Author here.
Happy to answer take any feedback and answer any questions about this post.
replies(9):
Now that you've been through this process, how would you go about finding a buyer yourself?
Also, are there any resources you found valuable for starting your business? How did you go about hiring your first employee and setting everything up for them as employees?
Again, thanks for the writeup and congrats on the sale!
I'm currently working on a book about writing as a developer, and that's my main focus for the next few months,, but I don't know if I' call it a business because I haven't sold anything yet.[2]
Yep, still happy with the decision. A lot of my comp at Google was stock, so I would have made a lot from the stock price movement over the last six years, and I'm a bit envious of that, but still yes.
I do still love the independence of working for myself, so I'm happy to have had the last six years of that rather than feeling unfulfilled at Google.
With everything shifting around AI, and big tech could be doing massive dev layoffs in the next five years. Given that risk, I'm happy to have experience as a founder rather than a dev who could be laid off immediately in a down market.
https://news.ycombinator.com/item?id=42126800
>Do you feel richer or poorer for the experience?
Definitely richer. I'm glad I did it, and it was so much more meaningful than the work I did at Google or any previous job.
>What's next for you?
My wife and I just had our first child over the summer, so I'm mostly on paternity leave to enjoy time with my family, but I'm slowly easing back into work. My next project is a book about what I've learned about writing effectively as a software developer.[0] Eventually, I'd like to try building a SaaS, but working on a book is much friendlier to an unpredictable work schedule at the moment.
Q: personal guarantee loans/contracts
I know it's common practice for lenders & commercial real estate to make small business owners personally guarantee the loan/contract.
Did you have any of this? And if so, how did you unwind those contract?
>Now that you've been through this process, how would you go about finding a buyer yourself?
It would have been tough to find a buyer. Before I met Quiet Light, I was worried a broker wouldn't take me, and I'd have to find a buyer myself. So my plan was to (in order) start more loudly telling other founders that I'm looking for a buyer, reach out to more adjacent companies pitching them on a strategic acquisition, discuss on my blog that I'm looking for a buyer, and if all else fails, put up a banner on the store website saying the company is for sale. The problem was that the more loudly I advertise the company is for sale, the more obvious it is to buyers that I'm desperate to sell. It also risks spooking customers who might not want to buy hardware from a company whose ownership is about to change.
>Also, are there any resources you found valuable for starting your business?
Minute for minute, the best resource I've found is Jason Cohen's talk, "Designing the Ideal Bootstrapped Business."[0, 1] The key insight for me is that bootstrapped businesses have very different strengths and weaknesses than a VC-backed startup, so you should pick a business that plays to those strengths.
I also enjoyed Start Small, Stay Small by Rob Walling [2] and The Mom Test by Rob Fitzpatrick[3]. The tl; dr from those is that you need to avoid the trap of building something for months and then looking around for customers once it's done. You instead should flip it and talk to customers before you even start and find out what they need.
It's not a book or resource, but one of the most valuable things I did and wish I did it earlier was create a course. It's a very condensed version of the experience of bootstrapping a business because you need to identify a need, create a product that fills the need, then market it to customers. And you don't have to be the world expert on anything, you just need to know enough to get someone who's at level N to level N + 1 and who likes the way you explain things. And you can pick a small topic and create a course with 30-100 hours of work.
I spent 60 hours on my first course, and it made $10k, so it's not like a smash hit, but it's the highest ROI thing financially I've done since quitting Google.
>How did you go about hiring your first employee and setting everything up for them as employees?
In the first few months, I was assembling all the devices, packing boxes, and printing out instruction sheets myself. It wasn't sustainable because I was also trying to write code and do customer support. It was during COVID and my wife and I were quarantining strictly, but she also was looking for a job since she was in grad school, so she was employee #1.
We started with just Google Docs. I'd write things and share them with her, and she'd ask questions or make updates.
My next hires were developers, which was a pretty dumb decision because it's the most expensive role, and it's the job I like doing most myself. I was finding that I didn't have time to advance the product because customer support was taking too much time, so I should have hired a customer support person. But I hired devs because I'd hired devs before and worked with a lot of devs, so it was a role I felt comfortable hiring. For that, I tried to add lots of automated checks on Github and document things there. I also wrote guidelines on my blog that became official guidelines for devs within the company.[4]
We moved into an office in early 2021, and at that point, I had to hire real W-2 employees rather than contractors. For that I used JustWorks, which I hated. I switched to Gusto, and they were poor but not terrible. In the future, I'm going to avoid creating a business that needs W-2 employees because in the US, it's just set up so badly for small businesses to manage the paperwork around it.
As we were moving into the office, we also switched from Google Docs to Notion, and I had a good experience with Notion. It's set up well for internal documentation, and it's user friendly, so it's easy for everyone to do basic searching and editing.
I could go on and on about hiring, but those are the biggest things that come to mind.
[0] https://www.youtube.com/watch?v=otbnC2zE2rw
[1] https://mtlynch.io/notes/designing-the-ideal-bootstrapped-bu...
[2] https://mtlynch.io/book-reports/start-small-stay-small/
No, the only place where I was personally on the hook was credit cards, but that was fine because I just paid the balance and closed the accounts.
I maybe had to give a personal guarantee to rent our office, but it was $600/mo and the landlord was extremely laid back and agreed to month-to-month after our lease was up.
I didn't take out any small business loans to start the business, as I started it with my own cash, and then it generated enough revenue to sustain itself.
The buyer may have had more complicated agreements with his lenders to purchase the business, but I wouldn't be exposed to any of that.
Your worst case is you lose the deal and the time and money you spent on it, and their worst case is they are fired and lose their healthcare (that is how it works in America right?), is that correct?
>Your worst case is you lose the deal and the time and money you spent on it, and their worst case is they are fired and lose their healthcare (that is how it works in America right?), is that correct?
Yeah, I get that perspective.
As I said, I don't think there's any good solution here. I don't think it's fair for me to hand the company over to someone who might just fire the employees, but I also can't promise to keep everyone in their role forever regardless of a sale.
For added context, everyone at the company worked part-time, generally a max of 20 hours per week. Some were contractors who had multiple clients, others were founders with their own side projects, and others worked part time because they wanted to focus on other things in their personal life. Nobody had healthcare insurance through the company.
So, in the worst case of an owner coming in and firing everyone, it would suck, but it's also not like anyone would be like, "Oh no! I just bought a new house on the expectation that I'd be at the company for the next 20 years!"
The worst case for me isn't just that I lose some time and money. I was terrified of not being able to sell the company by the time my son was born. I was the sole founder and manager, so I can't exactly say, "Okay, I'm going to take a few months of paternity leave. Pay yourselves and our vendors while I'm gone." So I'd be probably in a position of letting down both the team and my family trying to keep the company afloat while becoming a new father.
Especially at a 2.4 multiple... It seems like you could have just let it keep running mostly on autopilot (assuming the team could keep working on improvements)?
I wrote about that in a previous post: https://mtlynch.io/i-sold-tinypilot/#why-sell
Now I know this is such a broad question, with many factors that could influence whether this pursuit is worthwhile, but maybe your experience could point out whether this is even something to consider. For example, would I even gain the necessary skillsets required to found a company whilst pursuing medicine? Would knowledge of tech compliment a medical-related company, or would I better spend my time working on the non-tech side of a company?
Your writing is great to highlight the complexities in the world of indie businesses. Thanks.
First, a meta comment is that I've found that you should weigh advice based on how similar the advisor is and how closely their success matches what you want. So, given that I came in with a background in software already, my advice might not be a good match for you.
I feel like I went down a lot of misguided paths as a founder following advice of people who were successful but were very different from me (e.g., their goal was to reach $1B in valuation, they love pitching to customers).
That said, the thing I recommend to a lot of people curious about starting out with an indie business is to create a course or a book. People call these "info products" and that term has kind of a stench to it, but I think they're a great way to learn. I prefer the term "educational product" because there's less of a stigma. I created a video course in year three of going off on my own, but I wish I'd done it sooner.
I think people feel reluctant to create an educational product because they feel like they're not an expert at anything, but you don't have to be the world expert on something to make a course. You just have to know enough that you can get your students from level N to level N + 1. You can take something that you recently learned and make a course that you wish that you'd had that would have let you learn the same information in 5 hours rather than 50 hours. And you don't have to be the world's greatest teacher as long as you can find some people who enjoy the way you explain things.
Creating an educational product is like a microcosm of the full experience of launching a business. It forces you to think about what customers want, build something that fills the need, and then market it to find customers who want it. And all that stuff is hard, but it's much easier to do with a course. If you spent 50 hours making a course and find out you can't sell it, you lost 50 hours. You can learn from the failure and try a new course or product the next month. If you spent 2 years learning to code and building a tech product and find that nobody wants it, you'll feel very tied to that idea and have a hard time pivoting to another idea.
I have my issues with Pieter Levels, but I think he's a great case study in trying businesses rapidly and then doubling down on the ones that work. When he started, he didn't know how to code well, so his early products would just be like a Google Sheets spreadsheet that he sold access to.
[0] https://mtlynch.io/solo-developer-year-6/#tinypilot-became-2...