On November 5th, Startup Grind Austin welcomed Joshua Baer managing director of Capital Factory and successful entrepreneur for a fireside chat. Joshua started his first company from his Carnegie Mellon dorm room, but that was not his first foray into creating. In fact he’s been a creator his whole life. And that is when he is happiest, creating. As a child it was music and then he found computers in his teens.
He went to CMU because they had one of the best computer science departments in the country. He described his first company as starting rather organically. First he had to set the scene. This is the early nineties and the software world was very different. Remember when software was expensive and they mailed it to you. He wanted a copy of a new software product so he signed up for the beta program; while he was on the company’s site he noticed that there was another software beta they were offering. So he signed up for that one too. Apparently the first beta was very popular, and he didn’t get in, but that second one wasn’t and he got the software right away.
When he got the software he read the manual, and then began to answer questions for other users on the forum. Eventually, people began to pay him to solve their problems with the technology. That led to hosting the software (on the computer that his parents bought him to take to college) and eventually he had a small business, a perfect example of validating the market before you build the company.
He continued to run this business on the side, completely boot strapped through school and moving to Austin to be part of Trilogy’s “Trilogy University”, before he began to focus on it full time. He learned some hard lessons in those years. Hiring friends is tricky and you have to be honest about how they are doing right from the start. And create a place you want to work and other people like you will want to work there too.
Eventually he sold that company and startup another and started Capital Factory. For his second company he went out and raised money, and did sell this company as well. In comparing the two experiences, he recommended that entrepreneurs try not to raise money, bootstrapping gives you more control over your company. In fact, he has set up the terms of Capital Factory’s accelerator program to be very entrepreneur friendly.
The conversation was sprinkled with good insights on Austin’s startup ecosystem. For example, he identified that the Trilogy University program is a big part of why Austin has such a big startup community for a city of its size. And he made several book recommendations, Eric Ries’ The Lean Startup and Paul Graham’s Hackers & Painters.
Join us next month as we welcome Jay Hallberg co-founder of Spiceworks. You can get tickets here.