Solofounding & Solofunding is tough, but worth it (my reflections, 4 years into it)
- Thread starter manga006
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@paraklettos Thank you! I happily accept the “lifestyle business” moniker. I fully believe a lifestyle business can outcompete and outlive a gasoline-fueled rocket ship, but it will take some time to prove that out.
swordfish11
New member
@swordfish11 I hope I can help other solofounders with the advice I’ve provided above, but I don’t want constant critiques of my every move in the future.
As a solofounder, hiding in the shadows is a choice and I get to decide on my own terms when it’s Groundhog Day and I’m ready to poke my head out, if ever. This is opposite of most start-up advice, but my route is also very unconventional.
I am still in the very early stages (have just recently started to scale) and thus am still balancing a full time day job alongside this nights-and-weekends endeavor which is required since I am solofunding. The shadows feel safe right now.
As a solofounder, hiding in the shadows is a choice and I get to decide on my own terms when it’s Groundhog Day and I’m ready to poke my head out, if ever. This is opposite of most start-up advice, but my route is also very unconventional.
I am still in the very early stages (have just recently started to scale) and thus am still balancing a full time day job alongside this nights-and-weekends endeavor which is required since I am solofunding. The shadows feel safe right now.
@lorak Simplicity is so important when you are solofounding. Keep everything as simple as possible for as long as possible.
In my city/town/village/region/state (keeping things vague here), there are no taxes on the revenue, only on profit. The platforms that I use automatically remit sales tax directly to the tax authorities, so I don’t even need to worry about that.
I try to keep my tax situation as simple as possible. Infact, my entire tax bill last year including this business and my personal taxes (including my significant other) was less than $700 - and the firm I use is very, very good.
The beauty of solofounding a company is that so many of the distractions that are embedded in traditional co-founder startups (legal formations, partnership agreements, complicated ownership and tax situations) are unnecessary and can be completely avoided. I get to spend 100% of my time solving the next business problem, not the next business structure problem, or worse, business structure vendor management.
“Keeping the books” is also incredibly easy as I’ve built it directly into my product. I’ve made it very simple to pull data needed to pull together my yearly taxes. Essentially any manual task that I come across managing this business (like keeping the books), I eventually write up a task to automate it and it eventually gets done and we move on to the next item.
When you aren’t a solo funded and solo founded company, you’d typically just hire that out. But it’s quite advantageous to automate solutions to your problems rather than fixing them with human capital. It allows you to stay lean. I’ve followed this strategy for the entire 4 years.
There is no issue with paying my non-US and outside-of-the-us (important distinction that he is both) freelancer. My bank takes care of the currency conversion and I pay in his preferred currency via wire each month after he issues me an invoice. Unlike most corporate payers who may take 30-90 days to pay an invoice, I usually pay him within 8 hours of receiving an invoice and I am sure he appreciates that. I’ve got no institutional investor telling me we must hold the cash as long as possible to earn as much interest as possible.
The hardest part will be finding a freelancer who cares about your project, who is responsible and friendly, who has expert level technical expertise in the full stack, and who is genuinely a good human being. I got incredibly luckily in this aspect. I do not even know his age, but I suspect he is an older guy, possibly 10-20 years older than me.
In my city/town/village/region/state (keeping things vague here), there are no taxes on the revenue, only on profit. The platforms that I use automatically remit sales tax directly to the tax authorities, so I don’t even need to worry about that.
I try to keep my tax situation as simple as possible. Infact, my entire tax bill last year including this business and my personal taxes (including my significant other) was less than $700 - and the firm I use is very, very good.
The beauty of solofounding a company is that so many of the distractions that are embedded in traditional co-founder startups (legal formations, partnership agreements, complicated ownership and tax situations) are unnecessary and can be completely avoided. I get to spend 100% of my time solving the next business problem, not the next business structure problem, or worse, business structure vendor management.
“Keeping the books” is also incredibly easy as I’ve built it directly into my product. I’ve made it very simple to pull data needed to pull together my yearly taxes. Essentially any manual task that I come across managing this business (like keeping the books), I eventually write up a task to automate it and it eventually gets done and we move on to the next item.
When you aren’t a solo funded and solo founded company, you’d typically just hire that out. But it’s quite advantageous to automate solutions to your problems rather than fixing them with human capital. It allows you to stay lean. I’ve followed this strategy for the entire 4 years.
There is no issue with paying my non-US and outside-of-the-us (important distinction that he is both) freelancer. My bank takes care of the currency conversion and I pay in his preferred currency via wire each month after he issues me an invoice. Unlike most corporate payers who may take 30-90 days to pay an invoice, I usually pay him within 8 hours of receiving an invoice and I am sure he appreciates that. I’ve got no institutional investor telling me we must hold the cash as long as possible to earn as much interest as possible.
The hardest part will be finding a freelancer who cares about your project, who is responsible and friendly, who has expert level technical expertise in the full stack, and who is genuinely a good human being. I got incredibly luckily in this aspect. I do not even know his age, but I suspect he is an older guy, possibly 10-20 years older than me.
akadascribe
New member
@juremahrb $125K
My margins are lower than a lot of true SAAS products because there is a physical product component. This also makes it more defensible. Gross profit % will likely increase as I scale more.
My margins are lower than a lot of true SAAS products because there is a physical product component. This also makes it more defensible. Gross profit % will likely increase as I scale more.
@manga006 congrats, buddy! worthy entrepreneurial pursuit.
25% ROI is not a startup, it's a tech-enabled small business. It is indeed fine for a small business to take time and be sustainable.
The points at which you may find yourself challenged are: emergence of well-funded competitor or sudden spike in product interest. Then classic venture model might be the only net to capture the school of fish swimming by
25% ROI is not a startup, it's a tech-enabled small business. It is indeed fine for a small business to take time and be sustainable.
The points at which you may find yourself challenged are: emergence of well-funded competitor or sudden spike in product interest. Then classic venture model might be the only net to capture the school of fish swimming by
malcolmsonjoshua
New member
@malcolmsonjoshua you'd be shocked
@manga006 Startup implies high growth and high uncertainty almost by definition.
There's nothing wrong with 25% for a scaleup or late stage (assuming ebidta margin is double digits too) as the uncertainty comes down.
There's also nothing wrong in starting a small business growing at 25%, as they tend to be more sustainable with lower uncertainty from the get go.
25% YOY in the beginning of startup's life means it is either not a startup or a concerning risk/reward. At early-stage, high double-digits or triple-digits growth is not at all shocking for venture-backable startups. And because they grow that fast is exactly the reason they rarely can do it on its own.
There's nothing wrong with 25% for a scaleup or late stage (assuming ebidta margin is double digits too) as the uncertainty comes down.
There's also nothing wrong in starting a small business growing at 25%, as they tend to be more sustainable with lower uncertainty from the get go.
25% YOY in the beginning of startup's life means it is either not a startup or a concerning risk/reward. At early-stage, high double-digits or triple-digits growth is not at all shocking for venture-backable startups. And because they grow that fast is exactly the reason they rarely can do it on its own.
@tomorrow ROI measures the gain or loss from the amount of money invested. How fast did Uber or Amazon return a gain to its investors? It took a long time, unless they sold. Unless you are considering the increase in valuation in your ROI calculation, the ROI was not accrued until money was returned to the investor. I understand perfectly well how to calculate ROI.