What we have learnt running a bootstrapped startup
Published in 2011, this chronicle by @nithyad details the mechanics of building a profitable, self-funded business without venture backing.
Core Principles for Independent Builders:
Charging customers from day one acts as the ultimate filter for building software that solves genuine, high-urgency problems.
Keeping fixed overhead low and leveraging lean infrastructure allows founders to stay alive until market tailwinds kick in.
Small, repetitive improvements in customer retention and conversion rates yield massive returns over multi-year horizons.
Community Debate Themes:
The community focused on B2B customer acquisition channels, cold email vs SEO distribution, and balancing full-time employment with side-project development.
CATEGORY Bootstrapping & MRR →
HISTORICAL ERA Web 2.0 Genesis (2007–2013)
COMMUNITY SCORE ★ 50 points
TOTAL DISCUSSIONS 46 comments
I think it's scary when you first realize you have to charge users. (Or to raise your price on them). But, as long as you talk to them, sometimes it can surprise you how receptive they are.
When I was an SAT tutor I started charging $20/hour. I was inexperienced and a bit younger than most of my clients, so I figured I couldn't charge much. After awhile, I decided I wanted a higher wage if I got new clients. But, how much? I decided to ask for $30 from new clients. No one argued, or showed any displeasure. Wow! But, had I not gone high enough?
The next time I decided I wanted more, I made the decision to jump it to $60/hour just to see if anyone would take it. And... everyone did. Without question.
In order to get paid you have to ask. And, it's sometimes shocking how much people will pay you. Don't be afraid to ask for more.
Refreshing, honest, well said.
This part caught my eye, though: "we were honest with them. We let them know that implementing that would mean addition cost for us , but would still do it if they were ready to pay a subscription fee".
That's a common early feeling, and one that I've had as well. But you need to completely and forever abandon cost-based pricing if you're going to thrive (find your best customers) as a subscription web app. The task of figuring out what your web app is really WORTH to your customers rather than what it costs you to operate is the key to high profitability and happy customers co-existing.
The worth/value of your app is a percentage of the surplus of success it creates for its users, where success is defined by the user.
"As corny as it may sound, we were particularly impressed with Guy Kawasaki’s ‘Create value and money will follow’ advice when we started up...Had we known then that he was going to create AllTop in future, we would have probably introspected a little more before buying his line of advice."
I don't understand this statement, specifically the reference to AllTop. Can someone offer me some insight?
I think you could write a whole other blog post about the last paragraph. To me, the most interesting part about getting started on a new side project is what I end up learning as a result.
New methods and skills always come out of trying to solve new problems. And hopefully that will lead you to pursue something even harder/more interesting.
Edit: typo.
Has anyone been forced to downgrade or reduce feature sets for free users when introducing paid plans? Is the generally accepted approach to grandfather in all existing free users?