Scaling a bootstrapped business is next frontier of entrepreneurship for Evan Frank

Evan Frank was five years old when he first knew he was going to be an entrepreneur. While attending kindergarten, Frank crafted books and sold them to his teacher at a nickel to a dime a piece. “There was always this desire to build stuff,” he explained to me, and also clearly a desire to make some money on those projects, to boot.

Frank, who lives in New York City, was a co-founder and eventual CEO of onefinestay, which sold in early 2016 to AccorHotels for $170 million. Now, he is embarking on the latest of his entrepreneurial endeavors, as the new CEO of Context Travel, a company that specializes in deeply researched tours in cities around the world. Until recently, the 14-year-old company was bootstrapped by its founders Paul Bennett and Lani Bevacqua, before raising $5 million in private equity funding last September from Active Partners.

I wanted to understand how Frank, who I first met sharing a RideAustin taxi at a SXSW pre-conference, chose between starting a new venture and heading up an established business. I also wanted to get a sense of what entrepreneurship looks like as a career, rather than simply as a single job title or startup.

First, entrepreneurship is in Frank’s DNA. After starting a short-lived startup in the dot-com bubble and a couple of years working in investment banking, he moved to London to join a growth equity firm in 2005 called Kennet Partners. Frank wanted to “marry career progression and fun,” noting that “it was a lot more fun to do board meetings in Barcelona and Berlin rather than Pittsburgh.” The job allowed him to meet a lot of different entrepreneurs and, along with his bank training, understand the financing of startups.

Eventually though, he got the itch to return to being a founder himself. “I got married a few years before, and I realized that I wasn’t fully satisfied with VC work. I decided if I didn’t start a company now, when would I?”

His first attempt at a startup was to build a verticalized e-commerce brand known as BOX, which sold men’s underwear, shirts and socks. “I was looking at what was happening with Bonobos at the time — and I wanted to apply that same philosophy of brand building,” Frank said. There were moments of absurdity, including “hawking boxers on Portobello Road in West London” — one of the largest antique markets in the world.

Eventually, Frank would shut down that business and sync up with Greg Marsh, who had been an investor at Index Ventures for three years and had recently started a business called onefinestay. Frank agreed to join the company, and became the last co-founder of the business.

For the next seven years, Frank would move with the company to its next scaling opportunities, starting out as head of commercial in London, and eventually becoming the head of U.S. sales for the company, which targeted New York City and Los Angeles as its key markets. Frank explained that “we were trying to bring standards and a brand to what was at the time a Wild West, which was urban vacation rentals.”

The company would go on to raise about $81 million, according to Crunchbase, across several rounds of venture capital. “We were scaling quickly, but never profitable, and somehow always dependent on the capital markets,” Frank said. The company would eventually sell to AccorHotels, and Frank would take the CEO position for a year as part of the acquisition and integration process. He left last September, looking to build a new startup.

Context Travel had been on Frank’s radar screens since 2010. Onefinestay and Context had a partnership by which customers of onefinestay would be recommended to Context in cities like Rome if they asked for a more personal and local tour experience. He continued to observe the business at a distance, and then in the last year was introduced by his co-founder Marsh to Bennett, who had founded Context. They had an on-going conversation to potentially join the company, and, “We spent the fall getting to know each other,” Frank said.

In the end, Frank decided to join Context as CEO, while Bennett decided to step back after almost a decade and a half to return to his love of sailing. Frank sees similarities between his new business and his old business, and not just that they are both in the travel business. “Onefinestay was the accommodation business for people who didn’t want to stay at a traditional hotel, and Context is a tour for people who don’t want to do a traditional tour.”

Frank explained that starting a company and joining a bootstrapped one have very different features. “When you start a company, you own the whole thing or whatever split you chose with your co-founders,” he explained. But there are serious challenges. “Certainly, from the onefinestay days, there is just this incredibly challenging multi-year period where you just don’t know whether it is working. When you are a founder or CEO, you are always telling people that it is working, but is it working if the business had to run sustainably and not spend money?”

Leading a formerly bootstrapped business though can solve many of those challenges. If it has been run properly, “you have taken an enormous amount of risk and time out of the business, and can work to scale above that.”

Frank argues that “I consider myself two parts entrepreneur and one part operator.” With Context, he gets to play both roles, building out an executive team while also continuing to learn about interesting places all around the world. His five-year-old self would likely approve.