Founders often celebrate fundraising as if it were the ultimate milestone. My guest on The Scaling CEO, Jon Nordmark, sees it differently.
Jon co-founded eBags.com, scaling it through the dot-com crash and post-9/11 era to $1.65 billion in sales before Samsonite acquired the company. In 2015, he pivoted to AI, launching Iterate.ai, a low-code AI platform now used by global giants like Ulta Beauty and Japan’s largest bank. Along the way, he’s raised over $70 million, but his view of capital is contrarian: every fundraising round is a reset, not a success.
Success Starts With People, Not Capital
When Jon looked back on scaling eBags, his lesson was simple: nothing matters more than the people you bring on board.
“If you get the right people and build the right culture, that’s when you have the best shot at succeeding.”
CEOs must prioritize building leadership teams that can scale. Fundraising won’t save you if the team isn’t capable of growing with the company.
Avoid the Trap of Hero Culture
Many CEOs fall into the trap of trying to be the hero. Jon rejects that idea.
“You can’t do it if you’re the hero… the best thing for a guy like me is when I know I’ve built a great business is the day I’m no longer needed.”
Scaling is not about being indispensable. It’s about building a team strong enough to function without you.
The Hidden Cost of Venture Capital
At eBags, Jon learned how quickly control slips away once investors enter the picture.
“A lot of founders… believe raising money is the be-all end-all… Actually I consider every time you raise it… it’s almost the opposite of success. It means you couldn’t do it without the money.”
He saw firsthand how boards can derail founders with “swoop management”, showing up every few months to dictate decisions without understanding the business. His takeaway: raising money isn’t achievement, it’s a reset point.
Bootstrapping Forces Invention
Iterate.ai took a different path: bootstrapped to over $10M in revenue before raising outside money. That discipline created room for invention.
“Not having money forces invention. We’ve been incredibly inventive at Iterate and that’s one of the reasons we’ve succeeded.”
Relying on creativity over cash gives CEOs more control, more leverage, and fewer destructive board dynamics.
Lessons From Crisis
The dot-com bust nearly wiped eBags out. Valuations collapsed, capital dried up, and Jon was forced to lay off 25% of his workforce. The experience changed him.
“We had an offer to get almost a 10x return six years in… none of the venture people would take the deal. They needed us to produce at least 20x.”
When you raise money, you’re not just building a company, you’re joining someone else’s portfolio. Their priorities may not align with yours.
Scaling Yourself as CEO
Jon’s shift from e-commerce to AI required scaling his own skills. He credits his co-founder, Brian Sathianathan, an Apple veteran who helped build the first iPhone. Jon’s role: enable Brian and the technical team to succeed, while stepping back when the team is executing well.
His advice for CEOs: know what you’re good at, admit what you’re bad at, and hire or partner to fill the gaps.
AI Agents Will Reshape Companies
At Iterate, Jon and his team built Agent One, an internal AI system that codes enterprise software with security and testing baked in. It’s not just automating tasks, it’s transforming what’s possible.
For one hospital, AI reviewed rejected insurance claims and recovered $17.4 million in lost revenue
This is the next frontier: agents that make current processes radically more efficient, and others that unlock what used to be impossible.
Final Takeaway
Jon Nordmark’s story challenges the narrative that fundraising equals success. Cash is fuel, not achievement. Real success comes from the team you build, the culture you shape, and the inventions that emerge when resources are scarce.
As a CEO, don’t mistake raising money for winning. Treat it as a reset, and keep your eyes on building a business that thrives with or without investor capital.
I’m Glenn Gow. I coach CEOs intent on building enduring companies. On my podcast, I reveal how top CEOs scale quickly while staying grounded.
Listen to the full episode of The Scaling CEO with Jon Nordmark to hear his candid insights on scaling both e-commerce and AI.
