[ig1]

Building a small boot-strapped company vs a funded company is in a large part dictated by market and product rather than by individual intention.

If you try to build a funded company in a space that can't sustain one you will struggle, likewise if you try to build a small bootstrapped company in a space that can you will similarly struggle.

If your direct competitors have a much better product then you (because they have more dev/product/ux resources than you), a professional sales org, marketing machine, etc. then it's very hard to compete. Your acquisition costs and churn will be high which will severely hurt your ability to grow to a sustainable level.

There are some ways to compete by going after the customers your competitors don't want (if they're price sensitive, too small, wanting unusual customization, services, niche needs, etc.) but you should think about upfront what your strategy is going to be.

[shubhamjain]

> If your direct competitors have a much better product then you (because they have more dev/product/ux resources than you), a professional sales org, marketing machine, etc. then it's very hard to compete. Your acquisition costs and churn will be high which will severely hurt your ability to grow to a sustainable level.

I would disagree. If the customers are comfortable with your product, and they don't feel a big reason to switch, they probably won't. This is more true in the B2B space where customers tend to be less finicky. There are plenty of products that haven't innovated in years, but still enjoy decent sales.

[ig1]

Even a couple of percentage points of churn is a big deal in the long term as you have to keep replacing those customers just to stand still.

If you're in a moribund space you can get away with a MVP product for a long time, but if you're in a highly competitive space where your competitors have a significantly better product and a better sales team it has a real impact.

The other major factor driving churn in bootstrapped b2bs is they largely sell to SMEs who have a high-rate of insolvency.

[amenod]

Being bootstrapped doesn't mean you can fall asleep. You still have to fight for your customers, however VC investment is usually not what will help you in the fight. It is even common for startups to fail because of the funding, when they try to reach the goals which are not realistic, just to provide returns for the investors.

[dgudkov]

>a professional sales org, marketing machine, etc.

All this costs money. We have a competitor, a big VC-funded company. They have very aggressive marketing and lots of sales people. But it all comes at a price. They spend 75-80% of their revenue on sales and marketing. We don't and it lets us keep our prices 8-10 times lower. For a similar (although, a bit more lightweight) product! We beat their product hands down every time we directly compete with them. So my point is -- it's not all black and white. It is possible to survive on a market with big VC-funded companies.

[njyx]

This is the crux of it - the world doesn't stand still. So if you're in a small team in a space that's fast moving and very competitive then the comfortable life wont last long...

If you're in a space where the addressable market is very hard to reach or fragmented, a venture based run will probably run aground. Whereas a small player hitting a niche might be great for a long time.

[jjeaff]

The key is finding a niche that simply isn't profitable to a VC funded firm.

Theoretically, I can run my small bootstrapped company and make a profit for myself of $1m a year. Thats excellent for me since I own the entire company. It's peanuts for a VC funded startup, assuming there isn't that much room to grow above $1m.

In fact, I co-founded a startup that raised millions and makes 10x more than my bootstrapped company. But it will likely fail and pay me nothing because if it can't generate an exit in the $100m+ range, then the VCs would rather run it into the ground trying to hit that Mark than sit back and let the net income flow.