Bootstrapping A Startup With A Paycheck with Sramana Mitra
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The 1Mby1M Methodology is based on case studies. In this course, Sramana Mitra shares the tribal knowledge of tech entrepreneurs by giving students the rare seat at the table with the entrepreneurs, investors and thought leaders who provide the most instructive perspectives on how to build a thriving business. Through these conversations, students gain access to case studies exploring the alleys of entrepreneurship. Sramana’s synthesis of key learnings and incisive analysis add great depth to each discussion.
In this course I take on the subject of starting a company while holding onto a full-time job. I speak with entrepreneurs who have built sizable businesses while navigating the messy, cash-strapped startup phases using their own paychecks, or their spouses’ income.
Risk appetite varies from entrepreneur to entrepreneur. Family situations, financial obligations, constraints, etc. often come on the way of entrepreneurial dreams. I hope to encourage entrepreneurs to adopt a flexible, pragmatic approach towards startups.
Is It Normal To Start Your Own Business While Working Full-time?
Yes. Good choice. Keep going.
Bootstrapping with a paycheck is a mode of entrepreneurship that has become a major trend. Entrepreneurs are starting companies in droves while still holding onto their full-time jobs.
Two interviewers, Amina Elahi from the Chicago Tribune and Katherine Harvey from Union Tribune San Diego, recently asked me the same question: If you are bootstrapping a startup with a paycheck, when is the right time to quit?
Here is what I told them:
Q: How can an entrepreneur know when it’s time to make the leap to full-time self-employment?
A: This is a personal choice that depends on your life circumstances, but at the minimum, you should definitely validate your business idea and determine whether it’s going to generate money. Talk to customers and make sure they’re buying. And keep in mind that most venture capitalists will not fund you until you’re running your business full-time. Before you go out to raise money, you’re going to need to quit your day job.
On this subject, there are two other relevant questions to consider:
Q: Should bootstrapping employees tell their bosses about their side businesses?
A: A lot of people are actually disclosing, and the bosses are quite fine with it. In the tech industry, employers are encouraging employees to become more entrepreneurial. It’s considered a plus, not a minus.
We are working with a bunch of companies, for example Oracle, where they are running corporate incubation programs. They’re asking employees to become entrepreneurial and call it Intrapreneurship. Corporations are willing to incubate these ideas, give resources and give money [in exchange for a piece of the company].
Q: How can you do this without angering your employer?
A: If you’re working for a tech company or a digital agency and building an e-commerce business on the side, if you tell your employer you’re doing that, the employer’s not going to care, as long as you don’t encroach upon your day job.
You should not encroach on your day job, because then you’re not going to fulfill your obligations to your employer. That is unethical.
Just to reinforce the point that you can and in many situations should bootstrap your startup with a paycheck, I share a conversation with an entrepreneur, Girish Navani, of eClinicalWorks, who has built a billion dollar Unicorn company in this mode. I hope you join us and listen to what he has to say.
The 1Mby1M courses are all heavily based on interview-based case studies on Innovation, Business Models, Go To Market Strategies, Validation Principles, and various other nuances of an entrepreneur’s journey. We offer extensive opportunities for entrepreneurs to learn the lessons from the trenches from successful entrepreneurs who have done it before.
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When to Quit Bootstrapping With A Paycheck
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Solo Entrepreneur Bootstrapping with a Paycheck to over $15M Revenue
SoPost CEO Jonny Grubin started as a solo entrepreneur, bootstrapped with a paycheck, and has built a $15M+ revenue global business with a small amount of funding. Excellent story!
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Bootstrapping an E-Commerce Startup with Jay Perkins, CEO of Kettlebell Kings
There are roll-ups of e-commerce brands going on right now. This case study delves into one such that has exited into a roll-up effort.
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Bootstrapping with a Paycheck, Growing to 1M Users: TryHackMe CEO Ben Spring
Ben and his co-founder are two techies who started by bootstrapping with a paycheck. With zero marketing budget, they have scaled. TryHackMe to a million users and significant revenue.
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$10M Revenue and $18M Funding: LoginRadius CEO Deepak Gupta
LoginRadius CEO Deepak Gupta tells a textbook story of a developer turned entrepreneur. He and his co-founder started by bootstrapping with a paycheck, validated the hypothesis, and then quit their jobs with $10M revenue and $18M in funding. We love stories like this, as you know :-)
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Bootstrapping a Billion Dollar Unicorn with a Paycheck
Girish Navani, CEO of eClinicalWorks, has bootstrapped a billion dollar Unicorn with a paycheck. Girish didn’t quit his job for two years, while he tested and validated his original product and customer base. He now has built a $300 million revenue company that is still 100% bootstrapped, private, and has no desire to sell out or go for an IPO.
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How Itai Sadan Bootstrapped Duda First with a Paycheck and then Raised $100M
Itai Sadan is Co-founder and CEO of Duda. I first met Itai back in 2013 and started getting to know his story. It’s a compelling case study of bootstrapping with a paycheck and then raising significant funding to scale over more than a decade. Our conversation from 2013 is shared as an external resource.
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Deciding When To Become An Entrepreneur
JT O’Donnell, a top 20 LinkedIn Influencer and CEO of WorkItDaily.com, shares what she is seeing from the career coaching perspective. Our observations about this gigantic trend of people starting companies while holding onto their full-time jobs, is from the entrepreneurship perspective. J.T. is in the middle of the decision-making process as people are trying to decide how to play their careers and when to become entrepreneurs.
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Discussing Bootstrapping Using a Paycheck with Gene Caballero, GreenPal
Gene Caballero is Co-founder of GreenPal, a company that was bootstrapped with a paycheck, and has built a sizable two-sided marketplace. I’m also sharing our previous conversation from 2018 as an external resource.
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An Excellent Bootstrapping Case Study: San Banerjee, Co-founder at ADDA
San Banerjee, Co-founder of ADDA, talks about her entrepreneurial journey as a bootstrapped entrepreneur tackling heavily funded competitors. I’m also sharing our previous conversation from 2013 as an external resource.
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Bootstrapping with a Spouse's Paycheck with Lloyed Lobo, Boast.ai
Lloyed Lobo, Co-founder and President of Boast.ai, discusses his failures and eventual success building AI startups. Wonderful conversation.
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Conversation with Geoff Ralston, President of Y Combinator
Geoff Ralston is President of Y Combinator. We had a terrific discussion on what we each are seeing in the startup ecosystem, including bootstrapping with a paycheck.
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Bootstrapping with a Paycheck to Y Combinator with Ryan Chan, UpKeep Maintenance
Ryan Chan, CEO and Founder at UpKeep Maintenance Management, bootstrapped with a paycheck and subsequently, went through Y Combinator, followed by raising $13 Million.
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Bootstrapping with a Paycheck to Techstars with Nevin Shetty, Blueprint Registry
CEO Nevin Shetty bootstrapped his company Blueprint Registry with a paycheck and then got into Techstars with a validated business. Blueprint Registry was acquired by David’s Bridal Inc. in August of 2018.
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Bootstrapping with a Paycheck to Raising Funds Without Moving to Silicon Valley
Sinclair Schuller, CEO and Co-Founder of Apprenda, built this enterprise software company with $55 million in financing from Upstate New York. He has raised funding from Silicon Valley, but without moving here. Listen to what he has to say about moving to the Valley.
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Investor Perspective on Bootstrapping with a Paycheck
Shomit Ghose, Partner at Onset Ventures, is also a veteran startup executive with multiple IPOs under his belt. He highlights the fact that 70,000 ventures received angel funding in 2014, but the number of companies receiving venture funding remains constant year over year at about 1,000 per year. Focusing on building value is of paramount importance, so that you can validate and prove your value proposition.
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Investors Should Take Solo Founders More Seriously: Michael Smerklo, Next Coast
Michael Smerklo is Co-founder and Managing Director at Next Coast Ventures. We have a terrific conversation about a range of issues including solo founders and their ill treatment by VCs and bootstrapping.
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Entrepreneur Couple Bootstraps an E-Commerce Business with Paychecks
Kish Vasnani and Vanessa Jeswani, Co-founders of Nomad Lane, bootstrapped to multi-million dollars in revenue selling a private label product before quitting their jobs. In this story, you also get to see the nuances of running successful (and not so successful) crowdfunding campaigns. Very interesting journey and insights.
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Other Bootstrapping Examples
