootstrap a business. Yes, it is hard. But it is always easier than the pain that comes from the twisted journey of burning through cash and constantly searching for more.
Aha! is bootstrapped and highly profitable. (We are hiring too.)