What bootstrapping a service business taught me and how it applies to today's startup?

Why did you bootstrap is usually the first question people ask. For me I wanted to challenge myself, focus on building a profitable business, have more control over business decisions, and put more skin in the game as a founder to make it work.??

Let me be clear, this isn't about "hustling," a concept I don't believe in, as it says nothing about the fundamental business plan, adapting, and responding.?Bootstrapping to me is about smart planning and tactical challenges.??

So what's the value? It's a harder path than funding your growth because it front loads revenue and profitability, making every decision about "will this earn us $1 more in profit".?That type of profit driven thinking means you don't get to do all the extra things you wanted to, the plan is to be lean, move fast, fail fast and get back up fast. For me it was an MBA, PhD, and post grad all rolled into one.?

Is this the right way to go? Every business is different so the answer is yes and no.?During my 6 years as a founder I grew almost 90% year over year for the first 4 years, hitting a seven figure ARR by end of year 4. However, at year 4 I should have looked more seriously at funding to get to that next stage of growth and services, merge, or secure bigger partnerships. I wagerd I could continue the trend, but I should have put my ego aside and looked at the downside...which is ensuring there's enough profit to pay for staff and company expenses.

Why is it relevant today? The current startup market climate shows that fast growing and well funded startups are getting pressured to just not grow, but to be profitable.?When they can't grow they cut the most costly expense they have, staff.?I once went through a downturn at a Fortune 500 company in the US, and their accounting team calculated that removing coffee and tea from all breakrooms would save money.?Turns out the first day this was implemented there was almost a riot. What most of those people didn't think about was that the accounting department were trying to save jobs.

Growth for growth sake is not the same as having a profitable business, they are different organizations with different focuses and cultures.?A growth focused business can have more staff than is really necessary, work on more innovation focused projects, explore more opportunities, and work in more markets.?The same business with a profit focus would be smaller, leaner, more strategic in their internal innovation projects, and more focused on their key market(s).??

Is it wrong? Yes, no, maybe, and all of the above. To start with only 4 out of 100 startups make it to long term success in their current form, and only 4 out of 500 are successful at growing independetly (Rev: IVC study).?My feeling is that a growth focused company can also be a profit focused company, when they have great product market fit and accurately cover the total addressable problem (TAP not TAM). If you don't know the difference, Nokia targeted the total addressable market of people using phones to make calls while Apple went after the total addressable problem of people needing a portable device that made calls and was convenient for their lifestyle. Nokia is still around but nobody is using a Nokia 1100 Series 22.

What's next? I think there is a lesson to be learned for startups about growing their business and profit models/strategies.?Do I think the lesson will be internalized and adopted? Lesson learned, yes. Adopted, no.?

Will this will have a long term impact on how startups grow? Honestly, not a big impact and certainly not the type of impact that would make a strategic change to a profit only focus.?Why? Simply because bootstrapping is hard, stressful, and feels like a never ending battle which creates challenging company cultures for employees because everything they do is measured by "does it make us one more dollar?".?

How did it turn out for me as founder? At the end of 6 years I was in a fortunate position to be able to sell the business, exit, and move to a strategic marketing role at HP.?I also left with a lot of hard earned knowledge and insights that apply to my marketing, strategy, and planning today.

If you ever bootstrapped a business what did you learn, what is your advice to other founders?