Startups & VC | Athletes & Trainers
I tend to understand topics better when I draw parallels to topics that I know about and have experience in. Startups/VC & fitness consume most of my life, I am learning that there is no explicitly correct or incorrect way to build a startup or fund a startup. And there is no explicitly correct or incorrect way for athletes to achieve a goal. The goal of this writing is mostly just to get these parallels out of my head, not advocate for a certain way of going about startup business/getting in shape.
Bootstrapping, equity financing & debt financing are to startups what self-guided research/implementation, personal trainers & diet coaches are to athletes. In both worlds, any of the above methods can lead to desirable results. But in today’s world the tweeters and conference speakers (that I have experienced) don’t accept that. The bootstrappers demonize VCs, (some) VCs scoff at bootstrappers, many athletes don’t trust trainers/coaches, and trainers look down on athlete’s independence as “unscientific.” Of course this is a generalization and not true of all VC and trainers.
Mailchimp & Titos Vodka| Dorian Yates & Rich Froning
The most famous tech company that “made it” by way of bootstrapping is Mailchimp. ($700M Rev + 5 acquisitions) Mailchimp has received no outside funding and is often regarded as the “Un-Silicon Valley” way to build a tech company. Mailchimp is the equivalent to an athlete never enlisting the help of a personal trainer or dietician to create plans and schedules “guaranteed to work.” A few years before Mailchimp’s founding in 2001, an English bodybuilder by the name of Dorian Yates was dominating the Mr. Olympia (bodybuildings most coveted contest) for most of the 90’s. Dorian is the Mailchimp of bodybuilding. He is famous (maybe notorious) for never having a trainer or dietician. He took it completely upon himself to learn what stressors his body best reacts to, even taking it so far as training in his own basement gym. The Americans initially could not take Dorian seriously… no coach? no dietician? a basement gym with old equipment? Not dissimilar to how many venture backed founders and VCs struggle to take bootstrappers seriously, and perhaps rightfully so… it is significantly more difficult to take the slow growth bootstrapping road, especially when the press heavily favors broadcasting funding rounds and hiring surges.
Another bootstrapping success story is that of Tito’s Vodka, worth over $2.5B and owned completely outright by the founder — Bert Beveridge (although he did borrow $90k on 19 credit cards to get started). About the same time that Tito’s started taking off in the early 2010’s, a man by the name of Rich Froning was dominating the Crossfit Games earning the title “Fittest Man on Earth” in 2011,12,13,14. Tito’s and Mailchimp are the “Un-Silicon Valley” ways of building a business just how Dorian and Rich are the “unconventional” ways of achieving peak physical performance and health. Rich Froning was also ridiculed and criticized for not following the Paleo Diet popularized by the Crossfit obsessed. He never hired a trainer either, taking it completely upon himself to complete the tasks required to qualify for the Crossfit Games.
Facebook, Peter Thiel, Accel| The 1990’s Chicago Bulls
The trending topic in sports as of this writing is The Last Dance documentary following the legendary Chicago Bulls teams of the 90’s. Phil Jackson (Head Coach) and Jerry Krause (General Manager) can be considered the Peter Thiel, Accel, and Greylock of The Bulls success. Without Phil, Michael and the Bulls (probably) could not have achieved dynasty, and without Thiel and Accel, Facebook (probably) could not have executed at the speed and precision in which they did.
However, I still ponder that Michael Jordan was undeniable even without Jackson/Krause and Zuckerberg & Co. were still talented tech wizards without Thiel and Accel and maybe they could have reached success without the coaches and investors. But that’s a sample path that just did not become a reality.
Yes, I know the difference between the two paragraphs above compares individual sport to team sport, but team sports still comprise individuals. One thing I have noticed about venture backed startups as compared to bootstrapped is that founders with venture backing by necessity have to spend more time fund raising, reporting to investors, and networking with potential new investors all of which takes away from time spent working on the actual business. So these founders rely more on delegating tactical objectives while they can focus on strategic objectives, making their organization resemble the Chicago Bulls (where Jordan is more focused on the dynasty than he is how many buckets he gets each game) more so than Yates or Froning.
While founders of bootstrapped companies still must build strong, qualified teams to rely on and grow the business, they necessarily have more time in the tactical trenches because they don’t have the strategic investors to entertain and meet with. Just as any leader does, they obviously still have strategic objectives to pursue, but they tend to be more hands on in the weeds of the business. Similar to how Dorian Yates and Rich Froning were more tactical and hands on with their building avenues to greatness.
Concluding Thoughts
I suppose you could look at bootstrappers like Mailchimp, Tito’s, Yates, and Froning purely as outliers, but you could also see Facebook and the many other successful venture backed companies as outliers too (by nature of the incredible fail rates of startups) so either way building a successful business and achieving peak physical performance are incredibly difficult, it’s just a matter of which difficult route you want to take. But being in the VC business I will always have a bias for going the VC route :)
