A bootstrapped software startup founder I know presented her 2024 business plan this week. Her progress and plan were impressive, but they were the opposite of the story a VC-backed founder would tell.

Two years ago, she was getting her first customers, and revenue started to grow.

Everyone was telling her to raise funding. It’s what you do, she heard.

I asked her some questions about her business and her vision back then.

She had a big vision and early traction, but she wasn’t clear yet about the business model, target customer, category, customer acquisition levers, and partner value proposition. There were too many possibilities.

She was experimenting fast and measuring the results. She said, “I’m not sure yet” a lot.

Her business was already profitable because their solution worked and they were extremely frugal. And it kept growing as they slowly figured things out.

I advised her not to seek outside funding, to stay frugal and profitable, and to keep learning fast. Maybe someday, when you know your game.

She told me it turned out to be the right decision.

She didn’t waste time raising funding. She spent all of her time with customers, partners, and team.

Her 2024 plan started with the 7 really big things they tried in 2023, what they learned, and how they are focusing on the few things that worked best.

•  She didn’t have to fake that she knew the answers, which most investors require.
• She didn’t have to hire additional staff and consultants despite doubling their business to $2 million in revenue last year.
• She didn’t have to race forward and scale fast on a flimsy foundation like most funded startups need to do. It’s a brand-new market and it’s more about getting it right than going fast right now.
• She is growing fast as a savvy CEO who knows her customers, partners, business model, and herself. She did it at her own pace–because she could.
• She didn’t get wrong investors who wouldn’t help much with the business she is now building. Product-market fit before founder-funding fit, if you can.
• She didn’t present a 3-year plan. No dotted line chart going up and to the right. It’s only about their next big bets and tests this year–and doubling their business again.

Later this year, she’ll have a sound strategic story, irrefutable traction and national partnerships, laser focus, and dialed-in metrics.

SaaS investors would line up to fund a fast-growing software company like that: past their big experiments with deliberately created product-market fit.

I don’t think early investors would have helped her two years ago.

She might raise funding someday, but she doesn’t have to.

Doubling revenues with serious cash flow in the next few years will help them build a strong foundation. It’s a huge market.

She is creating an amazing business with a ton of leverage in customer acquisition, partners, systems, and her senior team.

This practical founder is turning into a great CEO.

#practicalfounders