I’m a bootstrapper. Always have been, always will be.
The second you depend on other people to fund you business is the second you hand over control. And who wants to do that?
For me, the main driving force behind starting my own businesses, is being able to work for myself. As long as I can pay my bills I’ve never been one to really focus on becoming a billionaire. Sure, it’d be cool to join that elite crowd, but why take the risk with someone else’s money?
Last week I blogged about Buttercoin closing its doors. While I’m not one to go speculating, I knew more to the story would eventually emerge.
Today, while doing my daily rounds, I noticed the CEO, Cedric Dahl, sat down with Coindesk for an interview.
Back in 2013, Buttercoin raised $1.3m in funding, which made the startup “one to watch” in the already crowded market. Dahl referred to this as a “tactical mistake.”
“There’s much more seed money out there. It’s much easier to raise, whereas with venture, if you’re not able to get it, the funding is over. With seed and angel money, you can keep going,” he continued.
Even though it’s not quite bootstrapping, I do agree seed and angel money is much better if you absolutely have to go that route.
I did have somewhat of an advantage when I got started working online. It was 1998 and I still lived at home with my parents and was in middle school. Therefore I could devote a lot of time and re-invest my profits for something larger.
The capital I made in the early 2000s is what eventually lead me to developing my businesses to where they are today.
You shouldn’t let that count you out though. I’ve mentored many other Entrepreneurs over the years that have went from next to nothing to millionaires all by being smart with their funds.
Right now I see a fair amount of startups gaining capital from simple arbitrage. Sure, you have traditional good ole Affiliate Marketing, but you have the more sustainable route and that’s developing your own properties.
This week on Skype I had a Grinder hit me up thanking me for telling him to start developing apps. While he said he’s a long way from being the next Candy Crush, he told me he has about 25 apps in the iOS and Google Play stores earning him a solid $X,XXX a day. Now, I hope he’ll continue going with it, and develop even more assets to diversify his business. We all know app rankings are day-to-day.
Back to the Buttercoin CEO. He said the company was growing 10-25% per week, but because he wasn’t able to secure more venture funding he had to pull the plug.
Had he founded the venture on his own capital, we would be reading a completely different story today. Even if he couldn’t have grown at his initial pace, I strongly feel that it’s better to look at it like a marathon. He even said,
“What I should’ve done is really start with a fraction of what I would actually need and once you have enough demand, raise more,”
Slow and steady wins the race.
As I said last week, Cedric and the entire Buttercoin team learned a lot from this experience, and I’m sure we’ll hear of him again in the future.
Being an Entrepreneur is a lot of fun. Watching something as little as an idea bloom into a full-fledged business is very rewarding. But rather than developing around hopes of gaining substantial funding, develop around adding value, and creating a substantial business!
Ryan Gray is the founder and CEO of NameHero, one of the fastest growing independent web hosts in the United States. Ryan has been working online since 1998 and has over two-decades experience in Internet Entrepreneurship.