Masters of Scale – Reid Hoffman:   Mailchimp’s Ben Chestnut

Masters of Scale – Reid Hoffman: Mailchimp’s Ben Chestnut

You can bootstrap your business to scale, but you’ll have to make your own luck. Nobody knows this better than Mailchimp’s Ben Chestnut. He used a DIY ethos to grow a $600 million company without ever raising a dollar of outside funding.

The Mailchimp story is the exception to Reid’s rule (generally: raise more money than you think you need!). The episode explores a range of options for those who don’t fit the VC-funding mold for any number of reasons.

Take risks and believe in yourself

Believing in oneself and taking risks, despite lack of business experience, can lead to success. Financing remains a challenge for artists and creators, but crowdfunding and finding influential supporters can make a difference.

Not every business needs to pursue venture capital funding for rapid growth. Entrepreneurs can consider alternative options like bootstrapping, but it requires catching multiple waves of good fortune and a lot of grit.

Levar burton’s journey to fund his reading app for kids

Levar Burton, the famous actor and educator, struggled to find funding for his reading app for kids in Silicon Valley. He eventually launched a Kickstarter campaign and raised $6.4 million, with the help of a $1 million donation from Seth MacFarlane.

Financing has always been a challenge for artists and creators, as has the importance of believing in oneself and taking risks. Levar had no experience as a businessman but bet on himself and had absolute faith in his ability to get it done in the end.

Bootstrapping vs seeking investment

Our childhood hobbies and experiences can provide valuable skills and lessons that can be applied in our careers. Creativity, resourcefulness, and adaptability are essential traits for entrepreneurs, and early experiences can help develop these skills.

While bootstrapping can be a great way to start a business, seeking investment from the right kind of investors can add value beyond just financial support. Don’t be shy about seeking help from investors who can provide valuable guidance and support.

Managing expectations

Founders have the option to add multiple angel investors who can offer industry expertise and connections, but managing expectations can be challenging with numerous investors. The right form of investment must align with the company’s objectives and timing, and strategic angel investors should be chosen carefully.

A/B testing

By analyzing cohort data and A/B testing, businesses can achieve massive growth with a freemium model. Seeking VC funding can provide speed and support to focus on tuning virality for exponential growth. Both art and science are required.

We had crazy expectations for the consulting side of our business, and I think that’s why the revenue was always so flat. We were too hard on ourselves there, striving too much. 

Have confidence and trust in your product and team

You don’t always need external investment to succeed. Have confidence in your product and team, trust your instincts, and consider bootstrapping as a viable option for scaling your business.

When seeking investment, prioritize finding investors who align with your product, personality, and vision. Don’t compromise your beliefs and recognize that not all businesses need to scale with VC funding. Persevere and seek out the right match for your business.

Crowdfunding vs bootstrapping

Source

Get in