So you want to bootstrap?

A couple of patterns I’ve seen among companies that bootstrap successfully:

• They sell to governments. This was the first pattern that popped out at me, though it’s definitely not all bootstrapped companies. Grey Matter, which has since taken VC funding, and Defense Unicorns are the companies that first come to mind here.

• They start with selling services. I know this is a little controversial in the software business space, but if you’re bootstrapping, selling services is a good starting place. Bonus: These companies have a better finger on the pulse of what people will and will not pay for. The progression I see here is services business (ie no open source project) —> create open source project, offer services around said project —> monetize open source project and build software product company.

• They are super, super focused on a small, niche market. I’ve talked to a couple really interesting companies recently that are like this — Artefactual, which sells to archives, for example. When you bootstrap, you have to focus — bootstrapped companies that don’t die out and we never hear about them.

Anything else I missed? I’m sure there is. Obviously, bootstrapped companies are much more oriented towards profits, and they are also often much more likely, in my opinion, to be led by people I’d call open source true believers.

What do you think?