The Most Successful Bootstrapped Companies That Used The Resources They Had
Starting a company is the most miserable and most beautiful experience any person could ever experience — well, the most miserable and beautiful experience any man could ever experience. The time and energy required alone is not easy to manage. On the other hand, the one factor that usually makes or breaks the entrepreneur is his or her ability to cope with stress.
If you can’t keep a cool head when having a clear, focused and logical mind is required, then your company will fail. A company is like a chain — it’s only as strong as the weakest link. Unfortunately, in the business of business, our ability to deal with stressful situation is being tested regularly. From accounting issues, the delays in licensing, employee problems, stress in the personal life, etc., etc., dealing with stress becomes more of a way of life.
One stress-producing position that tops all the rest is finding yourself in financial debt to another person or company. Most entrepreneurial projects can’t simply be funded by your local bank — at least not in this day and time. Entrepreneurs realistically only have two options for funding their projects: pay for the endeavor yourself or look for investors.
Investors will expect a sizable interest on the sum amount and/or a piece of the company itself — profit share. Owing money is always stressful because these investors will expect their money back — and some, in a timely fashion. You will feel pressure from them from every angle; not necessarily right in the beginning, but a few months in you’ll start catching the hints. No matter what the promised timetable looks like, they will begin to question your abilities in running a company.
Then they start asking you directly when they should expect to see some profit. I speak from experience. If you are not careful, their doubt in you can result in you questioning your own abilities. In a sense, the pressure they put on you is the catalyst to your probable downfall. There are some companies that decide to bootstrap it themselves.
They cut down on their private spending. They pick up extra jobs to increase cash flow and they give up comfort, sleep and the impossibility of bankruptcy for the possibility of making their dreams a reality. Again, I speak from experience. Here are 4 of arguably the most successful bootstrapped companies in most recent years:
Mike Arrington and Keith Teare started TechCrunch in 2005. TechCrunch quickly became one of the most-read technology websites in the world. By the year 2010, AOL purchased the company for roughly $30 million. Arrington had bootstrapped the company and personally owned 85% of it. In addition to having been a tech attorney, Arrington also worked with several startups including Anex — a company providing an online payment service that was eventually acquired for $32 million.
Storm8 was started by a group of former Facebook employees. It is a mobile gaming company founded n the year 2009. The games the company produced have been downloaded by more than 100 million devices, over 300 million times. Perry Tam, CEO, once worked on Facebook Credits, but after witnessing the success of Zygna’s Web-based games decided to get into the business himself.
Storm8 was one of the very first gaming companies to market on mobile devices. Because they hit the market early, there was little competition to deal with.
2. Gawker Media Company
Gawker was founded in 2002 by Nick Denton. Denton had an earlier startup in the event industry, First Tuesday. After selling it, he used the money for funding to build Gawker. Starting out by working out of a rented storefront for his bloggers way before building out a real office, Gawker Media is now worth an estimated $150.
Markus Frind founded PlentyofFish, one of the largest and most popular dating sites in the world — all from his very own apartment. He had worked with startups prior, so he was not completely a beginner. The site now has over 38 million users and an incredible 6 billion monthly page views. Believe it or not, the service is free. Nevertheless, the company has made quite a bit of money via advertising. ReadWriteWeb wrote that this “one-person company” has grown to make hundreds-of-millions in revenue a year and may possibly be worth as much as $1 billion — all while having avoided investors.