Indie businesses: startups without the crunch

Responding to a post by David Heinemeier Hansson, Bryce Roberts thinks aloud about "indie" businesses -- high tech startups that eschew the fast path to sale and exit and opt for slower, self-financed growth. He calls them "indie" businesses, comparing them to musicians who build their careers without labels, and who, if they join up with a label later, do so on their own terms.

Similarly, Indie businesses will be comfortable playing by their own rules even if they may fly in the face of startup cultural norms. They will chase opportunities in markets that may be small, niche or non-existent instead of jumping on the most fundable fad. They will find ways to operate outside of the traditional venture model through either small amounts of early outside funding or choosing a slower growth path and getting to profitability on the back of a terrific product and happy customers. And they will have a goal to stay independent as opposed to looking for a quick flip or speedy IPO.

I think we’re entering a golden age for Indie businesses. Some will take the shape of long term durable companies, others will take the shape of projects that spin up and wind down to meet bursts of demand or to scratch a passing itch.

With democratized digital distribution and the rise of crowdfunding sources of capital, many companies will be in a position to stay independent and play by their own rules. And I think that’s a very important and powerful development worthy of it’s own word.

Rise of the Independents (via O'Reilly Radar)


  1. I would actually call this “traditional” business. Even early silicon valley pioneers like Apple and HP followed this approach. It’s only been the last 15-20 years that we’ve seen the VC-funded frenzy that has become the norm now. Statistically (someone put this in a PowerPoint that I saw, so it must be true), bootstrapped startups have a higher rate of success.

    1. While I absolutely agree that over the long run the non-VC/IPO/Raider-target path is more successful for many reasons, I wonder if the short term viability shifts between the two models a few times before the 10 year mark.

      What I mean is that I’d bet a lot of self-financed business fails in the first year simply because there’s often little revenue stream at first.

      Then the VC-funded companies probably fail more in the 3-5 year range because of the demand to prioritize short-term returns on investment to the VCs.

      In the 5-10 year range the self-financed are probably more vulnerable to abusing market control practices on the part of larger competitors who have more resources and are run by MBAs with gamesmanship mentalities and patent-sniping law firms on retainer.

      Finally, past the 10 year range, the VC-funded lose their top talent as they bail to go spend vested options and start their own companies, and professional management consultants come in to strip the assets and cannibalize the company.

        1. I bet you’re right. It’s also so different depending on the context… I was thinking of the kind of tech startups that just don’t have a product until late in the cycle, where just about any other type of business could supplement with related income. The bootstrap side can also “keep the day job.”

    2. Yeah, the other word for it is bootstrapping.  It’s what I’m doing.  I go at my own pace, keep my day job that I like, and build this thing on a shoestring.  It’s more fun this way, anyways.  Less stress, still a very intense learning experience, and the rewards will be a little something called 100% equity, whatever it materializes as.  That’s a quintuple win, as far as I’m concerned.

  2. At one point, “indie” was the common way. It is always interesting to see how much we take things for granted just because we grew up with it being that way at the time.

  3. Oh, come on.  Why is this pundit referring to non-bubble startups in the future tense?  Plenty of us have always operated this way.

  4. There seems to be a prevailing notion that all small businesses are either high-tech, or cupcakes. This is not the case.

  5. Love it! Everything old is new again. We have been doing it that way mostly because we see the process of going on the road show, pitch science and dog and pony for cash as a distraction from building a business that people love. Our products are for indies too, so we feel like living the lifestyle of indie is important for us to understand our customers. We may take money one day, but it will only once we understand the landscape and define the terms.

    1. Also, the web more and more allows “bespoke” mail order to be a viable revenue channel. Before Ebay, Amazon and Etsy one either had to go with economics of scale (hello venture capital) or get picked up by some mail order catalog of random nifty (in a sense what those before mentioned web sites have replaced).

Comments are closed.