Lili Balfour’s Post

Ever wondered why some of the most successful companies started with nothing but grit and determination? Bootstrapping has been the foundation of countless companies that defied the odds. Take Intuit Mailchimp, for example. Founded by Ben Chestnut and Dan Kurzius, this email marketing platform grew from a side hustle to a billion-dollar business—all without a single cent from outside investors. By keeping their focus on customers and profitability, Mailchimp became a leader in its industry. Then there’s Basecamp, a project management tool that started small but has become a go-to for businesses worldwide. Founders of parent company, 37signals, Jason Fried and David Heinemeier Hansson built their company from the ground up by staying lean and listening to user feedback rather than relying on venture capital to drive growth. These companies succeeded because they retained control, stayed focused on their mission, and scaled sustainably. In a world where funding rounds often make the headlines, these bootstrapped businesses remind us that financial independence and customer-centric growth can lead to monumental success. Do you think more startups should follow this path? #article • #startups • #investment • #bootstrapping • #losep24

During the “golden age of SaaS” (2010-2022) startups needed $Ms to build a team, a product, find a market, then beat competition, and then (if lucky) generate profits. Not anymore: Today, with tools like Stripe, Wix, and LinkedIn (free marketing), you can build a profitable company from Day 1 without any outside capital/influence. Building slowly, profitably and methodically also increases your chances for long-term sustainability. How do you embrace this paradigm shift? 1) Find a niche market you are uniquely able to serve. 2) Build something quick to serve them and generate profits quickly. 3) Reinvest the profits to scale, and fully exploit that niche market. 4) Only raise capital if there is a significant opportunity to scale beyond this niche and build towards $100m in revenue at extremely high margins. A company’s ultimate goal is not to raise capital. It is to offer a solution to a problem. The cost of building a solution is exponentially lower than it was even five years ago. Founders should take advantage. Full article in the comments below.

The top 5 mistakes I see startups make in the summer… #1. Assuming their metrics can and should look like other months of the year Your investors have targets. Your company has clear KPIs. But! Your customers are probably on vacation. Did you expect the summer to look like your growth in Q1 & Q2? Don’t! I regularly see a 20-30% dip in traffic with most of my clients during May/June/July and that has downstream effects on engagement and revenue. And that’s ok! Just know what it is. The worst thing you can do is flail (and boy have I been a part of the flail). I’ll never forget that one summer working for a team that didn’t account for seasonality in our growth model and strategy. We were asked to cancel vacations. We put money into paid ads. We launched a huge product line in July… to crickets…and then the team was incredibly burned out when traffic returned in autumn. Another time, I watched a team analyze a recent launch and decide the market didn't need that new feature they built, but to this day I think it was because it launched in June. While it might be a sluggish time for some activities, it’s prime for others. Over the next week, I’m going to be writing a bit about the other four summer symptoms because once we know what to expect we can 1. Build in a way that works with this momentum 2. Go to the beach guilt-free without stressing about what’s happening in our metrics. Because if there’s treading and flailing to be done, it should be done in a pool as part of game. (Not sure if your dip is within the normal range? Reach out!)

Great from Sendbird CEO John S. Kim: This is why many investors focus on the revenue retention rate for startups (also known as the “leaky bucket problem”), as the sensitivity to revenue retention is quite high when it comes to calculating your terminal ARR. Strategic implications By understanding your terminal ARR and the underlying input metrics — gross new ARR and gross revenue retention — you can set priorities to improve or structurally change the business. To influence your terminal ARR, you only need to change one of two metrics: gross new ARR or gross revenue retention. This helps you crystallize your priorities. By focusing on higher-quality customers and deploying rigorous customer retention programs, you can gradually increase your revenue retention. However, given that revenue retention is measured over a year-long period, it will take a good 12 months of lead time for your initiatives to impact the outcome.

"We were 2 weeks away from bankruptcy." That's what a successful founder told me about their lowest point. Today, their startup is valued at $100M. The difference? Mastering startup finances. Here are 5 financial lessons that separate thriving startups from those that flame out: Runway is Everything • Hard truth: 29% of startups fail by running out of cash (CB Insights) • Action: Calculate your burn rate weekly. Target 18+ months of runway. • Result: Peace of mind to execute your vision without constant money stress Raise Smart, Not Just Fast • Counterintuitive fact: The best time to fundraise is when you don't need to • Strategy: Show traction first. As Mark Cuban says, "Sweat equity is the best equity." • Outcome: Better terms, less dilution, more control Numbers are Your Superpower • Reality check: If you can't explain your finances, you can't run your business • Must-do: Know your CAC, LTV, MRR, and runway cold. No exceptions. • Benefit: Investor confidence, faster decisions, clear growth levers Unit Economics: Your North Star • Key metric: LTV should be at least 3x CAC • Focus: Optimize this ratio relentlessly • Impact: Sustainable growth, easier fundraising, path to profitability Bootstrap Like a Boss • Surprise: Mailchimp hit $700M ARR without VC funding • Mindset shift: See customer revenue as your best funding source • Upside: Full control, forced efficiency, potentially huge payoff The founder who nearly went bankrupt? They implemented these lessons and turned it all around. Your turn: Which of these lessons resonates most? What financial insight saved your startup? Share below – let's build a treasury of startup financial wisdom together. #StartupFinance #FounderLessons #GrowthHacking

"The day we almost lost everything taught me more than a decade of success ever could." It was just another Tuesday at RefME. We were riding high on increasing user numbers, in the middle of an investment round, and focused on expanding our user base. Revenue? That was tomorrow's problem. Then disaster struck. Just a day before signing, a key investor pulled out. Suddenly, our Runway wasn't just short – it was a cliff edge we were hurtling towards at breakneck speed. In that moment, I learned the harshest lesson of my startup career: User growth without revenue is a ticking time bomb. We found ourselves in a precarious position: 1. Limited Runway: Our focus on growth over revenue meant we had been burning through cash quickly. 2. No immediate backup plan: We had put all our eggs in the funding basket. 3. Vulnerable position: Our low cash reserves and high burn rate made us an easy target for opportunistic buyers. The outcome? We were forced to sell to a competitor. It wasn't the end we had envisioned when we started our journey. This experience reshaped my entire approach to startup finance: 1. Revenue is king: While user growth is essential, revenue provides stability and options. 2. Always have a Plan B: Never assume a funding round will close until the money is in the bank. 3. Watch your burn rate: It impacts your Runway and negotiating power. 4. Balanced growth: Aim for sustainable growth that balances user acquisition with revenue generation. Today, at Risika, we operate with a 'bootstrap mentality' even when in a comfortable financial position. This approach has allowed us to grow sustainably and maintain control over our destiny. To my fellow founders: Your Runway is your lifeline – protect it fiercely. Revenue isn't just about survival but the freedom to choose your path. Have you had any close calls with Runway in your startup journey? How did it change your approach to business? #StartupLessons #FinancialStrategy #RunwayManagement #EntrepreneurialInsights

A common scenario for founders and early employees of breakout startups: You’ve been heads down on rapid customer needs finding and execution, which fueled early growth and helped raise a series A or B. Now you have a little breathing room to pull your head up and think about how to get the next 10x in growth and fix your unit economics. You have sneaking suspicion there is a lot of opportunity (and waste) sitting below the surface, and you are right. One big thing you should do during this phase: de-average your business. Instead of looking at it as a monolith, cut it up into segments on a bunch of dimensions. You'll find some that are doing well (double down on product or growth) and others that are struggling (change, eliminate, cut cost). Common dimensions on which to de-average: - 𝐏𝐫𝐨𝐝𝐮𝐜𝐭 𝐜𝐚𝐭𝐞𝐠𝐨𝐫𝐢𝐞𝐬 𝐨𝐫 𝐠𝐞𝐨𝐠𝐫𝐚𝐩𝐡𝐲 (you'll find that the ones that really work are compensating for others that really don't) - 𝐂𝐮𝐬𝐭𝐨𝐦𝐞𝐫 𝐩𝐫𝐨𝐟𝐢𝐭𝐚𝐛𝐢𝐥𝐢𝐭𝐲 (you'll invariably find some customers that are highly profitable and others that are losing you money) - 𝐂𝐮𝐬𝐭𝐨𝐦𝐞𝐫 𝐞𝐧𝐠𝐚𝐠𝐞𝐦𝐞𝐧𝐭 𝐩𝐚𝐭𝐭𝐞𝐫𝐧𝐬 (it's not just engagement level, you're likely to find customers using you for totally different things) - 𝐀𝐜𝐪𝐮𝐢𝐬𝐢𝐭𝐢𝐨𝐧 𝐜𝐡𝐚𝐧𝐧𝐞𝐥 (beyond the obvious differences in ROI, you'll probably find big differences in the quality or nature of customers each channel is acquiring)

Have you made the move from a corporate career to a startup / scaleup? What was you #1 reason for the move? ____________________________________ 💭 Agree? Disagree? Let me know in the comments. 🔔 Like my content and want to see more? Follow or connect ♻ Found this post useful and think your network will too? Please hit that repost button. I write about the bootstrapped journey of founding, scaling, buying and selling B2B software businesses. Been there, done that, got the bruises, just about survived. #founders #founderstories #raisingequity #bootstrapping #venturecapital

Scaling to $30M in ARR in two years is no joke — but it's also not necessarily a big surprise for anyone who knows John Hu, Stan's CEO and Cofounder (the only founder we know who cold-called his way into a job with Goldman Sachs and built a following of 100k+ within a few years). With Stan, John has achieved what many believe to be contrary to conventional startup wisdom by entering a seemingly crowded, overhyped space — creator tools. In John's words: "There’s an analogy: when Google started, there were dozens of different search engines with nominal points of differentiation. Same with Stan — there were dozens of 'link in bio' companies competing for the same opportunity. At Stanford, they teach you all about the significant advantage you get in being a first mover. And when you reckon with the fact that all of these companies in the Creator Economy had raised hundreds of millions of dollars by the time I got started, you could reasonably say that Stan was objectively a stupid idea. But I went with my gut, and knew that we'd build something better — and looking back just a few years later, we've surpassed most of our competition. It may sound silly, but the reason why our growth is so strong is simply because we care about our customers the most. We are our own customers, we talk to our customers every day — we are not just our customers’ champions, we are our own champions alongside those whom we’re building for." True to John's commitment to fully aligning with customers — as a leader and as a creator himself — he's a fan of building in public, sharing the good, the bad, and the messy in-betweens of startup-building on his vlog. The videos are well worth a watch: https://lnkd.in/gZ_dJiah Check out our Q&A with John Hu for more on Stan's opportunity ahead, and the honesty and openness that makes his leadership style so powerful. https://lnkd.in/gnazmVjR

Working with 65+ founders, I've noticed something surprising: the factors that lead to success aren't always what people expect. Here's what truly matters (and what doesn’t). There was no correlation between their level of education and their success. There was a correlation between founders' industry experience. Those with 4+ years in their field thrived, while those without either struggled or burned through cash. An average definition of "short term" for a successful founder was at least a year. There was no correlation between the amount of money they started with and their success. This one's juicy 😝 An average successful founder had at least 1 co-founder (or co-founder-like partner). With the exception of 1, all of them either did a startup before or joined one at a super early stage, while those without either struggled significantly. Forget the founders I’ve worked with — even the ones I know personally didn’t fail because they couldn’t scale. And the last one for this post: Almost all non-technical founders, or those who got their product made by an agency, faced major issues due to tech debt within the first 3 years of their launch. __________________________________ Hi 👋 I am Siddharth. I help Early-Stage SaaS Founders to Avoid Pitfalls, Save Money & Time and Launch Successfully. Book a Free Call From My Profile