
Rocket Lease: 1 Year Review - ezl
http://blog.ezliu.com/rocketlease-1-year-review/#
======
programminggeek
I always love seeing what the real numbers of a bootstrapped business look
like. It's easy to look at a company that's been around long enough to be
successful and think, "If I just build a product and flip a switch... I'll be
rich." and it really doesn't work that way.

It's a long, slow, slog to get to a certain level of success if you're
bootstrapping.

~~~
nedwin
This is why I love Gail Goodman's "The Long Slow SAAS Ramp of Death" talk.
[http://businessofsoftware.org/2013/02/gail-goodman-
constant-...](http://businessofsoftware.org/2013/02/gail-goodman-constant-
contact-how-to-negotiate-the-long-slow-saas-ramp-of-death/)

There are no quick wins, it's a grind.

~~~
programminggeek
Yes, I've watched that multiple times and it's great.

------
samspenc
Wow never heard of this before, but I might consider using this. This is
amazing and detailed info on costs of running a business. Thanks for sharing!

A few questions I have, IF you don't mind: 1\. If you're contracted out your
dev work, do you mostly work as a manager, ensuring day-to-day operations? 2\.
Looks like you're now making a profit but a really small one... for May 2013:
$5660 - $2377.23 - $1808 = ~$1500, is that right? 3\. Sounds like your revenue
vs costs/expenses scale linearly as well, but more business = more margins, is
that right?

Once again, thanks for this detailed post! Very enlightening!

~~~
ezl
_1\. If you're contracted out your dev work, do you mostly work as a manager,
ensuring day-to-day operations?_

I spend my time doing marketing and bizdevy stuff. However, I'm still really
involved in any major development efforts, we regularly at least 3 times a
week discuss code, I still contribute code, and we often pair program.

My contracted developer, Henrique, is really not just a "contracted
developer". He's a CTO caliber amazing architect and I consider him a partner
in the project.

The current codebase is the 3rd-ish iteration on the same theme. The first and
second iterations were built primarily by me, so I had a pretty good sense of
how I wanted everything built for the future (incidentally, my "pretty good
sense" was totally garbage, and if i started over again, it'd be totally
different... again...)

Even the early versions of the current iteration were largely a collaborative
code effort between me and Henrique, either hitting milestones by "divide and
conquer" or by pair programming.

As the product began maturing, I have been slowly shifting away from code to
marketing and CEO/CMO-y stuff. Basically, I am not good at being a heavily
involved CTO and marketing. My perspective here is that development _CAN_ be
outsourced, though it may not be easy, but good marketing and bizdev can
_NOT_. However, we try to be analytics driven, so Henrique is also deeply
involved in the marketing and analytics, but we just have a focus on our own
individual domains.

 _2\. Looks like you're now making a profit but a really small one... for May
2013: $5660 - $2377.23 - $1808 = ~$1500, is that right?_

Correct.

 _3\. Sounds like your revenue vs costs/expenses scale linearly as well, but
more business = more margins, is that right?_

In principle, I can squeeze out a little more edge once I get to bigger scale,
but there's a floor on the cost of reports, so I'm more interested in growing
the audience size than optimizing the costs here. I'm also below the threshold
where reporting companies really want to cut me breaks, so I'll have to wait a
little further before that.

The "cost of reports" component scales linearly, but I expect the fixed costs
to be pretty static for very large ranges of total users/applications. It'll
be stepwise-ish, but I'll probably flat until at least 10x more sales from
here.

~~~
jt2190

      > Looks like you're now making a profit but a really 
      > small one...
    

Eric, at what point will you as the sole investor start making a profit,
assuming steady growth, etc?

~~~
ezl
oh man, i don't have a good answer for that, but i'll give you the next best
thing -- a bad answer. :)

I don't think its fair for me to assume steady growth at my previous 4 months
trajectory. I would love that, of course, because, uh, i like money, but it
seems improbable.

So the next best thing: last month, RL made ~$1500.

I try to track every dollar I spend, so I just grepped my expenses sheet for
every dollar ever spent that is tagged with RL.

$95,225.20

So, at 1500/mo, I'll break even in 63 months, assuming a cost of capital of
0%. :)

However, that number is really tagged based on what my accountant tells me is
valid for the purposes of IRS reporting -- meaning, whenever I have drinks or
dinner with other founders and we talk business, marketing, strategy, when I
park in a parking lot and have to pay a fee, purchases that can be attributed
to the business, etc. so the total invested number is probably non-trivially
lower than 95k.

------
dvt
Call for action: more posts like this on HN please!

This is exactly the kind of information that is valuable, pertinent, and
helpful to star-uppers. Not only that, but I love how the article foregoes
mumbo-jumbo and goes straight to the stats and numbers. +1 to you, sir.

Coming from a recent failed bootstrapped start-up, this is both encouraging
and motivating! It's hard out there, but it's good to see people achieve even
a moderate level of success.

~~~
ezl
Thanks dvt.

I personally would also like to see more transparency among founders.

I think there's a fear among entrepreneurs that if they post their data
publicly, one of two things will happen:

(a) they'll be judged if they're not succeeding wildly -- its easy for startup
founders to seem glamorous when there's a fantasy that they're just living the
startup dream (which, at least in my experience, most of us aren't just
rolling in rooms full of gold coins). without the certainty that they're not
succeeding wildly, founders can bask in the adoration of their unknowing peers
and reap the rewards of semi-fame without the actual success.

(b) if they ARE succeeding wildly, that competitors will know how much money
they're making/losing -- this information has never helped anyone. knowing
that RL makes $X doesn't immediately make my competitors make $X. RL has
succeeded, I think, mostly because I'm willing to work hard, and not because
I'm tricky or smart or have some magic silver bullet.

I, for example, would like to have sex with Heidi Klum. Finding out that Seal
is having sex with Heidi Klum does not confer upon me the privilege of doing
so. Knowing that a startup is making money won't make it true for you.

------
jcampbell1
I love bootstrapped companies. I was in the exact same position about 6 years
ago. My advice: it is time to put a grey hat on. I'd do the following:

1) Buy an email lists of property companies and send some unsolicited emails
to people that want your product but don't know it . "Are you tired of dealing
with rental application forms?"

2) Use fiverr to contact property owners on craigslist.

Once you get to about $10k/month you can stop doing these things and there
will likely be natural organic growth. You can then start spending a few grand
a month on "Free Rental Application", "Rental Application Template", etc.
keywords. That will drive predictable growth over time with very little
effort.

~~~
msrpotus
Alternatively, and maybe combined with #2, I'd suggest looking at LinkedIn for
brokers and property management companies. Sounds like they're your big
customers and individuals or small landlords will help but won't make or break
your business. Therefore, it makes sense to specifically look for the
potentially big customers and go hard after them.

------
halcyondaze
Great post Eric - Good to see all of the data we've been digging into get out
there in the startup community!

~~~
ezl
Thanks Kevin! I didn't even know you had an HN account!

Has been a pleasure working together with you as well

