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I sold TinyPilot, my first successful business

mtlynch.io

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Re: I sold TinyPilot, my first successful business

#181

Post by mountain_peak »

First off, congratulations on the sale - sounds like the right time and the right reasons for you, and you're 100% right on the seemingly 'backwards' nature of incentives and rewards when working for a large org. I was somewhat saddened when the logo changed (I suggested an alternate), but completely understand your rationale.

As a side project, I'm currently working with a hardware founder (I'm primarily software) who exited twice before having his "clock cleaned" by overseas competition steal and undercut his patented products on his third venture, which caused him to all but close shop and retire early. He's back I think due to boredom, but I'm seeing just how difficult hardware is. Why do you think hardware doesn't generally have the same level of 'respect' as software? From what I can see, it should be held in much higher regard with a correspondingly higher level of compensation. Is it literally just the current ability for hardware to be reverse-engineered and undercut?

Re: I sold TinyPilot, my first successful business

#182

Post by ilamont »

without an office and custom in-house manufacturing, a prospective owner could run TinyPilot from anywhere in the world.

Questions business brokers ask is how many hours the owner spends each week, and if it needs to be on site.

Lifetime profit from business

Thanks for including this. Startup hype always demands a focus on the size of the exit, ignoring the other funds extracted from the venture in the form of salary and covering other costs.

Re: I sold TinyPilot, my first successful business

#183

Post by mtlynch »

mmmlinux wrote: post #119

How did you get people to trust your product? If I see something like this from a small outfit for a cheap price, I will assume that the price is being made up some where else. How did you assure you customers you cant access their machines when you want. Or that your service will offer the reliability they will need?

Thanks for reading!

>How did you get people to trust your product? If I see something like this from a small outfit for a cheap price, I will assume that the price is being made up some where else. How did you assure you customers you cant access their machines when you want. Or that your service will offer the reliability they will need?

Good question!

Customers didn't express concern to me about me accessing their machines. I don't know if I did something special to engender trust or the average customer isn't so worried about that threat. I could imagine that there was some trust in the fact that my face was on the website, and I was clear about who I was and that I was located in the US. For a lot of customers, I'd imagine that I'm less likely to have backdoored the product than a faceless corporation who operates from overseas.

I also found that many of our customers found us through word of mouth. So there was trust that the product worked well because they heard recommendations from friends, co-workers, or bloggers that they liked.

Re: I sold TinyPilot, my first successful business

#184

Post by mtlynch »

CodeWriter23 wrote: post #79

@mtlynch I’m trying something new and with a different approach this time. I realized reading your post today, my “new” approach borrows a lot from your prior post on optimizing and externalizing ops at TinyPilot. Just wanted to say Thanks for that. Best wishes in becoming a new parent.

Oh, awesome! Glad to hear it was helpful.

Re: I sold TinyPilot, my first successful business

#185

Post by ilamont »

mtlynch wrote: post #59
xyst wrote: post #36

Earlier quoted context omitted.

A broker is just a middleman between the seller and buyer. What’s the value add for sales like this?

Author here. For me, the value of the broker was just someone to guide me through the whole process because I'd never done it before. It was good to have someone whose interests were pretty aligned with mine and who answered questions quickly and thoroughly without me having to pay by the hour. Another big part of the value was finding the buyer, as I probably couldn't do that on my own. I could have thrown a hail ma…

I used to listen to the Quiet Light podcast. One thing that the Quiet Light founder mentioned a couple times is they are always working on dealflow, lining up buyers and sellers sometimes years in advance of an actual sale.

Re: I sold TinyPilot, my first successful business

#186

Post by surfingdino »

alberth wrote: post #34

Broker commission: $88,900 Legal fees: $18,297 This equates to ~18% of total sale price. Most people don't realize how much get eaten up in deal/closing costs. Congrats to him for the successful exit. Reading his blog post over the years should be eye opening to anyone just how hard starting/running a business is.

Don't forget tax.

Re: I sold TinyPilot, my first successful business

#187

Post by Aurornis »

DaiPlusPlus wrote: post #141
hiddencost wrote: post #91

Earlier quoted context omitted.

Assuming he was a senior SWE, he would have made around $400k / yr staying at Google. I suppose if he can parlay this outcome into an L7 role at Google, E.G, then in another 6 years he would break even (compared to staying at L5)

$400k for Senior is an outlier. According to Levels.fyi - and my personal contacts - https://www.levels.fyi/t/software-engineer/locations/san-fra... Median TC - something just-south of $300k TC (not salary) is more likely. Furthermore, the higher you go, a greater proportion comes as RSUs, not cash - even if it was $400k TC, a good chunk of that is money you literally can't spend for a couple of years.

RSUs aren't really a big deal due to the way it vests.

But you're right that the TC of the average Google (or even FAANG) job has become somewhat mythical on the internet lately. I'm in a Slack where people have been asking about offers and TC for a long time. There are a lot of disappointed people who think they're walking into $500-600K job offers only to realize that they're "only" getting $300K from multiple companies.

Honestly quite frustrating, given that $300K with excellent benefits is an incredible job offer, but these people have been primed for disappointment due to unrealistic expectations.

Re: I sold TinyPilot, my first successful business

#188

Post by mtlynch »

mountain_peak wrote: post #181

First off, congratulations on the sale - sounds like the right time and the right reasons for you, and you're 100% right on the seemingly 'backwards' nature of incentives and rewards when working for a large org. I was somewhat saddened when the logo changed (I suggested an alternate), but completely understand your rationale. As a side project, I'm currently working with a hardware founder (I'm primarily software) w…

Thanks!

>Why do you think hardware doesn't generally have the same level of 'respect' as software? From what I can see, it should be held in much higher regard with a correspondingly higher level of compensation. Is it literally just the current ability for hardware to be reverse-engineered and undercut?

Oh, my perception of hardware engineers is that they are held in similar regard to software developers.

If they do get less prestige, my guess is that it just comes down to money. The margins on pure software products are so high, so software businesses can afford to pay their software engineers really well. I've heard that typically hardware products sell for about 3-4x their bill of materials, so that eats up a huge chunk of your profits. And then there are all the other costs like storage, shipping, fulfillment that are nearly zero for a software business but significant for a hardware business.

I think for similar reasons, we don't see a lot of successful hardware startups. The VC money is probably flowing much more heavily toward software, so we hear of fewer hardware unicorn companies.

Re: I sold TinyPilot, my first successful business

#189

Post by mtlynch »

ttcbj wrote: post #168

Congratulations! And thank you for sharing your story over the years. You are an excellent writer and thoughtful founder. I am really glad you found this graceful and economically rewarding exit. I also own a small bootstrapped company (pure software), and I am now on year 21 (!). Someday, my business will run its course. When it does, I will probably write a blog post about the entire experience of starting and owni…

Thanks for reading and for the kind words!

And 21 years is amazing! With everything that's changed in the last two decades, it's awesome that you've continued adapting and kept competitive all these years later.

Re: I sold TinyPilot, my first successful business

#190

Post by steve_adams_86 »

xyst wrote: post #35

Wild. I vaguely remember this founder spending an obscene amount of money on some boutique firm to give homepage a small update. Seems he exited the Google grind about 6 years ago. I guess salaries were between $180-250K during that time frame. Google grinder for 6 years: $1,080,000-$1,500,000 Entrepreneur: “$920k over four years (with sale)”, but doesn’t include the 2 bombs he had prior to successful exit. (None of…

This is so strange to read.

He learned and experienced so much more than he could have at Google. He actually built and sold a profitable company.

What’s life if we reduce it to how much money we could have earned?

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