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For your typical solo founder in their 30s, their odds of dying at any point over the next 10 years is something like 0.2%. And short of them dying, their busin

For your typical solo founder in their 30s, their odds of dying at any point over the next 10 years is something like 0.2%. And short of them dying, their business isn't going anywhere because keeping a SaaS startup online doesn't cost anything -- if you have the skills to do it yourself. Whereas the odds of a venture backed startup shutting down at any point over the next ten years is something like 30%. So from a risk perspective, it's literally over 100x more risky to use a software product made by a venture backed company than one from a solo founder. On all of my sales calls, I tell people that I'm bootstrapped and that I'm going to charge them extra so that I can reduce the risk to their business by staying bootstrapped, and I have yet to run into anyone who doesn't seem satisfied by that pricing strategy.

kapilkale 4y ago
Is the 100x valid? The odds of a founder dying vs. the chances of a company shutting down seem not apples-to-apples I would guess there are many cases of solo founders shutting down their business other than founder death...
- Alex3917 4y ago
  > I would guess there are many cases of solo founders shutting down their business other than founder death... Sure, but it really only makes sense to consider cases where: A) The business has paying customers B) It's very important to the customers that this product remain available C) The founder is unwilling to give or license the source code to those customers In practice, all three of these factors being present is uncommon. Usually if the product is actually important to a customer, they just pay to acquire the assets. And there is usually no reason for a solo founder not to take that deal if the alternative is just shutting down the business. For a venture backed business, maybe the lawyers decide there is too much legal risk or whatever. But for an indie hacker, that doesn't happen. We hear stories all the time of folks getting burned when venture backed startups shut down without giving people any time to switch to another product, or sometimes even to expert their data. When is the last time you heard about this happening from the paying customers of a solo founder? Literally never.
  - dahart 4y ago
    You’re comparing apples to calculators. Solo founders go out of business literally all the time, every day. I’ve definitely heard of solo devs canceling. It’s also like the entire reputation of the KickStarter experience, pay a solo dev to do something, get nothing in return aside from a bunch of hopeful emails followed by silence or a sorry. Software created by solo devs is used by many times fewer people, therefore it’s zero surprise that the total number of displaced customers is lower. You need to calculate the percentages, not hold up anecdotes of not having any rumors. I don’t see how (C) can reasonably factor into any statistics. I’d love to hear how often you think this matters, but I’m extremely skeptical that shutting down a solo business and giving source to customers has happened enough times to even talk about relative to the number of times that hasn’t happened. I’d like to hear about when giving source to paying customers is even helpful. Depends highly on what kind of software we’re talking about, and depends highly on what kind of customers, but assuming that paying customers can generally do anything with source code seems like a really, really big assumption.
akhmatova 4y ago
Ut's literally over 100x more risky It's clearly not, due to what the sibling commenters have been staying (people discontinuing products for reasons other than dying, etc.) I get the gist of your point but this 100x number is not just hyperbole -- it's silly.
SkilledUp 4y ago
Good point you made. Where did the 30% come from? Whilst I have not kept a list myself, I've seen SaaS products drastically change after acquisitions. Some SaaS products under new ownership stop serving small customers all together and focus on large enterprises. This is as a much risk as shut downs. In terms of Bootstrapped SaaS, what I have noticed since 2004 is that bootstrapped does not mean the companies are operated by a single person. As a bootstrapped SaaS founder, you can start building a team with revenues by hiring team mates. By doing this, you reduce the risk rate for your customers. Until you have revenues to hire talent, you can also bring on free talent from companies like https://skilledup.life https://skilledup.life. This is my latest tech startup. I have also been building subscription based tech products since 2004 with many failures and two Exits. I bootstrapped them all and continue to do so. The biggest issue I have during all these years is lack of capital to build teams. I'm solving my own problem through SkilledUp Life. My team now includes 2 salaried staff and about 20+ Volunteers. We are one solution. But there are many ways to de-risk a bootstrapped SaaS business. All the best Manoj
nxpnsv 4y ago
This is a neat reply. I guess there could be other factors that would lead someone to stop their solo biz though...
- Alex3917 4y ago
  Sure. For context, this is for a new product that solves a real pain point, and for which there aren't any other solutions on the market. And it also doesn't really cost anything to integrate. If this weren't solving a pain point and if there were other alternatives on the market, then this positioning might not work as well. But building something where folks don't really have any better choice was also a purposeful decision.
javajosh 4y ago
IANAA (I am not an actuary) but surely this can't be the entire computation. Death is only one reason a solo SaaS might fail. The real problem is mental noise, and the fact that large organizations have the positive side-effect of averaging out that noise to produce coherent, predictable actions. (The humanist wants to point out the "noise" is sentiment, artistry, beauty, and the coherent behavior is that of a profit-driven sociopath, but the point stands.) What I'm saying is that their chance of death is .2% but their chance of discovering Buddha, deciding to give up everything and become a monk, or meeting the woman of their dreams and going to live the simple life in Thailand, and so on, are much, much greater.
- dokein 4y ago
  I don't think one needs to be an actuary to appreciate that comparing the mortality rate of solo founders with the failure rate of VC backed companies doesn't make sense. When he is asked to defend it, he clarifies that he's only talking about companies that solve a major pain point, have no other competitors, and a low cost of implementation. (Obviously the failure rate of VC-backed companies with amazing PMF and amazing operating margins is much lower than 30%!) His comment is the highest voted in this thread (assuming HN sorts that way) -- this is a classic example of 'this person says something I want to believe and has some numbers so I'll upvote it without even a rudimentary interrogation!'
  - lazide 4y ago
    We all believe what we need to, or something like that.
codingdave 4y ago
If it is working for you, that is great, but... Death is not the only reason people quit working on a project. They could get a better offer, their family situation could change, they could get sick or injured, or they could simply get sick of it, just to name a few. Also, keeping a SaaS online does cost money. And those costs increase as you scale. If you are small enough that you can run on a free tier, you are too small for me to have confidence that you are sticking around.
- jjav 4y ago
  > If you are small enough that you can run on a free tier, you are too small for me to have confidence that you are sticking around. AWS has a free tier, so I wouldn't apply that rule too much.
- imdsm 4y ago
  So long as you're profitable, the revenue should scale too, covering the costs. It's a different approach when you're a solopreneur as you won't be burning money to try to scale rapidly. That being said, there are other risks, like the service being acquired and assimilated, but we face that with all services we rely on really.
- rovr138 4y ago
  Unless they decide to turn it off, they would just stagnate in features. Regarding it costing money, yes, of course. But costs increases as users increase. If you're giving away your product for free, that's an issue. If you're charging, then I don't see the problem.
- horsawlarway 4y ago
  > If you are small enough that you can run on a free tier, you are too small for me to have confidence that you are sticking around. There's a lot of truth in this. Particularly since the free tiers on most cloud providers are explicitly designed to suck you in, then raise the rates tremendously as you scale. A business that might be fine with 100 customers on the cloud could struggle mightily to cover the costs of dealing with 1000 customers on the same stack. The linear revenue growth doesn't match up to the insane cost increase as you go from "hobby project" to "small business" in the cloud.
alcio 4y ago
> For your typical solo founder in their 30s, their odds of dying at any point over the next 10 years is something like 0.2% The real figure is more 2.1% (source: https://www.ssa.gov/oact/STATS/table4c6.html https://www.ssa.gov/oact/STATS/table4c6.html)
- tdrgabi 4y ago
  I'm confused, where does the 2.1% come from. It does look like 0.001795 which is 0.2% for a 30 year old in the source you linked
  - vicek22 4y ago
    The number you read is for dying within the next year. The OP said within a decade.
    - kevinpet 4y ago
      OP also said "in their 30s" not "at 30". So I'd use 35-45 rather than 30-40, which shifts it a bit.
      - cupofpython 4y ago
        Since I already have the spreadsheet built for my other comment: 30-39 is 2.1% 35-44 is 2.5% 40-49 is 3.3% --------- 30-49 is 5.3% Ranges are inclusive of entire year. 30-39 is 30th bday to 40th bday
  - cupofpython 4y ago
    .001795 for year 30 = .998205 survival this year .001858 for year 31 = .998142 ... .002482 for year 39 = .997518 --------------------- .998205 x .998142 x ... x .997518 = .978997 survival rate over 10 years 1 - .978997 = .021003 chance of death = 2.1%
- throwoutway 4y ago
  Which is about the same rate that airlines lose luggage. (Unrelated comparison but analogies can help)
PaulWaldman 4y ago
>On all of my sales calls, I tell people that I'm bootstrapped and that I'm going to charge them extra so that I can reduce the risk to their business by staying bootstrapped, and I have yet to run into anyone who doesn't seem satisfied by that pricing strategy. What does this statement mean? Are you implying to your potential customers that charging them extra translates into profits to entice you to continue the business or that the efficiencies allow for business continuity services like providing the source code in escrow?
- Alex3917 4y ago
  > What does this statement mean? That I'm not going to dump product on the market below cost to gain market share. Since even though doing that is obviously saves customers a little bit of money in the short term, in the long term the money raised to do that needs to be paid back ten fold, which ultimately comes out of their pockets. It's just much easier for a business to keep its interests aligned with its customers if there isn't some third party who is trying to extract money from both.
  - alex_suzuki 4y ago
    You must have a pretty compelling product. Mind sharing?
    - deleted 4y ago
      [deleted]
yread 4y ago
That's a good one. I tell them that if they are really worried we can for a price of course arrange access to the sources so that they can maintain it after I die/quit. My clients are not in IT so I'm not too worried about them starting a clone
itsthecourier 4y ago
I will always choose at least a team of two
ransom1538 4y ago
"Whereas the odds of a venture backed startup shutting down at any point over the next ten years is something like 30%." Citation needed. I worked in startups my entire life. I thought it was closer to 90+%.
ezekg 4y ago
I should hire you as my sales guy. I say this same thing often to leads that are worried about my bus factor of 1. Oddly, most of the time its other small businesses that are worried.
dahart 4y ago
> the odds of a venture backed startup shutting down at any point over the next ten years is something like 30%. Where is this number from? Googling, I see numbers like 75% of venture backed startups failing [1] and 90% of all startups failing, most of that within the first year. The suggestion that 70% of venture startups live for at least a decade smells unlikely. [1] https://www.wsj.com/articles/SB10000872396390443720204578004980476429190# https://www.wsj.com/articles/SB10000872396390443720204578004... > from a risk perspective, it's literally over 100x more risky to use a software product made by a venture backed company than one from a solo founder. Yeah, no this is not even close to true (because, as many others have pointed out, death is not the primary risk to a solo founder, funding & motivation are). Unfunded startups fail at a higher rate than venture backed, from what I can find. YC funds solo founders, but advises trying to find a co-founder because the risks are higher. https://www.ycombinator.com/library/7P-does-yc-fund-solo-founders https://www.ycombinator.com/library/7P-does-yc-fund-solo-fou...
- tedmiston 4y ago
  Yeah, the 30% number is way off. The vast majority of startups die off. That percentage is likely 90–95%, maybe even 99%. If you include acquihired teams / sunsetted products, that number is even higher.
tnolet 4y ago
The "dying" of the company seems less relevant than the 1 person company just not being able to deliver the level of service required to compete, be reliable (think support, on call) etc.
grassmudhorse 4y ago
You're looking at the wrong metrics. The risk of using a solo-dev product is them losing interest and stopping support (or as someone else pointed out, not being able to deliver the required level of support). Both types of products also have a chance of being bought for cheap when they are failing, and at least kept alive on life support.
marcinzm 4y ago
>keeping a SaaS startup online doesn't cost anything -- if you have the skills to do it yourself. It costs time (customer support, security updates, deprecations, third party api changes, etc, etc.) and time is a limited quantity for a person. Eventually other things are a better use of their time from either an economic point of view (other ventures, etc.) or a personal point of view (family, etc.).
eternityforest 4y ago
For one reason or another software always needs maintenance. If I were literally keeping a business running solo, getting out would be near the top of my goals list.

kapilkale 4y ago

Is the 100x valid? The odds of a founder dying vs. the chances of a company shutting down seem not apples-to-apples I would guess there are many cases of solo founders shutting down their business other than founder death...

Alex3917 4y ago
> I would guess there are many cases of solo founders shutting down their business other than founder death... Sure, but it really only makes sense to consider cases where: A) The business has paying customers B) It's very important to the customers that this product remain available C) The founder is unwilling to give or license the source code to those customers In practice, all three of these factors being present is uncommon. Usually if the product is actually important to a customer, they just pay to acquire the assets. And there is usually no reason for a solo founder not to take that deal if the alternative is just shutting down the business. For a venture backed business, maybe the lawyers decide there is too much legal risk or whatever. But for an indie hacker, that doesn't happen. We hear stories all the time of folks getting burned when venture backed startups shut down without giving people any time to switch to another product, or sometimes even to expert their data. When is the last time you heard about this happening from the paying customers of a solo founder? Literally never.
- dahart 4y ago
  You’re comparing apples to calculators. Solo founders go out of business literally all the time, every day. I’ve definitely heard of solo devs canceling. It’s also like the entire reputation of the KickStarter experience, pay a solo dev to do something, get nothing in return aside from a bunch of hopeful emails followed by silence or a sorry. Software created by solo devs is used by many times fewer people, therefore it’s zero surprise that the total number of displaced customers is lower. You need to calculate the percentages, not hold up anecdotes of not having any rumors. I don’t see how (C) can reasonably factor into any statistics. I’d love to hear how often you think this matters, but I’m extremely skeptical that shutting down a solo business and giving source to customers has happened enough times to even talk about relative to the number of times that hasn’t happened. I’d like to hear about when giving source to paying customers is even helpful. Depends highly on what kind of software we’re talking about, and depends highly on what kind of customers, but assuming that paying customers can generally do anything with source code seems like a really, really big assumption.

akhmatova 4y ago

Ut's literally over 100x more risky It's clearly not, due to what the sibling commenters have been staying (people discontinuing products for reasons other than dying, etc.) I get the gist of your point but this 100x number is not just hyperbole -- it's silly.

SkilledUp 4y ago

Good point you made. Where did the 30% come from? Whilst I have not kept a list myself, I've seen SaaS products drastically change after acquisitions. Some SaaS products under new ownership stop serving small customers all together and focus on large enterprises. This is as a much risk as shut downs. In terms of Bootstrapped SaaS, what I have noticed since 2004 is that bootstrapped does not mean the companies are operated by a single person. As a bootstrapped SaaS founder, you can start building a team with revenues by hiring team mates. By doing this, you reduce the risk rate for your customers. Until you have revenues to hire talent, you can also bring on free talent from companies like https://skilledup.life https://skilledup.life. This is my latest tech startup. I have also been building subscription based tech products since 2004 with many failures and two Exits. I bootstrapped them all and continue to do so. The biggest issue I have during all these years is lack of capital to build teams. I'm solving my own problem through SkilledUp Life. My team now includes 2 salaried staff and about 20+ Volunteers. We are one solution. But there are many ways to de-risk a bootstrapped SaaS business. All the best Manoj

nxpnsv 4y ago

This is a neat reply. I guess there could be other factors that would lead someone to stop their solo biz though...

Alex3917 4y ago
Sure. For context, this is for a new product that solves a real pain point, and for which there aren't any other solutions on the market. And it also doesn't really cost anything to integrate. If this weren't solving a pain point and if there were other alternatives on the market, then this positioning might not work as well. But building something where folks don't really have any better choice was also a purposeful decision.

javajosh 4y ago

IANAA (I am not an actuary) but surely this can't be the entire computation. Death is only one reason a solo SaaS might fail. The real problem is mental noise, and the fact that large organizations have the positive side-effect of averaging out that noise to produce coherent, predictable actions. (The humanist wants to point out the "noise" is sentiment, artistry, beauty, and the coherent behavior is that of a profit-driven sociopath, but the point stands.) What I'm saying is that their chance of death is .2% but their chance of discovering Buddha, deciding to give up everything and become a monk, or meeting the woman of their dreams and going to live the simple life in Thailand, and so on, are much, much greater.

dokein 4y ago
I don't think one needs to be an actuary to appreciate that comparing the mortality rate of solo founders with the failure rate of VC backed companies doesn't make sense. When he is asked to defend it, he clarifies that he's only talking about companies that solve a major pain point, have no other competitors, and a low cost of implementation. (Obviously the failure rate of VC-backed companies with amazing PMF and amazing operating margins is much lower than 30%!) His comment is the highest voted in this thread (assuming HN sorts that way) -- this is a classic example of 'this person says something I want to believe and has some numbers so I'll upvote it without even a rudimentary interrogation!'
- lazide 4y ago
  We all believe what we need to, or something like that.

codingdave 4y ago

If it is working for you, that is great, but... Death is not the only reason people quit working on a project. They could get a better offer, their family situation could change, they could get sick or injured, or they could simply get sick of it, just to name a few. Also, keeping a SaaS online does cost money. And those costs increase as you scale. If you are small enough that you can run on a free tier, you are too small for me to have confidence that you are sticking around.

jjav 4y ago
> If you are small enough that you can run on a free tier, you are too small for me to have confidence that you are sticking around. AWS has a free tier, so I wouldn't apply that rule too much.
imdsm 4y ago
So long as you're profitable, the revenue should scale too, covering the costs. It's a different approach when you're a solopreneur as you won't be burning money to try to scale rapidly. That being said, there are other risks, like the service being acquired and assimilated, but we face that with all services we rely on really.
rovr138 4y ago
Unless they decide to turn it off, they would just stagnate in features. Regarding it costing money, yes, of course. But costs increases as users increase. If you're giving away your product for free, that's an issue. If you're charging, then I don't see the problem.
horsawlarway 4y ago
> If you are small enough that you can run on a free tier, you are too small for me to have confidence that you are sticking around. There's a lot of truth in this. Particularly since the free tiers on most cloud providers are explicitly designed to suck you in, then raise the rates tremendously as you scale. A business that might be fine with 100 customers on the cloud could struggle mightily to cover the costs of dealing with 1000 customers on the same stack. The linear revenue growth doesn't match up to the insane cost increase as you go from "hobby project" to "small business" in the cloud.

alcio 4y ago

> For your typical solo founder in their 30s, their odds of dying at any point over the next 10 years is something like 0.2% The real figure is more 2.1% (source: https://www.ssa.gov/oact/STATS/table4c6.html https://www.ssa.gov/oact/STATS/table4c6.html)

tdrgabi 4y ago
I'm confused, where does the 2.1% come from. It does look like 0.001795 which is 0.2% for a 30 year old in the source you linked
- vicek22 4y ago
  The number you read is for dying within the next year. The OP said within a decade.
  - kevinpet 4y ago
    OP also said "in their 30s" not "at 30". So I'd use 35-45 rather than 30-40, which shifts it a bit.
    - cupofpython 4y ago
      Since I already have the spreadsheet built for my other comment: 30-39 is 2.1% 35-44 is 2.5% 40-49 is 3.3% --------- 30-49 is 5.3% Ranges are inclusive of entire year. 30-39 is 30th bday to 40th bday
- cupofpython 4y ago
  .001795 for year 30 = .998205 survival this year .001858 for year 31 = .998142 ... .002482 for year 39 = .997518 --------------------- .998205 x .998142 x ... x .997518 = .978997 survival rate over 10 years 1 - .978997 = .021003 chance of death = 2.1%
throwoutway 4y ago
Which is about the same rate that airlines lose luggage. (Unrelated comparison but analogies can help)

PaulWaldman 4y ago

>On all of my sales calls, I tell people that I'm bootstrapped and that I'm going to charge them extra so that I can reduce the risk to their business by staying bootstrapped, and I have yet to run into anyone who doesn't seem satisfied by that pricing strategy. What does this statement mean? Are you implying to your potential customers that charging them extra translates into profits to entice you to continue the business or that the efficiencies allow for business continuity services like providing the source code in escrow?

Alex3917 4y ago
> What does this statement mean? That I'm not going to dump product on the market below cost to gain market share. Since even though doing that is obviously saves customers a little bit of money in the short term, in the long term the money raised to do that needs to be paid back ten fold, which ultimately comes out of their pockets. It's just much easier for a business to keep its interests aligned with its customers if there isn't some third party who is trying to extract money from both.
- alex_suzuki 4y ago
  You must have a pretty compelling product. Mind sharing?
  - deleted 4y ago
    [deleted]

yread 4y ago

That's a good one. I tell them that if they are really worried we can for a price of course arrange access to the sources so that they can maintain it after I die/quit. My clients are not in IT so I'm not too worried about them starting a clone

itsthecourier 4y ago

I will always choose at least a team of two

ransom1538 4y ago

"Whereas the odds of a venture backed startup shutting down at any point over the next ten years is something like 30%." Citation needed. I worked in startups my entire life. I thought it was closer to 90+%.

ezekg 4y ago

I should hire you as my sales guy. I say this same thing often to leads that are worried about my bus factor of 1. Oddly, most of the time its other small businesses that are worried.

dahart 4y ago

> the odds of a venture backed startup shutting down at any point over the next ten years is something like 30%. Where is this number from? Googling, I see numbers like 75% of venture backed startups failing [1] and 90% of all startups failing, most of that within the first year. The suggestion that 70% of venture startups live for at least a decade smells unlikely. [1] https://www.wsj.com/articles/SB10000872396390443720204578004980476429190# https://www.wsj.com/articles/SB10000872396390443720204578004... > from a risk perspective, it's literally over 100x more risky to use a software product made by a venture backed company than one from a solo founder. Yeah, no this is not even close to true (because, as many others have pointed out, death is not the primary risk to a solo founder, funding & motivation are). Unfunded startups fail at a higher rate than venture backed, from what I can find. YC funds solo founders, but advises trying to find a co-founder because the risks are higher. https://www.ycombinator.com/library/7P-does-yc-fund-solo-founders https://www.ycombinator.com/library/7P-does-yc-fund-solo-fou...

tedmiston 4y ago
Yeah, the 30% number is way off. The vast majority of startups die off. That percentage is likely 90–95%, maybe even 99%. If you include acquihired teams / sunsetted products, that number is even higher.

tnolet 4y ago

The "dying" of the company seems less relevant than the 1 person company just not being able to deliver the level of service required to compete, be reliable (think support, on call) etc.

grassmudhorse 4y ago

You're looking at the wrong metrics. The risk of using a solo-dev product is them losing interest and stopping support (or as someone else pointed out, not being able to deliver the required level of support). Both types of products also have a chance of being bought for cheap when they are failing, and at least kept alive on life support.

marcinzm 4y ago

>keeping a SaaS startup online doesn't cost anything -- if you have the skills to do it yourself. It costs time (customer support, security updates, deprecations, third party api changes, etc, etc.) and time is a limited quantity for a person. Eventually other things are a better use of their time from either an economic point of view (other ventures, etc.) or a personal point of view (family, etc.).

eternityforest 4y ago

For one reason or another software always needs maintenance. If I were literally keeping a business running solo, getting out would be near the top of my goals list.