Bootstrap vs Building from Scratch Without Outside Capital | With Expert Ben Dowling

You know, so you've hit some kind of great growth here from what you said, you know, 50% year over year. Why the decision to bootstrap and what was the thought process behind— you built this from scratch and then started getting traction, you went full-time. Why not at that point look for outside capital for fueling that growth and hiring that team you needed to really accelerate it?

Sure. Yeah. I think some of that comes back to the history with Germium and then Lightbox. With Germium, we raised very small amount of seed funding, but it ran out after 6 months. Then we're like, well, hey, we're stuck. We've got to go find contracting gigs, got to do something else. Now, had we have had longer, could we have maybe made something of it? Potentially. I also think had we have not have— one thing I'd done with IP Info is not say, hey, I've got this new idea, I'm going to spend 6 months and see if we can make it successful or not, and then if not, got to go do something else. It's very organically like, layering on top of each other. That way, there's infinite runway, and the expectations can change as it evolves. There's no timeboxing of like, okay, let's raise some money, we've got 12 months to get to the traction level to here. Otherwise, we've got to sell it or close it down or something. It's like we may say, hey, we want to get to here, ideally in 12 months. If it takes 2 years, fine. If it takes 4 years, fine. If it takes 6 months, great. I think being bootstrapped just gives us full freedom to figure out what the right pace is for us, to figure out what markets we want to explore, to figure out basically anything we want to. There's no time pressure, or no external time pressure. There's no— we've got complete control of our destiny. I think we probably won't raise ever. I wouldn't rule it out. But I think we're bootstrapped, we're profitable at this point. We're growing at a pace we're happy with. And so it's not clear to me that an injection of capital is necessarily going to change our trajectory. And so we're kind of pretty happy with how things are.

So 50% year-over-year growth, I mean, that's quite good. I mean, that's very respectable. That's really nice. I mean, if it continues to that or if you guys find ways to continue to grow it, yeah, I mean, there's always pros and cons of raising versus bootstrapping. Any tips or suggestions maybe you could share for those in our audience Maybe they're looking to bootstrap their next idea, or they're also contemplating the idea of raising capital, because you've done both, maybe pros and cons of each, and any other tips for them?

Yeah. So I think the downside to bootstrapping obviously is it just takes a lot longer. This was a side project for many years without me spending much time on it. And so you just have to be, I think, much more patient. I also think the bonus is it just means you have to plant those seeds earlier. I've worked on a bunch of different side projects, many with big ambitions for them that never became anything, some with IP Info, hey, this will be useful, but I don't know if it will be a business, and turned out to be a great one. I think knowing that, hey, this could take years before it gets to a point where it could be a business or could be generating revenue or whatever, And just experimenting and doing a lot of different things, things you're interested in, and saying, hey, this could take many years. Obviously, the big benefit with raising capital is it focuses you like, hey, I get to spend my full time on this for 12 months, 2 years, whatever the runway is. But that could be it. At the end of 2 years, if we've not got certain milestones, you've got certain things, we may have to start again from scratch. And so what I really like about the bootstrap thing is it takes that starting from scratch off the table. It's like, well, hey, we may need to just— maybe we don't grow as well as we'd hoped this year or over the next few years, but there's no starting from scratch. We just get to take our time on it, fix things that we think need fixing, and just play for the really long term.

Makes sense. Yeah, I guess if you can afford to build this over committing to it for a long term, then maybe bootstrap makes sense. But I think a lot of people maybe think, I need to go all in on this. They'll bootstrap it themselves, put everything in. It might take longer than you actually think, right?

Maybe it always does. Yeah. That's definitely the trade-off I think is the time it takes. You see people raise money and then they can hire a bunch of really smart people. And that definitely, I think, can increase your chances of making something successful, right? But it also ups the bar of where you need to get to.

Yeah, yeah, absolutely. Um, so I'd like to chat a little bit more about IPInfo itself, um, the product. How are you guys kind of innovating the product? And, you know, tell us, how does your technology stand out from any of the other IP data providers out there right now?

Yeah, sure. So initially, you know, I talked about the background of IPInfo, right? It was just like, hey, I downloaded some dataset wrapped in an API. And so initially, that's what we were. You know, our whole innovation and our differentiator was, hey, if you want IP geolocation data anywhere else, you've either got download a dataset, set it up on a server, or you've got to pay for an expensive, hard-to-use API. They weren't good options. I went, hey, let's make a free, really easy-to-use API that's quick and reliable. For the first few years, while this was a side project, that's where we innovated. That's where we got our footholds and where we got our initial growth. Then it was becoming clear that we would get feedback from people saying, but hey, your data, you You're saying I'm in San Francisco, but really, I'm down in San Jose. Can you fix this data for me? And initially, I'm like, hey, this isn't our data, right? We just downloaded it. We're an API provider. If you want to fix the data, you can go upstream. But this happened again and again and again. It's like, oh, that's interesting. Actually, there's an opportunity to fix the data, and we're getting feedback about where some gaps are in the data. And so then we went down a path of, OK, let's just build out our own data that's really world-class, high-accuracy data. So we stopped getting all this feedback about data being broken. We can just kind of— people are like, oh, wow, this is really great. The accuracy is really great. And then we'll get feedback on other datasets as well. Like I mentioned the ISP one, what's the ISP? What's the company? Is this IP address a carrier or not? And so then we thought, hey, instead of just being great at the API piece, We established that, let's make sure we've got really great data and world-class data as well. We thought, oh, that should be easy. It should be done in 12 months. That's been a focus for many, many years now. It turns out to be a really hard problem, but it's been really fun and rewarding solving that piece and making lots of progress there. One key thing that differentiates us now is, yeah, we have the really easy-to-use API, really developer-friendly. That's our roots. It's like, hey, we're just solving problems for developers. Now, we also have really great data and a great data team that's working on this. And so, differentiator between us and other companies as well is that we have really great, highly accurate data. We update it daily, and we have a bunch of different datasets as well. So, like I said, there's the geolocation, we do VPN detection, carrier detection. And so, we're really focused on what context can we give you around an IP address. And so, I mentioned there's the cybersecurity industry where we're growing, but we do try and be industry agnostic. There are lots of different use cases. There's ad tech, there's marketing, there's website personalization, there's cybersecurity. And we really try and get a lot of feedback from our users on the different ways that they're using it and try and make datasets that are useful across all of those. And they tend to be similar solutions. The one thing we do is IP type detection. So we'll say, given this IP address, is it most likely to be from a hosting provider, an ISP, a business or educational institution? different use cases, but the same data can be used for different use cases. So someone that's using marketing or ad tech may be like, hey, I just want to advertise to people. I don't want to show ads to any automation or whatever. And so they can use that data and say, hey, I want to filter out anything that's not an ISP. But then a cybersecurity person may have a use case of actually, I just want to look at everything from a hosting provider. Maybe that's riskier or there's something else. And so we try and work out what are these datasets that we can apply broadly to all IP address space, that also apply to a broad set of use cases. So yeah, it's been a lot of fun.

And kind of just going specific on those different datasets, and you said you create a kind of world-class data that's updated daily, kind of use cases specifically for, say, SaaS founders listening in. How can they use that to improve 2 things? One is what I hear, customer experience. And then also on the sales side, how are you increasing conversions from the quality of leads? If you can speak about those.

Yeah, sure. Yeah, there's lots you can do on this. And so if we dive into the IP geolocation dataset, so that is one where you give us an IP address and we'll tell you city-level accuracy for this IP address. So you may say, hey, this is someone visiting from Seattle. And so depending on your business and what you're doing, there are a bunch of different personalizations you could do with that. One could be a user experience improvement. So if there's anywhere, say, on your website that you're asking the user to give you a location, you could bypass that step. You could say you were in the travel industry, and it was a flight booking app. You could easily say, if I visited the website, it could say, hey, here are the nearest flights from SeaTac Airport, say. If I was in the UK, the website could just say, here are the nearest flights from Heathrow. It'd be great to give the user a way to override that and say, well, actually, I'm actually going to be flying from a different airport, or Maybe I'm on a VPN and it looks like I'm in London, but really I'm in Seattle, and so you may want to do something different there. It'd be great to give the user a way to override that. But lots of websites you go to, if you go to the IKEA website, I think the first thing that pops up is, what country are you in? It's like, hey, I just wanted to order some furniture online. They could use IP geolocation to say, hey, we know this guy's in the US, let's just take him right there, start showing him some furniture. That would not only give the user a better experience, that would probably result in more sales, less frustrated users, and all these things. There's that user experience where If you want to know something about the user's location, if you're going to ask them for something, you can just skip that step and jump right into providing value for the user. That's one. Another way you can do that is instead of personalizing the experience for the user is using that information to help with marketing. For example, on a user signup form, for everybody that signs up, you may want to get their location, their IP geolocation, and then you could say, hey, we had a signup from a user in Seattle, a user in London, and then various different things you can do with that. You may want to automatically send emails based on time of day. If you say, hey, it's better for us to land in this person's inbox at 9:00 AM their local time rather than it be 4:00 AM or whatever, and then they're going to wake up and we're not going to be at the top of the inbox. And so you could use that. We return the time zone API and you could do something based on that. You could also, maybe post-COVID when there's in-person events, you may want to email all users in Seattle and say, hey, we're going to have an event Come meet up with us. You could also inform where you might want to run events. If you notice that you had 50 signups in Seattle last week, but 5 in London, you may say, hey, let's go do more in Seattle, or maybe we need to be doing more in London to increase the number of users there. Yeah, lots of different things like that. Even user-invisible things. One could be, say you were a book publisher, or you're an author of a book, and you wanted to sell your book. you may want to send the user to Amazon, but it's going to be a bad user experience if someone in London goes to amazon.com and then they've got to either ship it from the US or they've got to go switch to the UK. It's a really simple personalization where it's like, hey, come buy my book, and that link just goes to the country-specific Amazon. And you could just use the country location data there and say, hey, if they're from the UK, let's send them to amazon.co.uk. If they're from the US, let's send them to amazon.com, and maybe there's a default that's Go, go buy them somewhere else if they're not in either of those countries.