TL;DR - Some entrepreneurs have successfully turned their ideas into giant businesses without a boost from the venture capital world.
Helpfulness - 4
Tags - bootstrapping, successful startups, savvy entrepreneurs, self financing, Spanx, GoPro, Craiglist, GitHub
- What are some examples of successful bootstrapped companies?
- How have they become successful?
- Many successful companies started out growing slowly, without outside capital such as venture capital.
- Spanx: an American underwear maker (Founder: Sara Blakely)
- Blakely launched the business at 27 using all her personal savings ($5,000).
- Blakely even wrote and filed a patent application herself to save on legal fees.
- Blakely still owns 100 percent of Spanx (which had an estimated $400 million in 2016 sales) and has not taken any outside investment.
- GoPro: an American technology company (Founder: Nick Woodman)
- After noticing that surfers’ wrist-wrapped cameras often break loose during his surfing trip to Australia (after his previous business, FunBug, went burst in 2001), Woodman launched GoPro (originally known as Woodman Labs) in 2002 using his personal savings and a $35,000 loan from his mother.
- Woodman bootstrapped GoPro until 2012, when Foxconn invested $200 million.
- Consistently grew revenue and went public in 2014 with an IPO valued at $2.96 billion (according to Bloomberg).
- Craigslist: an American classified advertisement website (Founder: Craig Newmark)
- Started as an email newsletter to keep Newmark’s friends updated on events around San Francisco in 1995.
- Started posting jobs and listing items for sale.
- Reached a million page views per month by 1997; Newmark kept the business as a side project and did not incorporate until 1999.
- Newmark did not take any outside investment until 2004, when eBay bought 28 percent of the company’s shares for $32 million - which Newmark bought back after a lawsuit in which the company was accused of diluting eBay’s financial stake.
- Topped $690 million in revenue in 2016 (according to AIM Group).
- GitHub: an American software development platform which allows users to share their work on projects with others (Founders: Tom Preston-Werner, Chris Wanstrath, PJ Hyett)
- The founders only spent a few thousand dollars to set up the business in 2008, working remotely and meeting at coffee shops.
- The business became profitable through charged subscriptions on the day it started.
- Received a $100 investment from Andreeseen Horowitz (VC) in 2012.
- Has raised over $250 million from other investors; a funding round in 2015 valued the company at $2 billion.
- Tough Mudder: a competitive obstacle course and mud run series (Founders: Will Dean, Guy Livingstone)
- Dean and Livingstone came up with the idea of a boot-camp-style footrace that features obstacles such as barbed wire and butter-greased monkey bars in 2010.
- Spent $300 on their website and approximately $8,000 (from Dean’s bank account) on Facebook ads to advertise the company.
- Over 5,000 people ran the first Tough Mudder, and over 2 million have run the company’s races in 10 countries .
- Generated over $100 million in revenue through registration fees and sponsorship deals in 2015.
- Still has not taken any outside investment.
Follow up links:
- How to bootstrap a business, https://www.entrepreneur.com/article/305600
- Bootstrapping guide, https://neilpatel.com/blog/bootstrap-startup/
When to Bootstrap vs. Raise Equity,