Bootstrapped 13 years to exit: A true founder story
Why a "boring" founder exit is the extraordinary outcome most of us should be chasing.
Hi, it’s Melissa, and welcome (back) to “your founder next door”, a weekly publication with stories and tidbits of my human journey bootstrapping eWebinar to $5m ARR. No BS, just straight-up truth bombs on what it’s like to build a company without an abundance of resources or friends in high places.
The Big Aha! 💡
This is the story of a founder who exited after 13 years with enough to never work again. It’s the story you’ll never read about in the media because it’s not exciting enough. But, perhaps it’s the ultimate outcome most of us should be chasing, even if we don’t know it yet.
Backstory 👩🏫
Last week, I got on a call with a friend of mine to hear his founder’s story. This story has been on my mind ever since. Not because it’s anything special, but because it’s not. It’s the “story next door” by a founder next door. Your “average” entrepreneur story by someone who stumbled on an idea by accident, worked hard, grew it through profitability, had its ups and downs, and eventually sold to a strategic buyer after becoming the best-of-class software in its category.
It’s not the clickbait, zero to $100m in 12 months narrative that’ll make headlines. It’s the storyline of the other 99.9%. The mostly likely path for you and I. It’s the one that deserves to be told. The one that needs to be told so we can recalibrate what success looks like. Because often, it is not the fairy tale unicorn porn we’re subject to. It’s the journey that we are on now.
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Bootstrapped 13 years to exit: A true founder story 📖
My friend is quite private, so for the sake of anonymity, let’s call him Spencer.
Spencer’s dad was an entrepreneur, so he never thought of entrepreneurship as something out of the box. To him, it was just another job.
One day, in his teens, his dad asked him if he’d want to work for himself. Till then, he had never given it much thought. But yes, he decided that he would want to do that. One day.
He remembers taking long summer family vacations where others would claim to only have two weeks off. “Fuck that.” He thought to himself.
He started coding at 8 years old. Self-taught, no formal education. He enjoyed solving hard problems and building products. As a result, he self-selected out of school into relevant jobs.
At 26, while he was working for a technology consulting firm, he told his boss that in a year, he would quit to start his own thing because of a promise he made to himself at 17. He was going to give himself a decade of experience before following his dad’s footsteps.
The firm he was working for had built a solution for their client that he believed could be productized. It was a learning solution for a university that perhaps other institutions would find useful. It seemed like a good place to start.
His boss tried to make him partner to keep him around, but due to cofounder misalignment, that proposal didn’t work out. Instead, his boss left his own firm to join Spencer on his new venture.
Spencer had dreams of pursuing multiple different ideas, so they cofounded a venture studio funded by their own capital. This learning platform was going to be the first thing they incubated.
As luck would have it, shortly after launching, the US had made this particular type of digital learning mandatory across universities. That’s how the business took off. They never thought about raising capital, and didn’t have to because they took 50% deposits up front for each contract. Like good bootstrappers, to get things going, they sold vaporware based on demand and delivered on their promise.
Around 6 years in, Spencer questioned whether he wanted to keep going or move onto the next problem to solve. He enjoyed building new products but that’s not what he was doing at that point. He did what he needed to gear up for a sale, found a buyer, but his cofounder didn’t want to sell as they were nearing the end of negotiations. The business was doing well and he didn’t want to push his cofounder to do something he wasn’t fully on board with. He could’ve convinced him, but that just wasn’t his vibe.
His cofounder, knowing that Spencer was craving a new challenge, told him he could work on other ideas they could incubate if they hired a CEO to take over. While they tried that for two years, it didn’t work as expected and Spencer had to step back in. He never got to see those other ideas come to fruition. He doesn’t regret anything, but in hindsight, he might have pushed for that sale.
Several years later, after some ups and downs, 13 years into their journey, this company rose to become the industry leading learning solution in its class. 80% of college students in the US were on the platform, which was impressive, but there wasn’t much room for more growth. They had hoped for more international adoption, but other countries hadn’t mandated this solution the way the US did.
It was then that they received an offer from a strategic acquirer, and the rest is history.
“What kept you going when things were hard?” I asked him. He was proud of the fact that they had built a product that made students better at their craft, that they were making a difference in the industry.
“What about purpose?” I said, hoping he would give me a window into figuring out my own.
“We’re going to have to continue talking about that, because purpose is something I’ve also struggled with.” He replied.
What happened next…👂
Spencer thought that he would hop into another project quickly because that’s what he always wanted to do. Turns out, his priorities shifted and he no longer had the energy to start something else. He got a retirement-level exit in his early 40s, and what mattered most to him was no longer work, but finding happiness in his personal life.
It’s been a few years since Spencer became “funemployed”. He spends his time advising startups, traveling, and making memories with friends around the world. In fact, that’s how we met; going to festivals and venturing to Burning Man together. He has since pursued a full-time hobby and part-time career in music, something he never got a chance to explore before.
Plot twist: The ordinary is the extraordinary 😯
This seemingly normal, boring, ordinary tale of a founder who exited after 13 years is nothing short of extraordinary.
How many people do you know can say they started a company with nothing but revenue and a belief that they could build something that makes a difference, and actually did?
How many can say that a large majority of their total addressable market used their platform?
How many 40-something-year-old retirees do you know who have complete freedom to live their lives without any financial worries? (He doesn’t have “fuck you money”, as he put it himself. But enough to never work again.)
I’d be willing to bet that the number is: not many.
We’re conditioned to believe that we have to chase the unicorn to have a meaningful outcome and to be deemed ambitious and sensible.
Here is the plot twist: The very “unexciting outcome” is the unicorn. It’s already a highly unusual event any one of us would be so lucky to experience. Only 0.4% of companies reach $10m in annual revenue, and only a fraction of those result in a $10m+ net payout for founders.
And yet, we keep getting told otherwise 📺
Every day, we are fed fairy tales of founders who hit the jackpot and we’re made to believe those are the norm. If it takes you 10 years to get to $5m ARR, you’re too late, it’s over for you, and nobody will ever buy your company for more than 1.5x revenue. You weren’t ambitious enough. You did everything wrong. You’ve failed.
Here is the truth: The media fucks up our idea of success.
The media needs to write about extraordinary stories because that’s their business model. They need clickbait to sell readership and ads. The everyday story next door is boring. It doesn’t sell. What sells is the American dream. But guess what? Dreams aren’t real. At least not for the majority.
It’s not to say that you won’t be the next Disney princess or prince charming. It’s just not likely. If you recalibrate your expectations to what’s the most probable outcome for you, you’ll have a much better, easier, and happier time building your company. If you end up with an extra, extraordinary outcome, it’s a bonus, not a rite of passage.
Rather than deluding ourselves with an unhealthy amount of optimism and being disappointed, we can choose to operate with a healthy amount of cautious optimism. We can work hard, grow profit, and build sustainably without beating ourselves up over every failure.
With all the noise out there, it’s easy to forget that companies are built in decades. Not months, not years. But decades.
Basecamp was founded in 2004. HubSpot in 2006. Buffer in 2010. Mailchimp was acquired in 2021, 20 years after its inception.
Reflections: What does this all mean? 🪞
It means that before you start something, you need to be prepared to devote at least 10 years into a passion you believe in.
It means that if you’re in year 6, and you feel defeated (like I sometimes do too), you remind yourself that you’re barely halfway through.
It means that on days where you feel like nothing is working, you’re behind, and you’re not as good as everyone else at this game, you tell yourself: I am exactly where I’m supposed to be.
The biggest lesson I learned through all of this is:
I’m on the right path, because this is where I am.
Thank you for reading!
Till next time,
— Melissa, your founder next door ✌️
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The only way this grows is by word of mouth, so I’d really appreciate all the help you’re willing to give. 🙏
Love this - I sold my "boring bootstrapped" business for £45m in May last year and retained majority shareholding in exactly the same way as Spencer. Started my business in 2005, so two decades is my timeline too.
I didn't make the news either, and other than close friends and family I'm completely under the radar.
I'm also early 40s, have taken funemployment (love that term), building a car, flying planes, playing music in a couple of bands, travelling and doing whatever the fuck I want without ever worrying about money again.
All eerily similar! Perhaps I should also go to burning man :)
The stories that aren't talked about are usually the best ones. I believe building - and retiring from - a "lifestyle business" is the goal of most people.