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Accelerating Bootstrappers


#1

A thought has been floating around in my head for a week or so: given the high rate of fatigue and failure among solo-bootstrappers, why don’t more of us team up on the few successful ideas and level them up much faster? Not to raise VC or build the next Facebook, but maybe build the next small, profitable software company (a la Balsamiq or 37Signals) and spread the wealth.

Here’s the idea in full: http://robsobers.com/accelerating-boostrappers/

Would love your thoughts!


#2

Well, I’m not sure more cooks in the kitchen is really the solution. Plus, partnerships are very tricky. It’s not impossible, but off the top of my head I can only name a few bootstrapped partnerships that weren’t people in a relationship of some sort. Example being all the people you list in your blog post are solo or solo + SO.

I think a mastermind type group where it’d be easier to talk very open about more private aspects could be useful. I’ve considered starting one, but I don’t really have the time.


#3

@Ian I’m not really talking about partnerships in the sense of bringing on co-founders; rather, building a software company using a pool of talent comprised of other bootstrappers vs. people you (can’t afford to) hire off the street.


#4

But why am I going to work at your company for free :slight_smile: No pay and not an owner. Plus, that seems kinda fuzzy legally. Though perhaps I’m just not connecting it together.


#5

Yeah, there are definitely some stumbling blocks.

But I dunno, if I were struggling to get off the ground and saw a friend’s business taking off, I’d potentially trade my few hours of spare time working on my own thing to team up and build something profitable. Of course there’d have to be some sort of profit sharing agreement in place.


#6

Nice blog post Rob. I too think IdeaLab is a cool concept.

Unfortunately, I’m with Ian on this. 1st off, partnerships are hard. Second, most bootstrappers are doing it to be independent – why would you band together when you want freedom? And I’m not even going to get into the legal aspect…

  • The thing you miss about IdeaLab is that Bill Gross started with millions in capital after selling his educational CD-ROM business Knowledge Adventure back in the 90’s. That cash allows him to be CEO and dictate which business gets to live or die – IdeaLab is not a partnership or a democracy.
  • If you want to share expenses, there are the office centers & co-shared workplaces.
  • For getting started + learning, there are numerous incubators. Not worth the equity in my opinion, but I’m sure some could find them useful.
  • For cross-promotion, you can just reach out to the companies you like and make no risk “gentlemen agreements”.

Also, having 2 or more struggling entrepreneurs join force doesn’t actually produce anything better. Mating 2 turkeys don’t make an eagle:slight_smile:


#7

It’s possible that people would be more willing to barter skills. The obvious swap being design and dev skills, but could include helping out a fellow bootstrapper with their Adwords Campaign in return for some copywriting help, that kind of thing. Barter economies tend to work best when swaps don’t need to be direct - so by offering someone your skills you get some credits that can be used up with anyone in the pool. Therefore they need a fair number of people and a bit of organisation.


#8

This definitely not what I’m advocating.

What I’m saying is that once someone has clearly built a viable business (think Rob Walling with Drip or Garrett Dimon with Sifter) and hits growth mode, rather than do it alone and go super-slow or grapple with 1.) I really should hire someone but I don’t have money and 2.) I really want to quit my day job but I don’t have quite enough revenue yet – I say bring on another bootstrapper who might be in walking dead mode or in between ideas.

The main idea in sentence is: when there’s a horse that’s a clear winner, double-down and accelerate the growth by adding more talent and time to the project without having to hire or quit your day job.


#9

@rsobers I agree that doubling down when you’re getting traction is a great move. However, if you take the P.O.V of the entrepreneur w/ the winning product, why would he/she have revenue share or take on some kind of partner when he/she doesn’t have to? I sure wouldn’t do it. If I need help doubling down, that’s what employees and freelancers/oDesk are for. No need to share the spoils.

I think your idea is a great one – it just falls apart when you consider the details. Then again, maybe it could work w/ the right people.

@rachelandrew’s idea of barter is pretty cool, and in fact is what most entrepreneurs do to help each other – just not in a formal way.


#10

For the chance of building something better than they could on their own. I know there are definitely holes in this idea, and quite frankly, I’m not sure that I would do it myself. :smile:

Maybe this isn’t a good solution–but I certainly do still feel that there are lots of hidden opportunities to level-up successful bootstrapped products to highly profitable small software companies. (Or maybe no one actually wants that.)


#11

Me and my cofounder fantasized about something similar. An inverse-VC type setup.

When you go for a VC, you ask to exchange a small percentage of ownership for a large stack of cash. Similar with accelerators, but they’re normally selling knowledge instead of cash. However, a lifestyle venture could, with a similar fund or group of bootstrappers pooling together, crank out lifestyle businesses. Instead of pitch decks being homerun swings, they’d be founders looking to get hired to build their dream (and help others build dreams if it fails).

This definitely goes well with the blog post saying that making good money and building products people love are the important parts. Hiring a culture of learning, inspired people could produce a series of small but profitable pieces of software that make lives better.

You could have a flat or mostly-flat setup like some other businesses (Valve, GitHub, etc) where people join products to make them happen. New hires come from pitches of people wanting to build something new or join in on an existing promising or profitable product. “Management” is exchanged for experts and everybody owns a piece of the company.

Again, this is mostly just fantasizing, but the idea is to create a collaborative, communal environment where people can work on making super amazing products and grow themselves. IMO such an environment would be a success story if it can regularly pay above market value (preferrably high above) and gets known as a haven of really intelligent, passionate people that then attracts and retains the best talent.

Edit: The biggest challenge here seems to be chicken-and-egg. The idea almost precludes wealthy investors dropping in cash but also might be nearly impossible to get a group of people to build the first couple of products. Any ideas on how to get such a thing started?


#12

I think you are underestimating the risks associated with having somebody else join your team.

Your reply is phrased in that gimmicky sales way that scamy SEO or PPC companies use when trying to sell me. “you don’t want more business?” :wink:

It always comes down to cost though. Its not like anybody doesn’t want to be more successful its just there are huge costs and risks by bringing somebody else on.

Even if some hugely successful solo bootstrapper wanted to join my company and work for free I’d be hesitant to work with them. Would they gel with the other partners? Would they understand the niche we are in? What would they do? How long will it take to ramp them up? How long will they stick around? What is their ultimate goal?

And you know the second the new person starts increasing revenue they are going to want a piece of the pie and then I’d have to deal with equity negotiations and lawyers.


#13

Maybe I missed the mark with this post, but I’m shocked by how much everyone wants to go at it alone.

I think it’s easy to fantasize about flying solo when you’re in the very early stages, but your tune might change if you’re lucky enough to hit scale.

Are you going to do all the support, server admin, design, marketing, accounting, and programming when you’ve got 100 customers? 500 customers?

Of course you could eventually quit your job and try to hire talent, but you’ll be competing with funded startups and big companies that will likely outbid for developers and designers. Or maybe you scale up to what you can handle alone and stop there (which is fine). But I think my idea could be a cheat code for growing past a one-person operation a la Fog Creek Software and 37Signals (both bootstrapped with more than one person).


#14

I think you’re on the right track but the idea could use some work.

I’d join a mastermind group that meets up and talks to each other weekly or daily, giving advice and helping eachother out on our own products. That sounds more reasonable to me.


#15

Assembly are actually trying to solve this issue at the moment with varying degrees of success. The issue they have had was figuring out a way to evenly split the profit, shares etc. Assembly takes a stake in the company which is deal breaker for me.

I think the ideas great collaborating on projects is fantastic but in practise its going to be tough without set guidelines and expectations


#16

As someone who’s gone it alone and wished for help I agree with that part :smile:

There’s definitely times I wish we had a partner. I’m just not sure this is the right way to go about it. I think it’s simpler if you set it up before anyone’s really rolling. Say if a few people agree (and via contract) to work closely together on different products and then after 1 year all of them will focus on the one with the most traction or something like that.

Otherwise wouldn’t I just hire you if I already had traction? It’s very messy to try and cut somebody in after you’re rolling (not just because of money, as mentioned above).


#17

Really interesting article. Thanks Rob for sharing.


#18

This approach actually might work for an agency-style organization where all the members are interested in consulting work, just maybe not full-time consulting work. I know I’ve seen examples of shops that are basically ad-hoc, but I suspect they need some sort of rainmaker. If someone has the hustle, or the reputation, to bring in new work, then you assemble a team per-project.

I recall reading about Doejo, a firm in Chicago that basically started out as a bunch of people working at a coffee shop. They started collaborating, and worked for years as a collective - though I think nowadays they are basically a straightforward agency with an interesting backstory.

But products are different - when successful, they probably last too long to withstand repeated collaboration among equals. And the challenges they encounter tend to be less about finding a person to do ‘x’ and more about strategy, etc.


#19

Translating this to bootstrappers: in a mastermind, when one of the
members starts getting serious traction with their product, 1 or 2 of
the other members can elect to sideline their own products and join the
promising one in hopes of making it a winner (where winner == a small,
highly profitable software business).

I think the stumbling block for most folks on this thread is the following question, which your article didn’t answer for me (or the replies here, Rob):

  • What does the advising founder get out of this deal?
  • Why would an advising founder be motivated to drop their product (which they would have passion for, presumably) and join someone else’s (which they may like, but not have expertise or passion for), just because of possible success?

That second point seems contrary to every bootstrapper’s inclinations that I’ve ever met–they have a passion for something, expertise in an area and the ability to match a problem with a product and get it to market. You’re asking them to drop what they’re good at in favor of something they aren’t really invested in…

That’s what I see as the issue here.


#20

You must hang around very successful bootstrappers. :smile:

I often see many really smart and talented bootstrappers that are working on any number of ideas, which they’re passionate about, but none of them ever quite take off enough to go full-time on it.

The seed of this idea for me was taking those smart people who haven’t quite been able to make their ideas profitable and merge them with bootstrappers who have struck a chord and are trying to scale but are resource constrained and don’t want to raise money.

The one thing I haven’t thought about and which could be the thing that makes this idea DOA is the compensation part.

Again this was just an idea for how we can turn 1-person boostrapped companies into Balsamiqs, Fog Creeks, and 37Signals, which I think could be a net-win for many people in our little circle of builders.