You’re Missing Out If You Don’t Know About These 12 Bootstrapped Companies
Not all businesses receive mass amounts of funding to get them going. You’d be surprised at just how many successful companies are bootstrapped – and if you’re considering a business start-up, there’s no reason why you can’t be, too.
What is bootstrapping?
We’ve all heard of the phrase: “pull yourself up by your bootstraps”, effectively meaning to improve your situation using your own efforts only. The same can be applied to business start-ups. Bootstrapping is the act of establishing a business with very little money, without the help of investment or venture capital firms. The money that is spent on the start-up is then, in successful cases of bootstrapping, earned back by the sales made from customers.
Bootstrapping relies heavily on digital marketing to be successful. If you want to avoid a good few years of debt from starting up your business, you need to know that you have a strong audience base before you’ve even started investing money into your project. Which is exactly how these 12 bootstrapped companies, listed below, are such well-known names today.
1. Patagonia
American outdoor clothing company Patagonia is based in California and was founded by Yvon Chouinard in 1973. Believe it or not, Chouinard, aged 18 at the time, taught himself to blacksmith and used his own dissatisfaction with the climbing gear available back then to build his own company from scratch. Chouinard never took outside investment as his business continued to grow, and has achieved millions in revenue to this day.
2. Loot Crate
Subscription box service Loot Crate didn’t raise institutional capital until it had a customer base of over 600,000 and a total revenue of $100 million. Founded by Matthew Arevalo Chris Davis in 2012, Loot Crate’s early success and loyal customer base enabled Davis to bootstrap its start-up, leading it to shoot to an annual revenue of $116 million in 2015.
3. TechCrunch
As one of the most well-known online tech publishers in the world, TechCrunch was one of the first to report in such detail on business related tech news. After being founded in 2005 by Mike Arrington, with the help of Keith Teare, TechCrunch was entirely bootstrapped in its start-up, and was sold to AOL for a reported $30 million in 2010.
4. GoPro
Technology company GoPro is most famous for its versatile action cameras, and was founded in 2001 by Nick Woodman. Woodman’s idea for the company came from a solo trip he took to Indonesia, when he was frustrated to have nobody to take photos of him. He bootstrapped his company while living in his parents’ house, and has since gone on to make $11 billion at the company’s peak.
5. Cards Against Humanity
The group of eight Highland Park High School alumni who created controversial party game Cards Against Humanity received only slightly more than $15,000 in funding from Kickstarter to bootstrap the business’ start-up. It then went on to gross more than $12 million in its first year alone, mainly from running memorable marketing promotions or simply asking the consumer for money.
6. PlentyofFish
It’s indisputably one of the most popular and most used dating platforms on the internet, but there was a time when PlentyofFish was being operated small-scale out of founder Markus Frind’s apartment. Since its establishment in 2003, when Frind built the site without any venture-capital funding, Frind continued to retain complete ownership of the business until it was sold in 2015 for $575 million to The Match Group (owner of Match.com, OKCupid and Tinder).
7. Spanx
Underwear brand Spanx was a revolution and an instant success when it was founded by Sarah Blakely in 1998. Blakely achieved the near-impossible and invented a product that was not just wanted, but needed by her customer base. Oddly enough, nobody believed Spanx would be successful in its start-up days, leaving Blakely to bootstrap her business herself, growing it entirely without investment.
8. Mojang
Mojang, the Swedish video game developer behind the best-selling videogame of all time, Minecraft, was founded in 2009 by Jonas Mårtensson. Mojang took no external investment for its start-up, relying only on direct sales to players to fund additional development as the company continued to expand. Mojang was bought by Microsoft for $2.5 billion in 2014, but before then was funded solely by the money acquired from sales to the company’s keen fanbase.
9. Craigslist
Craig Newmark founded American classified advertisements website Craigslist in 1995 as an email newsletter that provided updates on the goings-on in his hometown, San Francisco. By 1997, Craigslist was averaging a million page views per month, as was its almost immediate success. Newmark bootstrapped the start-up of his company, only taking money in 2004, when eBay offered him a deal he couldn’t refuse.
10. Tuft & Needle
Mattress company Tuft & Needle was founded in 2012 by Daehee Park and John-Thomas, after JT had a disappointing experience buying a mattress. Avoiding venture capital funding, Park and JT funded the business purely on the few thousand dollars they had between them. The hard work paid off, and in just under five years, the pair had hired a team and grown their business with only their monthly profits to $100 million in revenue.
11. Scentsy
Multi-level marketing company Scentsy is now an award-winning industry leader in direct selling, but it was launched against the odds by Heidi and Orville Thompson on their family sheep farm. The Thompson sisters had very little money to get the business started, and decided to bootstrap it, relying off early customers who believed in Scentsy to fuel their growth to a revenue of $450 million.
12. GitHub
Founded in 2008 by Tom Preston-Werner, Chris Wanstrath, Scott Chacon and P. J. Hyett, GitHub is an American company that hosts software development control, allowing users to share projects with each other. The founders spent a minimum amount of money setting GitHub up, and it was only in 2018 that Microsoft acquired the company for a reported $7.5 billion.
