Why Bootstrapping Was Best For Us
By Madhan Kanagavel, CEO, FileCloud
When we launched FileCloud in 2012, it was an ambitious venture given the competition in the Enterprise File Sync and Share (EFFS) space. The likes of Dropbox, Google, Microsoft and Box made the competition formidable. But our mission was unique.
Aside from being a filesharing solution, we set out to create the next-gen file services platform that becomes the system of record for companies to organize all their data regardless of network or location. And we did it by bootstrapping our company.
Raising Money Isn’t Really The End Goal Of Business
Instead of concentrating on raising money, we decided to focus on making value and serving our customers. In 2008, I was working on Tonido, a private file access, sync and share solution that essentially turned any private computer into a cloud server.
During this time, I ventured out to Silicon Valley to talk to venture capital firms about raising money but I realized a few important things:
- Raising money can help in many different ways, but it’s only part of the equation
- The onus is on you to establish the product market fit
- It’s not a requirement to raise money
In 2012, we pivoted to create a business version of our current product born out of a deep understanding of what our customers wanted. We spent a lot of time, fine-tuning the product by listening to what our customers were saying and quickly iterating to add new features.
As time went by, we sustained a focus on building a better product, a better business and solving for customer needs. Our growth was organic because our customers kept coming back. We didn’t prioritize raising money but instead put all of our efforts into our work. Each year since, we’ve been rewarded with growth — without taking any outside funding.
Soldiering Past The Disconnect
Any entrepreneur knows that when you have an idea you think is going to change the world, it can be frustrating to talk to others that don’t see what you see. There is a disconnect between what you believe in and the process for bringing your dream to fruition.
While it’s not possible for every company to bootstrap, I want to emphasize that just because a VC says no, that doesn’t mean you aren’t going to be successful.
As a technical founder, I had the necessary skill set to do what we needed to do without having to acquire money to hire additional engineers to build out and execute. Many times, entrepreneurs don’t have the skill sets needed to build a business from scratch so they go the typical VC route — raise capital, hire talent and build out from there.
For us, however, with my engineering background, we could build a minimum viable product (MVP) with minimal capital and to move quickly, enabling our team to generate cash flow from the start.
For an entrepreneur starting out with a clear vision, if your business can generate cash off the bat, you have the option to bootstrap.
Bootstrapping Now Doesn’t Mean You Have To Stay Bootstrapped Forever
Opting to bootstrap at the beginning doesn’t mean you can’t branch out later. For FileCloud, the position we take focuses on two things: making our product better and offering customer-centric support. If, in the future, outside interests align with what we want, that’s great.
Right now, many doors are open to us and as we hone in on rapid growth, we plan on spending resources accordingly. Investment, at any point, is like rocket fuel. You better make sure your systems are ready to handle the firepower. We are ramping up.
