<ul><li>Mojang: The masons behind Minecraft never raised any venture capital, employed just 50 people, and earned nearly a billion dollars in profit before selling to Microsoft. Minecraft grew by charging users a flat fee, resulting in a $2.5 billion dollar acquisition.</li><li>Craigslist: Craigslist parlayed an early launch in the first dot-com boom into a durable long-term advantage. Craigslist is the #17 most visited site in the US.</li></ul>

Build a Community

<ul><li>RXBar: When one of the entrepreneurs behind RXBar shared his ambitious business plan with his father, he told his founder son “You need to shut up and sell 1,000 bars.”</li><li>Scentsy: They sold candles at swap meets when they couldn’t afford to buy ads.</li><li>Spanx: Shark Tank judge Sara Blakely turned a $5,000 investment into an Oprah-approved approved garment that generates $400M in revenue annually. </li><li>Grammarly: Spell checkers around for decades, but Grammarly made enough improvements that they could charge over 800 universities and hundreds of thousands of writers.</li></ul>

Sell! Sell! Sell!

<ul><li>ButcherBox has thrived, earning as much as a million dollars a week by skipping expensive ad channels and developing ongoing, capital-efficient relationships with influencers.</li><li>Cards Against Humanity: They’ve sustained their brand with a series of canny marketing stunts, selling cow poop, cutting up a Picasso, etc.</li><li>GoFundMe: Viral marketing is dismissed, rightfully, when it is tacked on to a business model, but it can be a powerful driver when properly integrated into a product. Paired with hyper-efficient Conversion Rate Optimization, it can be unbeatable. </li></ul>

Be Miserly with Marketing

<ul><li>Wayfair: The company is currently worth $6 billion dollars and because they suffered little dilution, the founders are worth a billion dollars each!</li><li>Zip Recruiter: “We started out with humble ambitions, to bootstrap a lifestyle business,” said Co-founder/CEO Ian Siegel in an interview with Alex Konrad from Forbes. Those ambitions were met and superseded.</li><li>Nerdwallet: The personal finance service that promises to help young people save money lived on a tight budget from the time it was founded in 2009 until it a raised $64M series A in 2015.</li></ul>

Blessed are the Unfundable

Wayfair was profitable from its first month of operation and grew profitably for a decade until they ultimately raised a series A. the company is currently worth $6 billion dollars and because they suffered little dilution, the founders are worth a billion dollars each. Zip recruiter: “we started out with humble ambitions, to Bootstrap a lifestyle business,” said Co-Founder/Ceo Ian Siegel.

You Can Always Raise Capital Later

The easiest way to build a useful product is to automate some part of your daily workflow which ensures you’ve got proven demand for your product and a pre-existing funding source.Successful examples:<ul><li>MailChimp: built a tool that would streamline the process of email newsletters created.</li><li>Lynda: produced training films for her students. She spent the next two decades building a content library and tech assets.</li><li>PluralSight: Like Lynda.com, PluralSight offers remote software training. </li></ul>

Automate Your Workflow

<ul><li>SurveyMonkey was founded in the dot-com bubble of the 90s; it survived the dot-com crash and steadily grew into a nine-figure run rate, only raising $100 million 11 years after getting started.</li><li>Grasshopper is a phone networking company that had 150,000 customers, over $30 million in annual revenue, but no VC on the books, and was eventually acquired by Citrix.</li><li>GitHub took the pain out of version control and became a critical part of the tech ecosystem before raising capital.</li></ul>

Fortune Favors the “Boring”

Instead of trying to compete with a company like Apple, these scrappy startups filled the gap left by RadioShack and built multi-million dollar businesses worthy of emulation.<ul><li>AdaFruit Industries: Limor Fried started her DIY electronics eCommerce empire as a student at MIT by assembling DIY kits comprised of off-the-shelf parts. </li><li>SparkFun: Nathan Seidle started Sparkfun from his dorm room by selling electronics kits and oddball components to engineers who wanted to explore exotic new sensors and systems. </li></ul>

Start With a Capital Efficient Product

<ul><li>PaintNite: While their competitors relied on a slow, expensive franchise sales model, PaintNite paired art teachers with existing bars that wanted to sell wine on weekdays and created a business that did $30 million in revenue the year before it raised venture capital.</li><li>Tough Mudder: Track & field entrepreneur Will Dean turned $7,000 in savings into a company with over $100 million dollars in annual revenue. </li></ul>

Efficiency > Capital

<ul><li>Ipsy: Youtuber Michelle Phan leveraged her online celebrity — 8M+ YouTube subscribers — to turn it into a phenomenon. </li><li>ShutterStock: Jon Oringer combined his set of skills and used 30,000 photos from his personal photo library to start a stock photo service.</li><li>Quizlet: it was founded by a precocious 15-year-old who wanted to ace his French final.</li><li>Skyscanner: The company started as a bespoke spreadsheet to help its founder find the best flight prices.</li></ul>

Scratch Your Own Itch

Solving an old problem with a new technology or UX layer can be enough to build a multi-billion dollar business.<ul><li>Shopify: Shopify’s founders were searching for a shopping cart solution when they were setting up an eCommerce site for snowboarders. Unable to find one, they decided to scratch their own itch and built a bespoke solution on the then red-hot Ruby on Rails framework. </li><li>Braintree Payments: Exchanging money online, without being fleeced by fraudsters, is one of the oldest problems on the web. </li></ul>

Old Problem + Existing Business Model + New Tech = $$$

Venture capital has powered nearly every major tech company from Apple to Zappos. Just remember that you don’t need a penny to get started. You don’t need permission from funders to found and scale a startup. So the next time a VC tells you they “pass,” remember these three principles:<ul><li>It’s possible to get a tech-enabled business off the ground with no capital.</li><li>It’s feasible to scale a tech business rapidly with very little capital.</li><li>It’s often in the founder’s best interest to limit the amount of capital they take.</li></ul>

Don’t Design Your Business Around VC

Funding doesn’t always come millions of dollars at a time. Founders can scrape together money from grants, incubators, and angels, or even pre-sales.<ul><li>CoolMiniOrNot: it started out as a website where geeks could show off their ability to paint Dungeons & Dragons figurines. </li><li>The Wirecutter: Who says blogging doesn’t pay? Founded by a former Gizmodo editor, the Wirecutter promised more thorough and fair-minded reviews, and paired that with Amazon affiliate feed.</li></ul>

Everyone’s Money is Green

There’s a widespread belief among founders that venture capital is a precursor to success. It is true that VC is a common denominator of the most successful tech startups, but it isn’t a…