My sixth year as a bootstrapped founder

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.

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?

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/), 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/) 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/), 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.

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), 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.

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.