How Bubble Grew to $1.6 million ARR and 230k users without raising a dime
Listen to the episode!
Read The Blog Post!
Written by Emmanuel Straschnov, Cofounder Bubble
Hi HypeNATION,
My name is Emmanuel Straschnov, Cofounder of Bubble, a SaaS that makes programming as easy as pointing and clicking.
Funding your development through customers today is way less common that it has been for decades, if not centuries.
With the startup wave that we've seen over the last 15 years, people now go to investors to get the funds needed to develop their product. Yet, there is a real case for growing your business organically, without external funding, and for making sure from the beginning some people out there are ready to pay for your product.
Doing so also offers the advantage of that it is a safer way to run a business. By definition, when you raise money, you live above your means. So you are basically doomed to raise again, except if you manage to find a business model that works well enough to cover the costs you’ve been used to paying for with the money you raised.
In other words, raising money increases the risk profile of your company. Bootstrapping also forces you to figure out how to make money earlier on, leading to a much less likely cash-issue down the line.
That’s what we’ve done with Bubble (a visual framework to build web apps). We started our company in 2012, and have been bootstrapping for 6 years now, with a team of 10 and more than 230,000 users.
How did we manage to find these paying users early on (we got our first payment in December 2012, with a very early alpha)? Well, it starts with the obvious: don't raise money. If you do, the work to get the first clients will not be worth it in your mind...
You need to find customers that want to pay for a very early, buggy and not pretty version of your product. And this is hard to find: most entrepreneurs have friends that are very supportive, and that say how cool the idea is, but if you ask them "Ok, what is your credit card number to sign up for a paid plan?", it's hard to get a follow up on that... The reason being they don't really need the product.
In our case, we didn't go to our friends, we went to tech meetups to talk to people actively looking for developers. These people had businesses that couldn't take off because of the lack of engineers. They were, let's say it, desperate. These are the people you need early on in your user base. They will accept bugs, and will push the product in the right direction.
Once you find a few, you keep growing with your customers, until one day, you find someone that needs the product so much that he can pay way more than others, and that's how you grow.
In Bubble's case, it was an early user that joined a funded startup in San Francisco that had raised millions, but couldn't find engineers to develop the new version of their solar panel financing platform. They had very tight deadlines, money, and were, here as well, desperate. The need for a product like ours was so strong that we could quote them 10k a month, which basically enabled us to bootstrapp and fund our own product development for 2 years, as the contract went for years (they still use Bubble today!).
Now it doesn't come without problems. For us, for instance, it leads to extreme pressure, which can be hard at times, and can even make you lose time. So it's a tough journey, one customer pays you a lot, so you rely a lot on them (by the way, they rely on you a ton as well, at least for something like Bubble), and you need to know when to say “stop” when they keep pushing for features, help, etc.
This is tiring and can lead to some perturbations in your company's development. It's important to be firm on what is okay, and not okay, and be ready to say no to your largest customer.
That's the thing here, there is no free meal: if you don't go to investors, in some ways, it's easier, but then you have more pressure from customers. In most cases it's healthier, as users' interest are more aligned with the business than investors'.
Listen to more on how we get customers to fund our development in my episode with RajNATION on Startup Hypeman: The Podcast.
Emmanuel