I sold TinyPilot, my first successful business
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Re: I sold TinyPilot, my first successful business
#2Author here.
I'm happy to answer any questions about this post, the sale process, or my time running TinyPilot.
Re: I sold TinyPilot, my first successful business
#3Author here. I'm happy to answer any questions about this post, the sale process, or my time running TinyPilot.
Lovely read, and great to see a happy ending - I remember your previous blogs here.
As a sometime-bootstrapper and having failed at a previous hardware startup, I can relate to many of the emotions you narrated through. It may be too early, but my biggest curiosity is whether you think you will bootstrap something again?
(In my case, after the hardware business and some time off, I found that taking a swing at a “pure software” idea was the right balance for me, after the considerable challenges and occasional joys of building physical things..)
Re: I sold TinyPilot, my first successful business
#4Author here. I'm happy to answer any questions about this post, the sale process, or my time running TinyPilot.
Hey there, loved the post. What do you think is next for you? Would you do it all over?
Thanks for all of the content!
Re: I sold TinyPilot, my first successful business
#5Author here. I'm happy to answer any questions about this post, the sale process, or my time running TinyPilot.
Lovely read, and great to see a happy ending - I remember your previous blogs here. As a sometime-bootstrapper and having failed at a previous hardware startup, I can relate to many of the emotions you narrated through. It may be too early, but my biggest curiosity is whether you think you will bootstrap something again? (In my case, after the hardware business and some time off, I found that taking a swing at a “pur…
Thanks for reading!
>you think you will bootstrap something again?
Yes, definitely. Not hardware again because I think getting to the scale where you can use external vendors is so difficult and risky that it requires more specialized hardware expertise or VC backing.
I'm going to start with educational products because I liked my brief experience with that and never had time during TinyPilot, but I'd eventually like to build a SaaS that I can grow in a calm, sustainable way.
Re: I sold TinyPilot, my first successful business
#6Author here. I'm happy to answer any questions about this post, the sale process, or my time running TinyPilot.
Hey there, loved the post. What do you think is next for you? Would you do it all over? Thanks for all of the content!
Thanks for reading!
>What do you think is next for you?
Next is either an educational product or a SaaS business I can build either fully solo or with 1-2 teammates in customer support roles.
>Would you do it all over?
No, not knowing what I know now about how difficult it is to succeed in hardware.
I'm grateful that TinyPilot worked, but there's definitely a reason why there are so few bootstrapped hardware companies.
In the first few years, there were so many things that could have clobbered the business, like supply shortages, manufacturing errors, lost shipments, design mistakes. I did a lot of things to mitigate these risks, but a lot of it just came down to being lucky enough to avoid random disasters.
For example, there were definitely times in the business where a critical part could have been lost in shipping, and we would have been dead in the water for months if it went missing or got delayed.
As the business matured, we were able to mitigate those risks better, but I wouldn't want to go through those first two years again unless I had a huge amount of investment or co-founders with more specialized hardware/manufacturing expertise.
Re: I sold TinyPilot, my first successful business
#7Author here. I'm happy to answer any questions about this post, the sale process, or my time running TinyPilot.
Congratulations on building something of value and successfully selling it. It's quite the achievement and most don't get to this level.
I do have to say, I was somewhat surprised by the low multiple on the valuation, but perhaps that's just what the range is for a business of this nature. We're spoiled in the world of software and recurring revenue.
What about the tax implications of the sale. Have you figured out how much of the sale you'll be able to put in your pocket?
Re: I sold TinyPilot, my first successful business
#8Author here. I'm happy to answer any questions about this post, the sale process, or my time running TinyPilot.
Congratulations on building something of value and successfully selling it. It's quite the achievement and most don't get to this level. I do have to say, I was somewhat surprised by the low multiple on the valuation, but perhaps that's just what the range is for a business of this nature. We're spoiled in the world of software and recurring revenue. What about the tax implications of the sale. Have you figured out h…
Thanks!
>I do have to say, I was somewhat surprised by the low multiple on the valuation, but perhaps that's just what the range is for a business of this nature. We're spoiled in the world of software and recurring revenue.
Yeah, from what I've heard, SaaS businesses sell for a much higher multiple, often selling as a multiple of revenue rather than earnings.
The other thing that's really reduced valuations is interest rates. When interest rates were >What about the tax implications of the sale. Have you figured out how much of the sale you'll be able to put in your pocket?
Still working out the exact figure with my accountant. His expectation was that I'll keep a pretty large percentage after taxes because of Section 174. I had a large amount of expenses each year in software development from overseas contractors, and with Section 174 changes that went into effect in 2022, I had to amortize them over 15 years.[0] But with the liquidation of the company, I can count those expenses immediately, and they offset the income from the sale. So Section 174 is still a bad deal for software founders, but at least when you liquidate the company, you don't have to wait out the full 15 years of amortized expenses.
Re: I sold TinyPilot, my first successful business
#9Congratulations on the sale!! I love your blog and have really appreciated your retrospectives.
Re: I sold TinyPilot, my first successful business
#10Congrats! Bootstrapping a HW business to good profitability and acquisition is a remarkable achievement, particularly outside of China.