Bootstrapping Profits - Valiocon 2013

A story about bootstrapping BuySellAds.

Transcript

1. Bootstrapping Profits
   Otherwise known as “building a business”
   Thursday, June 6, 13
   

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2. )
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   we’ll get back
   to this later...
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3. Thursday, June 6, 13
   

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4. CLICK HERE!
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5. We make buying and selling ads easier,
   and more efficient
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6. 5 YEARS
   $50 MILLION
   $0 RAISED
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7. Not the largest
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8. We’re also not the smallest
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9. Cape Porpoise
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10. credit: http://www.broadsheet.ie/2012/08/01/spectrum-48k-was-better/
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11. credit: http://www.edibleapple.com/2009/02/09/oregon-trail-coming-to-the-iphone-eventually/
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12. I’m not a whiz-kid
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13. Thursday, June 6, 13
    

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14. Thursday, June 6, 13
    

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15. Thursday, June 6, 13
    

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16. Thursday, June 6, 13
    

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17. Thursday, June 6, 13
    

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18. Hmmm... will this work?
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19. The first spreadsheet I built to
    validate the money side of BuySellAds
    What?
    OK...
    Amazon Web
    Services S3
    Whoops...
    not gonna
    scale forever,
    $140,000...
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20. Trying to figure out which payment processor to go with
    Sometimes a
    random number
    can become
    reality
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21. High-tech expense projection worksheet
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22. February 2007
    Came up with idea
    September 2007
    Finished Version 1
    Started at HubSpot
    Full-time
    February 2008
    Launched BuySellAds
    January 2009
    BSA full-time
    2 years, concept to real working product, replacing my full-time salary
    (with a 6 month hiatus)
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23. Making the jump from
    nights & weekends to real business
    Time to quit
    full-time job
    worst case
    best case
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24. What Actually Happened
    Yay, the
    math worked!
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25. Business Structure
    ...or lack thereof
    Risky? YEP.
    But I don’t have any money, so who cares? Sue me...
    Setup Cost = $0
    Todd Garland (doing business as) BuySellAds
    Thursday, June 6, 13
    

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26. If you want the “nitty gritty”
    Starting + Sustaining
    by Garrett Dimon
    http://startingandsustaining.com/
    buy this book ($99)
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27. Sorry...
    I’m not going to plug Drew & Josh’s book
    I assume you all already have it...
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28. How did we attract
    our first users?
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29. Hi David,
    I noticed you have a bunch of sponsors in the sidebar. I’d love to help make it easier for you
    to manage those, and also bring you some new advertisers.
    We’re still in private beta, but the product is solid, and working really well for
    logopond.com, csselite.com, and 13styles.com. I’d love to add you to the list.
    If you’re interested to see what inside, here’s an invitation code:
    http://buysellads.com/register/?invite=HKSius98S98
    If you have questions or if there is anything I can do to help, please let me know.
    Cheers,
    Todd
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30. Didn’t waste time building features
    that could be easily faked.
    Stayed in “private beta” for over a year,
    using the fake invite system.
    (I’m not sure this works very well today...)
    We were responsive.
    (everyone is these days, and now you have to be UBER-responsive)
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31. How did I hire our
    first employee?
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32. Original email thread I sent to who
    is now BuySellAds’ co-founder @nathandev
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33. I’m still in
    high school
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34. If you are not a developer, how do you...?
    If you’re not an accountant, how do you...?
    If you’re not a sales person, how do you...?
    If you’re not a good manager, how do you...?
    If you don’t know how to ride a bike, how do you...?
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35. Figure it out!
    Re-source-ful-ness
    come on!
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36. Bootstrapping
    Revenue - Expenses = Profit
    PROFIT (you hope) IS > $0
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37. Inc500 2012
    founded on personal savings
    started with less then $10,000
    33%
    77%
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38. Thursday, June 6, 13
    

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39. BuySellAds.com domain
    Dedicated Server
    Authorize.net account
    SSL Certificate
    Fastmail.fm Email Hosting
    What does it cost to get started?
    $2,200
    $350
    $35
    $99
    $5
    $2,299 one-time
    $390 monthly
    formal apology to John Collison
    for not being a Stripe customer (yet)
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40. Less than 1% of companies
    started each year
    raise venture capital
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41. 76% of tech companies acquired in 2012 had not raised
    institutional investment (VC/PE) prior to acquisition
    http://www.cbinsights.com/blog/acquisitions/tech-mergers-acquisitions-deals-2012-report
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42. Yet...
    14,100
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43. Let’s refine that query...
    9,370
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44. Still want to bootstrap?
    143,000
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45. For each bootstrapping related
    article written on TechCrunch there are
    OVER 15
    written about venture funding
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46. OK, so let’s look at a more serious publication
    venture capital
    1,271
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47. Drumroll please...
    bootstrap
    9 (nine)
    1992!!!
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48. What gives?
    Nothing... it’s just the way it is.
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49. Thursday, June 6, 13
    

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50. Could not secure coverage for this beautiful
    product to save our life.
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51. NOBODY CARES!
    The only real advice you need about bootstrapping
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52. If you need to win awards...
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53. Thursday, June 6, 13
    

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54. If you need to build traction
    through press coverage...
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55. Go raise some money...
    (it’s OK)
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56. Let’s do the math
    But Wait!
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57. Widget Co.
    35% in exchange for 3 million Series A
    20% allocated to employees & executives
    25% in exchange for 7 million Series B
    10% for each founder
    +
    = 100%
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58. 50% of exits are less than $50 million
    http://www.cbinsights.com/blog/acquisitions/tech-mergers-acquisitions-deals-2012-report
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59. Acquisition price (all cash): $50 million
    Investor 1 owns 35%: $17.5 million
    Employees own 20%: $10 million
    Each founder owns 10%: $5 million
    Investor 2 owns 25%: $12.5 million (each)
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60. Don’t forget about Uncle Sam!
    $5,000,000 million
    - Uncle Sam’s cut
    $4,000,000 million
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61. What can you do with 4 million bucks?
    1. Pay off your mortgage or buy a house
    2. Watch it collect dust in your bank account
    (or agonize over the ups and downs of the stock market)
    ... and we didn’t even assume what would
    happen if it were a cash and stock deal
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62. Acquisition Price (all cash): $50 Million
    with $0 raised
    Each founder owns 45%: $22.5 million
    Employees own 10%: $5 million
    (each)
    After Uncle Sam - $18 Million each
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63. What can you do with 18 million bucks?
    1. Pay off your mortgage or buy a house
    2. Watch it collect dust in your bank account
    (or agonize over the ups and downs of the stock market)
    3. Spend as much time with your family for
    the rest of your life as you would like...
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64. (
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65. There’s absolutely nothing wrong
    with raising cash to
    execute your plan
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66. High-risk
    High-reward
    (with other people’s money)
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67. All money comes with strings
    Make sure they’re strings
    you can and want to live with
    that’s one vicious fish hook!
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68. Just because you are
    bootstrapping now...
    doesn’t mean you will
    always have to bootstrap
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69. ...all bootstrapped in the beginning
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70. Microsoft and GitHub founders are
    STUPID RICH
    because of bootstrapping
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71. Why we (BuySellAds) are not
    raising capital?
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72. We like being in TOTAL control
    Many reasons...
    Not sure what we’d do with the money
    and...
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73. Thursday, June 6, 13
    

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74. family-first
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75. Thursday, June 6, 13
    

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76. BuySellAds is a remote team
    3 in Boston
    4 in California
    2 in Toronto
    1 in Quebec
    1 in Leipzig, Deutschland
    1 in London
    1 in Texas
    1 in Maine
    1 in Romania
    1 in Bangladesh
    3 in North Carolina
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77. I’m nervous how that would
    change if we raised some cash
    We’re not interested in
    operating un-profitably ahead
    of growth.
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78. Let your passion prevail
    Don’t get caught up in all the hype
    &
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79. Build Build Build
    Ship Ship Ship
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80. and most importantly...
    Make sure the MATH WORKS
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81. @toddo
    http://BuySellAds.com
    todd@buysellads.com
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