What It's Like To Found & Run Multiple Bootstrapped Businesses

I am the founder of multiple bootstrapped companies. They include web, mobile and infrastructure development agency Solid State Group, virtual office business The Hoxton Mix and, most recently, developer friendly feature flag tool Bullet Train. I've been involved with many more than that, watching some succeed and others fail.
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13:12, 12 May 20 (edit: 13:17, 13 May 20)
This Taaalk was written on the first version of Taaalk in 2016.
The archive.org version is available here
Theo Ford
11:33, 13 May 20
Ben. What was your first ever independent venture?
Ben Rometsch
11:34, 13 May 20
Actually my first venture was a secondary school hustle! Around 1987/1988 everyone was buying Commodore Amiga and Atari ST computers. They were way more powerful than the old 8-bit computers that we had grown up with, but they required 3.5 inch floppy disks as opposed to cassettes.
We used to all buy loads of games for these machines, and swap them with each other at school. After a while people realised that they could buy blank floppy disks and use a tool called XCopy to copy the game onto a blank disk before giving it back. Back then blank floppy disks were a valuable currency at school. One day I went to a computer fair in London with my dad and brother and found vendors that were selling big boxes of blank floppy disks *way* cheaper than what we had been paying at our local computer shop. My brother and I borrowed some money off my dad and bought a couple of boxes (I think maybe it was 50 disks per box). I took one box to school and my brother took the other. We sold both boxes in something like 2 days.
After restocking a few weeks later I had a network of kids in other years who would act as resellers for me. It was a good laugh at that point. I'd sell other kids a box at a reduced profit and they would sell them through to their peer group.
I seem to remember we were making 100% margin or near that figure; They were £1 per disk at school. We started getting good relationships with the disk suppliers at these fairs and began ordering them directly. I can't think how many disks we sold; more than a thousand over the period that we were selling them. Before long however the disks became commoditised. There were other kids that started doing what we were doing so we had to start competing with them, and then the local shops started selling them more cheaply, but we had a good run!
It's funny writing all that and thinking about it now as it taught me a lot of important lessons. All the basics are there; seeing the opportunity, borrowing money for cashflow, arbitraging the price of the product between two markets and then over time seeing the price gap close along with the opportunity, employing a sales force. Although I didn't know it at the time, it was a pretty good microcosm to learn from.
Theo Ford
11:36, 13 May 20
Wow thats quite an amazing level of initiative and leadership for someone in their early teens. Having had this experience did you ever envision yourself as anything other than an entrepreneur?
Ben Rometsch
11:36, 13 May 20
Ha at the time it seemed sort of obvious and simple! I never really thought of myself as entrepreneurial and to be honest I hate that word. If someone asked me what I did for a job I would NEVER say that I was an entrepreneur. Very British of me I suppose. I do have an appetite for chasing opportunities that come up in life but I don't really go out looking for them. I think a little bit that if you define yourself as an entrepreneur then you be definition aren't one.
There's this idea of the 'wannapreneur'; a derogatory label for people who go through the motions of entrepreneurialism but don't actually produce anything. They go to the conferences, the event drinks and all that side of things, and are generally really good at networking, but there is no substance behind what they do. They are bullshitters and you can spot them a mile away. ! I do subscribe to that idea a little bit which is probably not constructive, but whatever, it's a free country.
Paul Graham talks about this in his Stanford Lecture - people who are "playing house":
another characteristic mistake of young founders starting startups is to go through the motions of starting a startup. They come up with some plausible sounding idea, they raise funding to get a nice valuation, then the next step is they rent a nice office in SoMa and hire a bunch of their friends, until they gradually realize how completely fucked they are because while imitating all the outward forms of starting a startup, they have neglected the one thing that is actually essential, which is to make something people want.
I was at University between '94 and '98. Mosaic, the first "proper" web browser was released in 1993, so I was perfectly timed with regards to the birth of the Internet and the web. The first time we saw Mosaic, and realised there were websites outside of our University one, and that they were all linked; we all just sat the in stunned silence. It seemed obvious at that point how powerful the idea of the web and the Internet would be. I remember really clearly in 1995 sitting in my student house with my friends and arguing about whether we should all quit our degrees and start a web design firm. We decided not to, and it's one of the only decisions I have taken that I have come to later regret.
So maybe I'm not entrepreneurial!
Theo Ford
11:37, 13 May 20
Ha, I can really relate to that closing statement at this point in my life.
I also particularly like Paul Graham's notion of a sitcom startup idea. One that sounds plausible but has no grounding whatsoever in user needs/research.
I am interested in this notion of 'substance'. I too am slightly repelled by accompanying culture that prevails around a false the sense of productivity in relation to entrepreneurship, i guess because it seems shallow and self satisfied. Whereas the actual endeavour of building something to me, or 'injecting an idea' into the world holds a great deal of integrity, in my eyes.
I wonder how would define your perception of substance in relation to 'entrepreneurship' for lack of a better word. Is it an attitude and enthusiasm towards 'life/projects', or perhaps an understanding and familiarity of the more technical aspects of business such as cashflow etc, (the points you outlined from your experience in question 1) through concrete experience?
Ben Rometsch
11:37, 13 May 20
Yeah I think that's an interesting point to consider. When I started Solid State Group as a web agency, "startups" weren't a thing. This was 2002, so there was no Facebook, Youtube, Twitter, Basecamp, Xero or pretty much any sort of SaaS product. The dot com bubble had burst and the internet industry as a whole was pretty much destroyed. So many agencies had gone to the wall, and most of the big startups had flamed out dramatically. It was sort of a crazy time to be starting a web development agency.
In 2002 I got made redundant a second time within a year. I thought about getting another job as a software engineer somewhere but then decided against it; starting my own company would be just as secure an option! So I sat in my bedroom for about 5 months straight and wrote a Content Management System that turned out (at the time) to be pretty good. I had a business partner who would now be described as a Product Manager and between us we carved out this business.
I had just bought a flat when I got laid off the second time, so making money was a crystal clear target. That sharpens the mind a lot. Everything we did was oriented around getting clients and sending them invoices; preferably large invoices. The notion of raising money for a new venture at that time was absurd; there was just no way anyone was going to give money to us. It would have been a complete waste of time even trying, so we had to bootstrap. I had 3 months of runway from my severance package and that was it.
Fast forward to London in 2015 and it's pretty crazy just how much as changed; not only the industry but also the operating environment for new companies. I get that some companies need to be heavily capitalised to grow rapidly, but some of the bullshit you see is pretty breathtaking. When you see people having parties to celebrate closing their A round! Celebrating! They should be devastated!
Everyone argues about bootstrapping vs raising rounds, but really it boils down to whether you are making money or not. All the successful ventures I have gone into were profitable within the first year; all of them. You don't have to know anything technical; you just need to orient your business around making fucking money. That's it.
Theo Ford
11:37, 13 May 20
When you fist started solid state how did you get clients?
Ben Rometsch
11:38, 13 May 20
Getting our first clients was REALLY hard. We did that classic thing of building a product and then expecting people to turn up at our day with a chequebook, but that didn't happen. We got a couple of small projects from friends that we didn't make any money on, but were invaluable as case studies for our website. When you start an agency it's all about demonstrating credibility as quickly as possible.
I don't quite remember how we got our first real big lead; I think it might have been through organic search. Google in 2002 was a very different beast, and both organic search and paid search were not the food fight they are today. It was either paid or organic search. The lead was a really good one though - 4 content managed websites for Essex council. We had a couple of weeks to prepare for the pitch.
One of the best pieces of advice I was given was about how you can use your small size in comparison to your competitors to your own advantage. Even though this was a relatively small contract for most people, it would have been a massive deal for us to win it. We decided to take one of the client's current websites and basically implement the entire thing on our CMS, to demonstrate who easy it would be for them to manage the site themselves. This was a pretty big undertaking, and there's no way we would do something like this now, but as I said, you use your small size in any way you can.
So I spent a few days doing this implementation. When it got to the pitch we just totally nailed it; the client was blown away that we had taken the trouble of doing all this work to show our system, and we got the news that we had won the contract on the way home! That was a massive deal and one of the best memories I have of running my own business.
One really important point to make is how these moments, right at the start of the company, are the ones that burn into your memory as the highlights. I used to think that the best moments would be when you are sat in your ivory tower, sending out massive invoices and talking to your big team, but that's bollocks. It's all about sitting in your pyjamas at 3AM hacking on some code because you can't sleep through excitement.
Theo Ford
11:38, 13 May 20
Having established credibility, through a few strong projects in your portfolio, did you find work hard to come by thereafter, or demand organically develop, i.e. reccomendations from former clients etc? and do you still sit in your pyjamas hacking at 3am?
Ben Rometsch
11:38, 13 May 20
After about a year in business we scored a really big project; the website build and CMS for that year's BRIT awards. That was a really big deal for us; it was the first really mass-market site we had worked on and got us really good exposure. It also meant a metric shit-load of traffic for about 3 days straight, which had me really really nervous. It was a great client (thanks John, Dan and Francis!) and a great challenge that we totally nailed. We got tickets to the show and after party. We went and got stuck into the free booze but I was still completely terrified that the site would melt under the load of millions of concurrent users, but thankfully it did the job.
Anyway, after that I think it did become easier to get work, yes. There's a good triangulation of better case studies, more people that you are working with who can then recommend your work and then the perfect situation of when a client changes job and takes you with them. It all does start to build. Obviously your work has to be over a certain threshold of "good" but really most people just want a safe pair of hands that isn't going to wobble at the wrong moment.
It's one of those things that you can only indirectly affect. If you try too hard at winning new business you wont get anywhere, but if you put your irons in the fire and just keep things humming eventually it comes to you. I think the mistake a lot of people make is to try and do all this direct, immediate stuff, and it's just really really hard to win work that way. You have to play the long game, and start playing it as early as possible.
All that changed in 2008/2009. The 2 years between 2009 and 2011 were absolutely fucking horrible and an experience I never wish to repeat. I'm still absolutely furious that no one has been held to account with regards to what happened in the financial markets, and have spent the last 4 years making sure that I am insulated from all that bullshit as much as possible. It's hard to know what would have happened to the business if the meltdown had not occurred. We basically trod water for 3 years and only recently started growing again.
I don't code at 3am any more, no. That stuff is a one-time-only deal. It's bad for you! I do still hack at code to keep my eye in and still really enjoy it, but I've been overtaken by all these kids who can code in 5 different languages and have more stickers on their Macs than I do.
Theo Ford
11:38, 13 May 20
Stickers on your Mac is no doubt crucial. At what point did you decide diversify your endeavours and move into other areas such as your office renting business, Hoxten mix?
Ben Rometsch
11:39, 13 May 20
The Hoxton Mix was a business we completely stumbled upon. Way back in 2004 we were looking for an office for our 4 person company. We realised we were growing and so we found a nice premises in Shoreditch that could fit about 14 people in to. Our first office was just Matt and myself, and we shared with another company. So we just did exactly the same thing. This was before gumtree or Twitter (!) so we went and stuck a notice up in Franco's, which at the time was THE place to get a lunch in Shoreditch.
We got the space filled pretty easily, and it actually helped cover a lot of our rent. One of the first companies that moved in was 3 guys called Square Circle; a design and UX agency. We got on with them really well, and before long were pitching on a huge project, that we landed. That turned out to be well into six figures worth of work, and at that moment we realised the value of co-working, especially in Shoreditch which has an insane density of companies all doing similar things.
When we moved out of the smaller office, we actually went into business with Square Circle, and they are now joint owners of the Hoxton Mix. From there we opened 2 other premises and now have over 150 desks being rented out. It's great seeing small companies working together, and we have really active mailing list where people ask for help, advice or even offer pitches to people.
Theo Ford
11:39, 13 May 20
I gather most of your ideas have developed organically, from spotting an opportunity in relation to situation you were emersed in. Do you have any advice for tuning your lens so to speak in order to see promising business ventures around you? and what are your thoughts on a more calculated approach - i.e. were going to sit down and think of an idea/looking for and idea...
Ben Rometsch
11:40, 13 May 20
Yes I mean we even started the agency partly because we saw how much our employer was charging brands for basic content management, and realised that there was a market there.
I think a part of it is that people want to come up with a novel idea intellectually, rather than spot some existing opportunity and go after it. It's almost as if doing what I'm doing is maybe perceived as less worthy. The extreme of that obviously is Rocket Internet in Germany who "clone" US businesses. People look down their noses at that business, and the Samwer brothers, but the point is that execution is *hard* and ideas are relatively cheap.
After doing this for quite a while I do think I'm more analytical in my approach now. So I'll look at the market overall, whether it is growing and at what rate (superb piece of advice I was given: only sell into a growing market!). Then do things like using the Google Adwords Keyword Tool to see what sort of traffic a key term for a business would receive.
I guess I am more analytical now, but I am mainly doing this to decide what not to work on, as opposed to what to work on. For example the other day an opportunity came up which initially sounded really great, but after looking at the number of people searching Google for the particular relevant term, we decided not to go ahead with any sort of further work on it, because the scale was not there. I'm not talking about the billion dollar businesses that big VCs are after, but just something that would get a relatively good ROI.
Also I think this is particularly relevant:

ben-theo-1.png 8.69 KB

What I mean by this is that the more money there is on the table, the harder it is to achieve success. Obviously there's luck, timing etc, but on the whole I think this graph is representative of real life. So we aren't really aiming at billion dollar businesses. There's a lot of low hanging fruit that is not going to return that sort of money but is still going to give good returns, and of course you are still in control of your own destiny and not working for the man.
With one of the companies I work with we joke about different levels of money. You go up in scale. Car money, house money, yacht money, island money. If you are always working on startups that are aiming at yacht or island money, you're going to have a hard time! We aim more at house money businesses. I think soon we will have enough recurring revenue coming in that we can try riskier projects that have a higher return, but I think generally it's a good idea to start at car money and work your way up.
You get kicked in the balls less that way.
Theo Ford
11:40, 13 May 20
When you look at the business and product landscape today, what products and companies do you really respect, and what figures inspire you?
BTW i loved that last answer.
Ben Rometsch
11:40, 13 May 20
Ha thanks!
Good Question!
I'm working with an investing in https://www.getvape.co.uk who have built their business on top of Shopify, which just blows me away. Everything from the UX to the App store side of things to the support is just mega impressive. Especially considering that eCommerce can be really really complex. They have really helped the GetVape guys launch and iterate their offering quickly, which has been invaluable.
I think Slack are in an interesting position too. What's interesting to me about Slack is how they demonstrated the power of UX. There were plenty of group chat apps around before Slack (Campfire, Hipchat, IRC, Lync and a load of enterprise ones) so ostensibly you would think that Slack would not be able to grow orders of magnitude more quickly than those other products but they have. I think the reason that they have is because they are just completely nailing the UX side of things. There are so many tiny little details in Slack, and I keep finding them, months and months after using the product heavily, day after day. I find that really impressive.
Vice are another interesting company. Funnily enough we used to share an office building with them on Leonard Street back in the day where rents in Shoreditch were still in their teens. Back then they were just this utter cliche. It just looked like Nathan Barley. They were mainly a high end fashion print magazine back then. If you look at the quality of writing, reporting and video coming out of their London office now I am always taken aback. Plus they know how to take the piss out of themselves now. Back then they were way too moody!
In terms of people, I'm loving the words coming out of the mouth and hands of Chris Dixon (@cdixon) and Ben Evans (@benedictevans) from a16z as well as Rob Fitzpatrick (@robfitz) on the startup side and Matt Taibbi (@mtaibbi) on the speaking truth to power thing.
Theo Ford
11:40, 13 May 20
If you had an unlimited budget, what would invest in tomorrow? or what company would you start?
Ben Rometsch
11:41, 13 May 20
If I had truly unlimited funds I would probably do something around energy. Fund a fusion reactor and thorium fission reactor I think. The story of how nuclear power was basically hijacked by national “defence” agencies is pretty terrible. If we hadn't been so busy worrying about generating weapons grade plutonium from nuclear reactors in the 50s and 60s the world would be a way more enjoyable place to be. “Solving” energy would have a bazillion benefits so wide reaching I can't even imagine what things would be like if it was achieved. So that.
Theo Ford
11:41, 13 May 20
We spoke earlier about how businesses ought to preferably have an earlier return on their income, as oppose to the Silicon Valley model, in which you accumulate vast amounts of funding and potentially don't turn a profit for a couple of years. What are your thoughts regarding crowdfunding, and hopefully soon ‘crowd investing'? In order to validate your value propositions, and develop capital early on through sales in order to grow. It kind of seems the opposite, but a lot safer to a big speculative punt. ‘Might get kicked in the balls less'. But potentially a smaller ROI.
Ben Rometsch
11:41, 13 May 20
Now that brings up a really interesting point! I know a few people that have raised money through crowdfunding. The one huge positive that I see what with that model is that there is no “lead investor” that is going to be busting your balls all day long. Sure, you have a responsibility to the investors, and you need to provide regular investor updates etc etc, but by their nature this whole lead investor aspect just disappears.
Admittedly the amounts that you can raise through crowdfunding is lower than what you would raise in a typical series A, but I think for seed rounds they are really attractive, for the reasons given above. I guess it can act as a double edged sword, as you don't have investors to go to for advice, but I guess it depends on what is important to you when you are raising money.
There are also interesting aspects from the investor side too. Someone might invest only £500 to a company, but they then get the chance to “see inside” that business. To a lot of people, me for example, the information that comes from those investor reports is potentially very valuable. How are Facebook display ads performing? What are they paying per app-install? What about video retargeting? All these soft aspects of the business (especially marketing) are then available to see.
Theo Ford
11:42, 13 May 20
What interesting developments do you see happening in online marketing? And what have you found advantageous in the past?
Ben Rometsch
11:42, 13 May 20
I'm kind of shit at online marketing and don't pretend to be an expert! One thing I have discovered, however, is that the demographic has an enormous influence on which marketing channels you should focus on. For example, one of our investments is www.getvape.co.uk . They have found huge traction through Facebook, whereas Twitter has been pretty much worthless for them. Whatever it is, vapers are just not that into Twitter. On the flip side, we are building a fantasy football platform ourselves - www.dugoutfc.com - and for football fans, Twitter is MASSIVE. There are dozens of fan accounts that have over 100k followers.
One of the things we consider now is to try and have no preconceptions about channels and demographics, and basically just spray out everywhere initially, but then focus down on one or two channels very quickly. That seems to be the best way of finding where you are going to get best ROI and then seeing how big that channel can be.
Theo Ford
11:42, 13 May 20
We are sold this vision that a successful entrepreneur in the grand sense is someone who just tries hard enough (bullshit). The reality of it is that your idea and technology (for the big buckets) have to be beautifully timed. I feel like I missed the boat on the web. One may be able to carve out a niche for themselves, but it feels like all the monopoly businesses to be had involving desktop and smartphone internet are had.
What are your thoughts about business on the web and looking forward?
Ben Rometsch
11:43, 13 May 20
I can't remember who said it, no doubt someone richer than me, that there are no bad ideas, just bad timing. I agree with that to a greater degree.
I think there's still loads of opportunities that will come up, but they will either be in niche areas, or based around concepts that just don't exist yet. Sometimes these concepts will be technology driven (GPS + Smartphone = Foursquare) and some will be trend driven.
So take Facebook as an example. You could have invented Facebook in 1997, but at the time the notion of sharing personal aspects of our lives on line was just totally alien. There was Friends Reunited in the UK which did have something of a moment, but it was not really designed to be visited several times a day, and you were never expected to write status updates. I think Facebook really grew on top of a generational change about personal information, photos and all that sort of stuff.
I think the web and smartphones are really just the plumbing that enable all this stuff. It's clear that people now prefer to consume this stuff on their phones as opposed to in front of a desktop web browser, for whatever reason, but it's still all just plumbing.
The best ideas are ones that just seem utterly obvious in hindsight. Uber, Facebook, Strava. But a few years before these ideas broke they would have just seemed really weird.
I do agree that the timing is really just so important. You have to reach the inflexion point between weird and “oh my god I cant live my life without this app”. 99% of the time I think that's luck.
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