Depends on what you mean by 'making it' as a startup - is it the revenue growth? burn rate? profit growth? Number of users? Number of employees? A SF office? How well funded you are?
It's hard to grow a business without going the conventional SV route and getting VC funding. Unless you have a revolutionary product, the bigger competition will likely stomp over you unless you have resources to grow your team and product and marketing. Or if you are comfortable with a small market share but a profitable one.
Not saying it is impossible, but just hard. I know a few SaaS out there like Roninapp and Reamaze that like Mailchimp are not VC funded and are growing well and are run by a small but effective team, but the question is would startups like these benefit from funding and be in a better position with regards to growth and user base than without vc funding?
More often than not when startups receive funding they move away from satisfying the customers to making investors happy. As the company starts to hire, get a nice office, increase spend on things like office perks, ads, marketing etc while it might contribute to growth it doesnt necessarily work well for the end user. You go from lean to bloat more often than not. I guess that depends on how you manage resources but it isnt exactly easy with investors breathing down your neck
I have a company that is bootstrapped and while there are well funded competitors out there, i'm perfectly fine with my startup running lean and being profitable, albeit slowly. At least I am my own boss and I answer to myself, and that in my world is 'making it'.
> Unless you have a revolutionary product, the bigger competition will likely stomp over you unless you have resources to grow your team and product and marketing. Or if you are comfortable with a small market share but a profitable one.
Case in point, me. I started FreeRADIUS in 1999. Started making money in 2007. Incorporated in 2008. I now have multiple offices, multiple employees, and good growth. No investment. No debt.
The "bigger competition" in my case are AMdocs (previously Bridgewater), Cisco, Juniper, Alcatel. I compete by offering a technically superior product, at a lower price point.
I do zero marketing. Zero sales people. Pretty much zero RFPs. My customers call me, and ask to buy my product.
I have a small market share by revenue, but a huge market share by installations. My guess is that the total number of FreeRADIUS installs is 10x that of all corporate installs combined.
> More often than not when startups receive funding they move away from satisfying the customers to making investors happy.
Exactly. My pitch is simple: We make you happy. You need customization? We do customization. You need to integrate with a 10 year-old system? No problem, we do that. We're about expertise, and keeping the money in our pockets, instead of doing gimmicky "enterprise" stuff.
A counterpoint is one of our competitors. Their product relies on an "enterprise grade" DB. Which means that for every dollar they make on a sale, the DB company makes ten.
Uh... if that money is available, why leave it on the table? Drop an open source database in (yes, it would have worked. They need the marketing label, not the technical capabilities). Give the customer a 50% discount. Your cut goes from $1 to $6, and the customers price goes from $11 to $6. Everyone is happy.
Nope. They couldn't make it big, so they got bought. And the new owner flogs the crap out of the product, "end of life" the product every 2 years, and forcing expensive upgrades. Which means that their customers call me.
Totally agree with this. We started Reamaze back in 2012 and have never needed an injection of money nor wanted it. We focus on our core customers and deliver a curated experience we all love as a community. We have good growth and our team is extremely happy all the time since we're building what we know to be important long term, not what others think is profitable in the short term.
The software is Open Source, and 100% GPL. We do custom installations and support. Load-balancing, fail-over, replication, high performance, new features, etc.
Speaking of building a business on inbound sales leads, i'd love to chat with you about some potential work. My email is in my profile, let me know if there's a better way to contact you than through the freeradius website.
I have made that same "enterprise grade DB" argument at numerous places. Telcos just love Oracle salesdudes, even if that's less true than it used to be. Congratulations on your success.
It is unfortunate, and it remains to be seen if they will remain profitable, or just go on an endless run of losses and increasing debt. Some say 'making it' is IPOing, even if not profitable and laden with a mountain of debt. As some would argue, why spend your own money if you can spend someone else's?
I do like the question on whether Mailchimp would be a lot more successful had it taken on more funding and debt.
It's hard to grow a business without going the conventional SV route and getting VC funding. Unless you have a revolutionary product, the bigger competition will likely stomp over you unless you have resources to grow your team and product and marketing. Or if you are comfortable with a small market share but a profitable one.
Not saying it is impossible, but just hard. I know a few SaaS out there like Roninapp and Reamaze that like Mailchimp are not VC funded and are growing well and are run by a small but effective team, but the question is would startups like these benefit from funding and be in a better position with regards to growth and user base than without vc funding?
More often than not when startups receive funding they move away from satisfying the customers to making investors happy. As the company starts to hire, get a nice office, increase spend on things like office perks, ads, marketing etc while it might contribute to growth it doesnt necessarily work well for the end user. You go from lean to bloat more often than not. I guess that depends on how you manage resources but it isnt exactly easy with investors breathing down your neck
I have a company that is bootstrapped and while there are well funded competitors out there, i'm perfectly fine with my startup running lean and being profitable, albeit slowly. At least I am my own boss and I answer to myself, and that in my world is 'making it'.