Tarsnap looks great and I've said so in the past, and may use it in the future. But if the title was, "Tarsnap turns 5" and later mentioned that it was founded in 2007, we'd probably also jump in to point out that it wasn't, in fact, 5 years old. That's what's happening here.
The reason I and others get a bit knee-jerk-y with the "profitable" line is that it's said often here on HN of businesses that aren't.
Ramen profitable is not the most interesting milestone. Getting any kind of revenue is a major step: it shows there are people willing to pay for your product.
After that, it's all a question of scale. PG's definition of ramen profitable is useful because it gets rid of all the accidental revenue. Sure, if my aunt bought my software once, it shows somehone is willing to buy my product. But not really. By setting a bar just a tad higher than just "1 sale is good enough", it becomes a useful metric.
Not really. Diffle made about $60/month when we killed it, on costs of about $80/month. That's purely on AdSense revenue. Thing is, we could easily have downgraded to a $10/month shared webhost for Diffle, and it would've been profitable. The only reason we needed the dedicated webhost was so we could have a working, demoable version of GameClay (the next iteration, Flash game creation instead of just Flash game hosting) up all the time.
Similarly, FictionAlley pulled in several thousand in donations a year, but nowhere near enough to support its 200+ person staff had they not all been volunteers.
I still contend that being able to support founder living expenses is a much, much higher bar than just being able to support the operational costs of your product. It's not too hard to do $100/month or so in AdSense alone.
Sure, if my aunt bought my software once, it shows somehone is willing to buy my product.
Right, but there isn't enough information to determine if this is not what he means by profitable. I am also a hacker, I know how much money it costs to run something like this. It could mean that 1 person paid $50 and the AWS bill and web hosting was only $49.
Anyway, I don't find this conversation interesting anymore so congrats on the profitability.
If you RTFA, you'll see that I addressed this point: I think it's a useful definition given that tarsnap basically runs itself. Yes, I'm working on it; but I'm working on making tarsnap better, not on keeping it running -- I could walk away from tarsnap tomorrow (or get hit by a bus) and tarsnap would keep on running and making a profit.
I could walk away from tarsnap tomorrow (or get hit by a bus) and tarsnap would keep on running and making a profit.
I read the article. If you disappear, the business dies. It does not keep on running and making a profit. Employees are the most important part in a startup. Especially in a one person startup. A definition of profitability that does not include employee salaries is bogus.
It's not that he isn't profitable, is it? It's that he hasn't provided us with enough information to know whether he is or he isn't. One of his lines of business is currently cash flow positive. If he's got a consulting business that's paying the rent for him, he's profitable, and as reliable, as that consulting business.
It seems that this is confusing a lot of people. Let me spell things out for you.
1. Tarsnap is profitable. Its revenue exceeds the cost of keeping it running.
2. I am not profitable. My revenue does not exceed the cost of keeping me running. (Well, living. I've never been very good at running.)
3. I could get a job, move to the middle of Africa, and get hit by a bus, and tarsnap would keep on running. Tarsnap doesn't need me on a day-to-day basis; while it is true that I'm still writing code for tarsnap, that is appropriately accounted for as a capital cost, not as an operating cost.
Unless you've hired someone you haven't told us about, you getting hit by a bus kills tarsnap. Nothing really runs itself on a day-to-day basis without any oversight:
* You still have to invoice/bill customers and do the books.
* You still have to keep up to date with Amazon web services, which could change out from under you.
* You still have to be responsive to bugs in your software, which will inevitably occur.
I take your point though; you've architected the business so that it depends very minimally on your own infrastructure and labor, and so its operational costs are very low.
You still have to invoice/bill customers and do the books.
Actually, no. That's all done automatically.
You're right about the rest -- but so far "bugs in my code" is very correlated to "new features in my code", so if I get hit by a bus it's unlikely that many new bugs will be found.
Well, but your hosting is probably paid for by an account owned by you or your business, and if you go away, those accounts do too, Amazon pulls the plug, Tarsnap go bye-bye.
Sorry, but that's just not what profitability means. That's like saying that ice cream is health food if you don't count all the sugar and fat.
Most business folk wouldn't even consider "ramen profitable" really profitable. Until the business is operating at a sustainable level, it's not profitable. Just because nobody switches the server off doesn't mean that a business is alive.
What if you only pay yourself for the time spent actually pressing the keys on your keyboard? Clearly you should only count the time that you're pressing them in, because they bounce back by themselves, so the time the key is going out should not count as billable time.
Points to both views. However, I think a big thing that's being neglected is the fact that this is a sole proprietorship. He's an owner not an employee. Big distinction. And, not unusual for an owner to work for nothing while building up a business.
You're arguing for "authentic profitability," or some such. You make fair points, but since TFA was quite clear, this really is just semantical masturbation.
