Joel Spolsky On How To Bootstrap a Business

Meredith writes "This is a great interview with Joel Spolsky of Fog Creek Software. Joel talks about the negatives of taking money from venture capitalists, and how the entrepreneurs that don't take money become 'super entrepreneurs,' learning how to make something significant out of nothing. This is a very popular interview among tech entrepreneurs and provides really valuable information for startups."

tradeoff

[brenddie]

it depends on your situation. IF you have the time, money, skills and patience you could make it work with less compromises. Most of the time you get to a point where all you want is to finish as soon as possible and start getting some profit. For that to happen you need to make some compromises. Maybe you will end up with less profit as you add more "partners" but the load should be less and you wont go crazy or loose your hair trying to figure out how to get the money to finish

The company you want, vs the most profitable

[Anonymous Coward]

I debated for a good half a minute about whether to AC this. Surely it would be read by a lot more people if I posted under my normal /. account (which has at least a few fans, and my posts are generally modded up), but I think I would feel constrained in some ways about what I could say. Normally I am very open in my slashdot posts, but I'd like to talk about some of the transitions that our company is currently in, and I wouldn't be able to do that openly under my normal nick.

I'm the CEO of a tech startup (not in IT/IS, however), we've been a legal entity for about 2 years, and the entire project is 3-4 years old. I spent every penny I had to get started, and bootstrapped the rest of our seed money (around $1M) from family. There was a bunch more stuff here about how the project started, but I edited this and cut a lot of fluff out, because I dont think anyone needs to really read it to get the point. We build a few products, products that are technically superior to our competition, and at the same time cheaper.

When we had recently began to engineer the first product, I started to talk publicly on the Internet about what I was up to, and asked for feedback. People responded positively. Although some of the other companies out there are more hype and marketing related, and it was difficult to compete for attention when we had zero marketing budget, we were able to get good feedback from serious users. Some people I knew in the industry introduced me to executives at some of the more serious players that would eventually be corporate clients. Some of them dismissed us entirely, I think both because I don't look like a CEO, and because we aimed to do things that were very complicated, and to do them reasonably. One time in an introduction meeting, I actually had the CEO of one of the potential clients/partners spend about 85% of the meeting talking directly to our lead engineer (who is about twice my age) instead of to me, because I guess he didn't listen well when we were introduced, and had assumed I was the engineer and "the gray-haired guy" was actually the CEO, haha.

The greatest reward of bootstrapping, for me, has been the ability to run the company I want to. For me, that means making tools for other techies, and making them accessable to techies. I'm not really a CEO, I'm a techie. I've probably made some less than optimal decisions as a CEO-- We could have priced our product at double what the competition sold their crippled ones for, and it would have made more net profit, but I didn't want to cater to just the most affluent segment. I didn't want to cripple my products just to slowly dole out a "new" version of the same old tech each year with less embedded crippling. I wanted to make a really robust, useful product, get it in the hands of guys like me, and use the profits to make it better and better.

So as you point out, Spolsky enjoys the same type of company I do-- I could make more money by changing our business model, but I wouldn't be as happy. I wanted to run an office where people didn't have to conform to some arbitrary dress code that had no bearing on their job performance, or leave their pets stuck at home alone all day. Life should be about enjoying yourself, and I feel very fortunate to be in an industry where I do enjoy myself, and no longer be in a position where I have an idiot CEO above me, who doesn't really HEAR what I'm saying, and with whom I have to wrestle to do my job properly. I try to listen to our engineers, designers, programmers, and *NOT* be the archetype of the idiot CEO that we've all had to deal with before. Our competitors.. most of the people in the industry know those CEOs by name. Most people in this industry probably couldn't tell you my name (although most of them know our products!). The downside (if you want to call it that) of being a niceguy techie CEO is that most people don't take you seriously as a CEO-- I don't inspire Jobs/Gates/Trump style excitement with the various fanboys of m

Re:Confused

[Brian Stretch]

Without public campaign financing, candidates rely on "donations" (read: bribes), tell you they are interested in alternative energy, yet provide oil companies with record profits and state-sponsored corporate welfare.

Or we could cut taxes, close down numerous government departments, replace the lobbyist-designed federal tax code with the Flat Tax [hoover.org], and otherwise reduce the amount of loot for "special interests" to fight over. It'd make life easier for small businesses who don't have K Street lobbyists on retainer to protect them from the federal government too.

Let 'em take all the campaign donations they want, just have full and immediate disclosure on the Internet.