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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

#241

Post by forgingahead »

Congrats on the sale, and on your wife expecting! Been following you for a few years, and glad to see you got a decent exit and have some nice life events to look forward to this year.

Fascinating that you had such a poor experience with FEI, but good to hear Quiet Light was a better fit. I also thought about potentially selling my business a while ago, and the broker, while nice, was just not interested in conducting anything more than a commodity transaction. So obviously we paused, but good for folks to know this is quite common, and if you're selling, always make sure your broker is aligned with you, otherwise find another.

I also want to point out, for posterity, that the HN commenters are often amazingly confidently wrong in their strong assertions. For Michael's 2023 retrospective post which got shared here, someone blithely wrote off TinyPilot as being worth "close to zero"[0]. Obviously that was not the case then, and this deal shows it.

Congrats Michael! All the best with next steps.

[0]https://news.ycombinator.com/item?id=39401974

Re: I sold TinyPilot, my first successful business

#242

Post by troad »

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…

This is flat out not true. Your health insurance is paid by your employer, and it's not at all cheap. If you were self-employed, you would be paying for your own health insurance. This is de facto the same system as in the US, except it's a criminal offence not to purchase insurance.

In the next-door Czech Republic, it's even mandatory to buy health insurance if you're unemployed, unless you go and register with the 'Ministry of Labour' (which requires you to spend inordinate amounts of time jumping through insane bureaucratic hoops, and is ultimately time limited). Consider for a moment the effect of these laws on people with mental health issues, the homeless, and itinerant minorities like the Roma.

Had a tough year out on the streets, but now getting back up on your feet? Congratulations, here's your back-debt for the 'public' health insurance you failed to purchase, you criminal. Want to take a few months off between jobs? Gotta go down, in person, to your local health insurance office to purchase yourself some public health insurance. Want to start a new business, but haven't made a profit yet? No worries, here's your 'minimum rate' of mandatory health insurance - prepare to shell out several thousand euros a year and spend time every quarter filing paperwork with the government health insurance bureau.

There are excellent public health care systems out there (e.g. Australia, and probably the Nordic countries) but much of continental Europe has truly terrible ones. And that's before you even discuss the difficulty of securing a doctor, or the actual quality of medical care received.

Re: I sold TinyPilot, my first successful business

#243

Post by xivzgrev »

not-my-account wrote: post #47
robszumski wrote: post #44

Earlier quoted context omitted.

The broker was advising him on price point, strategy and fielding the interested parties for further discussion. Pretty important for this type of transaction.

How much of this can be learned by reading a couple books? I wonder how much higher profit he actually made compared to if one could self teach these skills.

Just because you “can” self learn, is it worth the time to self learn? As he mentions in article the deal needs to move fast or one side may bail. If you have amateur hour seller, the buyer is more likely to back out.

This isn’t AdWords where your landing page sucks, and you can just quickly pivot and get some more traffic. There’s only so many serious buyers of a business like this why risk squandering any of them.

It’s a 15% commission to massively reduce the risk to seller and time commitment. Assuming broker is competent they’re going to get the deal done right. Seems well worth it to me.

He also mentioned having a kid soon, so why drag it out? Dude already made almost a cool million what’s 90k in grand scheme of things to get deal done and money in bank?

Skipping a broker in an extremely high friction transaction is penny wise pound foolish. If residential real estate hasn’t figured out yet how to cut out brokers, business acquisitions definitely have not

Re: I sold TinyPilot, my first successful business

#244

Post by paulddraper »

mickael-kerjean wrote: post #237
paulddraper wrote: post #192

Sold it for less than 1X rev? I understand it's hardware, but that's a bit rough.

Not sure why you're getting downvoted, I had the same reaction. If you have a sustainable and healthy business that is growing year per year, 3 years of today's profit and under 1x the revenue might as well be paid off in under a year 3 years from now if you got PMF and work torward scaling your business. It becomes an opportunity cost calculation which in the case of the author might be ok but definitly not ok for m…

I'm guessing either the author had a very strong personal reason (i.e. really wanted out), or the business was not particularly sustainable/growth-favorable for one reason or another.

Re: I sold TinyPilot, my first successful business

#245

Post by tradertef »

robszumski wrote: post #44
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?

The broker was advising him on price point, strategy and fielding the interested parties for further discussion. Pretty important for this type of transaction.

Seems like exactly what real estate agents do. That being said agent fee of 3% seems too high to me..

Re: I sold TinyPilot, my first successful business

#246

Post by [deleted] »

lapestenoire wrote: post #238
mtlynch wrote: post #224

Earlier quoted context omitted.

I typically worked 30-40 hours per week.

Many people would not count time required to sleep and attend to basic human needs like eating and hygiene as part of available time. It sounds like it took 75-100% of a full-time position.

[deleted]

Re: I sold TinyPilot, my first successful business

#247

Post by rtpg »

flawn wrote: post #53
makk wrote: post #42

“I immediately knew I was onto something.” Every successful bootstrapper who I know personally says this. The ultimate success didn’t happen instantly but the product/market fit was obvious on day one. And they didn’t iterate their way to that point. They walked away from whatever they were doing before, restarted with a blank sheet a paper, and the new thing immediately resonated.

Watch out for survivorship bias though, everybody might think that but a lot more still fail.

Well at least you might be able to apply it the other way around? If you don't feel immediate PMF then maybe your idea is garbage (for surviving as an entrepreneur anyways)

Re: I sold TinyPilot, my first successful business

#249

Post by jimbobthrowawy »

1-more wrote: post #33
xiphias2 wrote: post #22

Earlier quoted context omitted.

I would be interesting in reading the ,,buying process'' part of the same deal from the buyers. BTW tinypilot.com is down: https://www.isitdownrightnow.com/tinypilot.com.html

https://tinypilotkvm.com/

Thank you. The URL near the start of the blogpost is incorrect, and I was wondering if it was hugged to death or if the buyer took it down for some reason.

Re: I sold TinyPilot, my first successful business

#250

Post by demondemidi »

talldatethrow wrote: post #118
demondemidi wrote: post #93

Earlier quoted context omitted.

In the US there is the affordable care act from ~2013, where anyone can purchase insurance from a pooled market subsidized by the government up to a certain income (50k I think). But that is also impacted by the state you live in, as the states negotiate the contracts paid by federal dollars (I know it's effed up). So the ACA is cheaper on the west coast than it is in Alabama. Today, a "gold" policy for a single man…

I have a feeling your employer is paying the difference, so basically you're paying one way or another.

No feeling that is the reality. But corporations get steep discounts. They pay about half to a quarter of what I would pay on my own.
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