Ask HN: How long before we're profitable?
https://news.ycombinator.com/item?id=2664065One mistake that I, and I suspect a lot of first-time entrepreneurs building SaaS businesses make is just HOW LONG it will take before we will make a profit. Not 'first revenue' but actual profit - enough so that you can stop burning savings or other people's money to pay yourself or your employees. This means successfully and repeatably finding potential customers, and getting them all the way down the line to 'paying customer', and enough of them (say 2000) to be actually paying you money.
I think most of us follow DHH or Tom Preston-Werner and convince ourselves that we can build a real business overnight while consulting/juggling on the side. While clearly this has worked for them, it seems to me now that stories like this are the exception not the rule. The rule is closer to a long, slow grind to eventual success that can take years.
Obviously "How long before we're profitable" is a very subjective question, especially when we're talking about an idea which is sufficiently novel that the size of the market (and therefore the cost of reaching it) is unknown. It's almost pointless to even guess in the early stages.
But at the same time, getting the figure right is the difference between success and failure for most startups. Having some good idea of your distance to profit informs if you need to raise cash, and how much, and from whom (and on what terms).
Rather than try and build complicated models to try and predict profitability on essentially unknown quantities, I would much rather just see more data points from existing companies to help make an informed decision. Frustratingly, this is the one thing that already successful entrepreneurs seems reluctant to talk about.
My actual question then is a bit simpler - who can provide examples of how long it took for a number of SaaS businesses - such as those that frequently come out of HN - to become profitable? What was their revenue at that point (eg. did they have 2 staff or 200), and most importantly how long did it take?
Share examples, if you have 'em, here.