Why I'm Bootstrapping a Venture Studio (Pt. 2)
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The Journey Continues
In Part 1 I mentioned my initial inability to execute on the software products. Despite that, I was still very interested in building them
This led to my fixation with no-code and I was around in the earliest days of Bubble, et al.
Shortly after leaving my first full-time gig at a tech startup, I struggled as a freelancer. Luckily, I was then able to take a job with one of my earliest mentors and moved to San Antonio. Today, I refer to that ~two years in SA as my real-world MBA. It was a great opportunity and I learned a lot and it came with a bonus: Austin was 45 minutes up the road.
I could feel the pull to the startup epicenter and I desperately wanted to make something shake. I “retired” from the corporate role in spring 2017 with the plan to jump into tech entrepreneurship with both feet.
Slowly, I began building MVPs for people and launched an agency to partner with influencers and translate their digital offerings into SaaS products. Once my SA apartment lease was up, I finally made the move to Austin. I’d sold or donated all of my belongings so that I could travel light and be a feather in the wind — open to the possibilities as they emerged.
My first day in town coincided with the opening of Austin Startup Week and I was officially immersed in the world of startups.
I hung around Capital Factory and started to build a network while I attempted to build SiteOpp (a relaunch of OfflineList). To make ends meet I also did some freelance work building web scrapers and doing business development for a few startups based out of there.
The Second Win
Are You Ready for a Cofounder talk > heckling > convo
Bubble coaching
started with consulting > the trio had very complimentary skillsets > joining as a founder
- Christian’s key insight and understanding of the customer / scratching own itch
- Scottie initial heavy list on prototype
engineering the business model for growth
- what to charge as a fixed rate for a product with variable costs
- what’s is the growth engine (s/o Christian for white label/reseller strategy)
secret weapon: distribution is key
- because of bobby we launched with $1k mrr and 10 MUAs
- launching with a motivated, captivated audience gave us real time feedback enabling us to quickly learn what worked and what didn’t
- building with Bubble enabled us to respond just as fast
feb through april was rough, but fun. 12-15 hour days were normal while squashing bugs, building out the core functionality, dealing with the challenges that came with a scaling product. i’d read all of the stuff about finding product-market fit and how to scale but it’s different when you’re actually sitting in the seat as you cross the chasm.
By may, we were approaching $20k in mrr and growth showed no signs of slowing. We’d fixed the bugs that caused most of our customers’ heartburn and saw churn drop precipitously as a result. Because of our reseller model, new accounts showed up without us having to do any marketing.
It was around this time that folks from outside of Bobby’s group started showing up because of word of mouth: our customers were sharing their screenshots of their campaign results on facebook and people wanted to know what software they were using.
I started running the numbers because I was curious about how our growth compared to the startups you’d see in Techcrunch. To quote Paul Graham of YCombinator:
A good growth rate during YC is 5-7% a week. If you can hit 10% a week you’re doing exceptionally well.
We were doing exceptionally well. Starting in mid-March and continuing through the summer, we averaged >10% growth week-over-week for two key metrics:
- Revenue
- Net new customer accounts (inclusive of churn)
I call out those metrics specifically because in the context of Paul’s rule of thumb, he’s talking about a given startup’s north star metric in general. For example, in the early days Facebook tracked Daily Active Users (DAUs) to see track accounts were regularly logging in, and therefore getting value from the platform.
We had activity metrics that we tracked as well on a per account basis, but because we were bootstrapping we needed to focus directly on whether or not we were making money, and not a proxy metric. However, the constraint wasn’t a limitation — I’d say it was an advantage because it created the necessity to ruthlessly prioritize.
To that point, I also want to highlight the capital efficiency of the business. All told, we ended up putting about $30k on Christian’s credit card over the first few months to fund everything prior to us paying ourselves out from the free cash flow. That number includes everything: in addition to servers and software, there was rent for the townhouse on South Lamar where we lived and worked, three Freshly meal plans so we could eat healthily, our weekly team outings for tacos and salsa dancing, etc.
If you remove living expenses from the equation, the direct cost of building the business was less than 40k in MRR in August. At the pace we were growing we would’ve definitely surpassed $1M annualized run rate by the end of the year — an ROI of 1000x.
You’ll notice that I said would’ve. Unfortunately, we imploded as a team. Lol.
Per the terms of our partnership agreement, the catalyst for said implosion was forced to buy out the other two cofounders. We took our respective shares of the cash on hand and knew the business wouldn’t survive in the same way to pay out the remaining balance so mentally wrote off the rest.
Though it was a abrupt, and sad ending, I walked away with an abundance of lessons related to building a startup.
Into the Belly of the Beast
trying to figure out what was next, I worked on a few inconsequential projects while I did a bit of traveling. Ultimately, I had a couple of impactful experiences (aside from the travel) were impactful
interviewed for a venture analyst role with Precursor
- between that and a convo on twitter with Bryce [indievc], I stopped being anti-vc
worked with a software-focused private equity group
- learned about the burgeoning market for “small” software companies
after more than two years outside of the traditional workforce, I was ready to go back to getting a consistent paycheck.
Because I’d seen the view from the big company angle, and had successfully done the bootstrap from zero thing, this time I decided I to take those learnings and explore venture backed startups. had a chance to work with companies from seed to series C and saw firsthand the stressors that come from the constant pursuit of “up and to the right.”
An Opportunity for Improvement
An industrial engineer at my core, I’m constantly thinking about whether there’s a better way. I believe this is true of how we do startups.
I now see the utility of VC as an accelerant. Startups are designed to go fast in order to take marketshare, upset incumbents, and introduce new ways of doing things to wide swathes of customers and users.
Doing this well results in wealth for most parties involved when the stars align. Unfortunately, the number of people in these parties is an abysmal few. The construction of the venture capital driven ecosystem produces a lot of waste today and opportunity is far from equally distributed.
Because of this imbalance, we have a chance to improve the status quo; to build a platform that empowers and enables a new generation of entrepreneurs — and create billions of dollars in wealth in the process.
That’s why I’ve started Bootstrapital.