We never raised money for Exposely

People assume there's a philosophy here. There isn't, or at least there wasn't at the start.

In 2013 there was no category. I couldn't name the thing I was building in one word, which meant I couldn't put it in a deck in a way that sounded like a market. Investors fund a line item that's growing. I was proposing a line item that didn't exist yet, staffed by a 24-year-old whose experience was running his own stores. That's not a fundable position, and I'm not sure it should have been.

So we didn't raise because we couldn't. Everything after that is what happened to a company that had to survive on revenue from month one.

What that did to the company#

We got customers before we got a product. Not by choice. Revenue was the only funding available, so the first thing I built was a sales process and the software came behind it. That's backwards from how this is usually described and it produced a company with unusually good instincts about what brands would actually pay for, because the alternative to knowing was not eating.

We're small in a way that's now hard to change. Every hire had to pay for itself inside a quarter. That's a fine rule and it means we're structurally unable to make a bet that takes eighteen months. There are things I'm confident are right that we simply haven't built, because I couldn't fund the gap between now and them.

I under-hired. When it's your own money, every salary is a personal expense. I've kept roles open for months that I should have filled in weeks, and I've hired cheap when I should have hired right. This is the specific damage bootstrapping does to a founder and I don't think I've fully corrected for it.

We own it. Which matters less right now than it will later, and I'm aware I'm supposed to say it matters a lot.

The part where I could have raised and didn't#

Sometime in the last year, this became fundable. The category is getting a name. Money is starting to move toward it. I've had conversations that would have been impossible in 2013.

I didn't pursue them, and my reasoning at the time was that we were doing fine and I didn't want the obligations. That's true and it's not the whole truth.

The whole truth is that by then I'd built a company that couldn't absorb the money. A funded competitor would take capital and spend it on the things capital buys — a sales team, engineering velocity, buying the demand side outright. I'd have taken the same money and been unsure what to do with it, because for two years every decision I'd made was optimized for not needing it. You don't get to switch modes with a wire transfer. The whole company has habits.

That's the cost nobody puts on the bootstrapping side of the ledger. It isn't the dilution you avoided. It's that you become a company that's good at being small, and being good at being small is not a neutral position when someone with $10 million enters your market.

Where I actually am#

I think we made the right call in 2013, because there was no call to make. I think 2014 was a real decision that I made by not making it, and I don't yet know whether it was right.

What I'd tell someone in the same position: the question isn't whether to raise. It's whether the market you're in rewards speed. In a category with no name and no competitors, speed bought very little and I was correct to ignore it. In a category with a name and funded entrants, speed is most of it. The market changed underneath the answer and I kept the old answer because it had been right for two years.

That's the failure mode. Not bootstrapping. Not noticing when the conditions that made it correct stopped holding.