Billion Dollar Valuations and Bootstrapping
Oftentimes, the best ideas and best solutions come from a bootstrap model.
By Mike Templeman
Well, Josh James has done it again. He’s taken a startup and turned it into a billion dollar company. Well, almost a billion dollar company. On February 5th, Domo announced a $125 million Series C financing round led by TPG Growth, Fidelity Investments, and T.Rowe Price. The investment was at an $825 million valuation.
This investment adds to the already rich coffers of Domo. Over the last two years, they’ve raised $250 million to promote growth.
The news of Domo’s investment was hot on the heels of the announcement by AtTask that they’d raised $38 million in a Series D round of funding. AtTask is a Utah-based company that provides project management software to the enterprise market. They were founded in 2001 by Scott Johnson.
The news of these funding rounds is a boon for the startup space in Utah. It proves that there is a robust and growing tech industry nestled in the Silicon Slopes. However, it does beg the question: Do you need a large round of funding to be a successful tech startup?
The answer is no.
While having tens of millions of dollars in the bank does make it easier for sales and marketing initiatives, it does not guarantee a great product. And at the core of any ultra-successful business is a great product or service offering.
In fact, bootstrapping a business can have a refiner’s fire effect on a product offering. If a company is forced to examine all expenses on a granular level, they are more likely to only spend what is absolutely necessary on R&D and other product improving efforts. Because of this, the product will receive the ultimate level of scrutiny and all changes will be for the betterment of the product, and not change for the sake of change.
There are many startups in Utah that are taking the bootstrapping approach and bringing their products to market with a forced focus on what their customers absolutely need; nailing the right pain points, and exploiting gaps in other offerings. They don’t have hundreds of millions to spend on sponsoring trade shows or plastering their brand on sports arenas. They are 100% focused on their product and their target market.
A few such companies are:
Decisions, a workflow software company
The group at Decisions comes from a long history of workflow software and process automation. From their decades of workflow software experience, and multiple acquisitions, Decisions is meant to be the next generation of workflow software that is ready for all of the contemporary technology shifts.
Decisions works closely with partners to deliver OEM, and add-on solutions to help software vendors add to their product line, and extend a products capabilities. Only recently have they started selling the platform directly, and they have already signed on multiple Fortune 500 customers.
They are a self-funded organization that is finding traction in the industry and beginning to turn heads.
Arellia, an enterprise security software company
Arellia is changing how employees are performing tasks. They are offering a layer of security with privilege management and administrator rights management that is seamless and unobtrusive.
They believe that the best security is the security you never see. They have created a product that protects an organization by shrinking their vulnerability to attacks. Instead of making the shield bigger to protect against malware and viruses, they’re making the target smaller, to avoid the malware and viruses altogether.
Like Decisions, they are finding ways to promote and sell their product without the backing of a T. Rowe Price.
BambooHR, a SMB HR software company
Founded in 2008 by Ben Peterson and Ryan Sanders, BambooHR was started to offer a better HR experience for small to medium sized businesses. Their software offers a secure, central database to manage employee data, track PTO, and create reports. Recognized as one of the fastest growing companies in Utah by UVEF, they are actively hiring and carving out their piece of the HR market space from their offices in Lindon, Utah.
So, if you haven’t had a phone call with Marc Andreessen, and Google Ventures isn’t busting down your door to give you a suitcase full of money, don’t be discouraged. Oftentimes, the best ideas and best solutions come from a bootstrap model.
Published 2/14/2014
