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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

#171

Post by abtinf »

mtlynch wrote: post #99
berkanunal wrote: post #82

Earlier quoted context omitted.

Congratulations. I have been following the retrospectives for more than 2 years now. I hope to keep enjoying your monthly posts. My question is, did you change anything on your strategy after you were set on selling? Or the goal was still the same, optimize earnings?

Thanks for reading! > My question is, did you change anything on your strategy after you were set on selling? Or the goal was still the same, optimize earnings? Once I started the process of preparing the company for sale, it did change a lot of the strategy. For example, one of the things I'd been thinking about was how to allow users to purchase recurring subscriptions to their TinyPilot Pro software licenses rathe…

Everything was always that expensive, it was just less obvious.

What if you had moved to outsource the office tasks sooner? Could you have better invested that time and stress elsewhere?

The $100k per year improving hardware? Was that the best way to spend the money? Maybe it would have been better spent on marketing, or investing in reducing production costs with better tooling. Whatever the differential from what you spent was lost at 3x.

Gains often compound over time too. Cost reduction begets cost reduction.

Of course, thinking like this results in madness and moral hazard. I’ve seen companies do crazy, catastrophic things gearing up for sale.

Re: I sold TinyPilot, my first successful business

#172

Post by mtlynch »

nickjj wrote: post #39

You know it must have been stressful when you were compelled to list your desserts in order. Now that we're almost in June, does it feel like the deal happened a million years ago? I know when stressful things happen and time passes, it always feels like it was so long ago even when it was only a month or 2 back. It was a pleasure having you on a few years ago in the Running in Production podcast: https://runninginpr…

Hey Nick, good to hear from you again!

>You know it must have been stressful when you were compelled to list your desserts in order.

Haha, that's true, but I also get more excited than the average person about desserts.

>Now that we're almost in June, does it feel like the deal happened a million years ago? I know when stressful things happen and time passes, it always feels like it was so long ago even when it was only a month or 2 back.

Yeah, I hadn't thought about it, but you're right. We're only about six weeks out, but it feels like it happened six months ago.

It was funny during due diligence, I was really stressed out, but I could already tell that I'd look back on it and wonder why it was so stressful. At the end of the day, it's mostly just preparing reports and answering questions.

I think the feeling that's hard to recall is that even though the reports I was creating weren't that complicated, they were stressful because the stakes always felt so high. I was always so worried about making errors and messing up the deal or opening up myself to liability claims after closing.

>It was a pleasure having you on a few years ago in the Running in Production podcast

For me as well! It was fun to chat about TinyPilot's stack and tooling.

Re: I sold TinyPilot, my first successful business

#173

Post by drubio »

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…

I also remembered his post about dropping $50k on the site redesign*

I actually thought it was a big W for him when I saw this post. But I guess, if you consider the opportunity cost of Google employment, it's a financial L.

* https://mtlynch.io/tinypilot-redesign/

Re: I sold TinyPilot, my first successful business

#175

Post by cdiamand »

mtlynch wrote: post #78
cdiamand wrote: post #28

Digestively, how did you handle all that dessert in such a short timeframe?

Haha, great question, Cory! It was over three days (dinner, dinner, lunch), and I was splitting them with friends. Although, I do love dessert and probably could have eaten those all solo.

Haha! That's great! Selling the company - also incredible. Congratulations my dude.

Re: I sold TinyPilot, my first successful business

#176

Post by ativzzz »

mtlynch wrote: post #62
ativzzz wrote: post #55

Earlier quoted context omitted.

> and we received pre-qualification for an SBA loan What does this mean? How does this work? Shouldn't the buyer take out the loan? Or does it look something like - tinypilot takes out 600k, which you pocket - you transfer ownership - tinypilot is in debt, not the buyer ?

Thanks for reading! Yes, you're correct. The buyer takes out the loan. This was an asset sale, so assets transferred over but not any debts. The seller (me) can approach a loan broker and show their financials, and the loan broker can say, "I think it's likely that the SBA would approve this loan, and I can connect you with lenders I think would offer the SBA loan for acquiring this business." The SBA pre-qualificati…

Ah I see, it just makes it easier for potential buyers to get a loan. Thanks for the response and the cool blog!

Re: I sold TinyPilot, my first successful business

#177

Post by talldatethrow »

ThePowerOfFuet wrote: post #124
yojo wrote: post #80

Earlier quoted context omitted.

My wife runs her own consulting business, I’m taking a break from tech work. This means we buy insurance on the federal marketplace (healthcare.gov). It is expensive, but not insanely so. Family of four, living in Oregon, non-smoking, our premium is ~$1k/month. Granted it’s a high deductible ($12k), but it protects us from the kind of catastrophic emergency that could wipe out our savings. We are fortunate to not hav…

> Family of four, living in Oregon, non-smoking, our premium is ~$1k/month. Granted it’s a high deductible ($12k), but it protects us from the kind of catastrophic emergency that could wipe out our savings. We are fortunate to not have expensive, ongoing conditions. Family of two, living in the EU, non-smoking, our premium is ~€0/month. Granted it's a €0 deductible, but it protects us from the kind of catastrophic em…

Taxes you pay pay for this, or your employer pays it instead of paying you.

Now you can argue that health care costs less on a per basis, or even per productive taxpayer basis, but that's a different matter. Maybe the US could recreate your healthcare COST system, but it doesn't have to also take on your payment system (tax instead of direct)

Re: I sold TinyPilot, my first successful business

#178

Post by mtlynch »

tadeegan wrote: post #165

How much tax did you pay? Long term cap gains?

I'm still working with my accountant on that, so I don't have the final figure. I'm expecting the taxes to be relatively low due to expenses that I had to amortize in the last couple of years:

https://news.ycombinator.com/item?id=40513450

Re: I sold TinyPilot, my first successful business

#179

Post by lp0_on_fire »

ThrowawayTestr wrote: post #75
tills13 wrote: post #61

Earlier quoted context omitted.

Holy hell the pessimism in this thread over a life-changing amount of money for 99% of people. > should have stayed at Google You should feel privileged that you've never been "stuck" at a job that you don't find personally interesting and stimulating. Wasting your life to see the number in your bank account increase.

Half a million isn't really that much.

Half a million dollars would be a life-changing amount to the vast majority of the American population.

Re: I sold TinyPilot, my first successful business

#180

Post by mtlynch »

Arch-TK wrote: post #92

> ServerCo would email me a list of detailed questions about TinyPilot’s finances and risks, I’d answer in a day or two, and then there’d be weeks of silence. Finally, they’d respond with a new round of questions, and we’d start the cycle again. Wow, I've done technical due diligence for a number of large acquisitions in the past few years (quite a few big enough that most people on HN would have heard of them) and t…

Yeah, a bit of extra context is that the four months that I was talking to ServerCo also overlapped with my wedding and honeymoon last year. I would have pushed for a quicker decision, but I didn't want to be in serious negotiations about an acquisition at the same time as my wedding.

That said, when I talked to Chris at Quiet Light about how it played out with ServerCo, he said it was rare to see strategic acquisitions come together successfully at TinyPilot's scale. He suspected that because I approached ServerCo and acquisitions weren't on their mind at all, it just wasn't a priority for them, so that's why everything went so slowly.

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