Reader mail: “What about funding growth?”


Hunter Ashmore asks:

“Out of academic curiosity, I’d love to hear your thoughts on funding growth… Is there a scenario where you would need external funding to address a growth opportunity, potentially resulting in short-term non-profitability?”

For 17 years the answer to this question has been no. And as far as I can see moving forward, it’ll remain no.

Why? We believe in growing within our means. I wouldn’t want to grow any faster than that. I don’t want the baggage or hassle or stress that comes with that kind of growth.

And frankly, we have plenty of margin and money to grow much faster today if we wanted to aggressively acquire more customers. We don’t. Even with the means, we prefer to grow slow, steady, and in control. More like an oak tree than bamboo.

And really… What would we need to invest in that would cost so much money? Kicking off software projects is cheap — just takes a couple people to begin exploring something. Infrastructure is cheap and only getting cheaper. Marketing can be expensive, but we prefer to be more clever about it and do most of it for free. I imagine if we wanted to buy a massive building and pay cash for it, we might want to borrow for that. But we’re not hiring tons of people, we’re not booking the next 10 Superbowl ads, and we’re not opening a new 1,000,000 sqft office next year.

If we need more money to do something we can’t do, we either don’t do it, we figure out a more creative way to do it for less money, or we wait until we have the money to do it. If that means missed opportunities, so be it. Sometimes there are just things you can’t do. That’s fine with us. We’ll figure out something else to do instead.

And sometimes there are just things you wait for. For example, back in 2010 we signed a 10 year lease for an office space and put about $1,000,000 into the build-out. But 2010 was 11 years after we started our business.

Before that, we leased a small raw space for a couple grand for few years. Then we rented a corner of someone else’s office for another couple years. Then we rented a few desks from our friends from Coudal Partners for another 5 or 6 years. Then we finally invested in our own office in 2010.

That said, for 17 years we’ve never wished we had the money to do something we couldn’t. We’ve kept our costs low, our appetite reasonable, and we didn’t let our ego be the growth driver. We’ve said no to things that didn’t feel right, but we’ve never said no to something because we didn’t have the money.

We run a simple, straightforward, profitable business. Nothing fancy. As long as we take care of ourselves, treat people well, and continue to make a great product that delivers far more value for our customers than what it costs them to buy it, we’ll do just fine. If we stop doing those things then we’ll be in trouble.

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