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Ask HN: Do bootstrapped billion-dollar companies exist?

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Re: Ask HN: Do bootstrapped billion-dollar companies exist?

#111

Post by optimusclimb »

wsh91 wrote: post #3

I'm part of one, Atlassian, which was last valued at $3.3 billion and started with $10,000 in credit card debt, taking $60 million in venture funding eight years in . (For more on valuation and the background, http://www.businessinsider.com/atlassian-helps-employees-poc... )

Thanks for building a shitty company and product that I'm forced to use. Enterprise! Seriously. Meditate on that word.

We were actually forced by my company to move our "How to use this repo, get it up and running, etc" documentation out of README.md at the root of our github repos, to the Atlassian Wiki because, "this is how we do things now."

Fuck your terrible editor that adds random double spacing, and in general, fights me at every turn.

And the fact that at almost every standup, or planning meeting, we end up fighting some Jira issue that makes it obscenely hard to plan the way we want.

Your software makes it harder for me to get my job done. It is not good. I don't care if HN down votes me to oblivion. Your company has failed to make a good product. If you've read this, I feel better.

Re: Ask HN: Do bootstrapped billion-dollar companies exist?

#112

Post by andy_ppp »

dirtyoldman wrote: post #35

Virgin Group was born out of Richard Branson's Virgin Record stores. The stores started as a mail-order business, advertising in his own magazine, which he started at 16. The name Virgin is a reference to his and his business partners' inexperience in business when they opened their first record store.

That's not what his autobiography says... Says when he was running the 'Student' magazine and had the opportunity to move on they needed a name and were brain storming. Someone piped up with "what about Virgin, because there aren't many of those left around here?".

Re: Ask HN: Do bootstrapped billion-dollar companies exist?

#113

Post by logicallee »

eloisant wrote: post #102
cheald wrote: post #94

Earlier quoted context omitted.

You don't think that surviving for 8 years without raising funding counts as "bootstrapped"?

The important question is: did it get to the billion dollar level before raising funds?

I'm sorry, that's a ridiculous question. This is like asking if any companies have made it to $100M without ever opening a bank account, but doing everything with cash (while keeping a strong paper trail, being totally above-board.) A ridiculous question.

If you never take any money you don't even have a valuation, so what makes you a billion-dollar company anyway? You're just a $0 company that happens to be pulling $10M in profit per year (for example.)

I don't mean the question that started this thread is ridiculous (though it's unusual) - I just mean that the example given is a perfect answer, and your follow-up question is kind of ridic (IMHO.) Or at any rate not "the important question."

Re: Ask HN: Do bootstrapped billion-dollar companies exist?

#114

Post by ownagefool »

optimusclimb wrote: post #111
wsh91 wrote: post #3

I'm part of one, Atlassian, which was last valued at $3.3 billion and started with $10,000 in credit card debt, taking $60 million in venture funding eight years in . (For more on valuation and the background, http://www.businessinsider.com/atlassian-helps-employees-poc... )

Thanks for building a shitty company and product that I'm forced to use. Enterprise! Seriously. Meditate on that word. We were actually forced by my company to move our "How to use this repo, get it up and running, etc" documentation out of README.md at the root of our github repos, to the Atlassian Wiki because, "this is how we do things now." Fuck your terrible editor that adds random double spacing, and in general…

The reason HN will downvote you isn't because they agree or disagree on whether or not jira and confluence are crap but it's because you clearly should be pointing the blame at whoever made the call force it on you, which isn't Atlassian.

Oh and "Enterprise" is the problem. Let's use complicated shit that doesn't really solve anyones use cases particularly well, but manages to fudge along for everyone so seems like a big win for idiotic top down managers.

Re: Ask HN: Do bootstrapped billion-dollar companies exist?

#115

Post by ownagefool »

logicallee wrote: post #113
eloisant wrote: post #102

Earlier quoted context omitted.

The important question is: did it get to the billion dollar level before raising funds?

I'm sorry, that's a ridiculous question. This is like asking if any companies have made it to $100M without ever opening a bank account, but doing everything with cash (while keeping a strong paper trail, being totally above-board.) A ridiculous question. If you never take any money you don't even have a valuation, so what makes you a billion-dollar company anyway? You're just a $0 company that happens to be pulling…

Uh, if you're pulling in $10M in profit per year you definitely have a value greater than $0 and that's pretty easy to work out. It's the companies forever making a loss having a positive valuation besides their constant losses that defy logic.

Re: Ask HN: Do bootstrapped billion-dollar companies exist?

#116

Post by EliRivers »

optimusclimb wrote: post #111
wsh91 wrote: post #3

I'm part of one, Atlassian, which was last valued at $3.3 billion and started with $10,000 in credit card debt, taking $60 million in venture funding eight years in . (For more on valuation and the background, http://www.businessinsider.com/atlassian-helps-employees-poc... )

Thanks for building a shitty company and product that I'm forced to use. Enterprise! Seriously. Meditate on that word. We were actually forced by my company to move our "How to use this repo, get it up and running, etc" documentation out of README.md at the root of our github repos, to the Atlassian Wiki because, "this is how we do things now." Fuck your terrible editor that adds random double spacing, and in general…

Your software makes it harder for me to get my job done

If the tool isn't helpful, don't fucking use it. I can draw you a diagram if that would help. If someone is forcing you to use an unsuitable tool, where do you think you should direct your opinion?

Re: Ask HN: Do bootstrapped billion-dollar companies exist?

#118

Post by logicallee »

ownagefool wrote: post #115
logicallee wrote: post #113

Earlier quoted context omitted.

I'm sorry, that's a ridiculous question. This is like asking if any companies have made it to $100M without ever opening a bank account, but doing everything with cash (while keeping a strong paper trail, being totally above-board.) A ridiculous question. If you never take any money you don't even have a valuation, so what makes you a billion-dollar company anyway? You're just a $0 company that happens to be pulling…

Uh, if you're pulling in $10M in profit per year you definitely have a value greater than $0 and that's pretty easy to work out. It's the companies forever making a loss having a positive valuation besides their constant losses that defy logic.

it might be pretty easy to work out but that's not how valuations at a billion dollars work. Only actual transactions in shares would establish this kind of a valuation.

I mean just consider our specific example: at $10M profit, the price per earnings if you purport to be a billion dollar company, is 100. So, no alternative accounting metric would ever give you a billion-dollar valuation (assuming you bootstrapped, which implies high margins and low infrastructure and other costs, so really nothing would give you the billion-dollar valuation.)

I'm not an accountant, but from how I've experienced things, only if the company sells shares and establishes a valuation thereby can value the company at $1 billion in our example.

Re: Ask HN: Do bootstrapped billion-dollar companies exist?

#120

Post by patio11 »

fookyong wrote: post #109
patio11 wrote: post #87

Earlier quoted context omitted.

This is an artifact of a longstanding issue that they've had with GAAP. They sell non-cancelable non-refundable multi-year services (like domain registrations) and receive cash up front for them. GAAP requires that they book that revenue on a pro-rata basis over time. This means that if it costs them $200 to acquire a new customer and that customer immediately whips out their CC and buys $1k of domains spread over te…

Fascinating - thanks for the explanation on this. I'm often surprised at how slow accounting practices are to catch up on business models that we see as commonplace in the tech world.

I'm of two minds on it. On the one hand, revenue recognition rules seem to lag common practices in our industry. They're wacky for domain registrations and absolutely insane for e.g. virtual currencies used to purchase improvements in video games. (If I sell you four dragon eggs for $10 and you spend 1 dragon egg on a Sword of Dragonslaying, do you know how much revenue I can recognize? Make a guess. Answer: I have to estimate your lifetime as a player given my best data of player behavior, subtract the age of your account, and pro-rate $2.50 over the remaining days of your estimated life.)

On the other hand, most time when tech companies chafe under GAAP restrictions, it is because they're trying "creative accounting" in the abusive rather than the creative senses of the term. Salesforce, for example, is periodically annoyed that they have to account for stock-based compensation to employees. Well, yeah, you can't simultaneously say "Equity grants are why people work for startups" and also say "But on the other hand they're totally free." They also have some other things which are apparently allowed in their GAAP accounting but... are rather aggressive, like $3.5 billion in goodwill on the balance sheet.

Disclaimer: I have in the past held, and currently hold, options positions which express the opinion that CRM is far overvalued and which profit if the market decides to agree with me.

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