Long term technology bootstrapping founder here. Paying yourself is very important. You may need to work for free for a while but when you get your first paying customer pay yourself a little salary. And when you get a second customer, pay yourself some more. Try to get a near market salary before you hire your first employee.
Corporate and your own founder/personal longevity is the path to success.
There's an old rule in small business: "Pay yourself first." It means, make sure you allocate money to pay yourself before paying everything else. Once you are used to it, it makes it a lot easier to get to something that seems like market rate.
If the rule falls down it's a sign your business isn't going to work. That's the entire point of the rule. It's supposed to highlight when you're beating a dead horse.
I’ve always thought of this rule (and the similar Profit First strategy, which I personally follow) as more of a guiding principle.
When taxes, salaries, and expenses come due, those need to be a priority, so before any money flows in or out, have a plan for how to set your own salary at X% while also meeting those commitments.
The reason for the rule is to make sure there is ample planning to make sure you don’t fall to the bottom of the priority list. It is also to have an aversion to letting business get to a state where you have to forgo getting paid.
The whole point is that if you can't sustain your company or even meet the baseline of it's operational costs then either you've grossly overextended your expenses or you don't have a viable business on your hands.
The point is to allocate money for yourself first, and if there aren't sufficient funds to fund operations then you know you have a problem. Clearly paying necessary expenses must come first from a cash perspective but in terms of the business, if allocating for what you want to make results in the company not being able to cover expenses then you know that you are working for your business and not the other way around. It's a common trap.
I imagine the issue is just psychology,there's always a reason not to, another place to put that money that might help make more money. But then, you're never paid.
Five years in, no salary, and not enough earnings to pay for basic living expenses? That sheds a pretty poor light on venturing out on one's own.
The author seems like a pretty bright person, and the About Me page lists an ivy league education and some prior work experience. What prospects, then, would someone from a more humble background have? Or is the point of the "bootstrapped experiment" not to earn a basic living?
The media paints entrepreneuship as a high calling and "founders" are seen as stars of the show, but is the reality much bleaker?
One subtle point about the profit is that because I'm selling a physical product, there are still a lot of unrealized gains in inventory. I estimate that if stopped purchasing new material and just liquidated my existing stock, there'd be about $350k in profit at the end.
That said, I don't think hardware is a good path for a bootstrapped business. I went into this thinking I'd mainly be focusing on selling the software to people who already had the hardware, and then it turned out that there was much more demand for pre-made hardware.
There are many of other tech business paths that are friendlier to bootstrappers, like content businesses, SaaS tools, and educational products. I know of several founders making a comfortable living in those domains, so I wouldn't generalize based on my experience.
Thanks for writing Micheal, I’m also 30-something ex-Google SWE and currently all-in on solo dev bootstrapping, so your blog is one of my (many) big inspirations.
As you note, I do think if your primary objective was to catch up to SWE compensation, your project idea filter was probably not optimal. But it’s still great that you have the spark of something with TinyPilot. One thing I see repeatedly in
the indie hacker community is hockey stick success where people struggle to get the engine going but often once they find the spark it takes off. The ten year overnight success.
Also worth noting many indie hackers add part time stable income such as contracting as their finances require.
If people are looking for a straightforward path where they leave their SWE job and quickly get similar stable income as a bootstrapper, they’re in for an unpleasant surprise. But if you can “make it” you control your own destiny , face unique challenges demanding true creativity, and have uncapped upside in a way you’ll never get at BigTech .
I do think content businesses are an easier launch point . Adam Wethan of Tailwind and Nathan Barry of Convertkit are both examples of bootstrappers who self-funded by starting with info products. I think one mental trap for solo devs is to over identify as SWE and not as online entrepreneurs with SWE skills as a particularly helpful asset.
Wish you and TinyPilot the best of luck and look forward to future updates.
> I think one mental trap for solo devs is to over identify as SWE and not as online entrepreneurs with SWE skills as a particularly helpful asset.
This is one of those scary truths that chased me out of entrepreneurship.
It's scary because it shines a light on the enormity of the task outside of building the product (and building the product usually isn't easy). Parts of it (sales especially) can be very fun, but a lot of it is painful.
I scratched the itch of "can I make something from nothing" and after that realized there was a reason I didn't major in business in the first place. I left with a newfound appreciation for what they do!
If there's a single rule for small business it's "Cash is King". Cashflow is what kills you and the monthly income statement is way more important than your balance sheet.
This is actually why the balance sheet is more important than the income statement. The income statement can obfuscate what's happening to cash flow. A close study of the balance sheet reveals whether working capital is consuming retained earnings.
I figured the idea of labeling the inventory as an asset was part of the practice of later deducting the cost (expensing). I.e. you can’t expense it twice.
I'm assuming this was slightly in jest, but paying yourself is all about free cash flow when you're bootstrapped, fronting inventory and growing. And in practice, with hard goods this is really difficult unless your gross margins are really high.
Maybe I misunderstand something, but inventory is not an expense until it's sold; it shouldn't influence profit in any way. It seems that what you call profit is actually free cash flow (profit after taxes minus investments into operating capital).
Most (but not all) inventory gets old as time goes on, and the 2022 model isn't as cool as the 2023 version. Which is to say, having a bunch of 2023 stuff on hand is a liability until it is sold. Imagine a car dealership right as Covid shuts things down in 2020.
Generally true, but with the continuous saga of component shortage and that market dynamic has shifted over time from a broad shortage to specific segments particular newer, high end ICs type you can't reliably get your hands-on having inventory and liability on the books is still a better way to go for now.
My current large corp employer is making hardware products and I can not tell you how much more even in 2023 time and effort is spent by teams procuring material to keep production up, including pushing hard on our suppliers.
It depends on the media. HBO's Silicon Valley for example depicts being a founder as being mostly stress and existential dread punctuated by occasional moments of great excitement. I find this to be pretty accurate.
Startups are pretty hard compared to a lot of things. Even if you have funding from the most prestigious seed fund, most startups will fail before they get to the stage mentioned in the blog post. The nature of the game is that 95% of the time you fail and the rest of the time you get rich. This is why it's so important to execute quickly and keep trying things until you find something that works.
How bleak this reality is depends on your perspective. If you expect it to be like most things in life where you follow a prescribed path and get a reliable result then it's quite bleak indeed. If on the other hand you want to go out and have adventures it's pretty cool.
It turns out.. striking out on your own as a solo tech founder is truly challenging for most. I learned this the hard way myself through first hand experience. Ultimately I failed, though arguably in the long term the lessons I learned were more valuable than the few hundred thousand dollars of my own money I spent.
The reality is that it takes a certain skillset to do all the research, product development work, business development, sales, and marketing by oneself. Much less procuring VC funding (in my case) or for a physical product, creating the end-to-end supply chain and manufacturing pipeline.
If I needed a KVM I'd definitely consider a TinyPilot, because it actually looks useful and @mtlynch has demonstrated an unrelenting high degree of dedication.and commitment to this idea for years.
Edit: After writing this I checked out a review [0], was surprised how tiny it was. After reading about the Chinese vs. American metal enclosure debacle [1,2], I somehow expected it to be larger despite it having tiny in the name. To be fair, in the pics it does look similar to a PSU enclosure and my brain has heavy PC-parts bias :).
You're making a lot of assumptions about what leads to entrepreneurial success. My gut feeling is working at a big business and attending an ivy league school isn't going to offer better preparation for bootstrapping a business than the hustler who learned to code on the side. In fact, it may actually harm your chances.
Entrepreneurship is something very special, if you can pull it off. It's not something that being spoon fed knowledge through typical education prepares you for. It's incredibly difficult and fraught with risk. But the rewards exists, so it's worth it to take a shot if you think you have what it takes and the opportunity seems worth it.
For what its worth, I'm a bootstrapped founder, and I do make a living off of it.
The reality is super bleak. Listen to the Indiehackers podcast and you will see that most of the 'crazy success' stories involve someone getting lucky and ending up with $10k/mo, that is a low junior dev salary at a FAANG.
The most recent episode featured a guy who was an expert at building and selling Shopify apps. He built 10 different apps, but 97% of his revenue was coming from 1 of them. Even in his own special niche he had a 10% success rate. It was something like the 4th product he had launched also, so it wasn't the product of lessons learned.
I don't want to make it sound bleak because everyone should experience building something from scratch (I have tried and still dabble) but it is really a tough game.
Throwaway for obvious reasons. I'm one of those senior FAANG guys making $300k/year, every day I'm waking up at 5 and working on my own startup idea for 3-4 hours so that some day I can get back to my home country and have freedom, $3k/month will be enough. I will try very hard to get that freedom, only if I fail I'll look for another job. $10k/mo as a solo founder and $10k/mo at FAANG is in no way comparable.
I'm sure you know about this already, but it's worth spreading the word any chance I can get: Look into Financial Independence
You don't need THAT much money to retire. You can put all your money into the stock market, then withdraw 4% per year and live off it and reasonably expect to live like that indefinitely, since the exponential growth of your savings will balance out the ongoing withdrawals and inflation.
At $40k a year you could retire with $1M saved, which could be doable in 10 years of saving FAANG money pretty comfortably.
<RANT relevance="Low">
On the topic of FAANG sucking: I'm another FAANG guy making the big levels.fyi bucks. This job is great, best job I ever had, but I do hate it as well. I have to ask for permission to take a few days off. My only real long vacation opportunities are during the same time of year as everyone else on the planet, so traveling anywhere is a stressful overpriced fiasco. I spend hours every week getting yelled at in meetings over stupid fucking no-op line items on spreadsheets. I can't take my kid to the park during the winter because I'm stuck going into an office during the entirety of daylight hours every day. While I was typing this rant, I got a popup from Slack telling me I need to update the format of my pull requests to match some stupid fucking template.
People aren't meant to live this way, it's bullshit.
</RANT>
This rant was awesome. Please post more like it. I am at the point in my career where I don't really need a manager. I am mature enough to come to work and produce valuable things. Still, managers are required in the corporate world, and they ask you do all sorts of dumb things that add no value, e.g., "pull request reformatting".
I'm sorry to hear about your holiday situation. I assume you have about 20 business day or more per year. One idea: Pre-plan 3-4 holidays at the start of the year. Get them pre-approved by your manager. Also: Ask if you can buy more holidays (give up base salary). Most managers think you are crazy for asking, but few say no. (It required some finess with HR.) If you could get 5-6 weeks of holiday per year, you might be able to put up with more b/s from your manager. It helps me a lot. I try to take a one week holiday every quarter. Also: Ask your partner if you can take a holiday alone. Be upfront and tell them "nothing shady", but you want to go backpacking in India or drive accross New Zealand for two weeks (or whatever). Most partners are supportive if you are making very good money (like you).
That's a great suggestion, thanks for that. Especially if I went for a less demanding and remote-friendly role I'll bet that would work really well to keep a decent work-life balance.
I'm just going to tough it out one more year, and hopefully I can get out of this hamster wheel forever after that. I managed to save about $500k in 4 years, so I should be able to move somewhere normal, buy a house, and live in it with my family while working on a revenue stream
>You don't need THAT much money to retire. You can put all your money into the stock market, then withdraw 4% per year and live off it and reasonably expect to live like that indefinitely, since the exponential growth of your savings will balance out the ongoing withdrawals and inflation.
>At $40k a year you could retire with $1M saved, which could be doable in 10 years of saving FAANG money pretty comfortably.
It depends what kind of securities you are buying and where, especially if you want to secure your kids’ future (their education/healthcare/land/legal risks). I also think a 4% withdrawal rate is too optimistic given the demographic changes that are projected to occur, I am using 2% for my calculations.
Which FAANG uses slack? Because I'd like to avoid them. Microsoft and Google sure don't, but then they have their own thing going on, so I'm not sure that's any better.
If you attain relative independence at 10 K per month, it might be worth it.
Personally, I am a very independence-minded person and I am not sure what offer would I have to receive in order to drop my current business (with a lot of small customers, so not a single chokepoint) and become a cog in some big wheelhouse.
Experience of my peers (I am soon to be 45) says that big wheelhouses can sometimes collapse with alarming speed and once you get used to the putative safety, the aftereffects can break your family, your mind (one guy I knew really fell into a bad alcohol habit after being let go from a bank) etc.
Just went and listened, and sure enough the first episode was on point. Justin Welsh. Smart guy, but he does attribute a lot of his success to being one of the first people to create posts specifically for linkedin, which allowed him to acquire an audience of about 20k very quickly.
Yeah he is actually doing pretty well. The people who do the best seem to be the ones who do newsletters and courses on... how to build SaaS companies lol.
LOL. Totally agree. In the gold rush, sell shovels. I also like it when people who are really good bloggers or technical writers do some navel gazing and write a post about how their most valuable skill is writing and it should be yours also. I have a good laugh when I see those.
1 out of 10 sounds about right. Especially if you're taking a shot in the dark and/or not competing in an established market. Truth be told, it is tough, but its not the path of least resistance, so there's nothing else to expect. It is easier to push through if you have thick skin. If you have grit, you can iterate through projects quickly and find the one that connects with a market. The trap is falling in love with your idea without first proving it can generate revenue. I know guys who have poured tens of thousands of dollars into SAAS, only to discover after-the-fact that nobody wants to buy it.
Every person's situation is unique, but less money can be equivalent given the tangible costs (transportation, food, clothing, etc) and intangible (stresses of any particular jobs like meetings, hours, etc)
Furthermore it's very few businesses that make it past 20 years and it's very hard to transition from one business to another. I am now in that tight spot as a successful businessman in year 14
So unfortunately, this is called delusion. This is worse than working five years on a failing crypto project with funding for five years.
I tend to measure progress as a function of financial / skill gain over time spent. What a lot of solo founders fail to realize (regardless of education) is that time is the real risk in startups. Sure, you could wait five years for a $2M exit, but how much of your own time / investor time did you burn? At some point, you have to ask whether a "business" is really more of a side-project and whether you're being honest with yourself about how much you value your time.
For context, someone with a high school degree and a poor understanding of social media marketing could make more money with zero employees power-washing driveways. I don't mean to be harsh - but time is valuable.
The value of life lived is different for each individual, but slowly bleeding out what could've been a prosperous education and career for someone who might just be bad at managing a business is a travesty. I have friends who do this, they're misguided but they also have huge sums of family money paying their rent etc... alas another form of delusion and a detached form of reality.
I've literally made more revenue paying a college kid to farm black soldier flies with waste from a vegan coffee shop. I'm literally not kidding.
One overlooked factor in these numbers is that the founder now has more levers to pull. For example, they are paying $206k in payroll, and in an emergency situation, could let some staff go and take over those functions themselves.
I've experienced the same thing with my bootstrapped startup; I'm not paying myself any more money than I did 3 years ago, but if I need money, I can double or triple my own salary within a month or two.
The reason the founder isn't doing that now is likely exactly the same reason Uber or other VC startups consistently lose money; they are optimizing for growth, not profit/salary.
> The reason the founder isn't doing that now is likely exactly the same reason Uber or other VC startups consistently lose money; they are optimizing for growth, not profit/salary.
Optimizing for growth is very risky and makes sense to VCs. VCs diversify into dozens of companies. The odds that one company will be a moonshot are pretty good. But as an individual founder you're 100% exposed to the growth/collapse of your one company.
You raise good questions, especially for someone considering striking out on their own.
Personally I'm laser focused on this question: "How do I match what I could earn in salary as a software engineer?" Beyond that - I can figure it out on my own. Until then - I'm burning savings and need to figure it out.
As far as I can tell, the safest fastest way to get from A (unemployed and without income) to B ("engineer salary") is as follows, assuming "engineer salary" is 150k/year.
1. Have enough savings to live for 1 year with $0 income and another year with reduced income - say, 50k/year. Having 40k on top of that in savings: half of that to get you started, half to buy businesses in the future and/or to buy services to do that then.
2. Buy an ad supported online business on Flippa. Budget: 20k. This can be for one or multiple businesses, though multiple is probably better for quicker growth & profit potential. (It doesn't have to be Flippa btw, but that's 'good enough' for our purposes).
3. Assume no income in year 1. In this year you add pages to your site(s) and continuously improve them, using Google search analytics to confirm what you're doing is working. Your traffic should be increasing.
4. Assume 50k/year income in year 2. This is either through ad revenue or selling one of those sites you bought (probably the latter). Continue doing what you did in year 1, but better.
5. By year 3 you've hit your goal. By year 4 you've exceeded it. Every year after that, you can expect your income to substantially grow, for at least the following 3 years.
Until a google algo update wipes you out and you are screwed. If you are going to go down this path it's better to sell the pick axes than go mining for gold. Learn how to mint the sites yourself and sell them on flippa to guys who think they can buy retirement $20K at a time with no sweat equity.
I read some of your comment history and I’m impressed: you’re an SEO expert. I’ll take your advice seriously.
What do you think about using AI to create a lot of niche websites - carefully, crafting a few dozen pages around search intent, w a real tool like SEMRush or Ahrefs - and then releasing them on the world, letting Google penalize some but making it up on volume?
To quote Matthew Mercer - You can certainly try. But in all seriousness, run a test. As far as tests go this one is about as low cost as they get. In general, I don't expect purely ai written content to do all that well - and that's probably a good thing for now. That said, nothing beats a practical test for this sort of thing.
Domain expertise matters. Solving a problem for businesses with software is what most successful tech companies are doing - but it's very difficult if you don't have some insight into the process and problems of some group of businesses.
Observations as a regular human worked in the late 90's and around 2010 because there was lots of obvious stuff stuff to do when the web was taking off and mobile taking off. Outside those windows...domain expertise.
Selling things to people might give you domain familiarity, but it won't give you domain expertise.
I think a better approach is getting actual domain expertise in the door one way or another. E.g., a cofounder, an early hire, or a consultant. Thinking about the domain experts I've worked with in the past, I'd look for 10-20 years of work in the industry, hopefully in a few different roles or companies.
I spent 9 years building domain expertise in a traditional engineering field and have many ideas for startups that would 100% be successful if I had the time/capital/grit/etc... not just me, anyone with my experience would be able to do it. It is incredible how absolutely awful most engineering software is. Meaning software for mechanical, civil, chemical engineers, etc... The business logic backends are basically all ancient codebases written in C++ or Fortran. CI/CD? Testing? Clean code? Yeah, no. You're having spaghetti code for dinner. And the greybeard who wrote that line of code 25 years ago and is still hanging out in a back office is reverting your changes if you touch "his" code. Imagine what someone could do using a language like Julia or Python/Numpy with modern software engineering practices could build. You would be able to iterate and add new features so quickly, none of the current players who all basically built their stuff in the 90s would be able to compete. I applied for a job at one of these companies and they earnestly asked me if I knew how to code in Delphi... um, no, have you guys heard of React or Electron?
What makes you think the folks developing CAD/CAE software are so behind (nay, negligent)? No amount of React will solve topology or perform naming and matching (look it up, modern CAD can’t live without it).
A lack of respect for established success is both a superpower (don’t listen to the bozos) and foolishness. Knowing when to use each is what makes some pursuits blossom and others slowly burn out.
Not talking about CAD/CAE, that's not my expertise at all. I'm specifically talking about chemical process simulation.
And React obviously gets used for the GUI instead of something like Delphi. As I said, for the business logic, there are amazing new languages available like Julia that allow devs to iterate significantly faster than in C++.
I guess I made a bit of a leap of faith assuming that it's just as bad in the other engineering disciplines.
Are you saying the software products used by (for example) chemical engineers are no good? What are they using the products for? On what dimensions could the products be made better? Ie, faster, easier to use? Something else?
Specifically chemical process simulators used by Chemical Engineers are all very, very long in the tooth. I sold and trained other engineers to use these products for years. They are fine in the sense that thousands of engineers around the world use them on a daily basis to get work done successfully, but they could be so much better. I'll give you one specific example. Engineers will spend hours, days, and sometimes weeks (I'm not joking) trying to get simulations to converge without any luck because they fail to manually generate 'good' initial guesses for the models. And because engineering design is an iterative process, you don't need to just generate good guesses once, you'll need to do it many times as you iterate towards a final design or solution. A neural network could be trained and used to assist generating these initial guesses. I built a prototype in Tensorflow that did exactly this and the results were very good - of course this was trained on a dataset generated for a very specific plant. But it worked, and it worked well. But all of the companies in this space are stuck in the early 2000s and just want to keep doing what they've always done, there is very little innovation going on.
The most conspicuous examples of so-called entrepreneurs and founders are really just class bullshitters [1]. This class of solopreneur as portrayed by "the media" typically comes from a well-off family, so basic living expenses are already covered behind the scenes.
Another frivolous example is the boutique kombucha company founder living a posh Manhattan lifestyle, with frequent updates to their instagram about their life and "success". The hip status of being a founder/entrepreneur is their ultimate goal, not financial success, as finances are not a concern for this class of individual.
Success is a means to an end: success enables you to do the things you want to do that you couldn’t do otherwise. If the things you can do don’t require financial success, why does financial success matter? The author is apparently having a great time living his life and building his company, who cares if he could make more money back at Google?
Entrepreneurship is about making your own path, not about maximising money.
It actually highlights the survivorship bias in startups
TinyPilot is an okay venture, if they raise outside capital or do a big exit they will look like an overnight success
Everyone else will have tried the single venture five iterations ago, gone in debt and had to get a job for the next 10 years before hoping their life, family and health let them try again
Richer people just iterate faster, are flexible enough to upskill if they chose to apply themselves in this way
As an employee, you are essentially a business owner with one customer. Your customer can cut you off at any time with a 3 AM e-mail, even if you pour your heart into your work. You lose access to it too. You own nothing, any thing you do, your customer owns 100%. There is no intellectual property of yours it's all theirs. Owning a business is super hard and you won't make as much money until you sell, if you are lucky to sell. But, being an employee is even more crazy.
I hope this doesn’t discourage you! There’s a thriving community of indie founders who are earning a good living from their own companies, many of whom are developers who struck out on their own.
Most don’t have fancy degrees or companies on their resumes, though a few do. Many don’t have a college degree at all.
It’s definitely possible to build a profitable small tech business. We’ve been running our own company full-time for over 6 years now, and make a better living than we did as employees. It did take 3 years of patience as it grew from a side project (so we’re in year 9 now, all told).
FWIW self-funding a hardware company, especially when outside expertise is required, is definitely bootstrapping on hard mode. (Though I do know someone who bootstrapped a rocket company!) Most of us do software.
I encourage you to check out a MicroConf Local if you’re interested in learning more about the indie founder world.
>> is the reality much bleaker?
Of course, because the media suffers from survivor bias. No one gets article written about them for failing.
But lets give the OP some credit- if the company becomes more profitable it could be worth many years salary in equity. And someone who can start a company can usually start another company, which is kind of security I think a lot of people don't have.
Look, if you are getting a large salary from a FAANG type gig, every study shows for your wealth you should stick with it. If you don't want to, or you don't have that choice: lets help that person learn to hunt and kill for themselves.
Typically the media reports on startups with significant investment by venture capital firms. This startup is bootstrapped, (i.e. self-funded) that makes the process significantly more difficult.
I find it remarkable that someone would go into business for themselves to NOT pay for their living standards. In a start-crunch sure, but if you got revenue, pay yourself. The whole point of going into business for yourself is to pay yourself. I think some people get wrapped up in the emotional aspects, and fail to see the pragmatic aspects.
> Or is the point of the "bootstrapped experiment" not to earn a basic living?
With no offense to the methods of this founder, no, I don't think that's the point of his (yet?). Maybe an eventual goal, but he clearly has no need for immediate profits, he'd rather do a good job with the product.
It's true that most people can't afford to to not have enough earnings to pay for basic living expenses while pursuing the entrepreneurship path. The middle ground would be to keep a day job as you go along that path.
moonlighting is very hard, and typically means your business will not get the best of your focus and energy. It also fosters an unhealthy and antisocial attitude; people need downtime to avoid burnout.
Looks like TinyPilot was started in 2020, so it's really $0 => $850k in sales in less than 3-years with a significant hardware element. That's quite an accomplishment - congratulations!
Seems like the next big inflection point is getting off the single-shot hardware sales & adding an enterprise-style SaaS upsell. Software updates & cloud offerings seem like natural starting points. Needn't be anything fancy -- even if it's just an out-of-the-box wrapper around Tailscale. Add on SOC2 certification & SSO, and you'd easily be able to command enterprise pricing (e.g. extra $100-$300/yr/device).
And in 5 years we’re back to where we started from: A KVM would be occassionally useful for my job, but it comes with a $400/seat/mo mandatory subscription, with a minimum of 12 months and 20 seats
If an enterprise tier means that we get to keep a low-cost individual offering and OP gets to actually pay himself a salary, I see that as a net win...
Many entrepreneurs dream of being able to get to nearly 1 million in annual revenue, very surprised you only are taking 6k. Hopefully you won't spend much more on redesigning and web design? 30k is an insane amount for a startup to spend on web design. It sounds like you are happy with it but I hope you do not continue to spend that next year.
It looks like Tinypilot is mostly a one time purchase. I could imagine there are software addons many of your customers go through - like taking a screenshot every x seconds and sending to aws that you could eventually for an extra cost (or even monthly subscription)
Just thinking you have something nice here and it hardware will always need to be improved and redesigned so maybe you can continue to add nice products on top of this with healthy margins. I look forward to reading next year when you finally pay yourself a decent salary from this.
Yeah, we've thought about add-ons but haven't found anything yet that would be a great match. One of the most common requests is cloud access. We teased the idea in a blog post,[0] but not that many people signed up, and a lot of customers balked at the idea of $30/month when Tailscale and friends are free.
Hey Michael, congrats on your success so far, you have built a community and product people are buying which is already a great achievement.
My experience as a tech founder (software) reading your blog (thanks for sharing) and your Cloud feedback at https://forum.tinypilotkvm.com/-163/tinypilot-cloud-feedback is that you need to dig deeper into requirements and your user personas, and what combination of product and software adjustments reach an enterprise / professional market that are happy to pay recurring subscription amounts to you because they receive benefits and value.
Be careful you don’t set out to build and shape software entirely focused on users that don’t want to pay (because they have simpler requirements and free options) and you then don’t offer value to enterprises that needed different features because your talking to hobbyists instead of professionals with expensive problems they would pay to have solved.
You’ve got hobbyists that may not pay $30/month for a subscription, but to me they aren’t your target audience for a new revenue stream, what’s it look like if you focus your efforts in customising the hardware / cloud software to support enterprise scenarios? Can you be doing Zoom calls with a few of your users in the professional space about what problem they wish TinyPilot could be solving that they could be paying for?
Look at the feedback from Reeman and Larry in the above forum post, they’re asking for enterprise features that you’d be best positioned to solve and charge for (and a lot more than $30 per month), schedule calls with them and dig into their problems further, build for them, so they can order 100 devices and put them under cloud management for work, not the hobbyist that has no budget and wants different features.
Why aren't you asking for help? If this is like a public investor update, you should explicitly call out where your network could help you.
"Our number one problem is finding a reliable partner in China. If you have over 5 years experience creating products like this, contact me at XYZ, I would love to hear your advice."
Thank you for publicly sharing and documenting so much information about this epic quest you're on (I'm sure it's a solid PR move, too :).
I wish you all the best and respect your decision to eschew a comparatively cushy and predictable job to take up this risky and challenging endeavor filled with never ending thankless tasks.
Godspeed.
Edit: Sorry to hear it isn't a big boon on the marketing front. All I can say is I recall seeing TinyPilot at least once before, but now it's much more on my radar. If it could do remote power switching I'd be very keen to keep it in my server rack as the sole point of remote administration (sorry, I'm sure you get dumb feature requests and this is probably just another one.. but I couldn't resist).
Remote power switching is what has held me back. Even if it was an additional cost / addon I'd definitely look at picking up a dozen or so. Still I've been following for a while and hope to see some cool improvements over time.
EDIT: Actually being a raspberry pi, It might not be hard to build in that feature. I might just grab one today and see.
Yeah, remote power switching is definitely doable. It would either be wiring directly into the motherboard's or controlling an external power switch. The challenge is making it user-friendly, supporting it, meeting compliance requirements, etc.
I think it's doable from the pi headers inside pretty easy, fortunately these are all homebrew machines i'd use on so compliance issues aren't as big a deal. For work though, i'm right there with you.
Did you move away from Raspberry now or what does the EE guys do?
I don’t have personal experience of outsourcing assembly yet but make sure quality control is flawless before letting that go. I would and will personally fly down to China to set that up.
Will be following to see how that process goes.
Nope, we're still on Raspberry Pi. It's difficult to move to other hardware because it would mean managing a lot more of the OS stack ourselves, and then we'd still have thousands of users still on Raspberry Pi.
I'd like to move to the Pi CM4 because we'd reduce costs and get a lot more control over the hardware, but it's a big up front cost to start over from scratch on a new board.
1. If you're going to have a headshot, get yourself a professional headshot on the About page. You squinting into the sun in a selfie is nice for a Twitter profile, but you're trying to present a real company w/ a real product here, right?
2. It's clear this story is really tied into your identity right now, but nobody cares about this part on a page about TinyPilot:
>> I'm a software developer and worked most of my career at Microsoft and Google, but I quit in 2018 to found a company of my own.
I like the focus on your frustrations and how you solved that. The quitting part people could take negatively ("is this guy a quitter? will I receive product support if I buy this?").
Everything else looks pretty solid for a SaaS homepage.
Thanks for reading and for the constructive feedback!
Yeah, the About page is something I haven't touched much since I first launched the site, and I agree that it feels not quite consistent with the tone of the site or where the company is at this point.
Thanks for sharing your experience Michael! I found out about TinyPilot a while back ago. I made a similar device for a completely different industry and learned that TinyPilot has nearly the same architecture but a completely different use case. Unfortunately, we weren't able to turn a profit with that device either. It seems streaming video is a tough market to crack :(
Our manufacturer in China is a startup as well if you are looking for a connection. He works hard and can give you a good price at smaller scales. I'll send you an email as well but in case anyone else is interested, kevmo314@gmail.com.
Michael, thank you for sharing your story and experience for TinyPlot from inception starting to scale. As a hardware engineer myself and having been in your shoes, founded 10 years ago a startup and launched the product I know what it takes and how hard it is to reach the point you got to, kudos.
This blog mentions that you consider manufacturing in China and drop ship the product. In all likelihood by now you might get PCB/PCBA and/or other parts of it from China, not sure. Outsourcing the whole chain flow is another dimension.
Some post here mentioned it already, but the support/expense you will need to provide that is going to be a longer list. Ongoing quality handling remotely, component shortage, part replacements you did not know about, yield, shipping issue, etc it can be real distractions. That is one of the reasons you need some build/ship volume, probably minimum over several hundred units a month to make the whole flow work efficiently.
One more thought. I am not sure how you will avoid an actual office for a hardware company assuming you want to continue to grow with product improvements, debug and next generation development.
My post is just to give you heads up shifting from in-house build with tight control to outsourcing might not solve all your problems. At least that was my experience and I for one definitely did that outsourcing too early.
Amazing post Michael! I have been following your story for years.
I have also a similar project backing, but not as technical as yours. I use also Raspberries for Smart Kiosks that are set to be in restaurants and increase the demand of the most convenient dishes at a time with great photography.
I see that you think now of Debian packages as an optimal way for installations in your project.
What would you say it is the best way yo keep a Raspberry system "auto-updated"?
PD: My skills are way lower than yours. I use mostly Ruby scripts (SystemD) to contact a backend in Rails.
>What would you say it is the best way yo keep a Raspberry system "auto-updated"?
I think Debian packages are better than what I was doing, but if I were starting from scratch, I'd try to use Yocto[0] or NixOS[1].
Take this with a grain of salt, because this is secondhand from another founder who had good experience with Yocto, but from what she told me it's optimized for the case of pushing out updates to embedded devices. One of the pitfalls of Raspberry Pis is that the microSDs are vulnerable to filesystem corruption, which can leave the device unbootable. I believe Yocto protects against that where there are always two bootable partitions, so you failover to the other partition and can recover.
Yeah, I think taking myself out of the critical path and making the business more location-independent will make it more attractive to a buyer if I decide to sell.
How have you thought about pricing? I would have thought a small increase in price would make a big difference to your bottom line given the difference between your revenues and profits.
Congrats on your amazing success! 0 to 850k revenue with a hardware product in three years is almost unbelievably amazing. I'm totally ignorant about hardware dev. How does one even go about designing and manufacturing a hardware product like TinyPilot? Do you design in some sort of CAD software and then partner with some sort of factory?
Have you considered retail Or other distribution channels?
I've reached out to a couple of resellers, but they weren't interested, though I didn't pursue it very heavily. With supply shortages, I can only produce ~200 devices/month, and I can sell that volume on my own, so the resellers wouldn't help much. Maybe next year when the supply is less constrained.
Do you have a SO, if so what do they think about this experiment
Yep, she helped edit this post! We met when I was a year into bootstrapping, so she kind of knew what she was getting into, and she's been supportive. She worked on the business for the first year when we were quarantined for COVID and doing everything from our house.
I'd love to work with US vendors because that would solve a lot of problems, but I tried twice in 2022, and it went disastrously both times.
I tried working with a US vendor on assembling PCBs, and the soldering was incredibly sloppy. They repaired it for free, but it was a month delay when we didn't have a lot of time to spare. I gave them another chance and the next batch they did had a defect rate of 30% whereas our Chinese vendor's rate is <1%, so I bailed on them at that point.
I also tried working with US-based sheet metal vendors on making enclosures for my product, and it cost 6x as much as the Chinese competitors for drastically poorer quality.[0]
I hear a lot of stories like this and I boggle. Back in the 1970s, American car makers took it on the chin because their quality was so much lower than Japanese imports. And it's not like the Japanese approach was a secret; Toyota has been positively evangelical about the Lean model.
I get that it's hard to compete on price with overseas labor. But in theory, our more-educated workforce should let us find non-price advantages, like quality and service. I have theories as to where the problems lie, but it seems so wild to me that this 50-year-old problem hasn't been licked.
Vertically-integrated success stories like Tesla can't be that shoddy in quality, when compared to the horror stories here.
Maybe the truth somehow lies more along the path of antiquated ecosystems leading to too-lenient customers, the way the space launch industry could allow itself to be incredibly wasteful until SpaceX came along.
An odd example, given that Tesla is known for mediocre quality. But yes, success stories are definitionally better than the usual; there are definitely places that don't fit the stereotype. E.g., Wahl clippers, or some of the companies in the Lean orbit, like the ones Kevin Meyer [1] has been involved in. But still, it sounds like the average level of quality is way lower, and I don't think that's just due to the customers.
Thanks for your post and sharing your progress. I look forward to the next one.
As a little bootstrapped startup, I can relate. I've also had on-shore production and sourcing issues that couldn't be resolved without unexpected costs/delays. And, culturally, Chinese vendors seem more straightforward or at least aligned with small makers. Their starting point is what they can offer rather than qualifying you as a customer.
I ran my startup 7 years in China doing pcba, injection molding etc. The speed is really amazing. Now trying a more hybrid model though.. Contact me if you need tips!
It's awesome to have been able to follow this journey from the beginning. Reading your blog posts, to your announcement, to your yearly posts. Keep up the great work.
Congratulations on 2022 revenue, and thank you for sharing! Your blog posts are genuinely inspirational because of how honest you’ve been about your mistakes.
I remember reading your first post about bootstrapping and thinking that you were spending a lot of time on weird products and making rash decisions with money. I did not think you’d last long. Very happy to be wrong.
Those early years pre-TinyPilot are what make this success inspiring: they’re proof that you don’t need to immediately start out as a product or business genius to build a real company. It’s an antidote to the “oh I should learn more before starting” attitude that stops me.
I really hope this doesn’t come off like a backhanded “if this idiot could do it, anyone can” comment, because that’s not how I feel. Just trying to express real admiration for your transparency, perseverance, and now success.
At what point does a minimally positive income-generating concern become a hobby? I know many people who collect and sell Magic cards and make roughly the same amount net, but they wouldn't consider themselves bootstrapped founders. You can't live on $6k a year.
Hardware is hard. Manufacturers in China have a MOQ that tends to be high, and the chance of them screwing you is high.
And the process of hardware is harder. You have to handle bootstrapping, provisioning, firmware, updates, configuration, etc. You have to worry about the vendor substituting other parts in (yes, it happens more often than you'd think). Component failures. Heck, sourcing components is apparently a PITA.
Before, it used to be $1 in components = $10 in end-user cost. I think that multiple is smaller now.
But with all that said, hardware can make money. And it provides lock-in for you.
I'd love an article about how you got the hardware side up and running: finding a manufacturer, features, design, etc.
How did you go about that? All I know is that start ups just self-certify, based on the fact that components they use are already certified and "it's going to be okay" attitude.
Some start ups do some basic in-house checks (some that have more funding can go for pre-compliance tests), but never heard of any small business actually commissioning full compliance tests.
Something like this probably would require selling both kidneys and a house and made the whole business unprofitable - also considering the fact that sellers in China if they copy a product, don't need to do any compliance checks (in practice, because nobody cares).
I work with a US-based compliance testing lab. It was $7k to do both FCC and CE testing. I'll share the name over email if you'd like.
I also talked to UL, who's like the gold standard for compliance testing, but they were pretty hard to deal with and wanted something in the $20-30k range.
Yeah, that blog post definitely resonates with me. As I've been learning about Debian packaging, there are so many times I think, "Oh, why was I reinventing what Debian does really well?"
Part of it is also just getting lost in the local maxmium of Ansible. I kept feeling like, "Well, I'm not reinventing the wheel. Ansible has a pre-built module for creating users / installing dependencies / installing services, but then the Debian package manager does it so much better and faster.
Howdy friend! I've loved following your progress with these posts over the years :)
Ansible is definitely more ergonomic than Debian packaging still. I hope someday we get a better pipline for deb/pkg that's closer to yaml/declarative-style config that Ansible offers. Despite packaging for deb for 3 years now I still have no clue how to do it by memory, I have to check my own docs every time.
Please do not take the following as criticism, just observations based on my own experience and hopefully guidance for others wishing to venture in this direction.
First, to state the obvious: Hardware is hard. I have been doing hardware for forty years. I know. The cash requirements to build and sustain a hardware business can be brutally painful if you are bootstrapping.
One of the problems I see when reading about solo founders in the hardware domain is that they launch into the business without having 100% of the skills necessary to deliver the product.
When I built my first hardware startup I was able to complete all of the electrical engineering, firmware/software engineering, mechanical and had a pretty solid grounding in manufacturing. In looking at the profit statement for the OP's startup, I see $360K in costs that could have been avoided. That is, payroll, electrical engineering and web design. That's a ton of money.
My guess is the raw materials costs ($330K) likely is high as well. Hard to say without having greater visibility into the design. I'll say this, I would not be surprised if the cost could be cut in half by going to a reputable contract manufacturer in China. That's just reality, sorry.
The first quarter my product went on the market we (I) sold $650K of that product. The website didn't look particularly great, but it worked. I got better at web design over the years and improved it, eventually handing it off to someone else. At that point we were nicely profitable and I had several employees. The point is, if the product solves a problem the website almost doesn't matter. I always think of Craigs List as and example of that.
It looks like the OP devices sell for, rounding it, about $400. Which means 2022's sales amount to about 2,000 units. That's great, but the profits got eaten-up by having to pay people for skills. A device like this can be assembled and delivered 100% without having to hire a single person.
I recently had a case where I had to redesign a board three times due to component availability issues. It cost me nothing to do that work (in terms of cash), just a few nights and weekends of my time. That's the power of being able to do the work yourself.
My take is that solo founders, particularly if bootstrapped, must restrict their venture to whatever their competencies might be. If they don't, they will have to use cash to buy that expertise, which can make the difference between a nice grow path and extended pain and agony.
That said. Good job! Hardware startups can be horribly painful. I am currently helping a hardware startup that has to spend a million or two building prototypes before they can even hope to sell their product. Very different from being able to code-up a web product on a laptop in the dorm where pizza might be your greatest expense. It takes a special kind of personality to endure entrepreneurship in general, hardware entrepreneurs are on a different class altogether (which could mean we are amazing or we are absolutely demented...I think I am demented).
Yeah, I completely agree with you. One of my biggest influences is Joel Spolsky, and his advice on this is, "If it’s a core business function — do it yourself, no matter what." [0]
When I started the business, I thought the money was in the software, not the hardware. I figured people would build the hardware on their own, and they'd pay me to create a nice software experience for them. I offered hardware kits as a convenience for users who wanted to buy all the parts at once. Then, I realized people would pay more for custom parts, and I ended up with electrical engineering at the core of my business before I even realized what I'd done.
In the future, I'll definitely stick to software and domains where I'm competent at the core skills myself. But now that I'm here, I'm hoping to make it work despite having to outsource the EE portion.
> When I started the business, I thought the money was in the software, not the hardware.
That can happen. I had a business where I set out to develop hardware product A, and then realized I needed product B to be able to make A work. Five years later the business was about product B and A never got off the ground at all.
Reminds me of when I bought my first surface mount assembly line from this guy who deals in used manufacturing equipment. We had a nice conversation as the equipment was delivered and installed. He had downsized the business from some 50 employees to just him and a couple of assistants. He could not be happier.
At one point he said: You know, a business is like a living, breathing life form that tells you what to do every day, not the other way around.
BTW, I still think that businesses that can create a hardware + software lock can be excellent.
Generic hardware is trouble, just ask anyone who thought they'd design a cool new 3D printer only to have it cloned by someone in China before their Kickstarter campaign was over (this actually happened at least once, I met the poor fellow). If the hardware is connected to useful non-trivial software and services, the barrier to entry is significantly higher.
> Yeah, I completely agree with you. One of my biggest influences is Joel Spolsky, and his advice on this is, "If it’s a core business function — do it yourself, no matter what." [0]
Keeping that in mind in the era of AI-generated code.
> Very different from being able to code-up a web product on a laptop in the dorm where pizza might be your greatest expense.
That feeling when you fat fingered one resistor value on the BOM and you have not noticed even after going through BOM five time before placing the order, then realising this when boards came assembled month later and you couldn't figure why they don't work. The dilemma - go through 100 boards and manually replace each resistor or keep them for parts and run the order again and so on and so on.
Completely different to when you have a bug in software and you can just change few lines and deploy.
> That feeling when you fat fingered one resistor value on the BOM
Three short stories:
I did this board almost twenty years ago. FPGAs and a bunch of other stuff. Signals going all the way up to 1.7 GHz. I got the signal and power integrity design of the PCB as close to perfect as could be. It passed emissions testing as well. Somehow I managed to lay out the $5 DC power in connector backwards. Yup. The joke was I could be trusted with multi-giga-Hertz designs but I suck at DC.
More recently, we had a few hundred boards assembled. Due to supply chain issues some of the parts on that board are in the "unobtanium" category. The pick-and-place machine screwed-up and rotated some of these impossible-to-get components on a couple dozen boards. Somehow optical inspection did not pick up on it (I have my theory on that one). We blew the top off a couple of those chips on power-up before understanding there was a problem and re-inspecting everything. You can't buy the chips (50+ week lead times) so, a couple dozen of these $1K+ boards are on a pile waiting for new chips.
Finally, I found myself having to hand-solder 800 resistors on a bunch of boards because the interface to a device these were talking to changed without notice, requiring pull-downs. The board had no pads for pull-downs. I had to solder these 0402 resistors to existing pads shared by other SMT components. It was about twelve hours of pure agony.
That's why I say I must be demented. I like hardware, and I can hate it just as much.
That's one nightmare :P. But also with software, because the factory firmware can't be changed! Luckily there's OTA but even that may not save you if it's part of the config file that doesn't change!
Don't most modern systems have baked in lights out management with kvm? I think there was even an open api. So it's a pretty niche hobbyist old system market that already seems price sensitive and if want to be able to powercycle you'd need another solution anyway. Numbers are pretty grim but hardware is hard, esp bootstrapped. It seems like you're definitely playing on hard mode a bit.
The fact that you didn't comment on this yourself shilling TinyPilot is another glaring indicator that running a business might not be something you're cut out for. I can't manage to get a job at Google though so obviously we all have something we're really good at.
Posting here is FREE advertising, (I OWN a TinyPilot) why not include "building TinyPilot" or something "Raspi KVM" in the title? This is the lowest hanging fruit.
