14 min read
Confucius once said “apply a winner’s mindset to every step of your journey, be the best at whatever it is you do - however lowly your craft might be...
Please don't misunderstand my following point. If I were launching a new business and you offered me bundles of fat funding, it would be a cold day in hell before I turned it down. Most of the time, at least.
The advantages of a VC-backed startup over a bootstrapped startup are obviously pretty enormous.
But I have a theory that severely underfunded bootstrappers might have the upper hand in one regard: I genuinely believe they have a psychological advantage over well-funded VC startup counterparts, providing an extra feather to their bow.
You might think I am clutching at straws. But in my view, some bootstrappers are aided by an almost primitive instinct of base survival, not so readily blessed to those with adequate funding.
What I am referring to is an extra gear of something. A different level of determination somehow conjured up from within when the odds are stacked against us and our backs are against the wall.
When the prospect of failing mortgage payments are alarmingly real, and smirking peers are convinced of our failure.
Without sounding overly dramatic, bootstrappers are survivors, in one way or another. They are able to dig deep and find that extra magic in some way owing to a different realm of pressure.
Not sure you agree? Well, indulge me for a moment if you can.
I remember launching a company in 2006 without a penny to my name, earlier than planned for. I was forced into the situation through circumstances beyond my control and happened to be living in Thailand at the time.
I had to downsize my nice roomy condo to a more modest dwelling in a sketchy district, and even with very affordable rent, I was constantly late in paying it.
It was an incredibly intense period.
At one point, my usually quite affable, softly spoken Thai landlady chased me down a corridor clutching a meat cleaver, screaming for the rent money. Some days, I couldn't eat, unless you count a small bowl of plain steamed rice as food.
I remember working in the dark one night after my electricity had been shut off - my laptop was connected to an extension cable, secretly plugged into the socket of my neighbor's balcony.
It really was that tough, honestly. I flirted with abject poverty for several months until bits of revenue started trickling in. Eventually, I made it work, and the business was incredibly successful for the 14 years it was active. I made a ton of money.
The early grind was worth it, and the suffering had been for something.
To be honest, I sometimes wonder how the business might have fared had I been in a more comfortable position, to begin with. As someone with an awful tendency to procrastinate, would I have succeeded without the immense pressure of having no choice but to make it work?
Without that intense pressure, I still would have found success; I am sure of that. I was pretty good at what I did and had a bunch of extremely happy clients.
But it might have taken me far longer to get there - not the several months it actually took - without the extra drive and sizzle produced out of fear, desperation, potential hunger, and maybe even homelessness.
Let me tell you; a pissed-off cleaver swinging landlady is one hell of an incentive to defeat procrastination. I can picture it right now very clearly, as if it happened five minutes ago.
The sharp steel glistened in the cheap overhead striplights, making a sharp swoosh akin to a movie sound effect, with every swing. I can recall a feeling of sudden slow motion as she chased me: in the same way a car wreck somehow feels slow motion.
And it wasn't a bluff. She had every intention of catching me with it.
You might think I am exaggerating, but I am not. Had I been wearing my usual flip-flops on that day and not my Nike joggers, there is a real possibility that I would be writing this article today missing an arm.
Now, VC-backed startups also experience pressure, of course they do. But the pressure that comes from must make this work or I am homeless and butchered is an entirely different kind of thing; one that diamonds are made of, at the risk of sounding cliched.
On the other hand, you also have what I like to call the middle grounders. Those Bootstrappers who are without funding to aggressively steam forward at breakneck speeds, but at the same time are not facing the prospect of immediate misery, through pottential failure.
They might have a stable, separate revenue stream to fall back on, a trust fund to bail them out, or without a mortgage to worry about.
These are the bootstrappers without adequate funding, but in relative comfort at the same time. Striving to make a business work and with every chance of success, but without the whip of investor pressure or desperation to encourage rapid progression.
I am not suggesting this is a bad thing, by the way. It's just a third category I have constructed:
And I could be very wrong in my opinion of course, but I believe there are two extremes driving rapid growth; well-funded and secure or on a perilous knife edge. Either one of those extremes emphasizes acceleration in different ways, compared to the relative safety of the middle ground.
Product: Custom Form Application SaaS
Founder: Aytekin Tank
Turnover: $84 million ARR (as of August 2022)
One person who knows a thing or two about bootstrapping is a gentleman named Aytekin Tank, founder of the SaaS company JotForm.
Launched on a shoestring in 2006, now with 5 million customers and an ARR of $84 million (as of 2022). It's an impressive company, headed by a rather clever, forward-thinking guy.
Aytekin might have resided in the category of less intense bootstrapping during the company's formative years, in my analysis. The middle ground. Let's take a look at why that might be, and in the process, delve into the JotForm story, now 16 years in the making.
For those unaware, JotForm provides a service allowing users to create online forms easily. Appointment requests, purchasing, membership applications, surveys, polls, sales. You name the form, and they have a solution that can easily apply to your website, landing page, email, app, or social.
Bootstrappers quite often have interesting backstories, so let's take a look at Aytekin's and see what lessons, if any, we can learn. Don't expect anything as extreme as a middle-aged landlady with murderous intent, though. I am pleased to report that his story, while impressive and valuable, contains little in the way of drama.
Born and raised in Turkey, a young Aytekin moved to the states and enrolled at college to study computer science.
Upon graduating, he got a job for a huge media company in New York as a developer. One of his recurring roles was to develop online forms for various websites: quizzes, polls, surveys, memberships, that kind of thing.
Finding the work quite repetitive and time-consuming, he began looking for plug-and-play software to help create the required forms quickly so that he might apply his skills to a broader range of tasks within the company.
Nothing existed. All he could find was Survey Monkey which, as the name implies, only provides survey forms.
I doubt anyone ever woke up one morning with a burning, passionate desire to sell forms. If such a person exists, I hope we never meet. I hate to sound harsh, but anyone with a deep affection for form building is probably not the most interesting of folk you could wish to meet for drinks, expecting a riot.
But this was not a company borne out of passion. Aytekin realized the tedious work of building various forms from scratch was likely a common pain point for other developers and web admins. With no software to provide forms easily, he began researching other markets for plug-and-play forms that could be used outside web admins and corporate websites to the broader consumer market.
Several untapped markets existed. Event management, RSVPs, schools, side-hustle website sales, the list seemed endless for providing accessible, plug-and-play forms as a service. He decided to exploit this apparent gap in the market and pursue the idea as a business venture.
With his decision to create a company in this niche, we are reminded that in business, passion is a fortunate thing only if you are lucky enough to find it. The reality for most of us is to simply go where the opportunity is, at that time.
This wasn't his first foray into business, though, having created various small online projects for a few years already. Some of his ventures produced meritable success, others not so much, but by the time he quit his job, he was making enough money from these projects to equal his primary employment.
More than that, however, he had developed experience and skills in setting up and managing ventures. Confident of JotForm's potential but aware of the time and effort it would take to create, he committed to building JotForm full-time in 2006.
This poses an interesting question; I wonder how readily he would have quit his job and jumped into the launch of JotForm full-time, had he not 'dabbled' with ventures over the proceeding few years, gaining valuable experience in the basic tenets of business?
There might be a lesson there, for those of you who are currently running side hustles in tandem with a full-time job: treat your smaller hustles as a petri dish, for your future killer business launch. A breeding ground for business confidence.
Aytekin spent six months building JotForm, before launching it as a free service. Over the next 12 months, he set about marketing by issuing press releases to tech blogs and newsletters, posting on tech forums, and encouraging his network to push the brand in any way they could. Grass roots stuff.
Now, most VC-backed startups have the luxury of dedicated employees to fill each role as they can afford the salaries. Bootstrappers, not so much. Versatility is required, and in Aytekin 's case, he had to manage all aspects of the business, including development, tech support, customer service, sales, marketing, and even PR.
An introverted character by nature, being forced to venture into unfamiliar territory such as sales and marketing would later serve him well as an employer. He could speak with some authority on the various departments he would eventually create and lead.
Bootstrappers are often forced to wear several hats, and that's a good thing. Through it, we can gain experience in unfamiliar roles and, with that, have more empathy as future employers across various departments.
Aytekin promoted JotForm as a reliable, trustworthy, secure and fast browser app. The service gained traction. Remember though, back in 2007, browser apps were not commonly used. The launch of more credible apps around this time, such as Gmail, helped bring attention to browser-based apps, and JotForm rode the wave of this interest.
After running as a free service for 12 months and garnishing 20,000 users, he launched a premium version of the app in 2007. He immediately converted 500 free users into paying subscribers, with a combined MRR of $5000 (500 subscriptions at $9 each). It was at this point that Aytekin recruited his first ever employee.
For the next five years, he added one or two more developers. Together, they strove to tweak and develop the product while nurturing a slow but steady group of subscribers.
However, he continued to manage the smaller side hustles and projects I mentioned earlier. With a steady MRR from JotForm, he could narrowly afford to keep his fingers in various side-hustle pies and slowly improve JotForm.
Maybe too much so, which brings me full circle to my initial point. Aytekin himself acknowledges that he should have ditched his various projects and side hustles from the beginning of JotForms first foray into premium memberships and the MRR that came with it.
The warm blanket of a few thousand MRR ensured a slow, steady, cautious progression over several years.
Would he have driven the business forward quicker without the comfort of a nice MRR and side hustles keeping the rent in check? We can only speculate.
But how do you go from 500 subscribers and one solitary employee to 5 million customers and 350 employees? Aggressive marketing, clever campaigns, and substantial brand drives would be the obvious answer, but Aytekin decided to take a different approach to growth.
Whenever he updated JotForm, there was an immediate increase in subscribers, so he exploited this with more frequent updates, ensuring noticeable improvements each time and, as a result, more subscribers.
He also made support forms and tickets public (optionally), which helped SEO with constant, regular posts - most of which naturally contained crucial keywords. The social proof that came with this approach was also helpful, building trust and reputation.
However, a more tangible tactic was a viral brand awareness approach. All free forms are embossed with the JotForm logo and contain the name in the shared URL. Whenever a free form was used by a customer, applicant, poll user, or subscriber, potential new customers would see JotForm branding.
This led to organic virality, and new subscribers came naturally.
Growth strategy, for the most part, focused on product improvement. As the team began to increase, he built a small number of customer outreach agents who would, amongst other things, reach out to subscribers to find out how they could improve.
Apart from the actionable feedback this provides, that's quite a good look to have as a provider, contributing further to word of mouth through a positive user experience.
A great lesson from this is that you can sometimes leverage your product to do the outreach for you at no additional cost. Marketing campaigns are, rather obviously, a proven method to push growth. But a far cheaper alternative is to think outside the box a little and leverage what you have available at your disposal.
This strategy - of using product development and customer service to win customers - speaks to the founder's background as a developer.
This is true of most companies when you think about it; core strategies usually echo the founder's experience and comfort zone.A salesman will naturally feel at home using direct response marketing for growth. A developer will naturally lean toward tech and product improvement.
JotForm hasn't been an overnight success story. It has been a gradual, careful journey focusing on customer service and product development over 16 years without any attempt at aggressive selling or catchy marketing campaigns. Indeed, they only recently employed their first ever salesperson this year - the entire company consists mainly of developers and customer service teams.
The biggest takeaway from JotForm's success speaks to Aytekin 's preference for small, incremental steps, focusing on perfection with each stage of development instead of going in all guns blazing.
But I do wonder if he could have been a little quicker about it. Without VCs pressuring him and with a small, stable, subscriber revenue stream, it could be argued he built the company as a middle grounder over that first decade.
And again, there is nothing wrong with that. I am simply acknowledging that these so called middle grounders might benefit from taking a few more risks here and there, to achieve success quicker.
I guess Aytekin just needed a crazed, meat-cleaver swinging landlady around him. He could have reached his current status in half the time.
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