[odyssey7]

I don’t know from personal experience, but my impression is that it’s hard to know which startups are going to be high-profile before they’ve found exponential growth —- and once the bootstrapped company has that, the would-be copycat would be playing catch-up to a no-longer-bootstrapped company. Plus, as many copycat services as there are, it looks like the hard-to-copy team specifics make a big difference on the outcome.

[JumpCrisscross]

> once the bootstrapped company has that, the would-be copycat would be playing catch-up to a no-longer-bootstrapped company

This counts on the bootstrapped company tapping outside capital once they hit their stride.

If it refuses to do so, it would be trivial to copycat and flank them in markets they haven’t yet captured, thereby boxing them in and reversing the first mover advantage with a scale advantage. The only protections against this are IP and true, technological moats.

[JoshTriplett]

> This counts on the bootstrapped company tapping outside capital once they hit their stride.

No, it doesn't; if a bootstrapped startup hits exponential growth, they can be revenue funded and still hard to catch up to by just copying them.

[JumpCrisscross]

> they can be revenue funded and still hard to catch up to by just copying them

Capital financing can provide five to twenty years’ operational cash flows in a single go. It takes deep moats to outgrow someone copying you and simultaneously expanding into every market you would have taken the coming decade.

This is a standard scale playbook by the way. When your competitor can scale faster, but refuses to for political (control) or ideological reasons, it leaves a strategic opening.

[keenmaster]

Some growth hacks are hard to fund with bootstrap revenue. One example is Paypal's $20 signup bonus when they started out. The bonus tapered off to lower amounts over time, but it was still super expensive (~$70 million!).

[smoe]

> This counts on the bootstrapped company tapping outside capital once they hit their stride.

Isn't tapping into outside capital only at this point what makes the most sense, because you are in a much better negotiation position having already validated the product and making money?

At least if your a start up with exponential growth in mind. It can still be a very sustainable product and company without and the copycats can actually act as free advertisements for the "real" thing.

[claudiulodro]

If you have a bootstrapped company successful enough for VC-funded entrants to copy, you're already set. Other than ego, why wouldn't you just keep on truckin' along, taking sweet disbursements from your profitable company or even selling it without having to split the pot with investors?

For example, I don't think the Basecamp guys spend a ton of time worrying about Atlassian.

[robocat]

> it would be trivial

I really disagree that it is trivial to copy a successful company. Possible, yes. VC funding doesn’t automatically make it simple and easy to create an effective competitor.