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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

#321

Post by johnjago »

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…

> I wish I'd done educational products ("info products") earlier. They're like a microcosm of the experience of launching a product because you have to find customers, pitch to them effectively, and then deliver something they'll want. Like you can do that whole cycle in a month, whereas it would probably take 3-10x that long to do it with a SaaS.

Something that helps with this fast cycle is that many people have prior experience which they can turn into an info product. For example, Daniel worked for many years at AWS, and then after quitting could write up https://dvassallo.gumroad.com/l/aws-good-parts by leveraging his many years on the job.

If the info product is along the lines Daniel describes,

"This is an opinionated book. We only cover topics we have significant first-hand experience with. You won't find most of the knowledge we share here in the AWS docs."

it's really valuable.

I find it similar to how it's more effective for a fresh university student to ask senior classmates which classes are good and which professors to avoid, rather than asking professors or academic advisors. They'll get more relatable advice from peers.

The same goes for lots of knowledge or skilled work, whether accounting, construction, or something else. First-hand experience that doesn't appear in textbooks can be so valuable to others.

Re: My sixth year as a bootstrapped founder

#322

Post by guyfromfargo »

I’m curious if you’re getting killed by the new Section 174 changes?

In 2022 you spent what looks like at least $150,000 in what’s now classified as Research and Development. So this means you’d have a tax burden of around $30k even though you only made $10k in profit.

Re: My sixth year as a bootstrapped founder

#323

Post by _xk9i »

elbear wrote: post #289
csa wrote: post #207

Earlier quoted context omitted.

> You should write something about what you do too. I think most of what one needs to know is already out there. The key is being adaptable to the current environment and being aware of one’s value add (skill set, network, etc.). The problem with writing specifics about what I do is that it invites competitors and/or haters (e.g., review bombers or DDoSers). Some parts of my businesses have enough moat such that I do…

I have a feeling a lot of the lessons you learned could also apply to developers who want to be better at freelancing (my case). But I don't know if there is a way to pass down that knowledge while you also get something out of it. For what is worth, I appreciated your comments in this thread.

For freelancers who want to improve (it was my case years ago), the best book is "The Secrets of Consulting", by Gerald Weinberg.

https://www.goodreads.com/book/show/566213.The_Secrets_of_Co...

Re: My sixth year as a bootstrapped founder

#324

Post by borlanco »

csa wrote: post #269
windowshopping wrote: post #254

Earlier quoted context omitted.

Idk, optimizing inefficient systems sounds a lot more interesting to me than working for the man, as you put it. Thanks for writing this out. It seems very difficult to get into. I'll reread this a couple times.

> Idk, optimizing inefficient systems sounds a lot more interesting to me Yeah, I guess I’m being somewhat disingenuous. I like optimizing systems, but I’m aware that it’s not everyone’s cup of tea. You learn that very quickly at cocktail parties when people ask you what you do, ask for more than the headline answer, and then have their eyes glaze over when you get into the details. > than working for the man, as you…

Quite difficult to be like you. In any case, much obliged to you, sir!

Re: My sixth year as a bootstrapped founder

#325

Post by throwaway2037 »

tgtweak wrote: post #119
awhitby wrote: post #94

Earlier quoted context omitted.

You're missing something. From the post: > I don’t draw a salary, so the total amount I earned from TinyPilot in 2023 was $236k. and > Result: I worked 35-40 hours per week, a reduction from previous years, and traveled more than any previous year. This is a person who is effectively full-time CEO of this business and whose market salary is likely at least $236k. If they sold the business, the new owners would have t…

That is true, and you would assume that if he sold he would either work retained and draw a salary or hire someone at a fair cost. I think the company is too early to realistically sell - but I don't think the value today is zero - it's likely worth at least 2x revenue today given growth potential. Look at lantronix (nasdaq:ltrx) - the company that makes the "spider" product line - the original strap-on oob/ipmi. Wor…

I am disappointed that NASDAQ and US securities regulators allows companies without audited profits to go public. "Worth" 160M? Not to me.

Re: My sixth year as a bootstrapped founder

#326

Post by throwaway2037 »

tgtweak wrote: post #56
dustingetz wrote: post #54

Earlier quoted context omitted.

10x rev valuation is for high margin saas growing at 3x y/y in a massive TAM where incremental capital injection results in predictable rev growth

10x ebit is not 10x rev - I think hardware startups that can demonstrate economies of scale and straight line growth on advertising + additional product segments and markets are catching very healthy valuations still - not saas levels but large saas companies are pushing way more than 15x ebit.

Do you mean EBITDA?

aka Earnings before interest, taxes, depreciation and amortization

Re: My sixth year as a bootstrapped founder

#327

Post by sokoloff »

danielmarkbruce wrote: post #151
csa wrote: post #140

Earlier quoted context omitted.

> right now the business has a profit, and therefore a valuation, closer to zero You’re thinking of this like an engineer rather than a business person. 1. When selling a business like this, the $236k would be called SDI or SDE (seller discretionary income/earnings). 2. The buyer determines what, if any, of that SDE will need to go to paying someone to do what the seller does. These duties could be assumed by the buy…

He's thinking about it like a business person who is looking at buying a business. It's worth close to zero. In it's current state this business is not an asset, it's a organization doing stuff. Breaking it out into SDE + adjustment is what the comment already does, albeit without using that terminology. One cannot hire a person who can do all the things this owner does. The person is a smart former google engineer.…

I have no particular advantage in this space and don’t even own a TinyPilot. I think it’s worth $250K to me, and think it’s worth much more than that to someone who can create additional value by virtue of having some advantage relevant to the business (existing manufacturing, fulfillment, service, etc ops).

Re: My sixth year as a bootstrapped founder

#328

Post by byteflip »

mtlynch wrote: post #2

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

Wow, super inspiring.

I've coming up on a crossroads where I'm considering leaving my high-paid low-pressure cushy remote job at some big tech company to chase some silly ideas I have. The timing feels right - but I can't help but be fearful of a jump without any sort of indication on whether I can actually pull that off.

Thanks for the transparency and sharing - you've got a new fan!

Re: My sixth year as a bootstrapped founder

#329

Post by elbear »

_xk9i wrote: post #323
elbear wrote: post #289

Earlier quoted context omitted.

I have a feeling a lot of the lessons you learned could also apply to developers who want to be better at freelancing (my case). But I don't know if there is a way to pass down that knowledge while you also get something out of it. For what is worth, I appreciated your comments in this thread.

For freelancers who want to improve (it was my case years ago), the best book is "The Secrets of Consulting", by Gerald Weinberg. https://www.goodreads.com/book/show/566213.The_Secrets_of_Co...

Thank you for making me aware of this author. I see he has several books on topics I find valuable.

Re: My sixth year as a bootstrapped founder

#330

Post by Nemi »

csa wrote: post #140
awhitby wrote: post #94

Earlier quoted context omitted.

You're missing something. From the post: > I don’t draw a salary, so the total amount I earned from TinyPilot in 2023 was $236k. and > Result: I worked 35-40 hours per week, a reduction from previous years, and traveled more than any previous year. This is a person who is effectively full-time CEO of this business and whose market salary is likely at least $236k. If they sold the business, the new owners would have t…

> right now the business has a profit, and therefore a valuation, closer to zero You’re thinking of this like an engineer rather than a business person. 1. When selling a business like this, the $236k would be called SDI or SDE (seller discretionary income/earnings). 2. The buyer determines what, if any, of that SDE will need to go to paying someone to do what the seller does. These duties could be assumed by the buy…

If you are valuing a business on SDE the multiple is usually 2.4-3. So this business as it is today would be worth more like 566-708. The beauty of building a business is that as the bottom line goes up your business is worth more, but it ALSO fetches a higher multiple. So a business with a bottom line of $1M will get 5-7 times earnings (note: not SDE), whereas a small business gets a lower multiple based on SDE.
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