Profitable After 3 Weeks | Hacker News Reader

Profitable After 3 Weeks

balsamiq.com

100 pointsbreck46 comments

It's a great accomplishment to book thousands of dollars of revenue within a few weeks of launch. But as the article states, this is profitability without covering salary -- a big disclaimer.

And doesn't count the product development sunk costs, either.

By his maths, my first business was profitable in the first week, including my salary.

What makes product businesses unprofitable upfront is not the ongoing costs, it's the development costs.

Off-topic but honest question: Why does everyone say "maths" instead of "math" these days? Is it a European thing, an academic thing, or just a meme among hackers?

I never once heard it or saw it written like that before Hacker News / proggit.

I cringed when someone on proggit recently said "Do the maths!" I don't think that's a saying anywhere.

UK "maths" = USA "math"

"Maths" is the standard term outside of North America, as far as I know. I'm Irish, and "math" has always sounded odd.

It seems that "maths" is the semantically correct option. To take your quote, "do the math" expands to "do the mathematic" - which is surely wrong.

Thanks. Now I know.

The aftermath.

"Do the arithmetic" is standard American.

I also cringe when people use the term "codes" instead of "code".

I don't think of code as being divisible into discrete units, it's like a fluid. Like "water", you rarely say "waters". There are "programs" and "libraries" and "frameworks" that are made up of "code" or multiple "files containing code"... but they are not "codes"!

If you want to use the word "codes", you'll need to give me an adequate definition of the word "code" as a singular noun (which I will most likely disagree with).

In my mind "code" means programming language code, and "codes" means cryptography related codes.

</rant>

I agree with you, and the name of the concept is "uncountable noun":

http://en.wikipedia.org/wiki/Uncountable_noun

One of the funnier differences between Italian and English is that in the former, you say "hairs" - it's not uncountable, which to us sounds pretty funny, as I'm sure we do when talking about our "one hair". "My hairs are all messed up!"

"Codes" is the common usage in the engineering sector, probably because "code" was already in-use to identify component items.

I despise it. It's an effective way to eliminate idiots though, "plz send teh codes" being the canonical example.

I find 'plz' and 'thx' and 'tks' and '10x' and so on the most annoying though; how the fuck is it polite if you can't even be bothered to spell the complete word? If you want to show gratitude, 'thanks' or 'thank you' are much better, and english already provides 'ta' as a short form.

Sigh. People treating IRC like AOL make my sad.

Unfortunately it's actually not a very good idiot filter because a lot of non-native English speakers seem to use "codes" instead of "code".

sunk cost are sunk cost. after launch they don't matter, so I think he is on target for leaving those off. Oh and congrats on this early milestone. I'm wondering why your going to focus ads on the low performing market, why not hit where the iron is hot (i.e the market where you are gaining customers)?

Hi Mistone, I am focusing on the plugin version because the margins there are much, much higher. That said, I am definitely working hard to keep customers of my desktop version happy...just look at my blog's posts from the last few days...oh, and Mockups For Desktop 1.1 is coming up on the 21st! :)

Re: ads: I haven't done any AdWord-style advertising yet, just through bloggers and twitter. So far so good.

I agree that not including my time so far is a BIG disclaimer, but isn't every startup a labor of love to some extent? :)

What funded most of the development of Mockups was my day job, as I worked on Balsamiq for many, many nights and week-ends before "making the jump".

Like I said in the post, I am counting as costs only what's in Balsamiq's bank account statement at the moment...I am only just starting after all.

as I worked on Balsamiq for many, many nights and week-ends

And this for sure is another form of cost.

Yaw, using the word profitable isn't really reasonable even with a disclaimer. Software startups have very few significant expenses other than manpower. Our 3-person startup (when we start paying ourselves) will literally be paying out 10x more per month in salaries (that's with fairly stunted salaries) than all other expenses COMBINED. It's a long road.

Nonetheless, killer accomplishment and I think it's a kickass tool. I am leery of the non-recurring revenue (I read the authors post on why he made that decision, but I still think he's wrong)... Every customer adds a touch to the support overhead and doesn't add to the revenue line but once. Customer acquisition is hard, and fixed price software has to do it constantly or die.

SaaS is golden. Low risk for the customer, beautifully aligned interests, and you cease to be a slave to the launching new versions just to get your current customers to give you more money.

Hey there, thanks for the comment. Regarding your last point: I totally agree SaaS is golden, I just don't want to host it myself now, and thus be a slave to having to keep the service up all the time. :)

Heh-- you're just choosing a different master. You're going to be a slave to sales/distribution instead. I'm only half-kidding-- it's no coincidence that most shrink-wrapped software guys are trying to get into SaaS offerings.

The mockup app rocks.

Is it just me or is your site a lot like 37signals?

I personally had some trouble finding my way around. To me, it's not clear what confluence is, what the flatworld thing is and how the mockup app ties in. No big deal though.

Overall, congrats!

Hey there, thanks for the nice words. The design of the site is all mine (and sadly it shows), but when I designed it I was at the height of my 37signal fanboy phase, so I'm not surprised you can see an influence there.

Re: trouble with navigating the site: I keep hearing about it, but I haven't been able to find the time (or inspiration) to drastically improve it. I'll keep at it.

Great for having revenue after only three weeks. It is fantastic.

I would not call it profitable yet. You are considering your salary $0, but that is not really true. Your time has value.

The idea seems great, It seems useful for my current work. I will look into it.

WOW I never thought I'd be on HN twice in 10 days. Should I be proud...or afraid? ;)

Thanks for the kind words everyone, I'll answer questions in-line.

This is a great case study for anyone who wants to go independent for a while.

Out of pure artistic curiosity: What did linked article use to make those charts? They look nice.

Looks like Excel 2007 to me.

I used Excel 2008 for Mac.

FYI, you can defer the $800 california minimum tax for two years if you request to be taxed as a corporation when you file your taxes.

FYI you might not want to take tax advice from random people on the Internet although you might ask someone who is actually qualified about something like that.

> My family and I relocated from San Francisco to Bologna, Italy on May 1st

Congratulazioni! Thank you for sharing. Your blog is inspiring. So many people talk about living abroad and working for themselves - you are doing it..

What is it like? (working part-time but full-time on your mISV in a land where they value relaxation and enjoyment of life more)

Balsamiq makes complete sense now!

http://en.wikipedia.org/wiki/Balsamic_vinegar

I must admit life in Italy is really nice, especially when you have a large extended family around like I do. I'll share more on my blog about it but I am a little ashamed at how good the food is here and at how beautiful the country-side can be... :)

As for "Balsamiq", you got it: scroll to the bottom of http://www.balsamiq.com/company for the full story.

Complimenti! Vivere in Italia e` senz'altro bello, but if I may ask, how are you planning on dealing with the weak dollar, and more importantly, getting money from your company in the US to Italy? I mean the legalities of it, obviously, not the actual method. My friend in Padova is an accountant, and he was telling me that having a company in the US is pretty much "worthless". My guess is that many European countries would have similar issues.

Hey Davidw, good questions. For both, my answer for now is "ride it out and continue to live off of my Italian savings". When there'll be enough money in the US account to make it worth it, or when the money here runs out (whichever comes first), I'll cross the painful bridge of becoming a one-person multi-national. :( I am NOT looking forward to it and I expect to get a sour deal on taxes.

It's also not a given that we'll stay in Italy long-term, we are giving it a try for a year or two.

Just be careful, those numbers are most likely skewed by that initial rush from that initial promotion you did(i.e. HN thread etc). What I mean is, I wouldn't quit my day job thinking the revenue stays the same, wait till you have at least 2-3 months of 5K/month

Yup, the current revenue levels blow all my conservative predictions out of the water...I keep waiting for the slowdown to start...hopefully I'll have to keep waiting a while longer... :)

Did he really need to incorporate just to sell a shareware program over the internet? What are the benefits of that?

Taxes and liability.

but isnt the tax benefit of a single person LLC just the ability to deduct expenses? Besides forming an LLC he had almost no expenses.

And I highly doubt his desktop gui is going to be liable for anything right?

An $800 incorporation fee is a small price to pay to separate your personal liability from your business liability. Especially if you have other assets, like a house or pension.

Future expenses will most likely add up to more than the incorporation fee, so it makes sense. Stuff like traveling, mileage, a new computer, rent if the business expands. As the business grows he will be able to deduct more. However, I believe you can also deduct as a sole proprietorship, so the tax benefits of an LLC are more about removing the double taxation of corporations than being able to deduct expenses. But an LLC makes things clearer and formally separates your business from your personal life, so you can track exactly how well its doing and what expenses and income are associated with each.

Hey there. The main reason I incorporated is to give my potential customers (I am going after large enterprises) a warm and squishy feeling of being able to trust me. :)

That, and liability, and taxes, and I have big plans for Balsamiq, so I thought I might as well incorporate right away.

On a side note, its ironic that customers like doing business with a corporation more than just a guy. They think if you're a corporation, well then they know where to find you when things go down the tubes. Of course, when they finally do find you, they'll be limited in how much they can get from you because of your incorporated status.

That's great! Thanks for sharing the financial details. It's great to see someone progressing and doing well.

Hey, great job! I loved those mockups for heavyweight players.

Congratulations.

Reply on news.ycombinator.com