11 ms·

Congratulations! But I’m disappointed with no mention of profit level in this post or another one linked. My last business I scaled to 500K ARR in less than two

Congratulations! But I’m disappointed with no mention of profit level in this post or another one linked. My last business I scaled to 500K ARR in less than two years, with $20K in total annual profit including the $0 my cofounder and I paid ourselves for many hours of work. I shut it down a year later and strongly regret the amount of work I put into it. There’s an ARR metric trap in the founder community where people focus on revenue rather than on reaching a level of take-home income comparable to what they could make at a normal job. The former is a lot easier than the latter (especially in the US for people who can take home $250K fairly easily working in tech) - as the saying goes, you can make infinite revenue by selling dollars for 99 cents.

scubakid 1y ago
Profit margin started out around 90% in the early years, but is looking more like 65% this year now that we're making a concerted effort to reinvest into growth, building a team, etc.
FredPret 1y ago
If ARR grows enough, there should be plenty of room in there to pay the founders. For extreme examples of ARR growth at 0% profit paying off, look at Uber, Amazon, and ServiceNow. I know these are very much outliers. All three had rapid revenue growth but profits at (or far below) zero. But for all three, the founders are sitting pretty today. https://valustox.com/NOW https://valustox.com/NOW https://valustox.com/UBER https://valustox.com/UBER https://valustox.com/AMZN https://valustox.com/AMZN
- aledalgrande 1y ago
  > For extreme examples of ARR growth at 0% profit paying off Pretty sure parent was referring to gross profit, because that's what you'd look at to pay your salary. These examples are not relevant.
hermitcrab 1y ago
I share your frustration with the endless focus on revenue, rather than profit (looking at you, indiehackers.com). I suspect in many cases it is because they are embarassed to disclose their profit. But congrats to the OP. It is impressive growth for a bootstrapped business.
chrisweekly 1y ago
I don't think I'd call earning $250k "easy". Yes a significant % of us on HN are there, but we're still in the minority.

scubakid 1y ago

Profit margin started out around 90% in the early years, but is looking more like 65% this year now that we're making a concerted effort to reinvest into growth, building a team, etc.

FredPret 1y ago

If ARR grows enough, there should be plenty of room in there to pay the founders. For extreme examples of ARR growth at 0% profit paying off, look at Uber, Amazon, and ServiceNow. I know these are very much outliers. All three had rapid revenue growth but profits at (or far below) zero. But for all three, the founders are sitting pretty today. https://valustox.com/NOW https://valustox.com/NOW https://valustox.com/UBER https://valustox.com/UBER https://valustox.com/AMZN https://valustox.com/AMZN

aledalgrande 1y ago
> For extreme examples of ARR growth at 0% profit paying off Pretty sure parent was referring to gross profit, because that's what you'd look at to pay your salary. These examples are not relevant.

hermitcrab 1y ago

I share your frustration with the endless focus on revenue, rather than profit (looking at you, indiehackers.com). I suspect in many cases it is because they are embarassed to disclose their profit. But congrats to the OP. It is impressive growth for a bootstrapped business.

chrisweekly 1y ago

I don't think I'd call earning $250k "easy". Yes a significant % of us on HN are there, but we're still in the minority.