When I started Happy Mood Score 2 years ago I made the decision that it should be a bootstrapped startup.
I had a vision in my mind: Create a team management tool that team managers and HR departments would love. And I knew that in order to achieve that vision I should bootstrap.
There are two kind of investments: Seed investment and Series A, B, C,... investment.
Seed investment is used to create the startup: Hire employees, develop a product, define buyers and create a marketing strategy.
Series A, B, C... investment is needed when a startup has a solid idea, has found a business model and wants to grow, expand, acquire competitors, etc.
If you get money from investors early (seed stage) you also give them the ability to influence the company's decisions.
If you get money from investors early (seed stage) you also give them the ability to influence the company's decisions. Your vision and your goals are not what matter anymore. Now it's a shared vision and shared goals.
When the time is right (series A, B...) sharing that vision and goals with investors can boost your company. It can make a big difference. But when a company is starting it is almost never the right time.
You need to be free to make the right decisions. You need to be free to make the wrong decisions. To pivot, to change, to experiment, to evolve, to learn.
In this two years my vision and reality have clashed many times. I've learned from my mistakes. Happy Mood Score is not the product I'd developed two years ago. It has evolved, it has improved. I have also evolved and improved. We are both better than two years ago.
I'd never have had the opportunity to do so with investors joining the company from the very beginning.
There are so many hats I have to wear now. Developer, marketing, customer support, accountant. But I kinda like it. I know it doesn't scale and that it will have to change someday but I'm enjoying every minute of it while it last.
We are two people working full time on Happy Mood Score now. I do all the customer support myself. It's one of the things that I like the most. Talking to customers, people using HMS, knowing what they like, what they don't...
I'm really proud with my current marketing strategy. Online advertising is very expensive : LinkedIn, AdWords, Facebook Ads, Twitter Ads. They cost a fortune (I'll write about this in another post). So I had to be creative and use other approaches that do not involve spending $1.000/month in each of those channels.
With 20 employees you need to be the CEO 100% of your time
If you start with seed capital and you have 20 employees from the very beginning you may grow faster and you may launch a big product from the start. But with 20 employees you need to be the CEO 100% of your time. Unfortunately it involves losing contact with your customers and your product the moment your company and your vision need it the most.
It could be worse. You may hate being the CEO. All of a sudden you spend all your time managing employees, forecasts and investors. If you are a doer it can be very frustrating.
In a bootstrapped company you actually do things. You get your hands dirty from the start. When the company grows and you find yourself doing more management work than actual work then you can decide to step forward and take the role or hire a CEO. That could be a good moment for finding investors. A good investor will not only give you money but also advice on how to move into the future.
A bootstrapped startup can be harder to evolve than a seeded startup but the journey is very rewarding, you will learn a lot of things and you are going to love every single minute of it.