This is the first in an ongoing series of interviews that I plan to do with successful bootstrappers. I hope to bring a variety of viewpoints on the art of starting and running a business from a bootstrapping perspective.
I’m excited to have the first interview for my new series ready to go. My hope is to introduce you to some people that you may not necessarily be familiar with who have been successfully bootstrapping their companies. The first interview is with Spencer Fry. I first found Spencer through a Hacker News link and I’ve read just about everything on his blog since then. He’s the perfect guy to help me kick this thing off.
Jim Lastinger: Tell me a little bit about Carbonmade and what you do.
Spencer Fry: Happy to. Carbonmade is an online portfolio for creative people to show off their work. It’s for anyone who makes anything. Our team is mostly located in New York City with a few folks outside the city (Chicago, Las Vegas, and Canada). My role at Carbonmade is the “Everything Else” guy. I handle everything else that isn’t design or code. I wrote two pieces on my website that shed more light on what I do.
JL: How has bootstrapping impacted Carbonmade and your prior companies?
SF: Bootstrapping has been a big part of my life. I’m well-known in New York City circles as the “bootstrapping guy.” I never had access to capital or any interest in raising it to start a company. To me it always made sense to try and make revenue from the launch of your business rather than waiting for massive user growth before turning on the faucet. I’m not opposed to raising money, but to me it’s less interesting at the start of your business and more interesting when you’re looking to raise money to propel growth forward.
JL: Would you accept any venture capital now if you needed it?
SF: We’re thankfully in a positon where we don’t need to raise venture capital. It’s difficult to know what I’d do if we needed money to survive, which is actually a terrible position to be when raising money. You’re unlikely to get a good deal or a deal at all. Honestly, I probably wouldn’t start a company where I had to put myself in the position of having to raise money.
JL: What advice do you have for new entrepreneurs when it comes to choosing between bootstrapping and seeking outside funding?
SF: The lives of a bootstrapping entrepreneur and an entrepreneur who has raised money are far different. It’s great having access to a large bank account and being able to spend freely on hiring who you want, etc., but it can also lead to your downfall. I think you need to look at what type of company you’re trying to build. Some companies by definition need capital to be built: Twitter and Facebook are great examples. Companies such as Carbonmade, Harvest, and HypeMachine less so.
JL: Any financial advice for bootstrappers?
SF: Cash flow is the most important thing you can spend your time understanding. You need to make sure you stay on top of things. You can certainly put yourself in a terrible position by over spending.
That’s it! Thanks to Spencer for spending a little time with me. Please take a look at his sites if you haven’t already and follow him on Twitter.