

From 0 to Startup: How We Made $70,000 in Revenue in Our First 6 Months – Part 1 - kevinyun
http://blog.kevinyun.co/post/69735174286/from-0-to-startup-how-we-made-70-000-in-revenue-in

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grecy
I'm very wary of hearing you made $xyz of _revenue_.

My current company (multi-million dollar telco) is continually chasing
revenue, and it's driving us into the ground. We recently did a $4 million
dollar expansion to our cable infrastructure to accommodate a new little
community, involving many kilometers of fiber, a few expensive switches, etc,
etc. After all of that, we got less than 20 customers paying ~$100/mo. The
expected break-even for this project? Over 200 years.

The kicker? The people in charge got raises and promotions because they netted
the company more _revenue_.

Tell me about your profits.

~~~
kevinyun
Thanks for bringing up that point -- and sorry to hear that! Profit margin has
been pretty good (~40% margin), after all expenses have been said and done

~~~
grecy
Thanks for the reply, and NICE! Keep it up.

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jonathanjaeger
I'm not a laywer, but this scared me: " There’s really no need to worry about
setting up the business logistics from the onset since these are all secondary
activities in comparison to what really matters: the business. Also, no need
to initially worry about incorporation, but do assume that anything
government-related will take longer than expected."

You're already pulling in $70K in 6 months and you're clearly operating what
looks to be a company. Seems to me you're putting yourself up to some serious
liability if something were to go wrong. Also, getting all your IP and other
legal issues sorted out will save you massive headaches later on. Sure if this
fails and no one cares to fight over equity, IP, and no customers sue, you
might be fine. But what if it's a rousing success? You could be setting
yourself up for some undue stress and some tax ramifications that outweigh
putting it off.

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kevinyun
Thanks for calling this out. When I started this, I really had nothing to lose
(no personal assets of significance). Since there's something to lose now, I
can definitely assure you the business will (very) soon be an entity with
liability protection.

~~~
jonathanjaeger
I see what you're saying and I used to think like this. But you can't think
about what you have to lose now, you have to think about you could lose in the
future.

For example, I'm reincorporating my company and talked to a startup lawyer
this week. Did you know that if you incorporate in this calendar year, if you
hold on to your stock in your company for 5+ years, you pay no capital gains
taxes up to $10 million. Basically, if you ever sell your company many years
from now, you have some big upside. It's not guaranteed that Congress will
grandfather in 2014 for this rule. Once again, I am not a lawyer and only
paraphrasing.

It's this example and dozens of other things you might not know and could
potentially hurt you in the future. But glad you're getting it taken care of.

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keeptrying
The real story is that you found a market with huge demands which didn't have
much competition (not many design schools) that you could fulfill.

Everything else is irrelevant except for "keep going".

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leokun
$70,000 is a nice haul, but over six months it averages to a little more than
$10,000 a month which at least in the bay area pays for about 1.5 developers.
I hope their growth curve is still more vertical than flat.

~~~
Iftheshoefits
Hmmm. $11,666 per month for 1.5 developers is roughly $100,000 per developer
per year. You must be talking about junior developers, because salaries around
here for experienced developers aren't that low. They can't be--not when
senior/experienced developers can get $100,000 working just about anywhere
else in the country for less than 50% of the cost of living as in the bay
area.

~~~
leokun
I was being generous, also I know in at least Arizona senior developers are
not paid anything near 6 figures. About 50K at best.

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eclipxe
Move.

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jkestner
1) He's wrong. My first job in Arizona I got paid more than that, 15 years
ago. 2) It's so, so much cheaper to live in Phoenix than in one of the tech
centers. And a different lifestyle. Some people want a big house and a
boringly steady job.

~~~
leokun
I'm not wrong, look at jobs at the University of Arizona (Tucson) for
experienced C/C++ programmers. $45K a year.

~~~
Iftheshoefits
Universities are not going to pay as well as the private sector, or even many
government or non-profit organizations, for the same work. Using that as an
example doesn't help your argument.

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ramenmeal
Over 4 grand for a course. How many units at a university would you compare
your course to? Time wise it looks like about 2 classes for a quarter system
school (which works well to compare because they are also 10 weeks long per
class). That puts your cost per unit much higher than a UC school. Must be
good stuff you're teaching.

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iagomr
I guess someone has to bring it up, but a digital design school is not a
startup.

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wushupork
Care to explain why this is not a startup?

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wellboy
Because it's not scalable (yet).

For their startup to increase revenue to 100x or make $7M in revenue, their
efforts/time put in/costs would need to be 50x-100x higher. For it to be a
startup, at this scale their efforts should only be 2x-3x higher.

In other words, if they can't get to $10M in rev with 20 people or less, it's
just not scalable and right now it looks like they need several hundred
tutors, program coordinators etc. to do so.

For it to become scalable they have to do something like this
[https://onemonthrails.com/](https://onemonthrails.com/) for design. ;)

~~~
wushupork
Does a startup need to be scalable on day one? Would you consider Nintendo a
scalable company? They started selling cards in the beginning - which isn't
very "scalable" in your mind. Would you consider Samsung a scalable high-tech
company? They started as a trading company and diversified into textiles,
insurance, securities and retail before also adding electronics.

Or to use a more relevant example 37signals, their humble beginnings was a
design studio which then had a string of unsuccessful products such as the
usability report before finally hitting it big with BaseCamp.

Lots of retail based businesses are highly scalable through a franchise model.
If they can nail down the playbook - they can license that and repeat with new
locations.

