10 years bootstrapped: €6.5M revenue with a team of 13

I’m a former VC, and a former CMS company founder (late 1990s for the CMS side, competing with Genuity for instance), and I’m impressed at your margins and success delivering CMS tools, but I think you’re leaving a lot of money on the table and although you don’t realize it, you’re adding existential risk to the business with your current strategy.

Consider this a gentle nudge to think about growing more quickly - I’d propose to you that you’ve misunderstood the rule of 40 - or a useful way to interpret it - in your case, I think it tells you that you have room to spend more on marketing, and thus grow more quickly. You’re clearly happy with high margins and cashflow - don’t ever change! But, unless you’ve tapped out your market (I do not believe this is true for CMS worldwide for a company with 6.5m in revenue) then you have more growth you could achieve by spending some of that profit.

Should you care about this? I’ve noticed over the years that as a general rule some European founders proudly care less about growth than American ones, so clearly there is some default cultural difference here. In this case, though, I think the American values build more successful companies, and I think you should care about growth more than your blog post says you do.

The simple reason is this - you’re tiny. You’ve probably spent no more than 30mm EUR on product development over the life of the company. If any mid-size company with functional distribution and tech wanted to take your business away, they could. Because of how open you are, they could probably do it for even less - much of the value of the thought and engineering and architectural work you’ve done is published with your APIs, developer tools, and so on. This is real existential risk to your business - different than not being able to make payroll, but one that might well hit you on a random Tuesday and not be easily solvable without a major change and possibly outside help (e.g. investment or a buyer)

Years ago, I pitched the idea of my own CMS company staying small to 90s era billionaire Ed McVaney, founder of JD Edwards; one of the first successful ERP companies (sold to Peoplesoft then Oracle) - he told me “in software it’s grow or die.” I think this is generally true. I ultimately sold my portion of that company and it morphed into an agency, where it seems to have cheerfully stayed small and sustainable by layering on services - much worse economic model than you currently have.

Anyway, I hope you are writing the 20 year retrospective happily in 10 years from now; if you are, I think you will have needed to successfully grow into a more defensible market position - don’t put it off. It’ll remove another layer of risk, and make you more money in the bargain!

This is why I trust software made by people who come from that industry or have some background. I’ve seen too many startups where the founders are fresh out of college and have never worked in that niche and have never been in the shoes of the people they are trying to sell to. To me, that just means they are trying to get big and get acquired, I’m just a means to that end.

The commercial/SaaS side specifically is quite crowded now, with lots of good options for businesses of all sizes.

PS: This is not for lack of trying to raise VC, but the trying was not nearly on the level needed to actually raise it. Jeff Bezos and Reid Hoffman tried much harder to raise, with far, far less built. Part of me wishes I had done that. I'm open to advice as to how to raise properly, should it be a Seed round or Series A at this point, and how to get meetings with the VCs and herd the cats in a way that will actually be successful. For reference, I'm based in NYC.

PPS: I've had a lot more success and fun raising from angels (who make their own decisions about their own money) and remain open to it. Especially people who are aligned with what we're doing. I've found much of the VC signaling to be disingenuous (e.g. "we love funding startups who do X" actually means "we want dealflow and orbiters to get into rounds with large well-known VCs"). But maybe that's just my bias because I didn't pursue fundraising diligently enough.