EP33: Jason Calacanis of Inside.com talks about bootstrapping vs funding
It’s part 2 with Jason Calacanis! In this episode we explore the question every product person needs to answer: should I bootstrap, or should I get investors?
It’s part 2 with Jason Calacanis!
In this episode we explore the question every product person needs to answer: should I bootstrap, or should I get investors?
- Sprint.ly has been there from the beginning. Perfect for software teams of 3 or more people, Sprint.ly is the easiest way for managers and developers to track the software development process. You and your team can try Sprint.ly for free, go to www.sprint.ly
- I also just discovered KnowAds. The hardest part about online advertising is figuring out what works. KnowAds reveals your competitor’s campagins showing you exactly what’s working for them. You get to see their most successful ad copy & ad placements. Go to productpeople.tv/ads and sign-up for an account.
- And finally, if you’re trying to set-up an online store, you need to use Shopify. I’ve tried setting up dozens of online stores for clients, and there are always so many headaches: handling payment gateways, multiple currencies, taxes, shipping rates. Shopify solves all of these problems for you. I want you to go to productpeople.tv/shopify and get a 14 day free trial.
- “Raise a little of angel funding, prove that there’s product market, and then go out and get second market funding.”
- “If Uber doesn’t go into every market, someone else will, but they still have other people popping up in new markets before they get there. So they’re in a race.”
- “Raise less money in the beginning, raise more money once you have product market fit.”
- JJ: “There are some great products that have grown really fast, and have stayed private and bootstrapped (MailChimp, SurveyMonkey, Valve). Do you think they’re anomalies?”
- JC: “There are some people that stay private, and that’s good because they retain their equity. There’s not one way to do this. But some of those companies are 10 year ‘over night’ successes.'”
- “Most businesses don’t need venture funding. The truth is, there’s a time for both [bootstrapping and taking venture money].”
- “Investors need liquidity. There’s a secondary market for shares today. This really didn’t exist that much before. You used to be forced into an IPO. There’s a concept that (perhaps) venture capitalists would start taking dividends; but it’s more likely that they’ll just sell their shares.”
- “Trying to building for the sale is a terrible idea. You want to build for a growing market, a customer that loves you, and a team that loves to build the product. When I was hiring for Inside.com, I realized there’s a lot of developers into our space.”
- “Building to sell is a dangerous idea. When people come to me for an angel investment and say ‘This is a natural acquisition target’, I say ‘That’s not what you lead with.’ That’s not why you build it, you build it because you have a better solution.”
- “When you’re thinking about these big acquisitions, I encourage people to just drop off 3 zeroes.”
- “It turns out, there’s a lot of money in the world. The money is bored. Money wants to be spent! Money is intended to be gambled. These are big numbers, but these are big companies.”
Update from 2021: what am I working on these days?
A lot has happened since I recorded these episodes: I launched a podcast hosting company, Transistor.fm, with my friend Jon Buda! If you want to hear what I'm up to now go to transistor.fm/justin.