My co-founder and I come from a long lineage of high-growth, venture-backed startups. He was employee number 200 at Uber and then led operations at a series A company. I was working as an investor and Entrepreneur-in-Residence in the venture capital world.
So, when we came up with the idea for our own company—Bar None Games, which offers virtual trivia and team building events—we could have easily taken the path of raising money to help us scale as quickly as possible. However, we had both seen some of the trade offs that raising investment capital can bring. And we could see a path to getting our idea off the ground without an initial influx of cash, so we decided to try it.
The decision hasn’t slowed us down: In just a year in a half, we reached over $1M in annual revenue with over 30 percent EBITDA margins. But it has required that we think differently about how we grow our business. When you’re bootstrapping, every dollar really matters, so we’ve always had to keep a close eye on profitability and cost-saving measures.
Here are some of the guiding financial principles and strategies we’ve used to continue to scale sales, marketing, and operations—while still staying scrappy.
1. Generate revenue as quickly as possible
We were fortunate at Bar None that it was pretty easy for us to generate revenue quickly. We spun up a V1 (version 1) of our product within weeks and started reaching out to friends, family, and other people in our network to see if they’d be interested in hiring us to run a virtual event for their teams. This early version of our product was still strong—we wanted to ensure we could stand behind our offering and that our friends wouldn’t be embarrassed if they recommended us to their companies—but it was a simplified version of the ultimate vision.
Another important early step was pricing our product in a way that it allowed us to turn a profit. Initially, we were really underselling ourselves: Our first event was priced at just $200 for a small event, which barely allowed us to cover the cost of overhead operations and paying for our host! We knew that, in order to grow our company, this wouldn’t be sustainable. After getting to know the landscape and competitor pricing better, talking to customers about what they felt the value we offered is worth, and having a clear understanding of our operating costs, we switched to a per-person pricing and price at $30-35/person. We believe this is the right price point for the customer while putting us on more sound financial footing.
This approach helped us in a few ways. For one, that initial cash flow gave us the budget to invest in sales and marketing channels that would help us grow our customer base beyond friends and family, like creating content for SEO and investing in software to help us streamline cold outreach. Starting to interact with customers quickly also gave us important information to help us test, iterate, and grow in ways that would actually move the business forward.
2. For anything you want to do, see if you can do it for half the cost
I regularly tell my founder friends that anything they’re considering investing in can probably be done scrappily for half the cost. Yes, sometimes you have to spend money to make money, but before spending on the expensive “best-in-class” tool that everyone uses, I encourage founders to consider if there are more affordable (or even free) options that could do the job instead.
For instance, when we needed a system to track contacts and leads, Salesforce would have been the most obvious solution, but that costs thousands of dollars. Instead, we built out a CRM in Airtable, costing us just $24 a month per person. There are also so many no-code tools out there—like Webflow for creating websites and Bubble for creating web apps—that we’ve utilized for our technical needs without contracting an expensive developer. (It also means we can iterate on product developments faster and more affordably as we get user feedback.)
This philosophy extends to hiring, too. For most small businesses, headcount is the biggest cost, so not over-hiring early on can help you bootstrap to profitability faster. Every time we think we need to make a new hire, we ask ourselves: Do we truly need this person? If yes, is this a full-time job, or could we hire someone part-time or contract to support us? This has kept our team very lean: In addition to my co-founder and myself, we only have three full-time employees (one in sales and two in operations). We also work with a team of freelancers and contractors who host our games, write web content for us, and build out our web development.
The cheaper tools may not serve your needs forever, but starting with them allows you to build within your means now with the knowledge that you can always upgrade your expenses as your business (and your budget) grows.
3. Think about your time as a cost
Even more than money, I think one of my most valuable resources as a founder is time. And, just like there’s always more we could spend money on to grow the business, there are always more ways we could spend our time. By thinking of our time as a cost, too, we’ve been able to find opportunities to save it.
So many founders look to hiring when trying to reduce the number of responsibilities on their plates. Instead, we’ve been able to do more with less by thinking about what we can automate. For instance, a huge task for Bar None Games is creating Zoom links and sending out calendar invites for the events we’re hosting. When you’re doing hundreds of games a week, those two simple tasks can quickly become a full-time job! Instead, we use Zapier to make those steps automatically happen when a customer schedules an event. Not only has that freed up a lot of our team’s time, it’s removed the possibility for human error.
Always seeking opportunities to automate has easily saved us a full hire’s worth of time, while allowing our small team to focus on the things that really matter for growing the company, like product development and customer research.
4. Always be measuring against ROI
There will always be business expenses worth investing in, especially when it comes to sales and marketing efforts that bring in new customers. To keep our costs low without stunting our growth, we’re constantly running small tests on new channels and strategies. This is an affordable way to dip our toes into a particular approach and see if we get the results we’re looking for before investing a lot.
For instance, we didn’t immediately write off paid marketing even though we had heard from our peers that it can be a pricey strategy. We ran a three to four week test on Google Ads, targeting a few specific keywords that we thought would bring in high-quality leads. While we did end up getting leads, each one was quite expensive, and the conversion rate wasn’t high enough to make the ads worth the cost. I’m glad we only spent a little bit of money to verify that!
Once we do find a channel that’s worth investing in, we’re always looking for ways to further increase the ROI. For instance, we do a lot of A/B testing to optimize our sales funnel. Even small tweaks like shortening the subject line of outreach emails have helped us get a better return when it comes to customer leads or games booked, and meant that our salesperson can be much more effective with their time.
It comes down to this: Evaluating costs shouldn’t just be about the actual dollars spent, but about how those dollars compare to the value they’re bringing to your company. Keeping that ratio low will move you toward profitability faster.
5. Check up on your expenses regularly
Finally, we keep a very close eye on our costs to make sure they’re all still necessary and helping us grow. It’s so easy to sign up for a software subscription or agree to a monthly retainer with a contractor that you just need for a few months but then, the next thing you know, you’ve paid for it for a year.
To avoid this, we review every expense in our books once a month and ask ourselves what returns we’re getting on it, and whether we actually need it. This also gives us a monthly opportunity to discuss what we should invest in if revenue was higher than expected, or where to adjust if revenue was lower than expected.
Being this granular about our finances does take time, and it isn’t the most fun task on our monthly schedules. However, it’s been instrumental in building a strong, profitable business without needing a cent of outside capital.
That little bit of extra work each month is worth it to be able to bootstrap this business and have control of our own destiny. We have full autonomy to explore new strategies without needing investor buy-in, to treat our stakeholders how we want to treat them instead of solely being concerned about the bottom line—and to know that every success is truly our own. That’s a feeling that no amount of money raised, earned, or saved can buy.