20 ms·

My sixth year as a bootstrapped founder

• willsmith72 3y ago
  wow such a great, honest and open article. i wonder if with sales increasing in spite of the 10% price increase, he could increase it even more. personally i would rather have less fulfilment and a higher profit margin if possible
• Believeben 3y ago
  [dead]
• micola4151 3y ago
  [dead]
• adele4151 3y ago
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• alicanK 3y ago
  Thanks for sharing your journey. Are you worrying that someone can copy the idea and bootstrap a new business with the same product? I checked the product website, there are already other players on the ground.
• mtlynch 3y ago
  Author here. As always, I'm happy to take any feedback or answer any questions about this post.
  • kpw94 3y ago
    No question, always nice to read your yearly updates. Last year looked really promising , your revenue already high but profits not there yet, but I'm happy to see you turned a nice profit this year! Congratulations!
  • W-Stool 3y ago
    Thanks for writing a great summary of year #6 for your business. Question: where do your advertising dollars go and how do you measure their success? Good luck in year #7!
    • mtlynch 3y ago
      Thanks for reading! >where do your advertising dollars go and how do you measure their success? Sorry, but advertising spend is one of the few things I avoid sharing publicly. Most other things about my strategy, I think our execution is what makes the difference, so I don't care if competitors know. With advertising, it was expensive to figure out a successful strategy, and it's the kind of thing that a competitor can copy perfectly. I can talk about measuring their success, though. The metric I focus on primarily is revenue on ad spend. Material costs make up about 33% of the revenue from TinyPilot's product sales, so if we get $1.50 for every $1 we spend on ads, we'd end up about breakeven ($1.50 from revenue - $1 for the ad - $0.50 for materials), so I aim to be at 2.25 ROAS or higher on any channel so we have a comfortable margin.
  • havefunbesafe 3y ago
    Why the sharp drop in adspend?
    • mtlynch 3y ago
      Good question! I actually hadn't noticed it changed that much, but you're right. The biggest difference was that in 2022, I hired a paid ads consultant to set up ads automation for me on a few different platforms. That had a high up-front cost, but then it was inexpensive to maintain those ads in 2023. I also spent money experimenting on more channels in 2022, so in 2023, I cut out spending on the ones that weren't earning a positive ROI.
      • mardifoufs 3y ago
        Could you share platforms/channels were more profitable/worth it and which of them weren't? I love your blogs btw!
      • kansi 3y ago
        If possible, could you please the website for this ads consultant?
  • thomastay 3y ago
    Hi mtlynch, I just wanna say that your post brought back a lot of memories for me. I distinctly remember reading your original post back in 2018. I remember feeling that I really hoped you would succeed since your complaints were so authentic. When I was reading this post, I was like - wait, i think i remember this post - and it's you! Happy to hear that you've made it with tinypilot
    • mtlynch 3y ago
      Thanks for reading, and that's really nice to hear. That quitting Google post ended up being more popular than I ever expected, so from time to time, people tell me, "Oh, you're that quitting Google guy. Glad it worked out!"
  • lesuorac 3y ago
    Have you thought about expanding into the void left by SlingBox? https://en.wikipedia.org/wiki/Slingbox https://en.wikipedia.org/wiki/Slingbox
    • mtlynch 3y ago
      No, that's an interesting idea. I don't know that much about that market, but I guess it seems like a bad sign that SlingBox couldn't make it work even with dominant market position.
  • philipwhiuk 3y ago
    How detailed is your time tracking in terms of what you actually did (not the mythical calendar/plan/TODO list)? You're not going to get down to 20 hours a week without identifying the chunks of time you're doing and essentially outsourcing it to someone on the Tiny Pilot team (or removing yourself from meetings).
    • mtlynch 3y ago
      I think detailed tracking can be helpful, but I don't think it's necessary. I reduced time I spent on TinyPilot in 2022 even though I don't have rigorous time tracking to prove it. Do you have recommendations for granular time tracking? I don't know of any tool that seems like it would do what I want. I know there are tools that track your active window, and I'm not crazy about the privacy aspect of those, and I don't think window titles map perfectly to activities. And then I could manually log every hour of my day, but I feel like the time I'd spend bookkeeping aren't worth the insights I'd get from it.
  • testmasterflex 3y ago
    Always interesting to follow your progress Michael! I managed to sell 100 units last year and feel ashamed compared to your numbers but hey it’s better than the nothing of the previous year!
    • mtlynch 3y ago
      Nice work! I think units sold varies so much by business, so no need to feel shame at all. Selling 100 units per year is a nice spot to be in because you're making sales frequently enough that you probably have some knobs to adjust and see what impact it has on your results, and that makes it so much easier to improve. That's why I've always been afraid of businesses that rely on enterprise sales, where you're going for 3-4 big deals per year, and the sales cycle is 6-18 months. It seems so hard to know whether you're doing well or poorly until it's too late.
      • testmasterflex 3y ago
        You’re right. I find you very inspiring Michael. Your writing has given me a lot of new ideas on a crossroad I’ve been stuck at recently.
  • byteflip 3y ago
    Wow, super inspiring. I've coming up on a crossroads where I'm considering leaving my high-paid low-pressure cushy remote job at some big tech company to chase some silly ideas I have. The timing feels right - but I can't help but be fearful of a jump without any sort of indication on whether I can actually pull that off. Thanks for the transparency and sharing - you've got a new fan!
• skrebbel 3y ago
  Wow that’s a seriously cool product!
• marklubi 3y ago
  So good to see some actual Startup News on here. I miss the old days of this site when things were more optimistic and less click-bait.
  • BadHumans 3y ago
    [flagged]
    • abfan1127 3y ago
      in what sense is it getting worse? While there may be local minima, I'd argue that its the best its ever been. News has always been pessimistic because negative emotions are easier to trigger to drive attention which pays the bills.
      • spencerflem 3y ago
        Whether the world as a whole is getting worse is debatable, but I think it's very clear that tech companies are
        • WrongAssumption 3y ago
          Is it clear? Microsoft of old? IBM of old? AT&T of old? Juggernauts with abusive monopoly power that tech companies today could only dream of.
          • uoaei 3y ago
            I'm getting visions of that New Yorker cartoon about shareholder value but it's just a techie in Allbirds saying "is it really worse, tho?"
          • zilti 3y ago
            Apple, Google, Amazon are every bit as bad, and Microsoft is still up there, too.
• yakito 3y ago
  Very interesting, Michael, thanks for sharing! As a founder and bootstrapper myself, I really relate to parts of your post (well, not so much to that 2000% jump in profit... haha, maybe one day). I'd like to understand the steps leading up to these six years. What motivated you to create that particular product? was it simply something that interested you and that you believed had potential? What was the goal when you created TinyPilot? Thanks!
  • mtlynch 3y ago
    Thanks for reading! >I'd like to understand the steps leading up to these six years. What motivated you to create that particular product? was it simply something that interested you and that you believed had potential? What was the goal when you created TinyPilot? Thanks! It was a "scratch my own itch" kind of path. I had a home VM server[0], and any time I messed up its network settings or wanted to install a new OS, it was a huge pain to drag it over to my desk, disconnect my main desktop from my monitor and keyboard, swap everything over to the server, and then put everything back how it was. I saw an article about how Raspberry Pi could emulate a keyboard, and I tried that out and got it working.[1] And then I felt like there had to be a way to capture video and stream it too, and I finally found a way to do that. I came in at a lucky time because people had been experimenting with Raspberry Pi as a KVM over IP for years, but there weren't great video capture options. But right as I started looking, these cheap HDMI to USB dongles appeared on the market,[2] which made it cheap and easy to build a v1. In the beginning, I thought it was too niche to be a real business, but it got a positive response when I launched on HN,[3] and more and more people kept buying, so I stuck with it. [0] https://mtlynch.io/building-a-vm-homelab/ https://mtlynch.io/building-a-vm-homelab/ [1] https://mtlynch.io/key-mime-pi/ https://mtlynch.io/key-mime-pi/ [2] https://mtlynch.io/tinypilot/#hdmi-to-usb-dongle https://mtlynch.io/tinypilot/#hdmi-to-usb-dongle [3] https://news.ycombinator.com/item?id=23927380 https://news.ycombinator.com/item?id=23927380
    • yakito 3y ago
      Thanks a lot! Also, nothing new, but I am new to your blog and I love how you document everything! You need to write about writing one day ;)
• probotect0r 3y ago
  I really enjoy these updates! Thanks for putting out the numbers.
• annoyed_eng 3y ago
  I've really enjoyed following your story for years. Thanks so much for your transparency. I wish you lots of continued success.
• belter 3y ago
  I have two of these and can say it's a great product with great support by the creator.
  • mtlynch 3y ago
    Thanks so much! I'm really glad to hear that. I take the support really seriously because I get so frustrated with most companies' customer service and technical support. When customers contact TinyPilot, I always want them to feel like they're talking to a real person who's knowledgeable and making real effort to help them. It's nice to hear that this comes through in the experience.
• thdaraujo 3y ago
  That's very cool, Michael. Really great to see your business doing well, congrats! Really interesting to see that adding a metal box and making the product more premium made a huge impact on revenue. Have you run any pricing experiments after that?
  • mtlynch 3y ago
    Thanks for reading! >Have you run any pricing experiments after that? No, I haven't tinkered with the price much for the past few months. I have a hard time doing price experiments because at my volumes, I have to collect a few weeks of data before I think the evidence is strong, and I don't have a good way to A/B test different prices in parallel, so it's easy for two different time periods to have different results independent of price. I've also found that there's a lot of friction around changing prices too frequently. When I reduce prices by a significant amount, we get emails for a couple of weeks after from people who are annoyed they paid a higher price just before a reduction, so I've been reticent to invite those complaints. I don't have strong evidence for it, but $399 for base and $499 for premium "feels" right because they're round numbers and they're close to optimal based on different prices we've tried.
    • dheera 3y ago
      > we get emails for a couple of weeks after from people who are annoyed they paid a higher price just before a reduction What if you just explicitly guarantee a price match for say 30 days? People would feel safe and you can do your experiments.
      • mtlynch 3y ago
        Yeah, I think there are ways we can do it. It's just that with every hoop to jump through and layer of friction, it makes it a little less appealing than other paths to increase revenue, so I end up not doing it. I think it's very possible that my prices are suboptimal, so I will think more about how I can do some price experiments while minimizing the downsides.
• m3kw9 3y ago
  Looks useful
• seidleroni 3y ago
  That's a really cool product! The only thing I would love is a way to zoom into the product pictures on the site.
• theusus 3y ago
  How did you manage stress/depression during the time? I am thinking of going down the same path. Which tools do you use for sales and marketing?
  • mtlynch 3y ago
    Thanks for reading! >How did you manage stress/depression during the time? I don't think I ever reached the point of depression, but I definitely had bouts of severe stress and anxiety about the business. Some things that helped me were: - Having a supportive partner - Forming a meetup group and talking to other founders who have had similar struggles - Committing to a work schedule where I'm working or not working and avoiding looking at work things during non-work hours - Separating my work email to a whole separate account and disabling push notifications so that work doesn't intrude into my non-work hours - Using a GTD-style to-do list so I'm not carrying around a mental task list - Starting my day by sketching out my schedule in 30-minute blocks so I have a good idea of what's achievable that day - Scheduling time to exercise 3-5 times/week - Reading Dale Carnegie's "How to Stop Worrying and Start Living." Carnegie books are all kind of hokey-sounding, but I find some of his lessons really effective.
• huhtenberg 3y ago
  Fantastic product site. Clear, concise and good looking. Kudos. * /r/tinypilot link in the footer leads to a locked sub, so it's kinda pointless.
  • mtlynch 3y ago
    Thanks for reading! >/r/tinypilot link in the footer leads to a locked sub, so it's kinda pointless. Oh, thanks for catching that! I've been unhappy with reddit's direction ever since the 3rd-party APIs meltdown, and the subreddit was scattering our support resources, so I shut it down. We have a dead link check as part of the build, but I guess it wasn't picking up an HTTP error from the locked sub. I've just removed it!
• beoberha 3y ago
  Man this is really cool. The transparency is awesome. Shipping a hardware product as a bootstrapped founder sounds (at least) an order of magnitude harder than a software product. Edit: oh and congrats on the success this year! I’d have to imagine it feels insanely rewarding!
  • mtlynch 3y ago
    Thanks for reading and for the kind words! >Shipping a hardware product as a bootstrapped founder sounds (at least) an order of magnitude harder than a software product. Yeah, it ended up being way harder than I expected. I actually didn't even mean to make a hardware product. In the beginning, I thought people would just buy off-the-shelf components and pay me to make nice software to tie everything together. It became pretty obvious early on that people were a lot more interested in a pre-made hardware solution than a DIY project with ready-made software. And I'm glad I made it to the point of profitability and worked hard at it, but I also definitely got lucky a lot. There are so many more existential threats to a hardware business, especially in the early days.
• moneywoes 3y ago
  Love this blog. Any other similar blogs or communities?
  • mtlynch 3y ago
    Cory Zue writes about similar topics, and I draw a lot of inspiration from him: https://www.coryzue.com/ https://www.coryzue.com/ Suket Karnawat also left Google to pursue a similar path, and he writes regular updates about his progress: https://suketk.com/ https://suketk.com/
  • waprin 3y ago
    I have a similar blog / newsletter on trying to bootstrap a software business called “Road to 10k MRR” : writing.billprin.com I’m definitely a huge fan of mtlynch and was very inspired by his transparency especially around year 2 when he was pretty far in without much working. I’d also recommend Jon Yongfook who bootstrapped an image generation api for social media marketing to 50k as well. Tony Dinh is also a must read. I actually have a notion database with a bunch of other bootstrapped bloggers but on the go at the moment. For communities, Indie Hackers is the best known one, though there’s many others, Microconf, smallbets , etc
• clukic 3y ago
  Your home page/blog is by far the cleanest, fastest, and most functional I've seen. Can I ask what you use to publish it? I can't find any reference to a platform in the HTMl source (which is amazingly clean BTW).
  • mtlynch 3y ago
    Thanks for reading! Edit: Sorry, I just realized you meant my blog, not the TinyPilot website. My blog is just Hugo + Netlify, and the source is public.[2] -- The web tech stack is actually one of my biggest regrets. It's a static site generator called Gridsome[0] that the maintainers abandoned about three months after I used it to launch the TinyPilot website. At the time I made the TinyPilot site, I was very excited about Vue, so a Vue-based SSG seemed great. Since then, I've come to find SPAs and most frontend frameworks to be way too much complexity, so I've moved away from Vue, but the TinyPilot website is still stuck on Vue 2.x and bootstrap-vue (which is tied to Vue 2 and Bootstrap 4). So, it keeps creaking along, but building the 100ish pages on the site takes about five minutes, whereas I think something like Hugo could probably do it in a few seconds. Plus, we get random runtime errors[1] that are pretty hard to debug. [0] https://gridsome.org/ https://gridsome.org/ [1] https://github.com/nuxt/nuxt/issues/5800 https://github.com/nuxt/nuxt/issues/5800 [2] https://github.com/mtlynch/mtlynch.io https://github.com/mtlynch/mtlynch.io
  • deleted 3y ago
    [deleted]
• lbhdc 3y ago
  This was such a great post. I read last years as well, and it was super interesting to see how things evolved. I am curious about your ad spend. I noticed that it dropped 24%. Can you talk about your strategy for marketing your business?
  • mtlynch 3y ago
    Thanks for reading! >I am curious about your ad spend. I noticed that it dropped 24%. I added a few more details about that in a different reply: https://news.ycombinator.com/item?id=39398746 https://news.ycombinator.com/item?id=39398746 >Can you talk about your strategy for marketing your business? For the first two years, I was primarily reaching out to bloggers and YouTube creators that I liked. TinyPilot appeals to people in the homelab / IT prosumer community, and I've been involved in that space for a few years, so it always felt like a pretty organic way to get the word out. There have been diminishing returns to that strategy, though. When we got our first big review, our sales nearly tripled overnight.[0] At the time, we were the first affordable KVM over IP on the market, so YouTube creators were very excited about to be able to break a story about it, and their viewers were excited to buy our product. Since then, we continue to work with reviewers, but even high-quality reviews don't get that many reviews because we've been around for a few years and there are similar products like ours. We've been experimenting with new channels, but nothing has been a huge hit. One of the things I'm trying to do is talk to bloggers and YouTube creators about doing projects with TinyPilot rather than just reviewing it. We had one a few years back,[1] and I think there's potential for new interesting use-cases for TinyPilot through experiments, but I haven't found anyone with a good idea yet. It seems like our most successful channel has been word of mouth. I think it's a result of putting a lot of effort into customer service, so our customers feel good about working with us and tell other people about the product. [0] https://mtlynch.io/retrospectives/2021/02/#tinypilots-first-youtube-review https://mtlynch.io/retrospectives/2021/02/#tinypilots-first-... [1] https://tinypilotkvm.com/blog/dslr https://tinypilotkvm.com/blog/dslr
    • digikata 3y ago
      A feature that would have been useful from my IoT / embedded device development days would be the ability to fully turn power on/off of with usb port from software. It's nice feature for automated test and dev of embedded devices. Sort of adjacent to your kvm focus, but I suspect your h/w might not too far off from being able to support that use. A full A/C plug pwr control is useful too, but a much bigger hardware delta.
• slovette 3y ago
  I run an IT firm. Pretty sure you’ve solved a huge problem with remote hardware diagnostics for us. Ordered one for test. Thanks for making this.
• nadermx 3y ago
  "I realized that the dominant factor was the size of our codebase. We have three times the code that we did three years ago. And every line of code requires time to maintain. So, if I keep the number of developers fixed but increase the size of the codebase, then a higher proportion of our time must go to maintaining old code." That part is so true. Even trying to make everything systematic has a cost.
• jurgenkesker 3y ago
  Very nice blog and just overal awesome to read.
• afry1 3y ago
  Congrats Michael! I've been following along with your story on and off since 2019-ish, very cool to read about how things are getting along.
• gnicholas 3y ago
  Does the payroll figure include a salary for yourself? If so, that would make the jump in profitability even more impressive!
  • hapidjus 3y ago
    From the article: I don’t draw a salary, so the total amount I earned from TinyPilot in 2023 was $236k.
• dannyw 3y ago
  Try offering an affiliate program if you haven't already. It can increase your sales drastically and you only pay for the results.
  • mtlynch 3y ago
    I did try that for a while and still have a couple of affiliates, but it wasn't that successful. It could be that I just didn't invest in it enough for it to work. One of the biggest obstacles was that I hated all of the affiliate apps on Shopify. They all require all your customer data (email, names, shipping addresses), and most of them have privacy policies that grant themselves very broad permissions with user data. I refused to give up our customer data like that, and so we rolled our own by hand, but it's very manual, so the only way for affiliates to find out their earnings is when I manually run a script and pay them once a month.
• ein0p 3y ago
  FYI: You can’t “not draw a salary” and get that profit out of the company. IRS mandates that you pay yourself a reasonable amount, and pay (eye watering amounts of) taxes on that amount. You can’t circumvent any of that by just taking everything as distributions.
  • mtlynch 3y ago
    Are you sure you're not thinking about corporations? TinyPilot is a single-member LLC, so all the income is on my personal tax returns. When I said I don't draw a salary, it was to prevent confusion about whether payroll includes me.
  • tgtweak 3y ago
    I don't think there were any insinuations that that was after-tax income in his personal bank account - just that the company earned that much in the previous year and it could be paid out (dividends or otherwise) after much in the way a gross salary would be.
    • ein0p 3y ago
      For single person LLC (as the OP said) it doesn’t make any difference - they’re paying all taxes on the entire amount and then just deducting business expenses. IOW their business account does not require any special treatment. For corps (including S corp) there’s often this temptation for the founders to pay themselves the bare minimum and skirt some of the taxes (social security for example). I was pointing out that this is a good way to draw unwanted attention.
• tgtweak 3y ago
  I think people (and the founder) are focusing on yearly profits as their remuneration and comparing it to a salary... but the reality is you're creating a company that should be valued (and eventually sell) for 7-15X Earnings - and you really should be looking at that increase in value vs your increase in profits. In reality your net worth went up by over $1.5 million in the last year, in addition to earning 236k - that is the actual value you created for yourself in the last year and not the 236k you cashflowed. I find it redeeming that despite having a gift for development - software and hardware - the biggest factors affecting profitability and growth here are things that most MBAs would do in a business quite regularly (outsourcing design/packaging/fulfillment, streamlining costs, doing price elasticity experiments, polling customers and markets for product improvement). I enjoyed seeing the inverted perspective that product/engineering is straightforward and low risk but things like optimizing fulfillment and operating costs is a new exciting endeavor. One tip I suggest doing is leveraging google ads to figure out features that customers are willing to pay for before you build them... if they're clicking the ad they are searching for it and interested in buying it. Start a few very low cap campaigns calling out features you are thinking of building into the product, and see which one get's the most impressions and clicks per marketing dollar and focus on that. The added advantage is you know it will be easier to buy advertising for it once the feature is done.
  • dustingetz 3y ago
    10x rev valuation is for high margin saas growing at 3x y/y in a massive TAM where incremental capital injection results in predictable rev growth
    • tgtweak 3y ago
      10x ebit is not 10x rev - I think hardware startups that can demonstrate economies of scale and straight line growth on advertising + additional product segments and markets are catching very healthy valuations still - not saas levels but large saas companies are pushing way more than 15x ebit.
      • throwaway2037 3y ago
• tomashertus 3y ago
  I admire the level of insight and transparency. Congratulations on an amazing year, and keep swimming!
• bytemonitor 3y ago
  Nice job, respect!
• tech_ken 3y ago
  Nice work!! It's extremely motivating to see someone succeeding on this route, and especially with a hardware product. Did you start with any hardware foundations? Or was it something you had to learn as you pivoted? As an aside, this is such a nifty product! Don't personally have a use for it (yet), but it definitely evokes gear lust.
• chaosprint 3y ago
  This is a really informative and inspiring article. It has been 6 months (not 6 years) since I quit my full-time job as a Rust developer to start my own business. As time goes by, I can feel the pressure of mortgage and car loans, and I can also feel the care and pressure of my family. My original plan was to make a new IDE for Glicol (https://glicol.org https://glicol.org), and to develop relevant hardware with firmware written in rust for school education. I sent some cold emails to VCs, but most of them got no reply. I also sent an email to the Norwegian Museum of Science and Technology, offering to perform for children for free, but they didn’t reply for two months. I shamelessly sent it again, and someone finally replied with a rejection. Only one VC talked to me and thought that I should convince and validate a partner first, and he suggested that I go to an incubator. Very good advice. Later I learned that even Norwegian education startups skipped Norway and focused directly on the US market. People from the incubator also told me that it is impossible for Norwegian schools to accept new things independently. This is very enlightening to me because most of Glicol's visitors are indeed from the US. And it took me so long to discover this fact. But if I don’t start, I’ll never get past those six months.
  • CodeWriter23 3y ago
    A deceased friend and I tried something like glicol in the mid-80's. We hacked a different crystal oscillator on a Zilog SCC board design donated by our employer to make a MIDI interface. My friend coded 'lxm', Language for the eXpression of Music. My job was to 'mxl', Musically eXpressed Language - to capture from the Juno 106 we were developing with. We weren't able to market it at that time. For your project, maybe find a US-based partner, there are plenty of Magnet and Charter Schools that can independently develop curriculum for non-core subjects. A possible way in is to find ones with a PTO (not PTA), the parents can drive this sort of thing. PTOs are independent corporations that serve one or a few schools whereast PTA is a top-down org and they are not the place to try to drive innovation IMO. The way I think about investors, they are an extremely high interest loan. I have a money partner in my startup, I negotiated his equity down to 70% from the 80% he wanted. So if this product hits (already have a regular customer) and makes a million, he'll get $700K for investing less than $100K. I'll get $300K for investing probably about $300K worth of my own time and hand half of that to the IRS. Balance that with keeping 100% of $0 = $0.
• ttcbj 3y ago
  Congrats! Not sure how many employees you have, but as you get into the $200-$500k owner discretionary earnings level, definitely take a look at small business retirement plans. If it is just you, or just you and a family member, you can use something like a Solo401k to defer up to $69k in earnings to retirement accounts. The “personal” side of that (like $22k) can be Roth.
  • yieldcrv 3y ago
    I think its prudent for anyone to form a solo401k plan, you can have them attached to yourself as a sole proprietor and separately attached to a company you form I dont have the type of income to contribute to it EVERY year, but even if you use an employer’s 401k you can roll it over into yours as soon as you leave or are eligible solo 401ks remove all the guess work and limitations of your other employer’s random plans. you can invest in anything, not just random vanguard mutual funds, you can borrow against them instantly instead of however long the bureaucratic machinations take, you dont have to ask anybody - people that dont know the answers that they should know and most importantly, the annual contributions are just the first step, it grows tax free and should vastly exceed your contributions. once it independently has a big enough net worth it can be an investor in private equity and hedge funds’ feeders and be ready for some large moonshot bets or losses. but remember, if you equate retirement accounts with the least risk possible, generic advice gets generic results. its more important that it grows tax free. not advice, just what I do.
  • mtlynch 3y ago
    Thanks! I'm currently contributing roughly that amount into a SEP IRA.
• DrNosferatu 3y ago
  Curious about your Zig book!
  • mtlynch 3y ago
    Cool to know that there are people interested! I'm still a Zig beginner, but I'm hoping there are enough Zig-curious folks to support a book or course.
• hermitcrab 3y ago
  Congrats. Selling hardware+software sounds a lot more stressful than selling just software. I hit 20 years as a solo bootstrapper in 2025.
• system2 3y ago
  I remember reading the Tiny Pilot website redesign[1] and feeling the pain. I am glad you finally took care of the bleeding and turned a good profit. I wish you to reach 7 figures this year. [1] https://mtlynch.io/tinypilot-redesign/ https://mtlynch.io/tinypilot-redesign/
• pdq 3y ago
  General question when running a single member LLC: how do you determine how much to take as salary versus business profit, and how does that affect your taxes? I'm guessing tax liability is mostly a wash, as if you are taxed as an S-Corp, you pass through the profit into personal income and pay income tax on that.
  • ao98 3y ago
    That’s very much a talk to your CPA question - because it speaks to audit risk. The IRS wants to see you pay yourself a fair salary so you are paying the appropriate payroll taxes, social security, medicare, etc. The problem is “fair” is somewhat subjective and depends on the profitability of the business as well. I’m sorry this isn’t a clear answer, but it’s just not a clear matter. Seek advice and ask “how would you defend this stance in an audit”.
  • dugmartin 3y ago
    There is no difference in a single member LLC. All profits from the LLC pass though as income which is ultimately taxed at the same rate as salary (including SSI, Medicare, etc).
• dmezzetti 3y ago
  Really nice story with great details. I've been building NeuML (https://neuml.com https://neuml.com) for the last few years. It all depends on the situation but if you need to replace salary, then of course cash flow is important. It can't just be about the future value, you have to live. With that being said, I like to look at it as similar to renting vs buying a house. In both cases, there is cash flow except with buying you are also building equity. For those interested in more about NeuML, I published this year-in-review last month: https://medium.com/neuml/neuml-2023-year-in-review-560457b97fdb https://medium.com/neuml/neuml-2023-year-in-review-560457b97...
• renewiltord 3y ago
  Huh, interesting. I used the PiKVM product for the same purpose. This is very cool. This is a pretty cool product.
• JonChesterfield 3y ago
  Their tinypilot kvm works. It's in the category of boring infrastructure - I leave it plugged into whatever machine is currently in need of attention and `https://tinypilot/ https://tinypilot/` connects to it. Little box hanging off the PoE switch, much less bother than plugging a keyboard and monitor in. Especially so when I'm away from the office. Recommended. Saved me a lot of hassle. Thanks for the product! I'd like to be able to power cycle the attached machine but that seems inherently messy to implement.
  • tgtweak 3y ago
    It's a good idea for a feature - many other out-of-band solutions have this. I think the issue comes mostly in that you would need to unplug the server to add (and remove...) some kind of relay-controlled power interrupt. I would assume that most users of this are in a rack/datacenter/server environment and have switched PDUs they can remotely trigger power with, and it might make more sense to build in PDU management as a software feature over the network than try to reproduce the hardware functions. Would be kind of cool to have a C14 input plug on the device and a C13 out beside it that goes to the server/device, then you can put an relayed interrupt inside it and also an ammeter clamp to measure power draw and detect drops or spikes in device power - for those systems that don't have built in IPMI already.
    • justsomehnguy 3y ago
      And noone[0] whould allow to use that in a DC because this is now a high-voltage device what can be source of fire, shock and death. You need a certification for this kind of tech and it's not cheap. [0] of course most of time it would just go under the radar, but you can find yourself in trouble, especially if the device malfunctions
    • JonChesterfield 3y ago
      This thing https://www.audiophonics.fr/en/diy-kits-and-boards/audiophonics-trigger-12v-230v-slave-power-supply-device-p-10661.html https://www.audiophonics.fr/en/diy-kits-and-boards/audiophon... is a C13/C14 block with a 3.5mm control. AC power on if 12V minimal current applied via the 3.5mm, otherwise off. I haven't got around to it yet but my sketchy DIY idea is power-over-ethernet into a splitter into that. That'll power off the server when the switch port is turned off. Strangely I haven't found a relay in the same packaging anywhere else.
• solutionyogi 3y ago
  Michael, You are an inspiration. I have been following your journey since your post about quitting Google hit the HN front page. And what a wild ride it has been. You tried many projects (https://mtlynch.io/projects/ https://mtlynch.io/projects/), and it took a while for you to find your winning idea. And I have read each of your retrospectives on TinyPilot (https://mtlynch.io/retrospectives/ https://mtlynch.io/retrospectives/) and know that it wasn't easy. Your journey shows how hard it is to build a business (especially hardware-based), but with discipline and perseverance, it's definitely possible to create one as a solo founder. I also have a business idea that I would like to work on, but I am not ready to quit my full-time job yet. I have a few questions for you: 1. Have you always been so disciplined in life? If not, how did you improve it? 2. As you shared here (https://mtlynch.io/solo-developer-year-1/ https://mtlynch.io/solo-developer-year-1/), doubts are natural when you haven't succeeded yet; how did you keep going? Did you ever come close to giving up and going back to corporate America? 3. I believe you have a partner; how did this affect your relationship with your partner? 4. Knowing what you know now, what would you do differently? If you are ever in NYC, please hit me up; I would love to buy you a drink and chat more in person.
  • mtlynch 3y ago
    Thanks for reading and for the kind words! >Have you always been so disciplined in life? If not, how did you improve it? No, I was a lot less disciplined when I was younger. I remember as a teen trying to learn Java several times and always getting bored a day or two in. I was a good student, but I would procrastinate work and distract myself while working. I probably became more disciplined in my twenties, but I unfortunately don't think it was something I tried to do as much as it just happened. One thing I think helped was protecting my focus more. I used to hop between different tasks a lot and constantly check social media or email if I had a moment of downtime or boredom, so I became more aggressive at stopping that.[0] I also found the book Deep Work by Cal Newport to be helpful in staying more focused.[1] >As you shared here (https://mtlynch.io/solo-developer-year-1/ https://mtlynch.io/solo-developer-year-1/), doubts are natural when you haven't succeeded yet; how did you keep going? Did you ever come close to giving up and going back to corporate America? I went into it with the expectation that it might take 3-5 years for me to find a successful business, so I think that was helpful. I've spoken to other founders who feel disappointed that nothing they're doing is working because they were expecting success to come quickly. I definitely did worry that I wasn't cut out for being a founder and that my skills made a lot more sense for a big tech employee. The thing I found comforting was reading stories and listening to podcast interviews with other founders where they talked about how many failures they had before they landed on the right business. I never came close to going back to a corporate job because I knew I had enough savings to last me, but if my financial situation had been different, I might have given up before I landed on something that worked. >I believe you have a partner; how did this affect your relationship with your partner? There are lots of effects in different directions. Me not having a regular job means that my income is less consistent and certain, and she absorbs some of the risks I take. I also feel like I'm not a good partner when I'm stressed a lot about work, and so part of my motivation in de-stressing the business has been to be a better partner in my personal relationship. >Knowing what you know now, what would you do differently? I wish I'd done educational products ("info products") earlier. They're like a microcosm of the experience of launching a product because you have to find customers, pitch to them effectively, and then deliver something they'll want. Like you can do that whole cycle in a month, whereas it would probably take 3-10x that long to do it with a SaaS. I made my first course right as TinyPilot was getting traction, and that course made more than anything I'd done in the previous three years.[2] [0] https://mtlynch.io/eliminate-distractions/ https://mtlynch.io/eliminate-distractions/ [1] https://mtlynch.io/book-reports/deep-work/ https://mtlynch.io/book-reports/deep-work/ [2] https://mtlynch.io/solo-developer-year-4/#hit-the-front-page-of-hacker-news https://mtlynch.io/solo-developer-year-4/#hit-the-front-page...
• howon92 3y ago
  Thanks for sharing your experience!
• wenbin 3y ago
  Congrats on the incredible journey, Michael!
  • mtlynch 3y ago
    Thanks so much, Wenbin! It's been really fun following your journey with ListenNotes as well!
• hansonpeter 3y ago
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• nox101 3y ago
  Looking at the device, is it common to have a kvm that can't power cycle the computer? I often need to power cycle mine and was wondering if this was a solution for when I'm away
• rexreed 3y ago
  Looks great. As a note I don't count credit card rewards as revenue, but rather I count it as an offset to expenses. In this way, rewards don't add to the top line, but rather improves the bottom line. Basically I consider it a way to discount my expenses, or as a negative expense. The reason is because those rewards are linked to expenses. If you spend more, you get more rewards. Spend less, you get less. You can't increase rewards (generally) without increasing expenses. So I see it as a way to discount or reduce expenses vs. increase the top line. Long story short, if you see your rewards increasing 10x that means you've increased expenses some factor of 10x which isn't so great. You could list rewards under the "Everything Else" line of expenses as a negative expense in red. The result will be the same on the bottom line but it won't be misleading the top line, which should be driven as high as you can. Also those cloud expenses look significant. That looks like an 80% increase year-over-year which is substantial. Is there a way to shave off a significant amount by moving to a different method for architecture? Or will that break your system? I worry about rapidly growing cloud expenses especially when you're not that huge of a company. Finally I'm curious about those dividend earnings! Living off them is great, especially as you were doing so in the lower-interest rate years. Can you share insights in the high yield dividends you're earning that are also low risk enough that the underlying investment value doesn't erode?
  • codegeek 3y ago
    Agreed. You should not include rewards as revenue. That is incorrect and misleading. I get lot of credit card rewards for our business but it is definitely not revenue. If anything, some accountants will argue that it is actually an income for yourself if you redeem them.
    • jjeaff 3y ago
      Unless this has changed in the last few years, credit card rewards are non-taxable income. you can personally keep the rewards and not claim this as income. I'm pretty sure this is still the case because if it wasn't my cash back card would be sending me a 1099.
  • mtlynch 3y ago
• snarfy 3y ago
  > I had savings in index funds from years working in big tech, and those investments generated enough dividend income to sustain me. How big would that savings account need to be for these dividends to amount to something substantial to live off of?
  • aledalgrande 3y ago
    650+ according to his expenses
• celestialcheese 3y ago
  Weird to see CC rewards as income. If you're taking cash-back or applying to balance, I'd move to a points-based rewards card ASAP now that you're making money and don't need it to live off of. Our business has a significant amount of cc spend because of ad networks that don't charge processing fees, and high CC limits acting as nearly free lines-of-credit. This generates something like ~$100k annually in points value for us. We got some opinions from a few tax attorneys and CPAs a while back on how to handle this, and the consensus was clear that as long as points stay in the programs and are redeemed for flights/hotels/etc, they won't need to be recorded as rebate to expenses or as income. Applying the rewards against your balance should be recorded as rebate against expenses rather than income. Also, worth noting that some cash back programs have started issuing 1099s, depending if it's a "Bonus" or percent of spend.
  • abi 3y ago
    I was curious about this as well! Thanks for sharing your research.
  • ilamont 3y ago
    > Our business has a significant amount of cc spend because of ad networks that don't charge processing fees, and high CC limits acting as nearly free lines-of-credit. This generates something like ~$100k annually in points value for us. Same for us. One of the business cards we use gives 5x rewards on online ad spend, which translated to lots of free flights and hotel rooms over the years. During the early part of the pandemic when points were not usable, we converted them to cash or credited them to existing expenses (the card gave a 25% bonus to use this feature).
    • celestialcheese 3y ago
      > During the early part of the pandemic when points were not usable, we converted them to cash or credited them to existing expenses (the card gave a 25% bonus to use this feature). Man this was one of the biggest silver linings on the pandemic. Chase allowed groceries and home improvement purchases to be paid for with points. 1.5x redemption. Paid for all the materials for my home renovation with them.
• mixmastamyk 3y ago
  Great project. Got me thinking that we all have these management systems in our computers now (intel me vpro, amd psp) potentially compromising privacy. But, they don't appear to be useful in remote management. To the extent that this external device is necessary. Is that correct and/or why?
• magnetDD 3y ago
  Am I shadow banned?
• software0to1 3y ago
  If you or someone from this community with successful background are willing to mentor our startup, we will give meaningful equity and mutually agreed compensation. We are struggling to find ICP. We built an MVP but interest has faded away from early customers. We know problem exists because large players are solving it. Either our message and who we are reaching out for sales is wrong or our product approach is wrong. We need guidance. Email in profile if you are interested in mentoring us.
  • prawn 3y ago
    There is no email in your profile.
• nikisweeting 3y ago
  So happy for you, thats a wonderful milestone! I love especially that you share all the nitty-gritty details that so many would hold back (e.g. raw revenue/profit numbers, where bootstrapping savings came from, failures along the way, etc.). It's so important for people to share success stories without sugar coating the difficulties, good, undiluted positive feedback provides so more information than generic negative posts like "VC funding sucks". https://monadical.com/principles.html#:~:text=telling%20someone%20a%20solution%20is%20bad%20or%20wrong%20doesn%E2%80%99t%20contain%20much%20information https://monadical.com/principles.html#:~:text=telling%20some....
  • mtlynch 3y ago
    Thanks so much, Nick! Really great to hear from you!
• vander_elst 3y ago
  Thanks for the write up and congrats!! Sorry for asking, but genuinely curious, assuming you wouldn't have had some savings on the side, would have you started in the first place? How would the lack of backup have impacted the journey from your perspective?
• idealboy 3y ago
  I’d never heard of KVM before. I had to Google it before I figured out what KVM over IP meant, but once I got it I want to get it. Maybe add something on the homepage for folks that’ve never heard of KVM?
• jebickett 3y ago
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• andrewstuart 3y ago
  >> Would circuit boards work after being drenched? Probably not. Here is Adrian's Digital Basement putting computers in the dishwasher: https://www.youtube.com/watch?v=3eX3IGPq8AQ https://www.youtube.com/watch?v=3eX3IGPq8AQ And the 8 bit guy: https://youtu.be/LlLDN2kn7-0?t=299 https://youtu.be/LlLDN2kn7-0?t=299
• ilaksh 3y ago
  I looked up the CPU for one of the devices. It's the same one used in Raspberry Pi 4. So I think I figured out the secret to him making almost a million dollars a year: he has a privileged background (worked at Google) and somehow that helped him tap into a market of people who don't know that a good price for a Raspberry Pi 4 is $35, not $350 or $400. I can see $65 with a nice case and shipping. Maybe up to $100? But $400 is ridiculous.
  • lukoktonos 3y ago
    I just bought a mini PC for $350 that has 32gb of ram, a windows 11 license, and is not much bigger than these devices by the looks of it. People who find this small device useful must just not want to spend their (likely high $/hour) time with mundane things getting their expensive toy home servers working or something
    • ilaksh 3y ago
      I can't tell if you are trying to prove my point or discount it. But you can't justify $300 for installing and configuring free software. As you say, you can get a much more powerful computer for even less than they are charging.
      • lukoktonos 3y ago
        I was agreeing with you that it seems overpriced and relying on a niche market that doesn't care about being cost effective hardware-wise.
    • mtlynch 3y ago
      It's sort of apples and oranges because the mini PC you purchased almost certainly can't capture HDMI video and can't emulate a USB device.
  • mtlynch 3y ago
    >I looked up the CPU for one of the devices. It's the same one used in Raspberry Pi 4. It's the same CPU because inside it is a Raspberry Pi 4. We publish instructions for people to build their own.[0] >he has a privileged background (worked at Google) and somehow that helped him tap into a market of people who don't know that a good price for a Raspberry Pi 4 is $35, not $350 or $400. I can see $65 with a nice case and shipping. Maybe up to $100? But $400 is ridiculous. $65 isn't even enough to pay for the raw materials. If I sold for $100, I'd barely cover the cost of raw materials and the labor to assemble devices, test them, and fulfill the order. There are a lot of expenses to running a hardware business, and I listed them in the post. How do I pay software engineers, hardware engineers, support engineers, and customer service staff if I'm selling a product whose profit margins are only a few percent? [0] https://tinypilotkvm.com/blog/build-a-kvm-over-ip-under-100 https://tinypilotkvm.com/blog/build-a-kvm-over-ip-under-100
• M5x7wI3CmbEem10 3y ago
  how did you source the metal enclosure? I'm interested in making my products look more "professional" but don't know how I'd go about it
  • mtlynch 3y ago
    It was quite an ordeal! Our hardware engineering partner subcontracted the design to a team of industrial designers they'd worked with in the past. We ordered prototypes of the design from both China and vendors in the US. The Chinese versions were better by leaps and bounds.[0] We iterated a few times from there and eventually landed on a design we liked and worked with the Chinese vendor to produce the first few thousand. The Chinese vendor kept running into issues, though, so they were producing them at about 50% the speed they quoted, which was just barely enough to keep up with our sales. When we switched to the contract manufacturer, they took over manufacturing the cases in Vietnam. They had trouble getting started as well, but they got the hang of it after a couple of months and can produce cases much faster than we consume them. [0] https://mtlynch.io/retrospectives/2022/11/#with-metal-cases-manufacturing-quality-makes-a-huge-difference https://mtlynch.io/retrospectives/2022/11/#with-metal-cases-...
    • mixmastamyk 3y ago
      Was wondering about this is you don’t mind. The post states disappointment with the US manufacturer but for a prototype. Maybe it could have been improved if you’d asked? Perhaps they didn’t know they were in a horse race. I tend to think of a prototype as a rough sketch. Unless of course they told me it was a demo to win the job.
      • mtlynch 3y ago
        The impression I got was that they really weren't interested in working with me. Most of the sheet metal vendors I reached out to didn't even return my calls. The one vendor that called back accepted the job, but when it was done, they just handed me the prototype and asked for my money. They never asked whether I was satisfied or if there were things they could improve if given the opportunity.
• android521 3y ago
  his story serves as a strong deterrent for those who want to quit their jobs at FAAG to do a startup. Financially, it just doesn't make sense. It is only for those who prefers startup lifestyle and are willing to sacrifice potential economic loss for it.
  • deleted 3y ago
    [deleted]
• jongjong 3y ago
  That's a a great story. It's sad how much time and money is required to launch a profitable business and how many people never get this opportunity in spite of the fact that they could add a lot of value. They just need a few years of runway. Very few people are given that chance. Ex-developers from big tech are in an insanely privileged position, especially if they were able to accumulate some big pay packages. All developers I know outside of big tech are all broke.
• benknight87 3y ago
  This shows that going out on your own is not always strictly better or more rewarding. As a software engineer you can simply rent your skills and be part of a bigger team and company that's arguably doing something more impactful than building widgets. The finances work out better too. Market salary as a software engineer is easily in the 200-300k range and increases over time with experience and skill. You can also more easily cap your work hours at 30-40 hours a week especially if you're remote. Then if you can figure out a way to do that while living in Southeast Asia, it's hard to imagine quality of life getting better than that as you're now living like a king and should be able to save as much as 50% of your income and retire young.
  • discordance 3y ago
    Building and owning your business has other non monetary value
  • mil22 3y ago
    Going out on your own may not be always strictly better or more rewarding, but this founder story is just one datapoint. Since most companies have an employee equity pool that is sized at only 10-20%, working for them is by definition giving 80-90% of the value you create away to the founders and investors. The rewards of either starting a company or being a sole proprietor (e.g. indie dev or consultant), can therefore be expected to be very substantial, on average, perhaps even 5-10x per unit time worked, and that's not including the secondary non-financial benefits of not working for someone else (e.g. freedom, autonomy, etc.). I do wish more people were aware of this principle, because the willingness of engineers in the aggregate to acquiesce to 10-20% ownership is why VCs and founders become so inappropriately rich by comparison. Just my 2c.
  • mixmastamyk 3y ago
    Been doing this for a decade+ and never nor peers are making 200k. Getting close after a lot of inflation though. Lucrative jobs exist but are not available because they simply won’t allow you to join. This is kind of like saying, just be a successful actor. It’s significantly not up to you.
• habosa 3y ago
  On top of being a successful founder and a great writer, Michael is also a uniquely nice and generous person. He was the second customer of my startup and, before paying, advised me to raise the price.
  • lioeters 3y ago
    That is truly a great customer who cares about the longevity of your product/service enough to be willing to pay what it's worth.
  • mtlynch 3y ago
    Thanks so much, Sam! I'm proud to be such an early customer of CodeApprove.
• deleted 3y ago
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• wongkat22 3y ago
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• jiveturkey 3y ago
  > Would circuit boards work after being drenched? Probably not. Absolutely they would. It's common to put finished boards into an ultrasonic bath, even.
• infinitezest 3y ago
  > I don’t draw a salary, so the total amount I earned from TinyPilot in 2023 was $236k. People often wonder how I survived on the meager earnings of my first five bootstrapper years. TIL a $230k income is meager. Jokes aside, what am I misunderstanding here?
  • mtlynch 3y ago
    I earned roughly zero in my first five years, so that was the part I was saying was "meager." Year six was when I earned the $236k.
• toasterlovin 3y ago
  Do a significant share of your sales happen on Amazon? If so, have you experimented with sending inventory into Amazon so they can do the fulfillment and you can get a Prime badge on your listings?
  • mtlynch 3y ago
    They do, but I've been reluctant to give more power to Amazon. They make us jump through so many hoops and come up with dubious reasons to deny payment, and handing over a bunch of our inventory to them gives them power to control us even more.
• xavy 3y ago
  Pretty well-written blog. It's impressed to me about how you managed your bootstrapped company and switched workloads to 3PL to reduce stress of your people. Hope to see the future progress of your company in your future article.
• guyfromfargo 3y ago
  I’m curious if you’re getting killed by the new Section 174 changes? In 2022 you spent what looks like at least $150,000 in what’s now classified as Research and Development. So this means you’d have a tax burden of around $30k even though you only made $10k in profit.