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My sixth year as a bootstrapped founder

mtlynch.io

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Re: My sixth year as a bootstrapped founder

#221

Post by hurflmurfl »

boarnoah wrote: post #67
OJFord wrote: post #61

Earlier quoted context omitted.

Advertise features you don't have and disappoint/infuriate those would-be users? Or are you suggesting a slightly less annoying 'coming soon' type landing page, where if it doesn't get enough traffic 'soon' just never comes?

Wonder about this myself, have noticed with folks like Rob Walling and presumably others. They all seem to suggest testing market fit by essentially doing this for features, and in some cases soft launching websites prior to having anything ready at all! Seems risky if you are dipping your toes into something you do not have a deep understanding of the product market for. Anecdotally I've seen with video games (the c…

The reason it won't really work for gamedev or complex software is that the risk of the business isn't really in the product-market fit, but rather in stellar execution.

If your business idea is dependent on being able to do a complicated thing, then a POC or a demo might make more sense for testing the waters and seeing if there's any technical impediment to the idea

Re: My sixth year as a bootstrapped founder

#222

Post by Aurornis »

gamepsys wrote: post #160
titanomachy wrote: post #141

Earlier quoted context omitted.

Why sell a healthy growing $10m business for 4x earnings? Did you have debt to service, or just wanted to do something different, or some other reason?

At 4x it almost seems worth it to hire out the rest of your day-to-day and let the operation cruise. The company will probably under perform over time but you'll get more juice from the fruit.

> At 4x it almost seems worth it to hire out the rest of your day-to-day and let the operation cruise.

As many small business owners learn the hard way, it's nearly impossible to find someone capable of single-handedly operating a small startup who would rather operate your startup than their own startup.

Frequently, you can find someone to take the role for a while. They might even perform well while you're training them up. Then they're likely to go off and start their own thing, which might come uncomfortably close to competing with you (while staying just outside the reach of noncompete agreements).

Re: My sixth year as a bootstrapped founder

#223

Post by [deleted] »

windowshopping wrote: post #190
holoduke wrote: post #132

Earlier quoted context omitted.

No way that 7, 15x is realistic. From my previous 2 startups none were sold for more than 4x. And these were healthy growing +10m businesses. I am not sure where you got those numbers from. I am curious.

You built two $10m businesses? Geez man where's your blog post series

[deleted]

Re: My sixth year as a bootstrapped founder

#224

Post by [deleted] »

holoduke wrote: post #132
tgtweak wrote: post #51

I think people (and the founder) are focusing on yearly profits as their remuneration and comparing it to a salary... but the reality is you're creating a company that should be valued (and eventually sell) for 7-15X Earnings - and you really should be looking at that increase in value vs your increase in profits. In reality your net worth went up by over $1.5 million in the last year, in addition to earning 236k - t…

No way that 7, 15x is realistic. From my previous 2 startups none were sold for more than 4x. And these were healthy growing +10m businesses. I am not sure where you got those numbers from. I am curious.

[deleted]

Re: My sixth year as a bootstrapped founder

#225

Post by hinkley »

paulddraper wrote: post #167
solumunus wrote: post #152

Earlier quoted context omitted.

Ouch. Businesses sell for more than 4x all the time. There are countless examples of that.

Businesses sell for 0x and Infinityx all the time. There are countless examples of that. But bootstrapped business with growth rate for 7x+ (non-trivial) revenue are uncommon. 4x may be "ouch" for a VC but not a bootstrapper.

The last startup I was at that sold 'only' made the owners millionaires, when they were hoping to retire.

If you're in your thirties or forties, a million bucks won't even get you a school teacher's lifestyle for the rest of your life. A million bucks makes the rest of your work life low-stress, but not non-existent. You still have to work, you just don't have to worry about paying rent, or getting exploited by your boss. You can always quit, and you can always say no (one of the reasons some bosses like a hint of desperation on their employees)

They bought water view condos, one got his teeth fixed, and then they had to go right back to work.

Re: My sixth year as a bootstrapped founder

#226

Post by hinkley »

t_mann wrote: post #165
danielmarkbruce wrote: post #158

Earlier quoted context omitted.

Give the examples. Businesses this size in this market have very few (/0) logical buyers.

I can't speak for valuations, but I don't see the 'no logical buyers' argument. This product has multiple competitor products, mostly at far higher price points, any of those manufacturers would seem like a logical buyer to me (if only to get rid of the competition). Can you elaborate?

I think this is one of those areas where a competitor buying you can make sense. Either your product is attractive to higher margin customers, at which point they are buying into a higher end market, or your product is part of the low-end, and by buying you out and shutting you down, they hope to convert some of your lower margin customers to higher margin customers, and let some of your high-maintenance customers go bother one of your mutual competitors (which is honestly the most Sun Tzu-ish, borderline Machiavellian, reason to fire a customer)

Re: My sixth year as a bootstrapped founder

#227

Post by magnetDD »

chaosprint wrote: post #81

This is a really informative and inspiring article. It has been 6 months (not 6 years) since I quit my full-time job as a Rust developer to start my own business. As time goes by, I can feel the pressure of mortgage and car loans, and I can also feel the care and pressure of my family. My original plan was to make a new IDE for Glicol ( https://glicol.org ), and to develop relevant hardware with firmware written in r…

Wow. I am in similar situation. I quit job after having a baby and when workplace discriminated against me. I decided not to fight and rather start something of my own.

Now, I see no traction after building an MVP. We are in EduTech and eCommerce space. It is so hard to get any response from decision makers.

People would rather pay big corporations millions than talk to a regular person who is offering $200 software.

I don't know what to do.

Re: My sixth year as a bootstrapped founder

#228

Post by philipwhiuk »

mtlynch wrote: post #2

Author here. As always, I'm happy to take any feedback or answer any questions about this post.

How detailed is your time tracking in terms of what you actually did (not the mythical calendar/plan/TODO list)? You're not going to get down to 20 hours a week without identifying the chunks of time you're doing and essentially outsourcing it to someone on the Tiny Pilot team (or removing yourself from meetings).

Re: My sixth year as a bootstrapped founder

#229

Post by testmasterflex »

mtlynch wrote: post #2

Author here. As always, I'm happy to take any feedback or answer any questions about this post.

Always interesting to follow your progress Michael! I managed to sell 100 units last year and feel ashamed compared to your numbers but hey it’s better than the nothing of the previous year!

Re: My sixth year as a bootstrapped founder

#230

Post by software0to1 »

mtlynch wrote: post #204
solutionyogi wrote: post #138

Michael, You are an inspiration. I have been following your journey since your post about quitting Google hit the HN front page. And what a wild ride it has been. You tried many projects ( https://mtlynch.io/projects/ ), and it took a while for you to find your winning idea. And I have read each of your retrospectives on TinyPilot ( https://mtlynch.io/retrospectives/ ) and know that it wasn't easy. Your journey shows…

Thanks for reading and for the kind words! > Have you always been so disciplined in life? If not, how did you improve it? No, I was a lot less disciplined when I was younger. I remember as a teen trying to learn Java several times and always getting bored a day or two in. I was a good student, but I would procrastinate work and distract myself while working. I probably became more disciplined in my twenties, but I un…

Just found about your blog. Great job and you are a great inspiration. This is a personal question and I hope you don't mind. Do you have kids? How do you manage risk, especially financial risk of startup?
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