Funded vs. Bootstrapped: There's More Than One Way to Skin a Startup
Ben, January 26, 2015

Over the course of his career, Bob Knight won over 900 games and had over a .700 winning percentage. His 1975-76 team at Indiana went 32-0 and won the national championship. Without question, he was a successful basketball coach. He was also one of the biggest jerks in the sport. He may have been hugely successful, but he was just as well known for smacking players and throwing chairs

John Wooden also did ok as a basketball coach, to tune of 664 wins, .800+ winning percentage, and 10 national championships. But Wooden had a completely different style, when compared to Knight. When Wooden passed in 2010, the words "class act" were used frequently to describe him. Like Knight, he was an extremely successful basketball coach, but as far as I know, he never threw any chairs during a game. 

In February of 2004, a college kid launched a website out of his dorm room. By summer of the same year, the company had raised $500k. Less than a year after that, the company cashed a check for another $12.7 million in funding. Over the next couple years, the company tapped private markets for a total of $2.4 billion in funding, much of it prior to having a true business model worked out. As you might have guessed, that company turned out to be Facebook.

Contrast that with the story of another startup, Github, which didn't raise any funding until they were already doing millions of dollars in yearly revenue. They charged customers from the start, built something that people wanted, and bootstrapped the company the old fashioned way. By any measure, both Facebook and Github can be called terrific success stories.

If you listen to the noise, you'll hear some people arguing that your little bootstrapped "lifestyle" business is trivial and that VC-funded, change-the-world moonshot companies are the way to "make a dent in the universe." Others say that VC's are "evil" and that taking their money is a Faustian bargain that will ruin your business. But, to me, all of these stories add up to one fact: there's more than one way to be successful. There are nice guys who finish first and there are assholes who do as well. There are successful companies that raised enough funding to buy a small nation, and there are successful companies that raised no money at all.

There's more than one way to be successfulIt's one of those facts that, when you say it out loud, it sounds almost trivial in its obviousness. But I think it's something we should all keep in mind in all areas of life, and it's something that is easy to forget in the race to success. Just because Steve Jobs was a jerk probably doesn't mean that being a hard ass in the workplace will make me successful. Taking the path that fits my personality and goals best is probably more likely to lead to success.

If you enjoyed this post or have any thoughts, I'd love to hear from you on Twitter: @bcroesch

comments powered by Disqus