I always wanted to build something big.
When I started Tech Ladies in 2015 as a coffee meetup in New York City, I could immediately see the potential for it to grow into something larger. As a woman in tech myself, I craved a network to support me through the unique challenges I faced in the workplace. I also realized I was sitting on the answer to the “pipeline problem” that every tech company at the time was claiming prevented them from hiring more women in tech. It seemed like such a simple solution to connect our community with those who wanted to diversify their teams.
Of course, when you’re building something big in tech, most people expect that you’ll raise money to help you grow that big thing faster. While nearly all the founders around me were going the VC route, I decided bootstrapping would be better for us. And now, all these years later, I’m so glad I built it this way.
Don’t get me wrong, there are downsides to bootstrapping your business: You will move slower in staffing up your team, you will operate in lean ways that make you miss out on some opportunities to test at scale, you could lose out to a well-funded competitor who gets market share of what you’re doing (although I find that last one to be somewhat rare). And sure, I had moments when I felt wistful about the glamor of raising venture capital. It would have been nice to have a quick win, to be able to say I raised millions and therefore had a solid idea that important people thought was going to be profitable for them. Sometimes I wished I had a shiny office like all of my founder friends, and the ability to hire right away, staff up, and get this thing as big as we could make it.
But ultimately, none of that stopped our growth. Today, Tech Ladies is the largest community of women in tech with over 150,000 members and generating millions in revenue. We’ve helped hundreds of women find jobs in tech and helped companies diversify their teams. We’ve offered events, training, networking, and resources to women in tech and have had a huge impact in the industry. And I got to do it all without sacrificing my vision (or a percentage of my company).
Damn, I really built a company that employs 6 people, has helped hundreds of women get jobs in tech (where we are still grossly underrepresented) all without a dime of venture capital and now we are doing millions in revenue to continue our mission 🚀
— Allison Esposito Medina (@techladyallison) April 23, 2022
Here are some of the reasons why bootstrapping was the right path for me and the ways it has helped our company succeed since.
I Proved My Vision Quickly, But It Wasn’t VC Scale
The first indicator that I could bootstrap was the pace at which I started generating revenue that would, in turn, support business growth.
Early on, we started charging companies to place job postings in our weekly newsletter. At the time, the community only had 3,000 members but, because it was an incredible high-quality group of smart women in tech, it was a great pool to hire from. When the postings started bringing in around $5,000 a month and I didn’t have time to reply to every request coming in, I knew it was time to leave my job and work on building Tech Ladies full-time.
Since it seemed like everyone around me was raising money from venture capital firms, I figured I should take a few meetings with some VC connections I had made over the years. From the first meeting, a friendly VC encouraged me to put together a pitch that would promise outsized returns. “How is this a billion dollar company?” he asked. Embarrassingly, I returned with a blank stare and fumbled some answer off the top of my head. Another VC offered me a $50,000 check on the spot if I would just tell him I was “building the LinkedIn for women.”
I went back to my desk later that night and started drafting up some copy around how Tech Ladies could be a billion-dollar business. But everything I wrote felt out of touch with reality, or like a huge exaggeration. When I thought about becoming a massive social network, it didn’t sit right, and I wasn’t sure we could maintain our quality at that scale. I glanced over at the whiteboard next to me where I had clearly mapped out a bootstrapped pathway to make $500,000 our first year, a million after that, and $10 million in the following years. I was the sole owner of this company. Why would I not take a swing at that?
I canceled all the rest of my VC meetings and got back to building.
Very early on a VC I met with told me "Tech Ladies" wasn't a good name because it didn't "sound serious enough."
So glad I didn't listen 🙉
— Allison Esposito Medina (@techladyallison) August 29, 2022
Going all in on your business without venture capital can be scary. But I asked myself: Do I want to be the founder who burned through $20-30 million in capital trying to build something I don’t totally believe in, or the founder who made even $5-10 million building something smaller but meaningful? Yes, some companies need to raise venture capital because they can’t create revenue until they spend years finalizing their product. But a surprising number can start making an impact (and a profit) quickly. I felt in my gut that was the right path for Tech Ladies.
I’ve Had to Make Everything Work ASAP
As we all know from watching the rise and fall of unicorn startups, raising money actually says very little about whether a company will succeed. Many companies that go the VC route spend a lot of time and money spinning their wheels without ever quite figuring out how to make a profit.
The thing I always tell people about bootstrapping, on the other hand, is that everything has to work. You don’t have six months to ponder revenue models—you have to get to profitability as soon as possible. You don’t have time to debate different strategies—you need to start trying them and see what sticks.
That’s the hard part about bootstrapping, but also the great part. Building a successful company isn’t about getting a few rich people to believe in you, it’s about putting something out into the world that people think is valuable enough to pay for. I’m glad we were forced to figure that out instead of having the money to try a business model for years and have it ultimately not work out.
This isn’t to say we never had failures, we just had to learn from them and adjust very quickly. For example, when you’re bootstrapping it’s very easy to be overprotective of your revenue. After all, that’s your money at the end of the day, so investing it back in the business is another muscle you need to learn to build. For me, one of our biggest mistakes was not hiring full-time people to the team sooner. I think we could have accelerated our growth by about two years if we had made one to two strategic hires, instead of me stubbornly running everything on my own with a few freelancers.
Of course, there were times when I looked at venture-backed companies and dreamed of sitting in their beautiful offices with their massive teams. But I was okay with learning to live without that so I could stay focused on what really matters: the thing we were building and whether it serves people.
I’ve Been Able to Stay Dedicated & Responsive to My Community
Bootstrapping has been especially powerful because I’ve been able to stay focused on our community and our clients as our bosses, rather than having to balance shareholder interests, too.
Like many community-oriented businesses, we have a tight feedback loop with our members and are always paying attention to how we can better serve them. Unlike VC-backed businesses, we can stay really nimble and adjust with our members as their needs change over time. We’ve had instances where we’ve beaten companies with huge amounts of venture capital because we were able to ship something quickly while they were still running things by their biggest investor, putting together reports, and debating the plan.
While they were scaling up global teams that never panned out, we were focused on getting hires for our partners, hosting events that resonated with our community, and building a paid community to help women in tech grow their careers.
Ultimately, my favorite thing about bootstrapping a business is that it's available to everyone and ready for the taking. The only thing holding any of us back is limiting beliefs about what we can build, how we can build it, and if we even deserve it. That’s especially important given that only 2 percent of venture capital funding went to women-owned businesses in 2021. We can talk about all the societal changes that need to happen to fix that—and I’m personally investing my own capital in women-founded companies I believe in—but in the meantime, I hope more founders will stop waiting for permission from the VC powers that be and start working on their ideas on their own terms.
You can build any company you want on the internet right now and make millions of dollars doing it. Why not get started?
Want to learn more of my bootstrapping strategies? Subscribe to my newsletter, Bootstrap to Millions (with Allison), for more regular advice and stories from Tech Ladies’ growth.
By: Allison Esposito Medina
Title: All the Founders Around Me Were Raising Money — Here’s Why I Didn’t
Sourced From: buffer.com/resources/all-the-founders-were-raising-money-heres-why-i-didnt/
Published Date: Thu, 29 Sep 2022 11:00:45 GMT