Below: We’re getting so many submissions for our “Bootstrapped, Profitable, & Proud” series that it’s tough to find room to profile everyone. So here’s a roundup post featuring a quick look at several different companies that have $1M+ in revenues, didn’t take VC, and are profitable.
Litmus is a tool for email marketers. It helps them test their email designs across a range of different email clients. The founders attended 37signals’ Building of Basecamp workshop in Copenhagen and afterwards self-funded the business. It’s now “significantly above $1m in revenue, very profitable, and growing by around 10% every month,” according to founder Paul Farnell.
Litmus shows you screenshots of your email newsletter as it looks across all major email clients.
According to Farnell, there is no exit strategy:
We have no plans for a big “exit”. Being acquired and working for years at a big company sounds terrible to me. Why would we want to give up the flexibility and freedom we have right now? To us it’s not just about money, it’s about enjoying what we do and believing in it.
I wouldn’t advise starting something you’re not passionate about. It’ll be your life for the next 5+ years. Make sure you relish the idea of spending 12+ hours a day thinking about it.
Here’s his take on competitors:
I attended Geoffrey Moore’s talk at the Business of Software conference last year. What he said really stuck with me, and changed the way I think about what we do.
We have a handful of competitor’s doing a similar thing. For a couple of years we watched them closely and tried to keep up with them in terms of features. It felt like there were things we “had” to have, in order to be comparable. That was wrong. What Moore discusses is being competitive by innovation, not by keeping up on features. It’s similar to your own ideas about underdoing the competition.
Since then we’ve made some big calls not to build features that other people already have. We decided they weren’t necessary. Turns out they’re not! Since ignoring our competitors and focussing on what new and interesting things we can build, we’ve been happier, more productive, and seen more success.
A Small Orange
Douglas Hanna is CEO of hosting company A Small Orange and writes, “A Small Orange has had over $1,000,000 in revenue for more than three years now and has been well in the green pretty much since it was founded. We have 13 full-time employees and about 25,000 or so customers.”
Here’s why his company emphasizes customer support:
The hosting industry has undergone a lot of consolidation and bigger companies and investment groups tend to view customer service as a cost center instead of a potential profit center. When I do our books, I’m tempted to split up our support costs as half marketing and half operating expenses. When we provide great service (which we try to do as frequently as possible), our customers notice and appreciate that. A lot of times it results in them telling their friends and social networks about us, which leads to more sales and greater customer loyalty. Companies that view customer service as a necessary evil to prevent customers from canceling miss out on that and have to market with their wallets instead of their customers.
Bill Hamilton is founder and president of TechSmith, which makes products like Snagit, Camtasia Studio, Jing, Morae, Camtasia Relay and Screencast.com. Here he explains the company’s growth:
We’ve grown from approximately $1.8 million in 1999 to just over $34 million in 2009. And we’ve been profitable every year. We’ve also launched several new products along the way, including several that have been localized into German, French, Korean and Japanese. We’ve also gone from about a dozen people in 1999 to about 210 people now.
Hamilton’s advice on starting a company:
I think it’s important to learn a lot about what the components of a business are. There is a lot of value to be gained by working for other small businesses before starting your own, if that isn’t naturally part of your background. If you have no experience in payroll, hiring, firing, marketing, etc, it can be very valuable to learn from others first.
IData Inc. is a technology consulting firm for higher education institutions. IData has 18 employees, over $2 million in revenue, and over 50 universities as clients, according to founder and President Brian Parish. Here’s Brian’s advice for starting a business:
Patience. Some of the biggest mistakes I make are when I know I should be waiting, but I am afraid I will miss the opportunity if I do not act. This does not mean you shouldn’t take risks, but it does mean that you shouldn’t act just because you think someone else will beat you to it.
If you want something to happen, you have to invest in it with time and money. Ideas and hope are not enough. You need to pay for things to happen. This includes company culture as well as products.
Is your business bootstrapped, profitable, and proud? We’re looking for more companies that fit the bill ($1M+ in revs, no VC, profitable) to profile. (Note: We’d prefer to profile businesses that sell a product as opposed to consulting.) Drop us a line with the subject “Bootstrapped, profitable, and proud” and let us know why your company is a good fit.