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Summary:

In the summer of 2010 I caught the startup bug. Some close co-workers and I had day jobs that paid reasonably well but weren’t quite as fulfilling after almost a decade in the same business. We were really tired of using bad CRM in our sales […]

timorein

In the summer of 2010 I caught the startup bug. Some close co-workers and I had day jobs that paid reasonably well but weren’t quite as fulfilling after almost a decade in the same business. We were really tired of using bad CRM in our sales team, and had a good idea of what a sales management app should look like: the trouble was that we all had families and mortgages. So we started looking for ways to bring our software to life.

Nearly two years later Pipedrive is growing 30% or more each month, and we’re almost cashflow positive — all through bootstrapping. Here are some things we learned from our experience:

Don’t quit your day job too soon

All our co-founders kept their jobs for a full year, and one of them only came on board with the new company full-time in November. This way we managed to keep our expenses as low as possible for a really long period.

Run your own hackathons

It’s one thing to keep expenses low, but quite another to build your product at a fast enough pace. We figured that the best way to do it was to arrange long hacking weekends out in the countryside. Over seven months we ran five intensive weekends where we wrote massive chunks of code and crafted new marketing ideas.

Be frugal. I mean really frugal

When we stayed in San Francisco for a couple of months, we couldn’t find an apartment that had enough single beds in it, and we couldn’t afford a larger flat. So we shared a bed some nights. Our wives and girlfriends back home were not too happy, but we did have fun saying “Who do I have to sleep with to get this done?”


Ship and get revenue

We started charging for our product too early — some important features were missing and there were a couple of bugs. But it was still a good decision: had we continued to stay in product development mode, we would have been in a very tight spot last summer before we went to raise our one and only financing round.

Use the tools you already have

Don’t rent or buy things unless you really have to. We went without our own office for more than a year, using our homes and squatting in different offices spaces. We bought absolutely no hardware, using our personal or day-job computers. Skype and Google Docs instead of paid apps goes without saying.

Apply for good incubators

Incubators aren’t an orthodox component of bootstrapping, but they are a great way to get feedback, contacts and at least partially solve the money issue. We applied for Seedcamp in Europe, and Y Combinator, TechStars, 500 Startups and AngelPad in the U.S. In the end AngelPad chose us and we chose them, a step which provided not only financial resources to take our team to full time, but also learning and mentorship to get us there.

Every company’s experience is different, of course, but the benefits of bootstrapping are probably universal. Using all your internal resources and maximizing outside assistance can create, as Wikipedia says, “a self-sustaining process that proceeds without external help.”

Timo Rein is the co-founder and CEO of Pipedrive. Over more than 15 years in sales and sales management, he learned to despise CRM software as waste of time, so he set out to build his own pipeline management software. 

  1. Great post Timo and congrats on how well Pipedrive is developing!

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  2. Pearls of wisdom. I can retire to Nepal now.

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  3. I had to come here and comment on this. DO NOT create your new startup using your current work laptops/hardware/resources. There is quite a bit of case law around this which would allow them to exercise a right to the IP created with their resources. That advise is just plain dangerous/stupid. Buy your own laptop and do NOT work on your side projects using your current company’s resources.

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  4. Bootstrapping shouldn’t just be for startups. Organizations in the red and/or organizations with shrinking margins should read this post and act upon the information until they can create a new plan for higher profits. Create that plan and act upon it. ;)

    @juliefogg

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  5. I would perhaps echo the comments of Mr. Stump and expand on them somewhat: Depending on the jurisdiction in which you find yourself, the the terms of your employment agreement, and the subject matter of your startup, it may very well be the case that anything you create for your startup will be owned by your employer. A quick review of your employment contract and a brief chat (with someone who has previously sought legal advice from legal counsel, or your own legal counsel, in either case *in the same jurisdiction*) will save you a lot of potential grief.

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  6. Josh Ledgard Monday, March 19, 2012

    I’d add that while you are keeping your full time job you should be saving. Personally, for Kickofflabs (http://www.kickofflabs.com), I saved enough to live for year if we had made zero money. Thankfully that didn’t happen… but I felt much better doing it and did need it for a few months. :)

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