This is a post in a blog series on "things we learned while bootstrapping from 0 to $10M in ARR". Follow me on Linkedin for new posts.
Writing about our bootstrapping journey first occurred to me when we stopped bootstrapping about a year ago. We had bootstrapped our SaaS platform Leapsome to more than 10M in ARR, had just raised a sizeable “Series A” and it seemed like a good moment. It was more of a quickly passing thought, though. The reality is that when you are bootstrapping, you are likely so deeply operationally involved in what your business is doing that you rarely think of being a public “thought leader”. And to be transparent, I’m also just not the type of person who naturally enjoys the public thought leader part.
About a week ago, a discussion during our board meeting (still something we’re getting used to, but highly beneficial) sparked the same thought again. Right now, founders that are trying to get their fledgling companies off the ground have to be capital-efficient. As a result of suddenly higher interest rates and costs of capital, the tech industry is reeling from the worst hangover in a long time and there simply isn’t a lot of funding around. For many, bootstrapping is the new default.
Jenny and I started Leapsome to have an impact — to make work fulfilling for everyone. As we built Leapsome in a very capital-efficient way, we learnt (and oftentimes that means: accidentally discovered) a few lessons that could be helpful to other founders that have to do much more with much less today. If sharing these lessons (some might be helpful, some not) can help you and have a positive impact, that’s time well invested.
Making the cup of coffee last
The journey of our startup has been unconventional. Looking back, it would be easy to say we planned it like this from day one. The reality is we didn’t — we stumbled into bootstrapping. Sitting in various co-working spaces and (much to the dismay of their owners) squatting in cafes in Berlin for hours while sipping on a single cup of coffee, we simply started doing the things we thought would generate a bit of initial traction so we had something to show to potential investors.
We started building a prototype that was very rough around the edges and talking to potential customers. We collected initial feedback, iterated, received more refined feedback and iterated a bit more. Eventually a few companies were brave enough to use our early product and actually pay for it. We decided to keep going, for that one additional iteration, and yet one more.
The early days were certainly not a walk in the park. We worked as a “team of two” for almost two years before we made our (incredibly lucky) first full-time hire. Grinding long hours as your bank balance keeps dwindling can feel threatening. Fast-forward roughly 4.5 years though, and we had bootstrapped our way to a solid business generating more than USD10M in annual recurring revenue (ARR), serving tech household names like Spotify, Unity, and Bolt, with a team of roughly 50 employees.
There are a couple of very notable tech companies — and lots of more traditional companies — that have grown to such scale without outside investment and that we look up to as role models. But you rarely hear about them. In the tech industry, sizeable venture capital investments and astronomic company valuations are seen as signs of success. You will get press coverage if you close large funding rounds — the stories of the bootstrapped companies are much less frequently told.
This blog series is therefore not a manifest for the virtue of bootstrapping. While we believe that bootstrapping made us stronger — and there are quite a few benefits which we’ll talk about — there are also clear downsides. We also always bootstrapped pragmatically, not dogmatically and raised a significant first funding round from fantastic investors last year.
Instead, we’re trying to share some practical lessons on building small & efficient teams, on (not) hiring, on capturing demand, on iterating quickly on the product front, on shaping your mini-brand, and a few more. Some of them might seem rather obvious, especially in hindsight. We’ll share them regardless, as we think they eventually became strands of our DNA.
Please don’t take them for granted. We know that luck plays a massive role in any startup story, and it certainly did in ours. We’re also at a very, very early stage of our journey: When standing next to the giants in tech, we are certainly tiny and not in a position to share nuggets of wisdom without sounding slightly preposterous.
On a personal note
The things we’ve learned are things we learned as a team, and I don’t take personal credit for them. I do think that the personal perspective can make things a little more interesting, and I also just enjoy writing. My friends and family will remember my travel diaries — I spent hours crafting fun and entertaining (I hope) posts about my adventures while the clock was ticking in hot and humid internet cafes (those were the days) and I would make extra sure to save regularly so that the next blackout wouldn’t erase that beautiful draft.
My writing habit has admittedly become quite rusty in the meantime — please bear with me. There’s also no detailed plan, just a notepad with a few quickly jotted down ideas. We’ll see how this blog evolves. If you have particular questions or suggestions for topics — please send us a message.