This post originally appeared on Forbes.com.
These days, it seems rare to meet entrepreneurs who have opted to bypass the route of raising venture capital in favor of a building a business that sustains itself through revenue. Josh Goldstein and Chris Muir, cofounders of an NYC-based hiring startup that’s quietly amassed a customer list with some of the best-known technology companies in New York and San Francisco, including companies like Kickstarter, Warby Parker, and Etsy, have done just that. Underdog.io took to its blog today to announce that it had acquired Sourcing.io, another company in the recruiting space, for an undisclosed sum.
I had the chance to catch up with Josh and Chris about bootstrapping their business, financing an acquisition out of revenue, and how they see themselves within a broader recruiting industry that’s rife with venture dollars.
Dan Reich: How did Underdog.io come about?
Josh Goldstein and Chris Muir: We started Underdog.io as a side project back in April 2014. At the time we were working on a different business – enterprise software for real estate property managers – but we weren’t close to making any money with it and started brainstorming some other products that would help us pay the bills. Underdog.io was one of those ideas, and probably the one that we felt the strongest about. After getting some early traction with it, we decided to go all in.
Reich: You both have experience at venture-backed startups. Did you guys plan to build a bootstrapped business?
Goldstein and Muir: We’ve never set any hard and fast rules about fundraising. The only rule that we had when we started Underdog.io – and this was probably a result of both of us having worked at startups with no revenue – was to build a product that people would pay for on day 1. This was super important to us…much more important than raising tons of money or getting a write-up in TechCrunch.
Reich: Where did the idea to acquire Sourcing.io come from?
Goldstein and Muir: Both of us have been big fans of Alex MacCaw (the founder of Sourcing.io) for a while, in particular his blog and his writing about the state of recruiting in SF. As part of building Underdog.io, we tried out a number of sourcing products, including Sourcing.io. We loved the interface and some of the social and team features that Alex was building. Fast forward a few months and we jumped at the chance to meet with Alex when we found out that he was looking to move on and focus on another business.
Reich: Now that you’ve made this acquisition, what are your plans?
Goldstein and Muir: We’ve got lots of work to do to integrate our two products, onboard some new customers, and make sure that our existing customers understand where we’re headed. After that, it will be business as usual for us, which means staying focused on giving candidates the best experience possible and giving companies a cheaper and easier way to hire great teammates. The recruiting technology space is full of companies with big war chests and even bigger financial expectations. One advantage of bootstrapping is being able to stay focused on what matters to you, which is a luxury that we’ll take advantage of for as long as possible.
Reich: What’s one piece of advice that you’d give others that are looking to bootstrap a business?
Goldstein and Muir: Prepare yourself for a slow grind. Bootstrapping is neither harder nor easier than raising money, but it’s definitely slower. Almost every roadmap you have – from product development to hiring – will be extended because you have fewer resources than you need and, more than likely, fewer resources than other companies in your industry. Stay focused and try to use that slowness to your advantage in some way.
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