Bootstrapping a Business: 5 Years In

Retrospective on 5 years of Geocodio at IndieHackers in January 2019. Read the original post on IndieHackers

On January 21, 2014, Geocodio was officially launched into the world.

By some miracle of luck, we landed on the front page of Hacker News for almost the whole day. In the pre-Product Hunt era, this was about as good as a launch could possibly go. The traffic surge quickly faded and not everyone had positive things to say, but hey, it’s the internet. To have that much publicity for just a little side project? We were beside ourselves.

At that point, Geocodio was a just a side project — something we created because we needed it ourselves. Before we launched, I defined several levels of success, and to show you how low our expectations were, our definition of a wild-beyond-our-dreams success would be if it paid for its servers. Not profitability, not growth, not employing us full time. Just other people covering the server costs so we could use it for free for our other side projects rather than having to pay another company for a similar service. 

Much to our surprise, it covered its costs in the first month. We made $28.29 after processing fees ($30.68 gross), and had spent $20 on two little virtual servers from Digital Ocean. Amazing! It felt like we’d somehow done the impossible, and we were elated.

Now, five years later, our average revenue per customer is $139, and we recently passed $1 million in all-time revenue. Needless to say, our server costs are way more than $20 a month. And this little low-expectations-just-a-side-project now employs both of us full time.

I bet you want to know the secret now: how we got here. How we grew. How we attract customers. How we prioritize new features vs. infrastructure sustainability. How we manage to not tear our hair out over health insurance costs. How we managed to do it all without taking out loans, going into credit card debt, or taking on investors.

Unfortunately, there is no secret, and there’s no sage advice that I can give you that will help you do the exact same thing.

The keys to our growth are all simple and uncomplicated things:

  • Creating a product people needed
  • Treating our customers with kindness and respect
  • Making small improvements and changes
  • Keeping costs in line and maintaining profitability

If these things sound obvious, it’s because they are. But when you’re reading hustle porn on Medium about “what it really means to have a startup,” you won’t find that kind of advice. Quite frankly, aside from notable exceptions like Jason Fried and DHH and the articles on IndieHackers, most startup strategy advice is largely irrelevant for bootstrapped software companies. 

Venture-backed startups focus on growth, growth, growth, because their investors are going for home runs and they need to scale quickly. This incentivizes companies to use sophisticated, complicated approaches, like using AI to analyze coffee consumption

A bootstrapped software company has very different concerns: slow growth, managing costs, maintaining profitability. Without profitability, we don’t get paid. A venture-backed company can simply go ask for more money. The paradigm is completely different.

If you came here hoping I had some secrets and magic to share about how to create your own small SaaS company, I don’t. I’m sorry. 

If this were How I Built This and Guy Raz were asking me “whether of our success is attributable to our own intelligence and hard work or to luck,” I’d have to say that it’s mostly a product of luck and hard work. But intelligence? You don’t need to be exceptionally smart to bootstrap a business. 

You just need to avoid over-complicating things.