“Sign, Sign everywhere a sign” – Five Man Electrical Band

Dan Graham, CEO and Founder of BuildASign

“Warning: This house protected by Ninjas”

That’s one of Dan Graham’s favorite signs.

The CEO of BuildASign occasionally goes into the company’s 60,000 square foot manufacturing and warehouse facilities to look in its sign bins to see customer orders.

“It’s never a dull time,” he said.

Graham clearly enjoys his work as the head of one of the country’s largest online sign printing companies.

And how he got there is one of Austin’s best bootstrapping entrepreneurial tales that has become legendary in the city’s startup community.

Graham, who has an undergraduate degree in computer science, ran a web development business with three friends: Blake Borgeson, Ty Barho and JR Kraft. He wanted to make extra money while he went to the University of Texas School of Law.

They built basic websites for companies and often tried to upsell them on more elaborate e-commerce platforms.

They created BuildASign.com as an optional website for a local graphics company. But the company didn’t want to pay $7,000 for it. The platform put the approval process for print jobs like custom designed signs in the customer’s hands online and eliminated expense and time.

“The sign shop market is very fragmented,” Graham said. Austin has about 150 sign shops and tens of thousands of others exist around the country, he said.

“We built out a prototype,” Graham said. “We went door to door trying to sell it. We were told the Internet wasn’t an appropriate place to sell signs.”

They presented it as a cost savings model and they decided to prove it out on the revenue side, Graham said.

“We took our prototype and launched it out there,” he said.

And they started getting orders online. But they needed somewhere to print the signs. They were just four guys in a ten foot by ten foot office with two computers and no manufacturing plant.

“We partnered with a local print shop,” Graham said. “We guaranteed a three day turnaround.”

The print shop started delivering BuildASign’s orders late. So Graham and his partners arranged to print their own signs in the shop after hours.

“We went to the print shop after it closed and worked until two or three or four in the morning to get our stuff out,” Graham said. “It wasn’t a great deal for us. We were paying for labor and we were doing the labor.”

In 2005, BuildASign leased 1,200 square feet of space and a printer and got into the sign making business.

“We had been pulled into it by necessity,” Graham said.

By the end of 2006, BuildASign had $3 million in revenue and $7.8 million the second year and then $10 million in 2008, $12 million in 2009, $20 million in 2010 and $30 million last year.

“This year, we’ll do $45 million to $50 million,” Graham said.

Graham graduated in the fall of 2005 from the University of Texas School of Law after two and a half years but he hasn’t taken the Texas Bar Exam yet.

“It’s not something that I need for the job that I have,” he said.

His parents were OK with his decision. His mom is now a retired librarian with the City of Austin’s Milwood branch and his dad served as deputy executive director of the Association of Texas Professional Educators.

“If they had been making the decisions for me they would have advised having a backup plan,” he said.

But instead of taking a high paying job right out of law school with a big firm, he really wanted to “give the entrepreneurship thing a go,” he said.

In the summer of 2005, Graham quit a legal internship once BuildASign started getting some sales.

The company turned a profit its first month.

To work full time, the partners needed to get paid. They quit their day jobs in two shifts and by the end of January 2006 they were all making a salary as full time employees.

“We haven’t taken any venture capital, loans or other investment,” Graham said. “That kind of bootstrap mentality has been with us since the beginning.”

The company operated “lean” with a little l, meaning they watched every penny that they spent. They also subscribed to what came to be known as Eric Ries’ Lean Startup movement, which means deploying a product quickly and adapting and changing to meet customers’ needs.

“We were able to build our customer acquisition tool with sweat equity,” Graham said.

BuildASign spread the word about its services through Google Adwords and it hired its employees from listings on Craigslist.

“Our business, just in its nature, is a lot more conducive to bootstrapping,” Graham said. “You’ve got to have a gradual and scalable model to bootstrap your business. So that you are funding yourself as you move forward.’’

Most of BuildASign’s growth has come organically. It has bought a few companies, but acquisitions make up a small percentage of its revenue growth, Graham said.

“When we do acquire companies we’re looking for companies that fit into our existing business model,” he said.

Philanthropy is a big part of BuildASign’s company culture

Last year, BuildASign acquired ReflectiveRealEstate.com, which made reflective real estate yard signs and Carwrap.com, a vehicle graphics company.

BuildASign offers other products in addition to signs: bumper stickers, business cards, magnets, license plates and flags.

A couple of years ago, BuildASign began selling into Canada. A year later, the company expanded into the U.K. and six months ago, it entered the German market. Still, international sales make up less than 5 percent of revenue.

BuildASign’s largest market is serving small businesses with the real estate industry making up the largest segment.

Consumers order everything form novelty license plates to dorm room signs.

But business isn’t just about making a buck.

“Philanthropy has been a part of our business since the beginning,” Graham said.

BuildASign donates cash or signs to nonprofit organizations. It has given away $450,000 to more than 400 nonprofit organizations. Seven employees spend their time focused on the giving program.

In July of 2008, BuildASign started a program to give away 10,000 welcome home banners to families of returning military. They sold out in a week and a half.

“Ultimately we made more than 250,000 banners worth $7.8 million,” Graham said. “That’s been a fantastic program from all accounts.”

Graham doesn’t just donate money and goods. He donates his time. He stays actively involved in the Austin community.

“I was born here. I’ve a got a nine month old daughter. She’s going to grow up here,” he said. “We have an opportunity we shouldn’t pass up to make a difference.”

Austin Under 40 selected Graham as “Austinite of the Year” last March.

“Dan is a strong community leader who contributes his time to a variety of non-profit and City of Austin development boards,” Lance Parisher, Austin Under 40 co-chair, said in a statement. “He also mentors young professionals and emerging entrepreneurs in the hope that they can learn from his success.”

Kevin Koym, founder of Tech Ranch Austin, said Graham serves as a mentor to “many, many, many entrepreneurs.”

He’s successful because he’s very focused, Koym said.

“He experiments as he did with BuildASign by trying it out as a consulting project,” Koym said. “Then he focused in on something that was working. As we say in Lean Startup practices, he found a product market fit and he just grew the hell out of it.”

Graham’s personality is also a great asset, he said.

“He’s really approachable and very friendly and because of that people naturally want to support him and he deserves it,” Koym said.

Graham serves as a great example to other entrepreneurs, he said.

“He can teach other entrepreneurs that good guys really can be successful,” Koym said. “If you’re focused and a great guy helping other people and things like that then you can really be successful.”

Out of the four founders, three are still owners and only Graham and J.R. Kraft are still active in the business. Kraft serves as the company’s president.

BuildASign has grown from just four employees initially to 230 employees and is currently hiring 10 more.

Four months ago, BuildASign expanded into 22,000 square feet of office space and another 60,000 square feet of manufacturing and warehouse space in North Austin.

Venture Capitalists and Private Equity firms approach Graham all the time about investing, but he isn’t interested.

“We’re doing very well,” Graham said. “We don’t need to take money from anyone. We’ve been profitable since our first month in business. We think there’s a huge opportunity in the market in front of us.”