Bootstrapping isn't necessarily impressive

People tend to find it impressive that TopHire did not rely on external funding in order to grow.

I tend to explain to them that bootstrapping isn't inherently impressive. It's the business model and the sector that determines how feasible (and therefore impressive) it is.

In some sectors, bootstrapped success stories are rare and truly stand out.

In others, bootstrapping is the norm rather than the exception.

Sectors where it's hard to boostrap
Take a sector like Fintech. VC-backed startups in this space raise significant capital upfront—not just to run operations but to aggressively invest in R&D, marketing, and sales even before they have a proven & sustainable business model.

With a large balance sheet, these companies don’t need to prioritize short-term profitability. Instead, their focus is on grabbing market share as quickly as possible, with the hope that once they dominate their sector, they can turn on the monetization faucet and let the profits flow.

A bootstrapped fintech company on the other hand, would struggle to compete. For one, they'd iterate slowly due to limited resources. They'd have to hire much more selectively and struggle to pay the kind of salaries it takes to secure elite talent that can speed up their development cycle. Or maybe they'd find it harder to navigate the fintech regulatory landscape without adequate legal help that the VC backed players can afford.

Sectors such as e-commerce, hardware, social media, supply chain, ride sharing, ev, automobiles, etc are similar to Fintech. They require upfront capital infusion for R&D, have regulatory hurdles & face long sales cycles

Now despite all of what we've spoken about above, if a company manages to remain bootstrapped in a non-boostrappable sector, that would be very impressive.

1. Zoho (v/s VC-backed Freshworks)
2. Zerodha (v/s VC-backed Groww, Upstox, etc)
3. Craigslist (v/s FB marketplace, Ebay and various other online classifieds companies),
4. Wordpress (v/s Webflow, Ghost, Medium, etc.)
5. Patagonia (v/s Allbirds and other apparel companies),
6. Dyson (v/s Philips, iRobot, etc)

Each of these companies likely did something unique to stand out in a sea of heavily funded competitors. Zerodha for e.g. disrupted the traditional stock brokerage model by introducing zero-commission equity delivery, giving them a significant advantage and allowing them to dominate despite competing against deep-pocketed rivals at the time of their inception.

Sectors where it's easy to bootstrap
Sectors where it's easy to bootstrap a company tend to have low barriers to entry, don't require much upfront capital infusion before revenue generation occurs and tend to have little to no regulatory hurdles.

One of the defining characteristics of companies in highly bootstrappable sectors is their short time to cash flow positivity.

This does not mean such companies can't become large. Instead, it's that it's easier to get started. Thoughtworks, a product development agency for e.g. makes $1bn+/year. But then we also have tons of smaller product development agencies making $1-5mm/year, where if they played their cards right, have a real chance of getting to the kind of scale that Thoughtworks has. It isn't a winner grab all market.

Similar example is Naukri.com that does $500m+/year. But you also have much smaller Indian job boards doing $1-3mm/year, sustainably. Or you have Teamlease and Quesscorp that are public and doing $500m+/year in staffing GMV, but you also have much smaller staffing companies that also compete with Quess and Teamlease in a profitable manner.

Bootstrapping tends to be a natural choice in such sectors.

Why it isn't that impressive that TopHire is bootstrapped
The nature of our business is that we could get to profitability, pretty much by month 2 of our existence. While yes it did take an immense amount of effort to get it up and running and we had to do mini pivots along the way, bootstrapping TopHire was possible purely due to how our business model and the surrounding sector context works. And it helped that we did not have deep pocketed, VC backed competitors. Our competitors tend to be bootstrapped too.

TopHire isn't capital constrained
One other characteristic of bootstrapped companies is that the bottleneck to growth isn't exactly access to capital. Instead, it's other details such as being highly customer focussed, operational excellence, building and retaining great talent, building the right tech and automations for ourselves, and so on.

If someone offered us a meaningful amount of VC money tomorrow, and we truly believed it would help us reach 10x scale faster, we’d probably take it. But in reality, VCs and bootstrapped companies operate with fundamentally different expectations. VCs seek rapid, high-risk growth, whereas businesses like ours prioritize sustainable, profitable scaling.