Lessons From a Decade in E-Commerce — Bootstrapping the World’s Largest Art Site
Fine Art America is one of the world’s largest art marketplaces and print-on-demand technology companies. We’ve been helping artists transform their images into museum-quality prints and other products since 2006, and we hold a unique position in the print-on-demand industry as the only major company that has never raised money from investors.
In fact, we’ve got a backstory like no other e-commerce company in the world:
Our entire business was built by a single programmer back in 2006 and continues to be run by just eight employees to this very day.
We’re profitable, don’t have any debt, don’t have any investors, don’t have any connections to Silicon Valley, and have spent more than a decade fending off competition from well-funded Silicon Valley corporations with hundreds of employees and hundreds of millions in venture capital.
We’re now one of the largest art sites in the world and power the online sales for 500,000+ independent artists and iconic brands such as Vanity Fair, GQ, Vogue, National Geographic, Life is Good, PBS, and many others.
We’ve done it all with just eight employees.
How is that possible?
If you regularly read business news, tech news, and startup news, you’ll find endless articles about companies “getting funded” and raising millions of dollars to launch their businesses.
That’s the Silicon Valley mentality.
Raise a bunch of money from investors… hire 50+ employees… spend millions of dollars on your website, product development, and advertising… and then, hopefully… someday down the road… figure out how to make money.
That mentality is now so pervasive that it’s spawned hit TV shows (e.g. Silicon Valley, Shark Tank, etc.) and ingrained an entire generation of entrepreneurs with the idea that raising money from investors is both necessary and a symbol of success.
Oftentimes, it’s neither.
If you’re building spaceships to fly you to Mars, then you probably need to raise money from investors.
If you’re building an e-commerce business, then you probably don’t — especially in 2018.
What if I told you that the secret to our success is that we never raised money and that Fine Art America is now the most competitive, most innovative, and most profitable company in the print-on-demand industry because we stayed lean and privately held?
For the past twelve years, I’ve watched almost every company in our industry raise millions of dollars in venture capital, chase top-line growth at all costs, fail to deliver on profitability, and wind up a shell of its former self. I’ve seen it happen all over the e-commerce space, in general.
Each time it would happen, I would think to myself, “Why do these companies keep doing this?”
I think the answer is simple — very few people and very few media outlets are showing entrepreneurs that there’s another way.
If you’re an entrepreneur, almost everything that you read and everyone that you talk to will tell you to raise money — especially if you’re running a tech company.
Shark Tank tells you to raise money. Your MBA professors will teach you to raise money. Investors will tell you to raise money. If you’re a recent graduate, some of your friends probably work at tech companies that have raised money.
“Raising money” is almost universally hailed as a sign of success.
You made it!
However, all you have to do is talk to a handful of entrepreneurs who have raised money, and you’ll quickly hear the other side of the story. In many ways, the day that you raise money is the day that you lose control of your business. Instead of being the boss, you’re now an employee answering to a new boss — your investors and your board of directors.
Many times, “raising money” isn’t a sign of success — it’s a sign that your business isn’t doing that well. Instead of running a profitable business, you’ve run out of money and need someone else’s money to keep the lights on.
Despite what they may teach you in business school and on TV, there are other ways to run a business that don’t require raising capital.
Stay lean. Figure out how to become profitable quickly. Get scrappy with your marketing and social media initiatives. Keep control of your business, and pour your profits back into growing the business.
Fine Art America is living proof that a small, bootstrapped company with a relentless focus on product development, automation, and profitability can emerge as an industry leader with true staying power.
Now — I’m going to explain how we did it:
Part 1: Launching the Business
Part 2: Competitors Arrive
Part 3: Bizarro World and the Benefits of Privacy
Part 4: Why Raise Money?
Part 5: Don’t Believe Everything That You Read
Part 6: The Finale (Lessons Learned and the Future of E-Commerce)
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