5 ms·

There was a similar article submitted last week that resonated with me more: https://news.ycombinator.com/item?id=10149308 https://news.ycombinator.com/item?id

There was a similar article submitted last week that resonated with me more: https://news.ycombinator.com/item?id=10149308 https://news.ycombinator.com/item?id=10149308 Focused more on building a small (5ish people) business with $1mil in revenue a year as the path to enlightenment. Key insight: building a $1mil/yr business ($7/mo * 12 mo/yr * 12,000 subscribers) that focuses on delivering pure awesome is an excellent way to build a $10mil/yr business is an excellent way to....

kuschku 11y ago
And, more important, don’t focus on growing to become a $10mil/yr business – if there is no need to expand, just don’t expand. If your business is only profitable by constantly expanding, it will crash soon. If you have a smaller, but sustainable business, your company might be around in a few centuries still. This is how a lot of small businesses in Europe work, and how they continued to exist for a millenium.
- nxb 11y ago
  What's missing from this argument is that opportunities to make ongoing profit without considerable ongoing investments tend to be VERY short lived in the tech field. Assuming that steady revenue will last, will lead you to ending up crashing as hard as Atari. You grew a steady, low-stress $1MM/year lifestyle business? Great. Now thousands of people are going to see what you're doing, and dozens are going to try to clone you, many of them far better connected than you are. Software is rarely like the e.g. restaurant business, where you can own a scarce piece of property in a good location and don't have to compete with the whole world, or other defendable advantages. Tech startups tend to have far fewer defendable advantages. Once you realize this, it becomes obvious that "grow or die" is the nature of the business. Not some silly scheme that only exists due to VCs forcing it upon entrepreneurs. Long-term opportunities that are easily defendable with minimal effort are extremely rare in the tech startups field. On top of that, guess which type of businesses are, by far, the most attractive to cloners and other competition? - those "ideal" lifestyle businesses that make profits from early on and require minimal upfront investment. Edit: Or instead of Atari, insert here all the other profitable businesses that you've never heard of, who got crushed after a couple years because they slowed their investments into innovating, assuming that their very steady profits would continue instead of dropping off a cliff. Happened to me twice.
  - nine_k 11y ago
    Not necessarily grow or die; you can try to build a number of $10M/y businesses instead of growing one to $1B/y one. I won't hazard to guess which approach is harder.
  - furyg3 11y ago
    I think the Atari argument reinforces the point of the article. Atari went from nothing to a household name, something a lot of people had and loved, was sold to Warner Comms for millions of dollars making the founders rich, and became 30% of Warner Communications' income within 10 years of being founded. That sounds much like the meteoric rise of a hot-new-thing 'successful' startup (e.g. Myspace) that lost out to a competitor (e.g. Facebook/Nintendo) than a niche 'lifestyle' company that didn't innovate. Had they been working on, I don't know, restaurant POS machines maybe they would have been much less known but made that same amount of money over 20 years before some competitor bested them. And what the article is saying is that's also not bad.
  - bisRepetita 11y ago
    >Long-term opportunities that are easily defendable with minimal effort are extremely rare in the tech startups field. But that's the idea that not everything is a startup. If the addressable market is $10M and you get a good chunk of it already, there's a lot less motivation from anyone to compete with you. And they probably have no clue your market even exists. And yes, most SMB require more than "minimal efforts", but normal efforts. Much less than building a unicorn. And in many cases a great flexibility and quality of life.
  - lipstick 11y ago
    >> Long-term opportunities that are easily defendable with minimal effort are extremely rare in the tech startups field. I used to buy that. Then I started looking around: 1) What's McAfee today that it wasn't 30 years ago? 2) Windows 10 is a slightly newer look with small WinRT runtime (which may have come from WinCE I don't know) but most of the software underneath is the same code running for over 2 decades as it looks to my eyes. 3) SereneScreen fish screensaver, has it changed much? 4) How many years has Skype been around? Put some lipstick on the pig and if it ever sold at all, software is renewable. Also your restaurant analogy isn't really fair, it takes a lot of work every day to keep a popular restaurant popular regardless of location. >> Now thousands of people are going to see what you're doing, and dozens are going to try to clone you, many of them far better connected than you are. Linux is better than Windows yet what runs on most desktops? OS/2 was far, far better than Windows yet Windows is still on desktops because IBM stopped selling OS/2 (and PC's for that matter); not because people would not still be buying it but because they are more interested in selling mainframes (which were supposed to be dead by now).
- scruple 11y ago
  > This is how a lot of small businesses in Europe work, and how they continued to exist for a millenium. I'm not doubting you at all, I'm just very curious about this. Searching around a bit failed me, so I'm wondering if you have any examples of this?
  - kuschku 11y ago
    It’s such a common concept that it has its own Wikipedia article: https://en.wikipedia.org/wiki/Mittelstand https://en.wikipedia.org/wiki/Mittelstand
seiji 11y ago
It's great breaking the math down like that. A billion dollar company (~$100 million per year in revenue with 10x valuation multiplier) requires $274,000 per day in revenue (which is $8.33 million per month, or $3.20 per second, every second of the year). To actually receive a billion in revenue requires $2,740,000 per day (which is $83.33 million per month. Broken down further it reaches $32.00 per second, which doesn't sound impossible). To become Apple, you would need about $329,000,000 in revenue every day (which is $10 billion per month, averaging out to $3,800 per second).
dangrossman 11y ago
> building a $1mil/yr business ($7/mo * 12 mo/yr * 12,000 subscribers) ... Much easier to do if you sell to businesses. At $100/mo instead of $7/mo you only need 833 customers. I'm nearly there just by adding 1-2 customers a day, which is eminently doable without a team.
- vijayr 11y ago
  you are building a million dollar biz alone? what kind of product is it? Just curious, are there any other examples of one man million dollar software business?
  - dangrossman 11y ago
    https://www.improvely.com https://www.improvely.com -- marketing tools. "Solopreneur" seems to be a good search term for finding other examples, though I think it sounds silly.
    - cddotdotslash 11y ago
      Not to derail the original discussion, but I'm curious too - what methods are you using to gain 1-2 users (paying $100/mo) per day? I'm building out a product that I'm marketing to businesses, but am struggling to find ways to actually get the name / brand in front of enough people.
  - GamblersFallacy 11y ago
    One man writes a novel. One man writes a symphony. One man can write a $1MM ARR SaaS. One man million dollar software business is very doable if your focus has commercial intent. What marketplace services do people crave, but don’t have ?
- chii 11y ago
  and yet business customers might expect more individual attention, where as a consumer product has less of such expectation. you might end up with a lot of support overhead with such a small number of customers. They can start to be demanding, as they know you are beholden to them for revenue....

kuschku 11y ago

And, more important, don’t focus on growing to become a $10mil/yr business – if there is no need to expand, just don’t expand. If your business is only profitable by constantly expanding, it will crash soon. If you have a smaller, but sustainable business, your company might be around in a few centuries still. This is how a lot of small businesses in Europe work, and how they continued to exist for a millenium.

nxb 11y ago
What's missing from this argument is that opportunities to make ongoing profit without considerable ongoing investments tend to be VERY short lived in the tech field. Assuming that steady revenue will last, will lead you to ending up crashing as hard as Atari. You grew a steady, low-stress $1MM/year lifestyle business? Great. Now thousands of people are going to see what you're doing, and dozens are going to try to clone you, many of them far better connected than you are. Software is rarely like the e.g. restaurant business, where you can own a scarce piece of property in a good location and don't have to compete with the whole world, or other defendable advantages. Tech startups tend to have far fewer defendable advantages. Once you realize this, it becomes obvious that "grow or die" is the nature of the business. Not some silly scheme that only exists due to VCs forcing it upon entrepreneurs. Long-term opportunities that are easily defendable with minimal effort are extremely rare in the tech startups field. On top of that, guess which type of businesses are, by far, the most attractive to cloners and other competition? - those "ideal" lifestyle businesses that make profits from early on and require minimal upfront investment. Edit: Or instead of Atari, insert here all the other profitable businesses that you've never heard of, who got crushed after a couple years because they slowed their investments into innovating, assuming that their very steady profits would continue instead of dropping off a cliff. Happened to me twice.
- nine_k 11y ago
  Not necessarily grow or die; you can try to build a number of $10M/y businesses instead of growing one to $1B/y one. I won't hazard to guess which approach is harder.
- furyg3 11y ago
  I think the Atari argument reinforces the point of the article. Atari went from nothing to a household name, something a lot of people had and loved, was sold to Warner Comms for millions of dollars making the founders rich, and became 30% of Warner Communications' income within 10 years of being founded. That sounds much like the meteoric rise of a hot-new-thing 'successful' startup (e.g. Myspace) that lost out to a competitor (e.g. Facebook/Nintendo) than a niche 'lifestyle' company that didn't innovate. Had they been working on, I don't know, restaurant POS machines maybe they would have been much less known but made that same amount of money over 20 years before some competitor bested them. And what the article is saying is that's also not bad.
- bisRepetita 11y ago
  >Long-term opportunities that are easily defendable with minimal effort are extremely rare in the tech startups field. But that's the idea that not everything is a startup. If the addressable market is $10M and you get a good chunk of it already, there's a lot less motivation from anyone to compete with you. And they probably have no clue your market even exists. And yes, most SMB require more than "minimal efforts", but normal efforts. Much less than building a unicorn. And in many cases a great flexibility and quality of life.
- lipstick 11y ago
  >> Long-term opportunities that are easily defendable with minimal effort are extremely rare in the tech startups field. I used to buy that. Then I started looking around: 1) What's McAfee today that it wasn't 30 years ago? 2) Windows 10 is a slightly newer look with small WinRT runtime (which may have come from WinCE I don't know) but most of the software underneath is the same code running for over 2 decades as it looks to my eyes. 3) SereneScreen fish screensaver, has it changed much? 4) How many years has Skype been around? Put some lipstick on the pig and if it ever sold at all, software is renewable. Also your restaurant analogy isn't really fair, it takes a lot of work every day to keep a popular restaurant popular regardless of location. >> Now thousands of people are going to see what you're doing, and dozens are going to try to clone you, many of them far better connected than you are. Linux is better than Windows yet what runs on most desktops? OS/2 was far, far better than Windows yet Windows is still on desktops because IBM stopped selling OS/2 (and PC's for that matter); not because people would not still be buying it but because they are more interested in selling mainframes (which were supposed to be dead by now).
scruple 11y ago
> This is how a lot of small businesses in Europe work, and how they continued to exist for a millenium. I'm not doubting you at all, I'm just very curious about this. Searching around a bit failed me, so I'm wondering if you have any examples of this?
- kuschku 11y ago
  It’s such a common concept that it has its own Wikipedia article: https://en.wikipedia.org/wiki/Mittelstand https://en.wikipedia.org/wiki/Mittelstand

seiji 11y ago

It's great breaking the math down like that. A billion dollar company (~$100 million per year in revenue with 10x valuation multiplier) requires $274,000 per day in revenue (which is $8.33 million per month, or $3.20 per second, every second of the year). To actually receive a billion in revenue requires $2,740,000 per day (which is $83.33 million per month. Broken down further it reaches $32.00 per second, which doesn't sound impossible). To become Apple, you would need about $329,000,000 in revenue every day (which is $10 billion per month, averaging out to $3,800 per second).

dangrossman 11y ago

> building a $1mil/yr business ($7/mo * 12 mo/yr * 12,000 subscribers) ... Much easier to do if you sell to businesses. At $100/mo instead of $7/mo you only need 833 customers. I'm nearly there just by adding 1-2 customers a day, which is eminently doable without a team.

vijayr 11y ago
you are building a million dollar biz alone? what kind of product is it? Just curious, are there any other examples of one man million dollar software business?
- dangrossman 11y ago
  https://www.improvely.com https://www.improvely.com -- marketing tools. "Solopreneur" seems to be a good search term for finding other examples, though I think it sounds silly.
  - cddotdotslash 11y ago
    Not to derail the original discussion, but I'm curious too - what methods are you using to gain 1-2 users (paying $100/mo) per day? I'm building out a product that I'm marketing to businesses, but am struggling to find ways to actually get the name / brand in front of enough people.
- GamblersFallacy 11y ago
  One man writes a novel. One man writes a symphony. One man can write a $1MM ARR SaaS. One man million dollar software business is very doable if your focus has commercial intent. What marketplace services do people crave, but don’t have ?
chii 11y ago
and yet business customers might expect more individual attention, where as a consumer product has less of such expectation. you might end up with a lot of support overhead with such a small number of customers. They can start to be demanding, as they know you are beholden to them for revenue....