Masters of Scale – Reid Hoffman: Mailchimp’s Ben Chestnut
You can bootstrap your business to scale, but you’ll have to make your own luck. Nobody knows this better than Mailchimp’s Ben Chestnut. He used a DIY ethos to grow a $600 million company without ever raising a dollar of outside funding.
The Mailchimp story is the exception to Reid’s rule (generally: raise more money than you think you need!). The episode explores a range of options for those who don’t fit the VC-funding mold for any number of reasons.
Take risks and believe in yourself
Believing in oneself and taking risks, despite lack of business experience, can lead to success. Financing remains a challenge for artists and creators, but crowdfunding and finding influential supporters can make a difference.
Not every business needs to pursue venture capital funding for rapid growth. Entrepreneurs can consider alternative options like bootstrapping, but it requires catching multiple waves of good fortune and a lot of grit.
Bootstrapping vs seeking investment
Our childhood hobbies and experiences can provide valuable skills and lessons that can be applied in our careers. Creativity, resourcefulness, and adaptability are essential traits for entrepreneurs, and early experiences can help develop these skills.
While bootstrapping can be a great way to start a business, seeking investment from the right kind of investors can add value beyond just financial support. Don’t be shy about seeking help from investors who can provide valuable guidance and support.
Founders have the option to add multiple angel investors who can offer industry expertise and connections, but managing expectations can be challenging with numerous investors. The right form of investment must align with the company’s objectives and timing, and strategic angel investors should be chosen carefully.
Have confidence and trust in your product and team
You don’t always need external investment to succeed. Have confidence in your product and team, trust your instincts, and consider bootstrapping as a viable option for scaling your business.
When seeking investment, prioritize finding investors who align with your product, personality, and vision. Don’t compromise your beliefs and recognize that not all businesses need to scale with VC funding. Persevere and seek out the right match for your business.
Crowdfunding vs bootstrapping
- Crowdfunding and bootstrapping are viable options for startups to secure funding without relying on venture capital. When crowdfunding, aim for the bare minimum to test the minimum viable product. Bootstrapping involves relying on customers to fund the business.
- Successful entrepreneurs should take advantage of new technologies and customer input while relying on passionate users for marketing. Temporary fixes may become powerful tools, but persistent problem-solving is key.
Stay aware of the latest trends and platforms
- Businesses can achieve growth by repeating successful marketing strategies and keeping up with new platforms. Mailchimp’s success with Twitter and their accidental discovery of the freemium model demonstrate the importance of staying aware of trends.
- Offering a free service to acquire new customers can lead to rapid growth, but it’s important to constantly refine and analyze the business model to continue expanding into new markets.
By analyzing cohort data and A/B testing, businesses can achieve massive growth with a freemium model. Seeking VC funding can provide speed and support to focus on tuning virality for exponential growth. Both art and science are required.
Levar burton’s journey to fund his reading app for kids
Levar Burton, the famous actor and educator, struggled to find funding for his reading app for kids in Silicon Valley. He eventually launched a Kickstarter campaign and raised $6.4 million, with the help of a $1 million donation from Seth MacFarlane.
Financing has always been a challenge for artists and creators, as has the importance of believing in oneself and taking risks. Levar had no experience as a businessman but bet on himself and had absolute faith in his ability to get it done in the end.
We had crazy expectations for the consulting side of our business, and I think that’s why the revenue was always so flat. We were too hard on ourselves there, striving too much.