Bootstrapping, the process of building a business without external funding, has unique advantages and challenges for startups. On one hand, it offers complete ownership, cost-efficiency, and long-term vision. On the other, it can be resource-intensive, slow-paced, and risky.

But when it works, it results in profitable, scalable businesses. An example is a Danish SaaS company that embraced bootstrapping as a core strategy. 

Founded in 2013, Driversnote provides a mileage-tracking app for drivers that simplifies the often tedious task of tracking for individual drivers and businesses.

The company has grown its ARR from €2 million to €10 million, helping 2.5 million users worldwide track their mileage automatically when driving for work. 

And this is all without taking any money from VCs or private investors (despite repeated interest).

I spoke to co-founder Jonas Åradsson to find out more.

Driversnote offers a mobile app for automatic mileage tracking with automatic trip logging. 

An iBeacon detects when you enter and leave your vehicle, and automatically logs and classifies your trips. It offers features like location saving for quick tracking, work hour settings for automatic trip categorisation, custom mileage rate setting for personalised reimbursement, odometer logging reminders, and reporting reminders to streamline the mileage tracking process.

Build a product people need

What is the secret to building a bootstrapped business from scratch? According to Åradsson, you need to “build something people need.

“When you’re looking at product gaps, you want to cultivate something that is a need to have rather than nice to have.” 

Driversnote has highly incentivised users — the app, after all, enables them to get money back from their employer or claim tax expenses. 

From a part-time venture to a profitable business

Regarding how Driversnote was able to bootstrap themselves to profitability, the team started part time, supplementing their efforts with freelance work. 

They also received a small amount of government support via Innobooster funding — “equity-free stressed Åradsson, explaining, “We only got paid a full-time salary from Driversnote once the business could support it.”

Prioritising customers over capital

While sitting at coworking spaces in the company’s early days, Åradsson couldn’t help but notice that everyone was talking about venture capital investment — often at the expense of product ideation, development, and the needs of customers.

Unlike most companies making hardware or deep tech, the company is in a privileged position to not need investment.

 But he notes: 

“No one was talking about profit or customer acquisition, just investment. It was a massive time suck. It took outreach to 100 investors to get one investor.” 

VC funding dilutes ownership and introduces external pressures, which can result in pressure to scale too early, resulting in job cuts later. 

While growth is slower than those with more funding, Åradsson asserts that the company has also gained and maintained its success by prioritising organic growth and that private investment is not the only way to run a successful startup:

“We’re proud to be bootstrapped and happy to work without external pressure to grow faster than we feel is sustainable. We value feedback from customers, not investors.” 

Driversnote’s success also hinges on its early adoption of a global mindset. The company focused on building a flexible product capable of adapting to diverse local markets.

“Companies fail to scale meaningfully when they build with their existing language and culture in mind.”

And Driversnote’s financial independence has attracted a lot of investor attention, especially as the company scaled and reached profitability: 

“We’ve never been convinced that the deals offered by investors were worth the money. 

Investors were laughing at us for bootstrapping. But now, after the last 18 months of financial challenges – often by the VCs themselves — they’re not laughing anymore.”

Lead image: Driversnote. Photo: uncredited.