Profitable After 3 Weeks

http://www.balsamiq.com/blog/?p=95

by breck • 18 years ago

100 46 18 years ago

balsamiq.com

steveplace• 18 years ago

This is a great case study for anyone who wants to go independent for a while.

dominik• 18 years ago

Out of pure artistic curiosity: What did linked article use to make those charts? They look nice.

breck• 18 years ago

Looks like Excel 2007 to me.

balsamiq10• 18 years ago

I used Excel 2008 for Mac.

jbyers• 18 years ago

It's a great accomplishment to book thousands of dollars of revenue within a few weeks of launch. But as the article states, this is profitability without covering salary -- a big disclaimer.

swombat• 18 years ago

And doesn't count the product development sunk costs, either.

By his maths, my first business was profitable in the first week, including my salary.

What makes product businesses unprofitable upfront is not the ongoing costs, it's the development costs.

jraines2• 18 years ago

Off-topic but honest question: Why does everyone say "maths" instead of "math" these days? Is it a European thing, an academic thing, or just a meme among hackers?

I never once heard it or saw it written like that before Hacker News / proggit.

I cringed when someone on proggit recently said "Do the maths!" I don't think that's a saying anywhere.

Mistone• 18 years ago

sunk cost are sunk cost. after launch they don't matter, so I think he is on target for leaving those off. Oh and congrats on this early milestone. I'm wondering why your going to focus ads on the low performing market, why not hit where the iron is hot (i.e the market where you are gaining customers)?

balsamiq10• 18 years ago

I agree that not including my time so far is a BIG disclaimer, but isn't every startup a labor of love to some extent? :)

What funded most of the development of Mockups was my day job, as I worked on Balsamiq for many, many nights and week-ends before "making the jump".

Like I said in the post, I am counting as costs only what's in Balsamiq's bank account statement at the moment...I am only just starting after all.

cawel• 18 years ago

as I worked on Balsamiq for many, many nights and week-ends

And this for sure is another form of cost.

webwright2• 18 years ago

Yaw, using the word profitable isn't really reasonable even with a disclaimer. Software startups have very few significant expenses other than manpower. Our 3-person startup (when we start paying ourselves) will literally be paying out 10x more per month in salaries (that's with fairly stunted salaries) than all other expenses COMBINED. It's a long road.

Nonetheless, killer accomplishment and I think it's a kickass tool. I am leery of the non-recurring revenue (I read the authors post on why he made that decision, but I still think he's wrong)... Every customer adds a touch to the support overhead and doesn't add to the revenue line but once. Customer acquisition is hard, and fixed price software has to do it constantly or die.

SaaS is golden. Low risk for the customer, beautifully aligned interests, and you cease to be a slave to the launching new versions just to get your current customers to give you more money.

balsamiq10• 18 years ago

Hey there, thanks for the comment. Regarding your last point: I totally agree SaaS is golden, I just don't want to host it myself now, and thus be a slave to having to keep the service up all the time. :)

Maro• 18 years ago

The mockup app rocks.

Is it just me or is your site a lot like 37signals?

I personally had some trouble finding my way around. To me, it's not clear what confluence is, what the flatworld thing is and how the mockup app ties in. No big deal though.

Overall, congrats!

balsamiq10• 18 years ago

Hey there, thanks for the nice words. The design of the site is all mine (and sadly it shows), but when I designed it I was at the height of my 37signal fanboy phase, so I'm not surprised you can see an influence there.

Re: trouble with navigating the site: I keep hearing about it, but I haven't been able to find the time (or inspiration) to drastically improve it. I'll keep at it.

huherto• 18 years ago

Great for having revenue after only three weeks. It is fantastic.

I would not call it profitable yet. You are considering your salary $0, but that is not really true. Your time has value.

The idea seems great, It seems useful for my current work. I will look into it.

utnick2• 18 years ago

Did he really need to incorporate just to sell a shareware program over the internet? What are the benefits of that?

delano• 18 years ago

Taxes and liability.

utnick2• 18 years ago

but isnt the tax benefit of a single person LLC just the ability to deduct expenses? Besides forming an LLC he had almost no expenses.

And I highly doubt his desktop gui is going to be liable for anything right?

balsamiq10• 18 years ago

Hey there. The main reason I incorporated is to give my potential customers (I am going after large enterprises) a warm and squishy feeling of being able to trust me. :)

That, and liability, and taxes, and I have big plans for Balsamiq, so I thought I might as well incorporate right away.

tstegart4• 18 years ago

On a side note, its ironic that customers like doing business with a corporation more than just a guy. They think if you're a corporation, well then they know where to find you when things go down the tubes. Of course, when they finally do find you, they'll be limited in how much they can get from you because of your incorporated status.

wallflower• 18 years ago

> My family and I relocated from San Francisco to Bologna, Italy on May 1st

Congratulazioni! Thank you for sharing. Your blog is inspiring. So many people talk about living abroad and working for themselves - you are doing it..

What is it like? (working part-time but full-time on your mISV in a land where they value relaxation and enjoyment of life more)

Balsamiq makes complete sense now!

http://en.wikipedia.org/wiki/Balsamic_vinegar

balsamiq10• 18 years ago

I must admit life in Italy is really nice, especially when you have a large extended family around like I do. I'll share more on my blog about it but I am a little ashamed at how good the food is here and at how beautiful the country-side can be... :)

As for "Balsamiq", you got it: scroll to the bottom of http://www.balsamiq.com/company for the full story.

davidw2• 18 years ago

Complimenti! Vivere in Italia e` senz'altro bello, but if I may ask, how are you planning on dealing with the weak dollar, and more importantly, getting money from your company in the US to Italy? I mean the legalities of it, obviously, not the actual method. My friend in Padova is an accountant, and he was telling me that having a company in the US is pretty much "worthless". My guess is that many European countries would have similar issues.

tstegart4• 18 years ago

Congratulations.

rksprst• 18 years ago

FYI, you can defer the $800 california minimum tax for two years if you request to be taxed as a corporation when you file your taxes.

henning• 18 years ago

FYI you might not want to take tax advice from random people on the Internet although you might ask someone who is actually qualified about something like that.

balsamiq10• 18 years ago

WOW I never thought I'd be on HN twice in 10 days. Should I be proud...or afraid? ;)

Thanks for the kind words everyone, I'll answer questions in-line.

whacked_new• 18 years ago

Hey, great job! I loved those mockups for heavyweight players.

tortilla• 18 years ago

That's great! Thanks for sharing the financial details. It's great to see someone progressing and doing well.

vaksel• 18 years ago

Just be careful, those numbers are most likely skewed by that initial rush from that initial promotion you did(i.e. HN thread etc). What I mean is, I wouldn't quit my day job thinking the revenue stays the same, wait till you have at least 2-3 months of 5K/month

balsamiq10• 18 years ago

Yup, the current revenue levels blow all my conservative predictions out of the water...I keep waiting for the slowdown to start...hopefully I'll have to keep waiting a while longer... :)

Profitable After 3 Weeks

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