Nobody Cares That Your Competitors Have More Money Than Your Bootstrapped Startup | Jordan Gal

0:00next question is is related bootstrapping in enterprise sas is from declan sweeney he was written into the podcast many times uh he says hey rob declan here from campus connect we sell the universities and the higher ed market our service helps boost applicant conversion by enabling applicants to connect with peers prior to enrollment big kpi for recruitment and enrollment folks in universities our current clients are super happy and we've done well in terms of revenue expansion within the current customer base which is a great testament to the value they receive word of mouth and referral has enabled much of the expansion revenue but his universities are mostly in competition

0:33it doesn't support referrals to new sites my question relates to market penetration in a slow moving b2b enterprise market as a totally bootstrap startup it's exceptionally difficult to get in front of the right folks it seems those with mega marketing budgets can do so and win i would actually question that marketing well anyways well i'll keep reading and then i'll let you weigh in but i question some of the assumptions in this email for the record you said even though they have inferior products when they have so much money for marketing budgets that they can get inside these big orgs are some markets just not feasible for a

1:05bootstrapped approach thanks for the guidance as always what do you think sir you've sold to big ecom companies what are your thoughts so i too question some of the assumptions like that referrals would be discouraged by your customers oh man for me it's like i go to tough love on this question it's not fair that your competitors have more money or that they've raised more and that you don't and nobody cares and you're dealing with an unfair situation and you can cry about it or you can kind of work with it it does sound like a tough situation to sell to universities at the same time maybe that's your

1:45advantage that does not mean that you have to go out and raise the same money and it also doesn't mean that you have to go away and you know die not at all if you have existing customers that are happy and paying then you have the kernel of truth that means you can get more of them so i would hang on to that and have confidence in that and find others like them and i'd kind of ignore what your competitors are doing as much as you can i had some really good advice over twitter dm once when i saw one of our competitors raise like one of those preposterous makes no

2:25sense rounds like how what why i don't understand we're so much better that that kind of like pity thing and i paint a vc that i'm familiar with and i know it's familiar with the deal and what he said to me was was hugely impactful for me he said look they have no choice but to raise a ton of money and to get a ton of attention because the only way they win is by winning the market they have to be the leader or they lose they will run out of money it won't work out for them you have built a real business you have paying customers

3:00and you don't need to win in order to personally succeed so ignore it you guys are playing two different games you should be happy you should be proud of what you've built get more customers just like that and let them go big sure it's annoying to watch but you're playing two different games you don't need to beat them you just need to do your thing and win so i that's the approach i would take i think it's a great perspective every time that i was bootstrapping a sass and someone came in and raised a big bucket of money i would i used to turn to derek and say well set

3:30the clock for 18 months i want to acquire their assets when they can't raise their next round and it was a little bit of a jerk thing to say more often than not it wound up they did they weren't that good just because they have a bunch of money you're right it's unfair in certain aspects but also unless they know how to execute unless they're really good at it money doesn't do it money allows them to hire and move fast and if they if they're really good operators then yes you do have a problem but in you know most cases i would say people don't actually know what they're

4:00doing and that's the reality of it money can accelerate in the wrong direction also which is something that we're seeing at my new company we have competitors that are raising a ton of money some that are good at what they do and some that the money has twisted up their approach because it's almost like they're spending before they really understand the customer and where does that lead you so you have this great thing right now where you understand the customer you have paying customers yes it's annoying but i would look at whatever channels are working for you that might just be word of mouth or your

4:34individual networking efforts or whatever it is and keep focusing on them and if you have a big market like universities and you figured out how to sell to them you just keep going it turns into a longevity thing the founders that are bootstrapped that are successful the ones that i know that are most successful have just been persevering they've just been doing it a while and then it compounds and you get to the place you want especially in these really the i would call them tough markets that where it's customer pain where just the sales process alone is a year or more yeah i can imagine it's

5:07like selling to the government selling to universities selling to like electrical contractors i mean these are just people they're just very slow-moving selling into legal selling into you know there's just a lot of spaces that are tougher to sell to than bootstrap sas founders or designers or developer you know what i mean it's like you can build interesting things for for those people they're online they're easy to reach and that's just not the case so the fact that you're in a space like universities and trying to sell to them at all means you're definitely doing that part of it on hard mode now on the flip side your contract value

5:38should be enormous like that this is the mistake i see some folks making is selling into these really hard markets where it's a six month or 12 month sales cycle and you're charging a tenth of what you should be charging right these should be i mean i don't know what exactly a product is but there should be 50 grand 100 grand a year contract values or else it doesn't support the effort you have to put into sales you have a few choices here you could also go out and raise a bunch of money i mean that is a choice right i mean jordan you and i

6:10outsiders i knew zero people with money i knew zero entrepreneurs i knew zero venture capitalists when i started bootstrapping stuff 15 16 years ago as far as i know you you know you had a couple friends from college who like are traders on a stocking or they're in like finance but they they're bankers they're not like you didn't know any venture capitalists and now it's funny someone may have heard you five minutes ago say i dm'd a venture capitalist who i know you know how you know that person not because you your dad introduced you and you went to harvard with him no you hustled you went to conferences

6:40you were you meet people you built your network over the last decade or more right and that's that's what this takes so i'm not saying that that declan should or should not raise money but it is a choice you know it is a choice if you really think that's the way to get there then do it if you really want to be bootstrapped that's cool and then it's back to your comment jordan of now you have to figure out what are your advantages as a bootstrapper right and how do you combat this unfair situation where someone does just have buckets of money so those are our thoughts