I quit my job four years ago to build my own independent software business. I've written an annual retrospective every year and shared it on HN, and it's led to interesting discussions and extremely valuable feedback.
I'm happy to answer any questions or take any feedback about the post.
Loved the post, and congrats on the success of TinyPilot this year!
I thought the "Do I still love it?" question was so interesting and so important. I'm curious if you harbor any regrets about the type of business you got into (with the complications of hardware, supply chain logistics, complex customer support, etc.). It seems like a pure software business would have so much less complexity (though maybe is also harder to get off the ground because so many other people can do it). Did you think about what running a business like TinyPilot at scale would look like when you were evaluating it and decide it was worth it? Or did you just kind of fall into the success.
> I'm curious if you harbor any regrets about the type of business you got into (with the complications of hardware, supply chain logistics, complex customer support, etc.). It seems like a pure software business would have so much less complexity (though maybe is also harder to get off the ground because so many other people can do it).
Yeah, it's definitely been a mixed blessing.
On the one hand, I still feel like a software developer at heart, so I wish for more time on software rather than all of the complexities of building and shipping a custom hardware product.
TinyPilot feels much harder than my other businesses because there are 20x as many moving parts, though I can't meaningfully compare it because none of my other businesses have reached TinyPilot's volume.
At the same time, I think the reason TinyPilot works is because it's hard. Individually, the parts of it aren't hard (software, hardware, eCommerce), but I find the combination really challenging. Big companies likely aren't going to make a product like TinyPilot unless it's enterprise-focused. Small companies don't seem to want to venture in because the combination of required skills is daunting, so it gives me a nice moat.
> Did you think about what running a business like TinyPilot at scale would look like when you were evaluating it and decide it was worth it? Or did you just kind of fall into the success.
Haha, definitely the latter. When I first started TinyPilot, I thought I could maybe sell 1-2 a week, and that would be a fun way to earn a few hundred dollars per month. And then as demand grew, I felt like, "Wow, this is what product-market fit feels like. I'd better see where this takes me."
Sorry this blog has no substance because it doesn't articulate the elephant in the room. After 4 years you have some revenue, but you don't have any profit...therefore you are continuing to fail.
Unless the line 'Software Development' is what you paid yourself to develop the software. If so you have:
460k sales with 127k owner benefit (27% profit).
> Sorry this blog has no substance because it doesn't articulate the elephant in the room.
This feels like a fairly shallow dismissal given that I'm sharing more detail than the vast majority of private companies.
The only reason you're able to nitpick the finances is because I'm laying out my costs, whereas most other people share only revenue, at best.
> After 4 years you have some revenue, but you don't have any profit.
TinyPilot is 18 months old. It had $3k in cash profit and ended the year with $59k in inventory on $460k in sales. I could have optimized for short-term profit, but I'm investing in long-term growth. It's a hardware business, so there a lot of up-front costs that pay dividends over years.
Thanks, I appreciate the insight you shared. Curious on your profitability tho...your gross margin seems fairly low (raw material to sales price). How are you trying to reduce costs...or how have you determined the right market price for the product?
Raw materials includes the $59k I have in inventory, so cost of goods sold would be closer to $200k on $460k in sales.
I've been iterating on the hardware to reduce cost and increase value. The Voyager 2 reduced costs over the Voyager 1 by eliminating some retail hardware components I had to buy. I was expecting to release a PoE version of the Voyager 2 in December, and I think customers would pay a premium for PoE, but it's taking longer than I expected to get that version ready. I'm hoping to ship it in another few weeks at a price that's about 15% higher than the non-PoE.
I should experiment more with pricing. I used to sell the Voyager for $249, and then someone on HN suggested I raise prices, and I thought, "I can't possibly sell it for more!" And I raised it by $50, and it didn't seem to change sales, and then basically the same thing happened a few months later. So maybe it's time for another price experiment.
Agree with the parent commenter some more elaboration on how your seemingly low profitability isn't a concern in the long term would be helpful to understand as I don't see immediately how your investments in the short term will help in the long term. The table makes it seem you spend -$464,071 to make $477,449 but your comment here makes it seems like 460k sales actually only cost 200k in raw materials, which is impressive!
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[ 0.21 ms ] story [ 34.6 ms ] threadI quit my job four years ago to build my own independent software business. I've written an annual retrospective every year and shared it on HN, and it's led to interesting discussions and extremely valuable feedback.
I'm happy to answer any questions or take any feedback about the post.
I thought the "Do I still love it?" question was so interesting and so important. I'm curious if you harbor any regrets about the type of business you got into (with the complications of hardware, supply chain logistics, complex customer support, etc.). It seems like a pure software business would have so much less complexity (though maybe is also harder to get off the ground because so many other people can do it). Did you think about what running a business like TinyPilot at scale would look like when you were evaluating it and decide it was worth it? Or did you just kind of fall into the success.
> I'm curious if you harbor any regrets about the type of business you got into (with the complications of hardware, supply chain logistics, complex customer support, etc.). It seems like a pure software business would have so much less complexity (though maybe is also harder to get off the ground because so many other people can do it).
Yeah, it's definitely been a mixed blessing.
On the one hand, I still feel like a software developer at heart, so I wish for more time on software rather than all of the complexities of building and shipping a custom hardware product.
TinyPilot feels much harder than my other businesses because there are 20x as many moving parts, though I can't meaningfully compare it because none of my other businesses have reached TinyPilot's volume.
At the same time, I think the reason TinyPilot works is because it's hard. Individually, the parts of it aren't hard (software, hardware, eCommerce), but I find the combination really challenging. Big companies likely aren't going to make a product like TinyPilot unless it's enterprise-focused. Small companies don't seem to want to venture in because the combination of required skills is daunting, so it gives me a nice moat.
> Did you think about what running a business like TinyPilot at scale would look like when you were evaluating it and decide it was worth it? Or did you just kind of fall into the success.
Haha, definitely the latter. When I first started TinyPilot, I thought I could maybe sell 1-2 a week, and that would be a fun way to earn a few hundred dollars per month. And then as demand grew, I felt like, "Wow, this is what product-market fit feels like. I'd better see where this takes me."
We lose $ on every sale but make it up on volume?
Sorry this blog has no substance because it doesn't articulate the elephant in the room. After 4 years you have some revenue, but you don't have any profit...therefore you are continuing to fail.
Unless the line 'Software Development' is what you paid yourself to develop the software. If so you have: 460k sales with 127k owner benefit (27% profit).
This feels like a fairly shallow dismissal given that I'm sharing more detail than the vast majority of private companies.
The only reason you're able to nitpick the finances is because I'm laying out my costs, whereas most other people share only revenue, at best.
> After 4 years you have some revenue, but you don't have any profit.
TinyPilot is 18 months old. It had $3k in cash profit and ended the year with $59k in inventory on $460k in sales. I could have optimized for short-term profit, but I'm investing in long-term growth. It's a hardware business, so there a lot of up-front costs that pay dividends over years.
> therefore you are continuing to fail.
Not your judgment to make.
Raw materials includes the $59k I have in inventory, so cost of goods sold would be closer to $200k on $460k in sales.
I've been iterating on the hardware to reduce cost and increase value. The Voyager 2 reduced costs over the Voyager 1 by eliminating some retail hardware components I had to buy. I was expecting to release a PoE version of the Voyager 2 in December, and I think customers would pay a premium for PoE, but it's taking longer than I expected to get that version ready. I'm hoping to ship it in another few weeks at a price that's about 15% higher than the non-PoE.
I should experiment more with pricing. I used to sell the Voyager for $249, and then someone on HN suggested I raise prices, and I thought, "I can't possibly sell it for more!" And I raised it by $50, and it didn't seem to change sales, and then basically the same thing happened a few months later. So maybe it's time for another price experiment.
best of luck and great article as always!