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Comment by alberth | Hacker News Reader

> ”Tarsnap has spent 100% of its December operating profits [$274,482 over 14-years] on supporting open source software”

Off topic: if you extrapolated that math, it should be hugely encouraging to aspiring indie/solo developers that you can earn a fantastic income as a 1-2 person business.

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True, but I doubt it's linear, and I wonder if there's something unique about December (new customers paying annually to use up their budget, etc)

Nothing unique about December in terms of revenue. Even if people were prepaying large amounts in December (which isn't happening as far as I can tell) that would go into the "unearned income" reserve; profits are only realized when the service is actually delivered.

Usually its fourth quarter where many businesses move into the black for the year based on how they budget for things, hence things like "Black Friday".

That's retail for Christmas gifts.

Yep, but actually many companies unrelated to Retail use this or similar measures as they gain fourth quarter accounting success, pretty common all over the place.

is it really a fantastic income? tarsnap is well-known and we're seeing the value after 14 years of work. $250k/y is much less than what you would be making at a FAANG.

> is it really a fantastic income?

Just because it's less than a FAANG doesn't mean it's not a fantastic income. I make less than this, in a HCOL area, and I think I have a pretty fantastic income. $250k/yr is 3.3x the median household income in the US ($74,580 according to the 2022 Census).

"fantastic" is always going to depend on context -- you could also say $250k/yr is 80x the median global income. In this case, I'm sure the owner could easily make a FAANG income if he so desired, which is why I used it as a comparison point.

Your math only makes sense if you’re assuming they got all their customers year one and have had no growth since. Who’s to say the donations last year weren’t $100,000 putting the estimated profits at $1.2m (assuming all months are roughly equal)?

Who’s to say the donations last year weren’t $100,000 putting the estimated profits at $1.2m

To answer the rhetorical question: I can tell you that. I wish, though. ;-)

Reality is somewhere between those two hypotheticals. The past few years, my now-2.5-year-old has been taking a lot of my attention and I haven't really been focused on Tarsnap's growth.

Doesn't that makes the calculus worse for the startup, not better, due to time value of money? The counterfactual FANG worker chugging along at 250k/year has had health insurance, deductible retirement contributions, and years of stock market growth to appreciate their nest egg.

I don’t think so?

$300,000/year for 14 years is $4.2m

If you’re making $1m in profit after 14 years it doesn’t take long to catch up even if your first few years were slow. You also are sitting on a business you could likely sell for $5-10m on top of that.

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