Solofounding & Solofunding is tough, but worth it (my reflections, 4 years into it)

@pouliozil Custom work does cost much more to make than something that can be mass produced, yet the custom work (vs. the mass produced) may have pockets of extreme demand from people who are seeking it out and willing to pay a large premium.

Of this custom extremely high quality work, I can charge the absolute lowest price possible of any equivalent quality level of that custom work. Perhaps my competitors could compete at the same quality level I am at, yet their old & outdated business processes would require them to price it at 2x my rate.

I’m not claiming that the business I am in produces custom works, but it is a pretty good example to understand the concept I’m trying to convey.

Older, niche industries are ripe for revolution. My personal favorites are industries that seem uncool, outdated, off-trend, or just seem down right unappealing. A lot of times, the cool tech kids passed by those without giving them a second thought leaving a ton of untapped potential for revolution.
 
Something else for those that read this far: I’ve spent essentially $0 on ads. The products sell themselves on the major platforms at the quality and price point that I am selling for.

I guess you can chalk the platform % fees as somewhat being marketing fees. Eventually, I will build more branding and do marketing, but it’s just not been a priority to do that yet. Sort of ironic, since my career to this point has been marketing.
 
@valentinap See my prior responses above for more detail, but I found him on Upwork (then called O-Desk) in 2013. He was the best bid for a custom script I needed for a different (but also solo) startup I was founding. That particular job required a complex skill set of back end and front end work.
 
@heavenward7 Good question. The answer is complicated.

I need to keep all of the chips on the table to stay interested, motivated, and driven. This is different for everyone though and likely why there are so few large bootstrapped companies.

I am aware of the common trope that it is better to have 10% of a billion dollar company than 100% of a $10 million dollar company. This is not necessarily true for myself, but I know I am an outlier on this point, and if I felt differently on that I would not be a solofunder and solofounder. I suspect many would take the 10% of a billion if given the option, and obviously we can see that many, if not all, choose that route. Something within makes me fearless of both time and competition, two things which ultimately drive others to accept investment. And so I’m confident that that $10 million dollar fully controlled company could outcompete the 10% share of the $1 billion dollar company in the long term.

Taking money is a logical step for so many once they’ve finally created a cash machine because it is a mechanism to press “fast forward” and get to the end result more quickly. The desired end result often is an acquisition or ipo. If that is the desired end result, then it’s not necessarily an incorrect move to take investment to speed that up. However, that’s not my desired end goal. See my previous replies in this thread for my position on e/acc which helps to explain my stance.
 
@manga006 Could I ask what your position is at your corp marketing gig? It’s very cool to see someone in marketing taking ventures like this that aren’t agency based lol :).
 
@danielkibby I’m in analytics-based advertising. I discovered long ago that I fit in more with the engineering crowd in my way of thinking, so I am a bit of an outlier when it comes to traditional marketing and sales personalities. I also discovered early on that I could never do agency-based work or service-based work on my own and feel satisfied, so I created this business 100% based on that knowledge and my interests. Some call that a lifestyle business, I call it catering my work in this world to what I do best - something we should all strive to do as we progress through life and learn about our strengths and interests.
 
@manga006 Nice! Same here tbh. I had a phase where I wanted to leave digital marketing altogether for web dev and data analytics but now I’m learning both hand in hand. Do you think your experience in marketing & marketing analytics has/will help with your start up? Genuinely curious as most of these startups come from more technical backgrounds and learn things like sales and marketing from the ground up.
 
@danielkibby Many of the hard skills needed for this startup came not the 10 years of corporate marketing industry experience that I have, but rather from the random internet business and side projects that I created when I was in my teens. Those experiences laid all of the ground work. It took years to pick up those skills (basic sql, php, command line) - all self-taught through trial and error and reading endless amounts of threads on various Internet forums during the early 2000s. Virtually none of those skills are applicable to the corporate day job though, other than giving me a slight edge when communicating with engineering teams.

The corporate marketing experience has been valuable in understanding how to actually run and grow a business. It has also been useful in P&L management. Another valuable outcome of the corporate job was showing me how my strengths and weaknesses vary from others, and what types of work I absolutely want to avoid (either because I’m not good at it or I have a philosophical issue with it). This information helped me to design an ideal company that I know I can run for a very long time without getting burnout.

Interestingly, my business is unrelated to any industry that I have worked on in the corporate marketing gig. Infact, it’s an industry I stumbled into by pure coincidence initially as a consumer of the product (and I’m still a consumer of that product- probably why solofounding worked out so well in my case). But with what I’ve built, it’s possible to expand to other industries (it feels like a blue ocean, so much opportunity ahead). I plan to expand in a controlled and methodical way.
 
@manga006 That’s really cool! It’s great to see that you’ve scaled the business to this point and profitability - you inspire me !! Anywhere where I can read on your current path or look into updates on the biz and stuff? I’d be super interested
 
@danielkibby I actually considered documenting the entire journey from day 1 into vlog style content, but decided against it. Turns out I’m not photogenic nor do I want the reputation.

Feel free to message me here on Reddit from time to time and I’ll do my best to keep you updated. But spoiler alert, solofunded solofounding is slow-going so it might be some time before anything major happens as right now I’m just staying the course with scaling up as I save up more funds.

I would like to move my business to a dedicated industrial space in the next few years. Hopefully sooner than later. However, that’s not even completely necessary, and so I haven’t yet.
 
@manga006 Firstly it goes without saying - a huge well done in getting this far and having the will power and determination to getting your vision to where it is today, you are in a very small minority who have made it this far.

The one thing that stuck with me in your post is :

"I also have no desire or plans to ever sell, but that probably has to do with the longevity of the business that I think I’ve built. Since I have essentially no overhead, and everything is automated, it’s very improbable that a competitor could oust me."

I'm not fishing or asking you to discuss it here but unless you have something 'really really' I think this is the biggest risk to your business.
 
@doantrang Thanks for you comment. Can you rephrase what you believe the risk is?

If you believe my comment above refers to the business being stale now that “everything is automated”, that is not the case. Everything to this point has been automated but there is still endless runway ahead to automate, integrate, and expand in an unlimited number of ways to an unlimited number of adjacent industries.

Based on what I’ve already built and automated so far, there are very little further efficiency gains possible for anyone who would attempt to duplicate the work already done. This gives me great confidence in the longevity of the business.
 
@doantrang Competitors can and do jump in all the time in my industry, but they can’t compete with my price point and level of quality. Most of my competitors have 10-20 employees and antiquated systems which drives up their overhead and actually reduces their ability to scale.

In my case, it’s just myself, my freelance dev who is strictly building new automated tools, and the automation we’ve already built. It is possible that my margin could erode away to 0% with fierce competition, but even if it did I would be the last man standing as I have microscopic amounts of overhead compared to all competitors. Once I diversify to adjacent industries, this concern is fully alleviated. My lack of overhead gives me an immense amount of confidence of domination in this specific industry in the long-term.

Also, because I have worked hand in hand with the direction for development of the entire system over a 4 year period, I am quite aware of blind spots that might ordinarily not be obvious to someone who built a company with a large team. I’ve grown to be a subject matter expert in this industry now, but it didn’t come easily. Today all my sales occur online, but when family hear that I am in this industry, firstly they are shocked, and suddenly I am the go-to consultant for any and all questions they have related to this industry. I am told that I give better guidance than anywhere they could have gone to locally, even among those that have been in this industry their entire lives.
 
@manga006 It sounds really impressive.

if I were your competitor and knew you could outperform/replace 10 staff at say an average of $40,000 per annum your platform would be worth $400,000 for year 1 alone.. thats without factoring in additional scale.

It certainly sounds highly investible or at the very least a opportunity to licence.
 
@doantrang You raise a good point. I have been told that I should have made a SAAS to sell to existing businesses in this industry. But that sounded a little boring to me honestly, so instead I just created a business that uses the SAAS that I developed and I have been scaling up and taking market share ever since.

It is much more defensible (at least in my opinion) to build a …let’s call it “traditional” business instead of building a SAAS and trying to sell the SAAS. Once a SAAS is public, it is quite easy to duplicate the features and functionality. Competition then becomes an issue and you need to raise funding very quicky to stay ahead. A pure SAAS business is not very bootstrap friendly. On the other hand, It is much more difficult to replicate a business that is using its own private proprietary technology, and so such a business is ideal for solofunded solofounders, though much more difficult to build.

People have actually built SAAS for this industry over the years, which many of the competitors still use, but it’s just not built with the level of laser focus and customization that I built my product with. My intuition tells me there will never be a commercially viable product similar to my SAAS, but I need to further reflect on why I believe that is the case.

In a lot of ways, the competitors don’t really know what their actual business friction points are, and so they are all satisfied with the current state of the SAAS products they use. My SAAS takes everything about 100x deeper than any existing product on the markets. If the existing SAAS is Lake Tahoe, then my SAAS is Mariana’s trench. It would be very difficult to take it even deeper and drive any meaningful value from it.

I tested out the concept with this small niche, but I’m most excited about expansion to adjacent industries in the future which is where nearly all of my future growth will be after I monopolize this smaller market.
 
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