[HN Gopher] My fifth year as a bootstrapped founder
___________________________________________________________________
My fifth year as a bootstrapped founder
Author : mtlynch
Score : 264 points
Date : 2023-02-10 14:34 UTC (8 hours ago)
(HTM) web link (mtlynch.io)
(TXT) w3m dump (mtlynch.io)
| varispeed wrote:
| > FCC/CE compliant
|
| How did you go about that? All I know is that start ups just
| self-certify, based on the fact that components they use are
| already certified and "it's going to be okay" attitude. Some
| start ups do some basic in-house checks (some that have more
| funding can go for pre-compliance tests), but never heard of any
| small business actually commissioning full compliance tests.
| Something like this probably would require selling both kidneys
| and a house and made the whole business unprofitable - also
| considering the fact that sellers in China if they copy a
| product, don't need to do any compliance checks (in practice,
| because nobody cares).
| mtlynch wrote:
| I work with a US-based compliance testing lab. It was $7k to do
| both FCC and CE testing. I'll share the name over email if
| you'd like.
|
| I also talked to UL, who's like the gold standard for
| compliance testing, but they were pretty hard to deal with and
| wanted something in the $20-30k range.
| botswana99 wrote:
| Long term technology bootstrapping founder here. Paying yourself
| is very important. You may need to work for free for a while but
| when you get your first paying customer pay yourself a little
| salary. And when you get a second customer, pay yourself some
| more. Try to get a near market salary before you hire your first
| employee. Corporate and your own founder/personal longevity is
| the path to success.
| duxup wrote:
| I imagine the issue is just psychology,there's always a reason
| not to, another place to put that money that might help make
| more money. But then, you're never paid.
| jbenjoseph wrote:
| Also the taxman in most jurisdictions gives you a tax amnesty
| for some yearly income per year that you are essentially
| throwing away with a $0 income.
| holdenk wrote:
| Only the flipside, QSBS shares have some great tax advantages
| if you think you might have a traditional "exit" at some point.
| indymike wrote:
| There's an old rule in small business: "Pay yourself first." It
| means, make sure you allocate money to pay yourself before
| paying everything else. Once you are used to it, it makes it a
| lot easier to get to something that seems like market rate.
| skeeter2020 wrote:
| This "rule" falls down pretty quick IME. It's more like Taxes
| > Employees > Suppliers > Yourself.
| dceddia wrote:
| I've always thought of this rule (and the similar Profit
| First strategy, which I personally follow) as more of a
| guiding principle.
|
| When taxes, salaries, and expenses come due, those need to
| be a priority, so before any money flows in or out, have a
| plan for how to set your own salary at X% while also
| meeting those commitments.
| enos_feedler wrote:
| thank goodness for those credit card rewards
| mtlynch wrote:
| Haha, thanks. In my first few years, they were my main source
| of revenue.
| ahstilde wrote:
| Why aren't you asking for help? If this is like a public investor
| update, you should explicitly call out where your network could
| help you.
|
| "Our number one problem is finding a reliable partner in China.
| If you have over 5 years experience creating products like this,
| contact me at XYZ, I would love to hear your advice."
| mtlynch wrote:
| Author here!
|
| Happy to take any feedback or answer questions about this post.
| technotony wrote:
| How have you thought about pricing? I would have thought a
| small increase in price would make a big difference to your
| bottom line given the difference between your revenues and
| profits.
| blantonl wrote:
| Are you doing any work to position your product and service to
| be acquired?
| mtlynch wrote:
| Yeah, I think taking myself out of the critical path and
| making the business more location-independent will make it
| more attractive to a buyer if I decide to sell.
| testmasterflex wrote:
| Great post as always Michael!
|
| Did you move away from Raspberry now or what does the EE guys
| do?
|
| I don't have personal experience of outsourcing assembly yet
| but make sure quality control is flawless before letting that
| go. I would and will personally fly down to China to set that
| up. Will be following to see how that process goes.
|
| All the best.
| mtlynch wrote:
| Thanks for reading!
|
| Nope, we're still on Raspberry Pi. It's difficult to move to
| other hardware because it would mean managing a lot more of
| the OS stack ourselves, and then we'd still have thousands of
| users still on Raspberry Pi.
|
| I'd like to move to the Pi CM4 because we'd reduce costs and
| get a lot more control over the hardware, but it's a big up
| front cost to start over from scratch on a new board.
| testmasterflex wrote:
| Sounds like the smartest next step!
| metadat wrote:
| Thank you for publicly sharing and documenting so much
| information about this epic quest you're on (I'm sure it's a
| solid PR move, too :).
|
| I wish you all the best and respect your decision to eschew a
| comparatively cushy and predictable job to take up this risky
| and challenging endeavor filled with never ending thankless
| tasks.
|
| Godspeed.
|
| Edit: Sorry to hear it isn't a big boon on the marketing front.
| All I can say is I recall seeing TinyPilot at least once
| before, but now it's much more on my radar. If it could do
| remote power switching I'd be very keen to keep it in my server
| rack as the sole point of remote administration (sorry, I'm
| sure you get dumb feature requests and this is probably just
| another one.. but I couldn't resist).
| ganoushoreilly wrote:
| Remote power switching is what has held me back. Even if it
| was an additional cost / _addon_ I 'd definitely look at
| picking up a dozen or so. Still I've been following for a
| while and hope to see some cool improvements over time.
|
| EDIT: Actually being a raspberry pi, It might not be hard to
| build in that feature. I might just grab one today and see.
| mtlynch wrote:
| Yeah, remote power switching is definitely doable. It would
| either be wiring directly into the motherboard's or
| controlling an external power switch. The challenge is
| making it user-friendly, supporting it, meeting compliance
| requirements, etc.
| mtlynch wrote:
| > _Thank you for publicly sharing and documenting so much
| information about this epic quest you 're on (I'm sure it's a
| solid PR move, too :)._
|
| Honestly, I don't see much of an impact on sales when my blog
| posts reach the front page of HN. I'm sure that it helps
| some, but nothing dramatic.
|
| In terms of ROI, there's much better payoff in writing
| content aimed at the smaller niche of homelab users and IT
| folks.
|
| I mostly write these out of vanity because I think it's fun
| getting feedback on the process. So, thanks for reading!
| [deleted]
| kevmo314 wrote:
| Thanks for sharing your experience Michael! I found out about
| TinyPilot a while back ago. I made a similar device for a
| completely different industry and learned that TinyPilot has
| nearly the same architecture but a completely different use
| case. Unfortunately, we weren't able to turn a profit with that
| device either. It seems streaming video is a tough market to
| crack :(
|
| Our manufacturer in China is a startup as well if you are
| looking for a connection. He works hard and can give you a good
| price at smaller scales. I'll send you an email as well but in
| case anyone else is interested, kevmo314@gmail.com.
| mtlynch wrote:
| Cool, thank you!
| pyrrhotech wrote:
| Congrats on your amazing success! 0 to 850k revenue with a
| hardware product in three years is almost unbelievably amazing.
| I'm totally ignorant about hardware dev. How does one even go
| about designing and manufacturing a hardware product like
| TinyPilot? Do you design in some sort of CAD software and then
| partner with some sort of factory?
| dQw4w9WgXcQ wrote:
| About page feedback:
|
| 1. If you're going to have a headshot, get yourself a
| professional headshot on the About page. You squinting into the
| sun in a selfie is nice for a Twitter profile, but you're
| trying to present a real company w/ a real product here, right?
|
| 2. It's clear this story is really tied into your identity
| right now, but nobody cares about this part on a page about
| TinyPilot:
|
| >> I'm a software developer and worked most of my career at
| Microsoft and Google, but I quit in 2018 to found a company of
| my own.
|
| I like the focus on your frustrations and how you solved that.
| The quitting part people could take negatively ("is this guy a
| quitter? will I receive product support if I buy this?").
|
| Everything else looks pretty solid for a SaaS homepage.
| mtlynch wrote:
| Thanks for reading and for the constructive feedback!
|
| Yeah, the About page is something I haven't touched much
| since I first launched the site, and I agree that it feels
| not quite consistent with the tone of the site or where the
| company is at this point.
| juanse wrote:
| Amazing post Michael! I have been following your story for
| years.
|
| I have also a similar project backing, but not as technical as
| yours. I use also Raspberries for Smart Kiosks that are set to
| be in restaurants and increase the demand of the most
| convenient dishes at a time with great photography.
|
| I see that you think now of Debian packages as an optimal way
| for installations in your project.
|
| What would you say it is the best way yo keep a Raspberry
| system "auto-updated"?
|
| PD: My skills are way lower than yours. I use mostly Ruby
| scripts (SystemD) to contact a backend in Rails.
| mtlynch wrote:
| Thanks for reading!
|
| > _What would you say it is the best way yo keep a Raspberry
| system "auto-updated"?_
|
| I think Debian packages are better than what I was doing, but
| if I were starting from scratch, I'd try to use Yocto[0] or
| NixOS[1].
|
| Take this with a grain of salt, because this is secondhand
| from another founder who had good experience with Yocto, but
| from what she told me it's optimized for the case of pushing
| out updates to embedded devices. One of the pitfalls of
| Raspberry Pis is that the microSDs are vulnerable to
| filesystem corruption, which can leave the device unbootable.
| I believe Yocto protects against that where there are always
| two bootable partitions, so you failover to the other
| partition and can recover.
|
| [0] https://www.yoctoproject.org/
|
| [1] https://nixos.org/
| moneywoes wrote:
| Have you considered retail Or other distribution channels?
|
| Do you have a SO, if so what do they think about this
| experiment
| mtlynch wrote:
| _Have you considered retail Or other distribution channels?_
|
| I've reached out to a couple of resellers, but they weren't
| interested, though I didn't pursue it very heavily. With
| supply shortages, I can only produce ~200 devices/month, and
| I can sell that volume on my own, so the resellers wouldn't
| help much. Maybe next year when the supply is less
| constrained.
|
| _Do you have a SO, if so what do they think about this
| experiment_
|
| Yep, she helped edit this post! We met when I was a year into
| bootstrapping, so she kind of knew what she was getting into,
| and she's been supportive. She worked on the business for the
| first year when we were quarantined for COVID and doing
| everything from our house.
| avinassh wrote:
| small nit: 100k+ docker pulls does not mean 100k installs, it
| could be running in some CI/CD pipeline.
|
| otherwise a great post!
| mtlynch wrote:
| It's not 100k _users_ , but those are installs, even if it's in
| a CI/CD pipeline.
| [deleted]
| blobbers wrote:
| Great post! Thanks for sharing - very inspiring info on life as a
| founder.
|
| It seems like he picked a specific solvable 'small' problem and
| has built a solution. Great idea!
| 71a54xd wrote:
| The fact that you didn't comment on this yourself shilling
| TinyPilot is another glaring indicator that running a business
| might not be something you're cut out for. I can't manage to get
| a job at Google though so obviously we all have something we're
| really good at.
|
| Posting here is FREE advertising, (I OWN a TinyPilot) why not
| include "building TinyPilot" or something "Raspi KVM" in the
| title? This is the lowest hanging fruit.
| cdiamand wrote:
| I remember chatting with you about your recipe app at the
| IndieHackers meet up in NYC. Man, what a journey from there to
| here!
| mtlynch wrote:
| Hey Cory! Good to hear from you! I miss those early meetups.
| That was a great group. Thanks for reading!
| schizo89 wrote:
| What's the next step for a solo founder after an exit? An open
| source Dev?
| tashoecraft wrote:
| It's awesome to have been able to follow this journey from the
| beginning. Reading your blog posts, to your announcement, to your
| yearly posts. Keep up the great work.
| mtlynch wrote:
| Thanks for reading and for sticking with it!
| yafetn wrote:
| One of the updates I was looking forward to, and congrats on the
| $800k revenue! This year, I hope to transition
| assembly to China, where all of our parts originate.
|
| I'd have thought people were doing the opposite nowadays --
| bringing assembly stateside.
| mtlynch wrote:
| I'd love to work with US vendors because that would solve a lot
| of problems, but I tried twice in 2022, and it went
| disastrously both times.
|
| I tried working with a US vendor on assembling PCBs, and the
| soldering was incredibly sloppy. They repaired it for free, but
| it was a month delay when we didn't have a lot of time to
| spare. I gave them another chance and the next batch they did
| had a defect rate of 30% whereas our Chinese vendor's rate is
| <1%, so I bailed on them at that point.
|
| I also tried working with US-based sheet metal vendors on
| making enclosures for my product, and it cost 6x as much as the
| Chinese competitors for drastically poorer quality.[0]
|
| [0] https://mtlynch.io/retrospectives/2022/11/#with-metal-
| cases-...
| wpietri wrote:
| I hear a lot of stories like this and I boggle. Back in the
| 1970s, American car makers took it on the chin because their
| quality was so much lower than Japanese imports. And it's not
| like the Japanese approach was a secret; Toyota has been
| positively evangelical about the Lean model.
|
| I get that it's hard to compete on price with overseas labor.
| But in theory, our more-educated workforce should let us find
| non-price advantages, like quality and service. I have
| theories as to where the problems lie, but it seems so wild
| to me that this 50-year-old problem hasn't been licked.
| StayTrue wrote:
| Thanks for your post and sharing your progress. I look
| forward to the next one.
|
| As a little bootstrapped startup, I can relate. I've also had
| on-shore production and sourcing issues that couldn't be
| resolved without unexpected costs/delays. And, culturally,
| Chinese vendors seem more straightforward or at least aligned
| with small makers. Their starting point is what they can
| offer rather than qualifying you as a customer.
| dazhbog wrote:
| I ran my startup 7 years in China doing pcba, injection
| molding etc. The speed is really amazing. Now trying a more
| hybrid model though.. Contact me if you need tips!
| mtlynch wrote:
| Oh, I'd love that! I'll reach out.
| varispeed wrote:
| Do you know any company in the West that can match China?
|
| All I had is poor quality and magnitude more expensive.
|
| Oh and lead times. It feels like the west is now decades behind
| China when it comes to high tech.
| robomartin wrote:
| Please do not take the following as criticism, just observations
| based on my own experience and hopefully guidance for others
| wishing to venture in this direction.
|
| First, to state the obvious: Hardware is hard. I have been doing
| hardware for forty years. I know. The cash requirements to build
| and sustain a hardware business can be brutally painful if you
| are bootstrapping.
|
| One of the problems I see when reading about solo founders in the
| hardware domain is that they launch into the business without
| having 100% of the skills necessary to deliver the product.
|
| When I built my first hardware startup I was able to complete all
| of the electrical engineering, firmware/software engineering,
| mechanical and had a pretty solid grounding in manufacturing. In
| looking at the profit statement for the OP's startup, I see $360K
| in costs that could have been avoided. That is, payroll,
| electrical engineering and web design. That's a ton of money.
|
| My guess is the raw materials costs ($330K) likely is high as
| well. Hard to say without having greater visibility into the
| design. I'll say this, I would not be surprised if the cost could
| be cut in half by going to a reputable contract manufacturer in
| China. That's just reality, sorry.
|
| The first quarter my product went on the market we (I) sold $650K
| of that product. The website didn't look particularly great, but
| it worked. I got better at web design over the years and improved
| it, eventually handing it off to someone else. At that point we
| were nicely profitable and I had several employees. The point is,
| if the product solves a problem the website almost doesn't
| matter. I always think of Craigs List as and example of that.
|
| It looks like the OP devices sell for, rounding it, about $400.
| Which means 2022's sales amount to about 2,000 units. That's
| great, but the profits got eaten-up by having to pay people for
| skills. A device like this can be assembled and delivered 100%
| without having to hire a single person.
|
| I recently had a case where I had to redesign a board three times
| due to component availability issues. It cost me nothing to do
| that work (in terms of cash), just a few nights and weekends of
| my time. That's the power of being able to do the work yourself.
|
| My take is that solo founders, particularly if bootstrapped, must
| restrict their venture to whatever their competencies might be.
| If they don't, they will have to use cash to buy that expertise,
| which can make the difference between a nice grow path and
| extended pain and agony.
|
| That said. Good job! Hardware startups can be horribly painful. I
| am currently helping a hardware startup that has to spend a
| million or two building prototypes before they can even hope to
| sell their product. Very different from being able to code-up a
| web product on a laptop in the dorm where pizza might be your
| greatest expense. It takes a special kind of personality to
| endure entrepreneurship in general, hardware entrepreneurs are on
| a different class altogether (which could mean we are amazing or
| we are absolutely demented...I think I am demented).
| varispeed wrote:
| > Very different from being able to code-up a web product on a
| laptop in the dorm where pizza might be your greatest expense.
|
| That feeling when you fat fingered one resistor value on the
| BOM and you have not noticed even after going through BOM five
| time before placing the order, then realising this when boards
| came assembled month later and you couldn't figure why they
| don't work. The dilemma - go through 100 boards and manually
| replace each resistor or keep them for parts and run the order
| again and so on and so on.
|
| Completely different to when you have a bug in software and you
| can just change few lines and deploy.
| antoniuschan99 wrote:
| That's one nightmare :P. But also with software, because the
| factory firmware can't be changed! Luckily there's OTA but
| even that may not save you if it's part of the config file
| that doesn't change!
| robomartin wrote:
| > That feeling when you fat fingered one resistor value on
| the BOM
|
| Three short stories:
|
| I did this board almost twenty years ago. FPGAs and a bunch
| of other stuff. Signals going all the way up to 1.7 GHz. I
| got the signal and power integrity design of the PCB as close
| to perfect as could be. It passed emissions testing as well.
| Somehow I managed to lay out the $5 DC power in connector
| backwards. Yup. The joke was I could be trusted with multi-
| giga-Hertz designs but I suck at DC.
|
| More recently, we had a few hundred boards assembled. Due to
| supply chain issues some of the parts on that board are in
| the "unobtanium" category. The pick-and-place machine
| screwed-up and rotated some of these impossible-to-get
| components on a couple dozen boards. Somehow optical
| inspection did not pick up on it (I have my theory on that
| one). We blew the top off a couple of those chips on power-up
| before understanding there was a problem and re-inspecting
| everything. You can't buy the chips (50+ week lead times) so,
| a couple dozen of these $1K+ boards are on a pile waiting for
| new chips.
|
| Finally, I found myself having to hand-solder 800 resistors
| on a bunch of boards because the interface to a device these
| were talking to changed without notice, requiring pull-downs.
| The board had no pads for pull-downs. I had to solder these
| 0402 resistors to existing pads shared by other SMT
| components. It was about twelve hours of pure agony.
|
| That's why I say I must be demented. I like hardware, and I
| can hate it just as much.
| [deleted]
| jimhi wrote:
| Hey Michael, been following for awhile now -
| https://news.ycombinator.com/item?id=21882791#21883808
|
| Many entrepreneurs dream of being able to get to nearly 1 million
| in annual revenue, very surprised you only are taking 6k.
| Hopefully you won't spend much more on redesigning and web
| design? 30k is an insane amount for a startup to spend on web
| design. It sounds like you are happy with it but I hope you do
| not continue to spend that next year.
|
| It looks like Tinypilot is mostly a one time purchase. I could
| imagine there are software addons many of your customers go
| through - like taking a screenshot every x seconds and sending to
| aws that you could eventually for an extra cost (or even monthly
| subscription)
|
| Just thinking you have something nice here and it hardware will
| always need to be improved and redesigned so maybe you can
| continue to add nice products on top of this with healthy
| margins. I look forward to reading next year when you finally pay
| yourself a decent salary from this.
| mtlynch wrote:
| Thanks for reading!
|
| Yeah, we've thought about add-ons but haven't found anything
| yet that would be a great match. One of the most common
| requests is cloud access. We teased the idea in a blog post,[0]
| but not that many people signed up, and a lot of customers
| balked at the idea of $30/month when Tailscale and friends are
| free.
|
| [0] https://tinypilotkvm.com/blog/tinypilot-cloud-waitlist
| [deleted]
| zhi086 wrote:
| Everything is a struggle, but then everything is a victory.
| siliconc0w wrote:
| Don't most modern systems have baked in lights out management
| with kvm? I think there was even an open api. So it's a pretty
| niche hobbyist old system market that already seems price
| sensitive and if want to be able to powercycle you'd need another
| solution anyway. Numbers are pretty grim but hardware is hard,
| esp bootstrapped. It seems like you're definitely playing on hard
| mode a bit.
| beambot wrote:
| Looks like TinyPilot was started in 2020, so it's really $0 =>
| $850k in sales in less than 3-years with a significant hardware
| element. That's quite an accomplishment - congratulations!
|
| Seems like the next big inflection point is getting off the
| single-shot hardware sales & adding an enterprise-style SaaS
| upsell. Software updates & cloud offerings seem like natural
| starting points. Needn't be anything fancy -- even if it's just
| an out-of-the-box wrapper around Tailscale. Add on SOC2
| certification & SSO, and you'd easily be able to command
| enterprise pricing (e.g. extra $100-$300/yr/device).
| sasakrsmanovic2 wrote:
| "Don't become anyone's smallest client"
|
| What a great advice. Very well put - thanks!
| moorg wrote:
| Five years in, no salary, and not enough earnings to pay for
| basic living expenses? That sheds a pretty poor light on
| venturing out on one's own.
|
| The author seems like a pretty bright person, and the About Me
| page lists an ivy league education and some prior work
| experience. What prospects, then, would someone from a more
| humble background have? Or is the point of the "bootstrapped
| experiment" not to earn a basic living?
|
| The media paints entrepreneuship as a high calling and "founders"
| are seen as stars of the show, but is the reality much bleaker?
| PM_me_your_math wrote:
| I find it remarkable that someone would go into business for
| themselves to NOT pay for their living standards. In a start-
| crunch sure, but if you got revenue, pay yourself. The whole
| point of going into business for yourself is to pay yourself. I
| think some people get wrapped up in the emotional aspects, and
| fail to see the pragmatic aspects.
| metadat wrote:
| It turns out.. striking out on your own as a solo tech founder
| is truly challenging for most. I learned this the hard way
| myself through first hand experience. Ultimately I failed,
| though arguably in the long term the lessons I learned were
| more valuable than the few hundred thousand dollars of my own
| money I spent.
|
| The reality is that it takes a certain skillset to do _all_ the
| research, product development work, business development,
| sales, and marketing by oneself. Much less procuring VC funding
| (in my case) or for a physical product, creating the end-to-end
| supply chain and manufacturing pipeline.
|
| If I needed a KVM I'd definitely consider a TinyPilot, because
| it actually looks useful and @mtlynch has demonstrated an
| unrelenting high degree of dedication.and commitment to this
| idea for _years_.
|
| Edit: After writing this I checked out a review [0], was
| surprised how tiny it was. After reading about the Chinese vs.
| American metal enclosure debacle [1,2], I somehow expected it
| to be larger despite it having tiny in the name. To be fair, in
| the pics it does look similar to a PSU enclosure and my brain
| has heavy PC-parts bias :).
|
| [0] https://youtube.com/watch?v=o9-1yjGWoOA
|
| [1] https://mtlynch.io/retrospectives/2022/11/#with-metal-
| cases-...
|
| [2] https://news.ycombinator.com/item?id=34740537 (related
| comment in this thread)
| julianeon wrote:
| You raise good questions, especially for someone considering
| striking out on their own.
|
| Personally I'm laser focused on this question: "How do I match
| what I could earn in salary as a software engineer?" Beyond
| that - I can figure it out on my own. Until then - I'm burning
| savings and need to figure it out.
|
| As far as I can tell, the safest fastest way to get from A
| (unemployed and without income) to B ("engineer salary") is as
| follows, assuming "engineer salary" is 150k/year.
|
| 1. Have enough savings to live for 1 year with $0 income and
| another year with reduced income - say, 50k/year. Having 40k on
| top of that in savings: half of that to get you started, half
| to buy businesses in the future and/or to buy services to do
| that then.
|
| 2. Buy an ad supported online business on Flippa. Budget: 20k.
| This can be for one or multiple businesses, though multiple is
| probably better for quicker growth & profit potential. (It
| doesn't have to be Flippa btw, but that's 'good enough' for our
| purposes).
|
| 3. Assume no income in year 1. In this year you add pages to
| your site(s) and continuously improve them, using Google search
| analytics to confirm what you're doing is working. Your traffic
| should be increasing.
|
| 4. Assume 50k/year income in year 2. This is either through ad
| revenue or selling one of those sites you bought (probably the
| latter). Continue doing what you did in year 1, but better.
|
| 5. By year 3 you've hit your goal. By year 4 you've exceeded
| it. Every year after that, you can expect your income to
| substantially grow, for at least the following 3 years.
| ericmcer wrote:
| The reality is super bleak. Listen to the Indiehackers podcast
| and you will see that most of the 'crazy success' stories
| involve someone getting lucky and ending up with $10k/mo, that
| is a low junior dev salary at a FAANG.
|
| The most recent episode featured a guy who was an expert at
| building and selling Shopify apps. He built 10 different apps,
| but 97% of his revenue was coming from 1 of them. Even in his
| own special niche he had a 10% success rate. It was something
| like the 4th product he had launched also, so it wasn't the
| product of lessons learned.
|
| I don't want to make it sound bleak because everyone should
| experience building something from scratch (I have tried and
| still dabble) but it is really a tough game.
| PM_me_your_math wrote:
| 1 out of 10 sounds about right. Especially if you're taking a
| shot in the dark and/or not competing in an established
| market. Truth be told, it is tough, but its not the path of
| least resistance, so there's nothing else to expect. It is
| easier to push through if you have thick skin. If you have
| grit, you can iterate through projects quickly and find the
| one that connects with a market. The trap is falling in love
| with your idea without first proving it can generate revenue.
| I know guys who have poured tens of thousands of dollars into
| SAAS, only to discover after-the-fact that nobody wants to
| buy it.
| maxilevi wrote:
| I think 10k/month from a product and 10k/month from FAANG
| have a vastly different value quality of life wise
| bdcravens wrote:
| Every person's situation is unique, but less money can be
| equivalent given the tangible costs (transportation, food,
| clothing, etc) and intangible (stresses of any particular
| jobs like meetings, hours, etc)
| throwagoog wrote:
| Throwaway for obvious reasons. I'm one of those senior FAANG
| guys making $300k/year, every day I'm waking up at 5 and
| working on my own startup idea for 3-4 hours so that some day
| I can get back to my home country and have freedom, $3k/month
| will be enough. I will try very hard to get that freedom,
| only if I fail I'll look for another job. $10k/mo as a solo
| founder and $10k/mo at FAANG is in no way comparable.
| inglor_cz wrote:
| If you attain relative independence at 10 K per month, it
| might be worth it.
|
| Personally, I am a very independence-minded person and I am
| not sure what offer would I have to receive in order to drop
| my current business (with a lot of small customers, so not a
| single chokepoint) and become a cog in some big wheelhouse.
|
| Experience of my peers (I am soon to be 45) says that big
| wheelhouses can sometimes collapse with alarming speed and
| once you get used to the putative safety, the aftereffects
| can break your family, your mind (one guy I knew really fell
| into a bad alcohol habit after being let go from a bank) etc.
| l2silver wrote:
| Just went and listened, and sure enough the first episode was
| on point. Justin Welsh. Smart guy, but he does attribute a
| lot of his success to being one of the first people to create
| posts specifically for linkedin, which allowed him to acquire
| an audience of about 20k very quickly.
| VoodooJuJu wrote:
| The most conspicuous examples of so-called entrepreneurs and
| founders are really just class bullshitters [1]. This class of
| solopreneur as portrayed by "the media" typically comes from a
| well-off family, so basic living expenses are already covered
| behind the scenes.
|
| Another frivolous example is the boutique kombucha company
| founder living a posh Manhattan lifestyle, with frequent
| updates to their instagram about their life and "success". The
| hip status of being a founder/entrepreneur is their ultimate
| goal, not financial success, as finances are not a concern for
| this class of individual.
|
| [1] Class Bullshitters -
| https://news.ycombinator.com/item?id=30556312
| 71a54xd wrote:
| So unfortunately, this is called delusion. This is worse than
| working five years on a failing crypto project with funding for
| five years.
|
| I tend to measure progress as a function of financial / skill
| gain over time spent. What a lot of solo founders fail to
| realize (regardless of education) is that time is the real risk
| in startups. Sure, you could wait five years for a $2M exit,
| but how much of your own time / investor time did you burn? At
| some point, you have to ask whether a "business" is really more
| of a side-project and whether you're being honest with yourself
| about how much you value your time.
|
| For context, someone with a high school degree and a poor
| understanding of social media marketing could make more money
| with zero employees power-washing driveways. I don't mean to be
| harsh - but time is valuable.
|
| The value of life lived is different for each individual, but
| slowly bleeding out what could've been a prosperous education
| and career for someone who might just be bad at managing a
| business is a travesty. I have friends who do this, they're
| misguided but they also have huge sums of family money paying
| their rent etc... alas another form of delusion and a detached
| form of reality.
|
| I've literally made more revenue paying a college kid to farm
| black soldier flies with waste from a vegan coffee shop. I'm
| literally not kidding.
| qup wrote:
| > Or is the point of the "bootstrapped experiment" not to earn
| a basic living?
|
| With no offense to the methods of this founder, no, I don't
| think that's the point of his (yet?). Maybe an eventual goal,
| but he clearly has no need for immediate profits, he'd rather
| do a good job with the product.
| danielmarkbruce wrote:
| Domain expertise matters. Solving a problem for businesses with
| software is what most successful tech companies are doing - but
| it's very difficult if you don't have some insight into the
| process and problems of some group of businesses.
|
| Observations as a regular human worked in the late 90's and
| around 2010 because there was lots of obvious stuff stuff to do
| when the web was taking off and mobile taking off. Outside
| those windows...domain expertise.
| moneywoes wrote:
| As an outsider is there an effective format for attaining
| domain expertise via interviews in the sales process?
| wpietri wrote:
| Selling things to people might give you domain familiarity,
| but it won't give you domain expertise.
|
| I think a better approach is getting actual domain
| expertise in the door one way or another. E.g., a
| cofounder, an early hire, or a consultant. Thinking about
| the domain experts I've worked with in the past, I'd look
| for 10-20 years of work in the industry, hopefully in a few
| different roles or companies.
| eyphka wrote:
| For B2b, sales conversations and stalking users in their
| work _is_ the process of achieving domain expertise, then
| product market fit.
|
| You have to start with some hypothesis however.
| danielmarkbruce wrote:
| People seem to do it. I'm sure it's a lot of hard work but
| there are concrete examples. Stripe, Blend off the top of
| my head.
| throw_away1525 wrote:
| I spent 9 years building domain expertise in a
| traditional engineering field and have many ideas for
| startups that would 100% be successful if I had the
| time/capital/grit/etc... not just me, anyone with my
| experience would be able to do it. It is incredible how
| absolutely awful most engineering software is. Meaning
| software for mechanical, civil, chemical engineers,
| etc... The business logic backends are basically all
| ancient codebases written in C++ or Fortran. CI/CD?
| Testing? Clean code? Yeah, no. You're having spaghetti
| code for dinner. And the greybeard who wrote that line of
| code 25 years ago and is still hanging out in a back
| office is reverting your changes if you touch "his" code.
| Imagine what someone could do using a language like Julia
| or Python/Numpy with modern software engineering
| practices could build. You would be able to iterate and
| add new features so quickly, none of the current players
| who all basically built their stuff in the 90s would be
| able to compete. I applied for a job at one of these
| companies and they earnestly asked me if I knew how to
| code in Delphi... um, no, have you guys heard of React or
| Electron?
| danielmarkbruce wrote:
| Are you saying the software products used by (for
| example) chemical engineers are no good? What are they
| using the products for? On what dimensions could the
| products be made better? Ie, faster, easier to use?
| Something else?
| phphphphp wrote:
| Success is a means to an end: success enables you to do the
| things you want to do that you couldn't do otherwise. If the
| things you can do don't require financial success, why does
| financial success matter? The author is apparently having a
| great time living his life and building his company, who cares
| if he could make more money back at Google?
|
| Entrepreneurship is about making your own path, not about
| maximising money.
| camhart wrote:
| You're making a lot of assumptions about what leads to
| entrepreneurial success. My gut feeling is working at a big
| business and attending an ivy league school isn't going to
| offer better preparation for bootstrapping a business than the
| hustler who learned to code on the side. In fact, it may
| actually harm your chances.
|
| Entrepreneurship is something very special, if you can pull it
| off. It's not something that being spoon fed knowledge through
| typical education prepares you for. It's incredibly difficult
| and fraught with risk. But the rewards exists, so it's worth it
| to take a shot if you think you have what it takes and the
| opportunity seems worth it.
|
| For what its worth, I'm a bootstrapped founder, and I do make a
| living off of it.
| atentaten wrote:
| It's true that most people can't afford to to not have enough
| earnings to pay for basic living expenses while pursuing the
| entrepreneurship path. The middle ground would be to keep a day
| job as you go along that path.
| toyg wrote:
| moonlighting is very hard, and typically means your business
| will not get the best of your focus and energy. It also
| fosters an unhealthy and antisocial attitude; people need
| downtime to avoid burnout.
| jbenjoseph wrote:
| As an employee, you are essentially a business owner with one
| customer. Your customer can cut you off at any time with a 3 AM
| e-mail, even if you pour your heart into your work. You lose
| access to it too. You own nothing, any thing you do, your
| customer owns 100%. There is no intellectual property of yours
| it's all theirs. Owning a business is super hard and you won't
| make as much money until you sell, if you are lucky to sell.
| But, being an employee is even more crazy.
| mjwhansen wrote:
| I hope this doesn't discourage you! There's a thriving
| community of indie founders who are earning a good living from
| their own companies, many of whom are developers who struck out
| on their own.
|
| Most don't have fancy degrees or companies on their resumes,
| though a few do. Many don't have a college degree at all.
|
| It's definitely possible to build a profitable small tech
| business. We've been running our own company full-time for over
| 6 years now, and make a better living than we did as employees.
| It did take 3 years of patience as it grew from a side project
| (so we're in year 9 now, all told).
|
| FWIW self-funding a hardware company, especially when outside
| expertise is required, is definitely bootstrapping on hard
| mode. (Though I do know someone who bootstrapped a rocket
| company!) Most of us do software.
|
| I encourage you to check out a MicroConf Local if you're
| interested in learning more about the indie founder world.
| testmasterflex wrote:
| If you are going to bootstrap a hardware company then this is
| the reality. And most companies never even get this far.
| georgeecollins wrote:
| >> is the reality much bleaker? Of course, because the media
| suffers from survivor bias. No one gets article written about
| them for failing.
|
| But lets give the OP some credit- if the company becomes more
| profitable it could be worth many years salary in equity. And
| someone who can start a company can usually start another
| company, which is kind of security I think a lot of people
| don't have.
|
| Look, if you are getting a large salary from a FAANG type gig,
| every study shows for your wealth you should stick with it. If
| you don't want to, or you don't have that choice: lets help
| that person learn to hunt and kill for themselves.
| aranchelk wrote:
| Typically the media reports on startups with significant
| investment by venture capital firms. This startup is
| bootstrapped, (i.e. self-funded) that makes the process
| significantly more difficult.
| yieldcrv wrote:
| It actually highlights the survivorship bias in startups
|
| TinyPilot is an okay venture, if they raise outside capital or
| do a big exit they will look like an overnight success
|
| Everyone else will have tried the single venture five
| iterations ago, gone in debt and had to get a job for the next
| 10 years before hoping their life, family and health let them
| try again
|
| Richer people just iterate faster, are flexible enough to
| upskill if they chose to apply themselves in this way
| f0e4c2f7 wrote:
| It depends on the media. HBO's Silicon Valley for example
| depicts being a founder as being mostly stress and existential
| dread punctuated by occasional moments of great excitement. I
| find this to be pretty accurate.
|
| Startups are pretty hard compared to a lot of things. Even if
| you have funding from the most prestigious seed fund, most
| startups will fail before they get to the stage mentioned in
| the blog post. The nature of the game is that 95% of the time
| you fail and the rest of the time you get rich. This is why
| it's so important to execute quickly and keep trying things
| until you find something that works.
|
| How bleak this reality is depends on your perspective. If you
| expect it to be like most things in life where you follow a
| prescribed path and get a reliable result then it's quite bleak
| indeed. If on the other hand you want to go out and have
| adventures it's pretty cool.
| mtlynch wrote:
| Thanks for reading!
|
| One subtle point about the profit is that because I'm selling a
| physical product, there are still a lot of unrealized gains in
| inventory. I estimate that if stopped purchasing new material
| and just liquidated my existing stock, there'd be about $350k
| in profit at the end.
|
| That said, I don't think hardware is a good path for a
| bootstrapped business. I went into this thinking I'd mainly be
| focusing on selling the software to people who already had the
| hardware, and then it turned out that there was much more
| demand for pre-made hardware.
|
| There are many of other tech business paths that are friendlier
| to bootstrappers, like content businesses, SaaS tools, and
| educational products. I know of several founders making a
| comfortable living in those domains, so I wouldn't generalize
| based on my experience.
| waprin wrote:
| Thanks for writing Micheal, I'm also 30-something ex-Google
| SWE and currently all-in on solo dev bootstrapping, so your
| blog is one of my (many) big inspirations.
|
| As you note, I do think if your primary objective was to
| catch up to SWE compensation, your project idea filter was
| probably not optimal. But it's still great that you have the
| spark of something with TinyPilot. One thing I see repeatedly
| in the indie hacker community is hockey stick success where
| people struggle to get the engine going but often once they
| find the spark it takes off. The ten year overnight success.
|
| Also worth noting many indie hackers add part time stable
| income such as contracting as their finances require.
|
| If people are looking for a straightforward path where they
| leave their SWE job and quickly get similar stable income as
| a bootstrapper, they're in for an unpleasant surprise. But if
| you can "make it" you control your own destiny , face unique
| challenges demanding true creativity, and have uncapped
| upside in a way you'll never get at BigTech .
|
| I do think content businesses are an easier launch point .
| Adam Wethan of Tailwind and Nathan Barry of Convertkit are
| both examples of bootstrappers who self-funded by starting
| with info products. I think one mental trap for solo devs is
| to over identify as SWE and not as online entrepreneurs with
| SWE skills as a particularly helpful asset.
|
| Wish you and TinyPilot the best of luck and look forward to
| future updates.
| KeithBrink wrote:
| You could account for your inventory as an asset and then
| expense it once sold. That would make you much more
| profitable on paper right away! :)
| rumblerock wrote:
| I'm assuming this was slightly in jest, but paying yourself
| is all about free cash flow when you're bootstrapped,
| fronting inventory and growing. And in practice, with hard
| goods this is really difficult unless your gross margins
| are really high.
| cjbgkagh wrote:
| AKA Cost of Goods Sold (COGS)
| beambot wrote:
| Not quite. Inventory is an asset on the _balance sheet_.
| It only becomes _COGS_ on the _income statement_ when the
| goods are sold.
| cjbgkagh wrote:
| I figured the idea of labeling the inventory as an asset
| was part of the practice of later deducting the cost
| (expensing). I.e. you can't expense it twice.
| rgbrenner wrote:
| I think you're both saying the same thing... when you buy
| new inventory, the entries are:
|
| (subtract cash) (add to inventory assets)
|
| This is not an expense yet. Then later when you sell it:
|
| (subtract inventory) (add to cogs)
|
| COGS is an expense account.
|
| Since an income statement doesn't show assets, it
| wouldn't appear on the income statement until it becomes
| a COGS expense.
| [deleted]
| conductr wrote:
| Yes basically because of matching. The income statement
| is sloppy without it and difficult to determine operating
| performance
|
| https://en.wikipedia.org/wiki/Matching_principle
| skeeter2020 wrote:
| If there's a single rule for small business it's "Cash is
| King". Cashflow is what kills you and the monthly income
| statement is way more important than your balance sheet.
| KeithBrink wrote:
| One overlooked factor in these numbers is that the founder now
| has more levers to pull. For example, they are paying $206k in
| payroll, and in an emergency situation, could let some staff go
| and take over those functions themselves.
|
| I've experienced the same thing with my bootstrapped startup;
| I'm not paying myself any more money than I did 3 years ago,
| but if I need money, I can double or triple my own salary
| within a month or two.
|
| The reason the founder isn't doing that now is likely exactly
| the same reason Uber or other VC startups consistently lose
| money; they are optimizing for growth, not profit/salary.
| password11 wrote:
| > _The reason the founder isn 't doing that now is likely
| exactly the same reason Uber or other VC startups
| consistently lose money; they are optimizing for growth, not
| profit/salary._
|
| Optimizing for growth is very risky and makes sense to VCs.
| VCs diversify into dozens of companies. The odds that one
| company will be a moonshot are pretty good. But as an
| individual founder you're 100% exposed to the growth/collapse
| of your one company.
| Fuzzwah wrote:
| The 46k website redesign was also a huge thing....
|
| https://mtlynch.io/tinypilot-redesign/
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