6 ms·

I'm curious why with $20K MRR it will take a Kickstarter to create a mobile app.

randlet 7y ago
I don't know if this is the case here, but I think even if you don't really "need" the money, using Kickstarter can be a great way to get more exposure for a project as well as pre-selling/validating a product which reduces the risk of investing development time.
- Topgamer7 7y ago
  As well people willing to pay validates the market desire.
  - radcon 7y ago
    Not to mention letting backers shoulder the risk in case the project fails. It's practically free money assuming you act in good faith and don't blatantly defraud people.
- maxxxxx 7y ago
  Exactly. It's an excellent way to validate your idea.
kolbe 7y ago
We have no clue what his costs are. For all we know he loses money each month. There's no faster way to get me to stop listening than to tell me your revenues and omit your costs.
- pinky1417 7y ago
  You're right to be skeptical when costs are omitted. Skepticism is especially warranted when you're looking at a standalone company. However, cost estimation can be a bit of a dark art, especially for side projects. Sure, the article would be better if we at least got the readily available vendor cost information: hosting, contractors, etc. That still wouldn't tell us everything though: cost of the owner's time, cost of failed prior projects, etc. In short, generating a total cost estimate involves multiple choice variables. At any rate, do you believe his recurring costs, however you quantify them, are likely to be anywhere near $20k a month? It seems very likely that this is a profitable venture.
- busterbenson 7y ago
  This is a great point. I’m the creator of 750words.com and am happy to provide loose estimation of costs if it’s useful. It’ll take me some time to put together, and I’m not at my computer, but I can share high-level numbers in a bit if it’s of interest.
  - blorenz 7y ago
    Thank you! I, for one, would be keenly interested in this. I think it would enlighten about the operating costs and expenditures that are associated with this service and where they go. I'm hoping that the scrutiny of this might serve you well and you are able to get some takeaways to increase your profits. I appreciate your candidness and willing to be transparent to those ( at the head of the line, myself ) who you owe absolutely nothing to and possess zero vested interest.
    - busterbenson 7y ago
      Okay, I looked over our financial statement from 2018, summed a few things up that would be way too boring to provide in detail, and turned the numbers into percentages so that you don't have to do all the math in your head. Here's what I have: 2018 costs: 48% to salaries and contractors (my wife and I are the only people on payroll, and draw $60k salaries for ourselves) 12.1% to operations (health insurance, renting a desk at WeWork, minimal travel, lot of SaaS subscriptions, misc equipment and other costs) 7.5% to PayPal fees (I really need to renegotiate this) 4.9% to AWS 4.2% to payroll taxes and other business administration 23% to profit (goes to saving up to quit my job last year, finish my book, and then dedicate ourselves to this full time) Hope that's useful! Let me know if you have any other questions about this stuff and I'll do my best to be as transparent as I can without revealing every little detail. Update: I should also mention that the salary we draw is in now way sufficient to actually support a family of 4 in Berkeley, so since quitting my tech job last October, we've been draining our savings and preparing to find a way to turn this little business into something that could sustain us longer term. I call it our flying rickshaw (the opposite of a rocketship). Outcome still uncertain.
      - 7y ago
a13n 7y ago
Keep in mind it's revenue, not profit. You never know what their expenses are.
hinkley 7y ago
Isn't this exactly how business loans have worked for a few hundred years? I have a successful business, but it's at risk from competition if I don't build a new factory/buy some new equipment/produce promotional videos. These are my current revenues (I might be able to pay you back) and these are my projections (I believe I will continue to be able to pay you back).
iamnotacrook 7y ago
Rule number 1 of business - never gamble with your own money!
hinkley 7y ago
He mentions mobile and internationalization. In both cases hiring consultants may be more reliable than trying to build the expertise in-house. I've become the de facto internationalization expert at several companies and it's always rough. Everyone wants sentence structure to be simple and will fight you when you insist on something like interpolation instead of fancy string concatenation. Like Yoda, you will sound. Hmm! And then there are straight up dodges like using Arabic numbers for everything in Japan because they have multiple counting systems. Apples and humans use different words when counting. At the very least you will hire outside people to do the translations after you get the code in place to utilize them.
- thaumasiotes 7y ago
  > And then there are straight up dodges like using Arabic numbers for everything in Japan because they have multiple counting systems. Apples and humans use different words when counting. In Chinese, the Arabic numerals wouldn't get you out of this, as they replace the number, but not the measure word: 3 apples -- 三个苹果 -- 3个苹果 3 people [needing to sit in a restaurant, or being honored, or what have you] -- 三位 -- 3位. 3 cats -- 三只猫 -- 3只猫. Will an Arabic number replace both the number and the measure word in written Japanese? What's being dodged?
  - hinkley 7y ago
    Thus illustrating the difference between de facto expert an actual expert. And that you often get what you pay for. For every four things I can catch that other people wouldn’t, There’s at least one thing I haven’t even heard of. Though in this case as long as the noun isn’t being interpolated I think there’s a simple in a fix for it. You are much better off hiring someone with experience, and if you can afford it, a proper specialist.
  - yorwba 7y ago
    Japanese doesn't just have different measure words, but also different number words depending on the thing being counted. That said, the difference can be hidden in writing, so unless you need text-to-speech it is not much of a problem. https://en.wikipedia.org/wiki/Japanese_numerals https://en.wikipedia.org/wiki/Japanese_numerals
tjbiddle 7y ago
Why use your own money to scale when you can use someone else's?
- throw03172019 7y ago
  And not give up any equity!
jmull 7y ago
It sounds like there's about 1 FTE to run the site. Along with other costs I can see why there isn't a lot of money for development. And it sounds like the site could use some work too, so maybe any money left for development is going back into the site.
sdinsn 7y ago
Because he wants free money
busterbenson 7y ago
The other responses were accurate. Part of it is to be able to afford a little extra help, part of it is to re-spark excitement in the project with people, and part of it is to buy a little extra time to work on it full-time since the sad truth is that without my other income we're not actually able to live in the Bay Area with a family of four even on this revenue. An alternative is to move somewhere cheaper, which we're also considering. I also added a breakdown of costs to another comment deeper in this thread, in case that's of interest.
- swiftcoder 7y ago
  That immediately jumped out at me. The bay area seems like a pretty unsustainable economy for even relatively successful small businesses like yours.

I don't know if this is the case here, but I think even if you don't really "need" the money, using Kickstarter can be a great way to get more exposure for a project as well as pre-selling/validating a product which reduces the risk of investing development time.

Topgamer7 7y ago
As well people willing to pay validates the market desire.
- radcon 7y ago
  Not to mention letting backers shoulder the risk in case the project fails. It's practically free money assuming you act in good faith and don't blatantly defraud people.
maxxxxx 7y ago
Exactly. It's an excellent way to validate your idea.

kolbe 7y ago

We have no clue what his costs are. For all we know he loses money each month. There's no faster way to get me to stop listening than to tell me your revenues and omit your costs.

pinky1417 7y ago
You're right to be skeptical when costs are omitted. Skepticism is especially warranted when you're looking at a standalone company. However, cost estimation can be a bit of a dark art, especially for side projects. Sure, the article would be better if we at least got the readily available vendor cost information: hosting, contractors, etc. That still wouldn't tell us everything though: cost of the owner's time, cost of failed prior projects, etc. In short, generating a total cost estimate involves multiple choice variables. At any rate, do you believe his recurring costs, however you quantify them, are likely to be anywhere near $20k a month? It seems very likely that this is a profitable venture.
busterbenson 7y ago
This is a great point. I’m the creator of 750words.com and am happy to provide loose estimation of costs if it’s useful. It’ll take me some time to put together, and I’m not at my computer, but I can share high-level numbers in a bit if it’s of interest.
- blorenz 7y ago
  Thank you! I, for one, would be keenly interested in this. I think it would enlighten about the operating costs and expenditures that are associated with this service and where they go. I'm hoping that the scrutiny of this might serve you well and you are able to get some takeaways to increase your profits. I appreciate your candidness and willing to be transparent to those ( at the head of the line, myself ) who you owe absolutely nothing to and possess zero vested interest.
  - busterbenson 7y ago
    Okay, I looked over our financial statement from 2018, summed a few things up that would be way too boring to provide in detail, and turned the numbers into percentages so that you don't have to do all the math in your head. Here's what I have: 2018 costs: 48% to salaries and contractors (my wife and I are the only people on payroll, and draw $60k salaries for ourselves) 12.1% to operations (health insurance, renting a desk at WeWork, minimal travel, lot of SaaS subscriptions, misc equipment and other costs) 7.5% to PayPal fees (I really need to renegotiate this) 4.9% to AWS 4.2% to payroll taxes and other business administration 23% to profit (goes to saving up to quit my job last year, finish my book, and then dedicate ourselves to this full time) Hope that's useful! Let me know if you have any other questions about this stuff and I'll do my best to be as transparent as I can without revealing every little detail. Update: I should also mention that the salary we draw is in now way sufficient to actually support a family of 4 in Berkeley, so since quitting my tech job last October, we've been draining our savings and preparing to find a way to turn this little business into something that could sustain us longer term. I call it our flying rickshaw (the opposite of a rocketship). Outcome still uncertain.
    - 7y ago

a13n 7y ago

Keep in mind it's revenue, not profit. You never know what their expenses are.

hinkley 7y ago

Isn't this exactly how business loans have worked for a few hundred years? I have a successful business, but it's at risk from competition if I don't build a new factory/buy some new equipment/produce promotional videos. These are my current revenues (I might be able to pay you back) and these are my projections (I believe I will continue to be able to pay you back).

iamnotacrook 7y ago

Rule number 1 of business - never gamble with your own money!

hinkley 7y ago

He mentions mobile and internationalization. In both cases hiring consultants may be more reliable than trying to build the expertise in-house. I've become the de facto internationalization expert at several companies and it's always rough. Everyone wants sentence structure to be simple and will fight you when you insist on something like interpolation instead of fancy string concatenation. Like Yoda, you will sound. Hmm! And then there are straight up dodges like using Arabic numbers for everything in Japan because they have multiple counting systems. Apples and humans use different words when counting. At the very least you will hire outside people to do the translations after you get the code in place to utilize them.

thaumasiotes 7y ago
> And then there are straight up dodges like using Arabic numbers for everything in Japan because they have multiple counting systems. Apples and humans use different words when counting. In Chinese, the Arabic numerals wouldn't get you out of this, as they replace the number, but not the measure word: 3 apples -- 三个苹果 -- 3个苹果 3 people [needing to sit in a restaurant, or being honored, or what have you] -- 三位 -- 3位. 3 cats -- 三只猫 -- 3只猫. Will an Arabic number replace both the number and the measure word in written Japanese? What's being dodged?
- hinkley 7y ago
  Thus illustrating the difference between de facto expert an actual expert. And that you often get what you pay for. For every four things I can catch that other people wouldn’t, There’s at least one thing I haven’t even heard of. Though in this case as long as the noun isn’t being interpolated I think there’s a simple in a fix for it. You are much better off hiring someone with experience, and if you can afford it, a proper specialist.
- yorwba 7y ago
  Japanese doesn't just have different measure words, but also different number words depending on the thing being counted. That said, the difference can be hidden in writing, so unless you need text-to-speech it is not much of a problem. https://en.wikipedia.org/wiki/Japanese_numerals https://en.wikipedia.org/wiki/Japanese_numerals

tjbiddle 7y ago

Why use your own money to scale when you can use someone else's?

throw03172019 7y ago
And not give up any equity!

jmull 7y ago

It sounds like there's about 1 FTE to run the site. Along with other costs I can see why there isn't a lot of money for development. And it sounds like the site could use some work too, so maybe any money left for development is going back into the site.

sdinsn 7y ago

Because he wants free money

busterbenson 7y ago

The other responses were accurate. Part of it is to be able to afford a little extra help, part of it is to re-spark excitement in the project with people, and part of it is to buy a little extra time to work on it full-time since the sad truth is that without my other income we're not actually able to live in the Bay Area with a family of four even on this revenue. An alternative is to move somewhere cheaper, which we're also considering. I also added a breakdown of costs to another comment deeper in this thread, in case that's of interest.

swiftcoder 7y ago
That immediately jumped out at me. The bay area seems like a pretty unsustainable economy for even relatively successful small businesses like yours.