The benefits of bootstrapping

`1:17:16`

"Let's hire some more people. Whatever, we can afford to. In fact, they need us to spend the money, by the way. They didn't give us the money to save it and earn 6% interest." Which would be great now. Three years ago, 0% interest. "They didn't give us the money to sit in the bank. They gave us the money to spend the money." What are you going to spend it on? Two things, people and marketing. Basically, that's what you spend it on. We can buy more ads. We can do more of this. We're going to do that. We can hire some more people, build up more teams, do more things simultaneously. There's a certain sloppiness in that. I think it just becomes harder when the environment encourages slop, which is why I think the value in bootstrapping is that it teaches entrepreneurs, it not even teaches, it forces them to have to figure out how to make money. The more time under the curve they have making money and practicing making money, the better

`1:18:05`

at it they're going to get. I used the guitar metaphor a bit earlier, I'll use it again. If you're playing guitar, if I give you a guitar and ask you to go up on stage and play guitar, you're going to suck. It's going to be horribly embarrassing and you're going to be terrible at it. You might be terrible at it a month later, but you'll be slightly better at it. You do it for six months or a year, you're going to be better and better. And then, five years and you're really getting good. Why do we think that a business that is sloppy, that doesn't have to make their own money, that is just getting pumped full of money by somebody else, can all of a sudden turn on the profit spigot and all of a sudden be profitable? What you see is that they oftentimes cannot because they're just not set up to be that way. They've never played guitar before, and now they're being asked to play guitar. The reason I think it's great for entrepreneurs to start bootstrapping is because they just have more practice making money.

`1:18:50`

They get better and better and better at the fundamental skill you need to have ultimately to run a successful business, which is to make money. If you don't have to do that from the start, you're just not practicing that. You're practicing spending money. Getting good at spending money is not a valuable skill as getting good at making money. That's why I think it's just harder. But, of course, it's possible. It's just harder. What I'm hearing is, essentially, to do this well. You need discipline. Understand, here's the incentives they're driving me to; spend more money, grow faster, and being really good at not... And then, also, it sounds like you just need investors that are on board with... "We understand. We're not going to focus on growth obsession. We're not going to focus on getting new teams. We're going to give you space to build it the way you want." That exists. It's just also an outlier in that industry. I think what you need are constraints, is what I'm actually trying to get at.