Bootstrapping Examples: Craigslist, Spanx, Gymshark, and more
Bootstrapping is the process of starting a business using minimal outside funding. Here are 5 examples of companies that were successful in bootstrapping.
1. Craigslist
Craigslist is a website that provides local classifieds and forums for jobs, housing, for sale, services, local community, and events.
With only 50 employees, Craigslist generated $694 million in revenue in 2021. Craiglist had no intention or need to take on outside capital. The business was profitable early, allowing them to use operating cash flow to fuel the company's growth. eBay managed to buy a 25% stake for 13.5 million in 2004, but this was a secondary sale from a former employee rather than a deliberate move from the company. The decision to bootstrap allowed Craigslist to find a sustainable business model without sacrificing the trust and love of its users.
2. Spanx
Spanx is an apparel company with the largest selection of slimming intimates, body shapers, hosiery, apparel, and the latest innovations in shapewear.
Spanx generated $400 million in revenue in 2021. With only $5,000 in savings when starting her company, Sara Blakely demonstrated the creative skills needed to bootstrap the company from the beginning. To save $3,000, she learned how to write a patent to save on the lawyer fees. To land her first account, she cold-called Neiman Marcus. After 21 years of bootstrapping the business, Sara sold Spanx to Blackstone for $1.2 billion in 2021.
3. Gymshark
Gymshark is one of the fastest-growing and most recognizable fitness apparel and accessories brands, supported by over 5 million highly engaged social media followers and customers in hundreds of countries.
Gymshark generated net revenue of £401.9 million, for the fiscal year ending in July 2021. Ben Francis, the Founder of Gymshark, started the company as a side hustle while working full-time at Pizza Hut. He began by manufacturing clothes in his parent's garage with a sewing machine and screen printer that he purchased with £1,000 of savings. After eight years of completely bootstrapping the company, Gymshark brought on its first investor at a valuation of over $1 billion.
4. Chess.com
Chess.com is a website that allows you to play chess online for free, with over 150 million members from around the world.
Chess.com is a website where over 10 million games are played daily. Jay and Erik, the Founders of Chess.com, met during college at BYU and bought the domain name for $55,000 out of bankruptcy. The team bootstrapped the company for 17 years to 400 employees before taking on a growth investment from General Atlantic, a private equity firm, in 2022.
5. Reforge
Reforge is the world’s leading career development platform for top-tier professionals in tech.
Reforge bootstrapped for five years into a profitable, eight-figure revenue business before deciding to take a $21 million investment from Andreessen Horowitz. Brain Balfour, the Founder of Reforge, started the company when he was VP of Marketing at Hubspot after someone on his team asked about professional development each week. He didn't have a great place to refer them, so he created his course, which would become the first Reforge course. Balfour acknowledged the tradeoffs between raising capital or continuing to bootstrap the business in a blog post on his website.
