soundlab

Wait there's 17 megawatts of solar on this thing? Would love to hear more about how this integrated into the facility. That is an immense PV array.

100%- what an abomination it is moving beyond one machine. Moving to the hosted Enterprise version was a complete nightmare. Finally pulled the plug and went with Xero and a series of API-based add-ons and it's like being handed the keys to a P100D in Ludicrous Speed mode. Trouble with QB is how entrenched the CPA community is around it. Our CPA howled at the idea of Xero and was the reason we stayed with QB for as long as we did.

I feel pretty strongly that managerial accounting is a MUST have skill if you're running a business. Part-time book keeping is not very expensive and if you sit down routinely and review your chart of accounts, pull financial statements, AND have a professional cashflow projection setup for you it will save you an enormous amount of stress and time. It's also possible to learn as you go with this, especially if you have an advisor or someone that can check in on your books on a rolling basis. It takes all the mystery out of tax time and will enable you to operate the business with much greater confidence and clarity. I'm partial to Xero instead of Quickbooks FWIW, I find Intuit QB to be death by a million small charges...

"The stock market doesn’t reward big acquisitions in these categories as they often do with Silicon Valley giants, and they’re expected to justify these purchases, at least partially, on financials. This massively constrains the realm of possible outcomes."

Yes! Let's do much more of this.

Fellow self-funded biz here, definitely agree with this. Go with a small local/regional bank. Start small and grow with the LOC. Depending on how involved the loan officer group is, you may get some great CFO-type advise / dashboard review out of it. Even if they're not typically doing hot SaaS businesses, they know the fundamentals and growth stages of small businesses inside and out, regardless of industry.

For decades Dr. Bose held an aggressive "not invented here" bias, which they are now finally moving on from. It's great to see Bose becoming active in the startup scene in Boston, including a sponsorship of the MassChallenge accelerator. Say what you will about the marketing hype or sound quality, it is an extremely well run diversified business that goes way beyond headphones.

This is so refreshing to see on HN. People looked at me like I was out of my mind in the ancient days of 2011 when I told people I was working on a hardware startup. I would only take issue with the author's advice to reconsider what you're doing if your volumes are under 1000. You can bend the cost and risk of your product launch substantially by focusing on a narrower niche and growing out from there. VCs don't like this of course, but scaling a low volume product to a high volume product is orders of magnitude easier than going from zero to a million units in a year. Following good design for manufacture principles and keeping excellent documentation is also key regardless of production size.

Aside from a salesperson, I wonder if Patio11 has considered a dedicated content marketing person to build on that SEO and maintain some level of growth for both businesses? I get it that the goal is to not get buried with work and to achieve some level of passive income, but if you lose the SEO and sales are declining, what are you left with?

Pulse: Understanding the Vital Signs of Your Business

This is a great book for anyone running a bootstrapped business. It is based on the Corelytics software product, which is a financial analysis tool that syncs with Quickbooks to provide trendline, progress against goals, and other real time financial metrics for startups. This gives you a view of where things are headed rather than a "too late" picture in your financials.

http://www.amazon.com/Pulse-Understanding-Vital-Signs-Busine...

Have you ever manufactured anything? A shitload of technology, engineering, and creative financing at huge risk is required. I'm not going to debate the semantics of what defines a tech company but I'd say their business model disrupting large incumbents and their rapid growth qualifies them enough for airtime here.

--If you want to scratch your head, I won’t stop you. At a time when capital is easy to come by for buzzy startups and valuations are frothy, some will view this news as another signal that the tech bubble is real.--

I find this angle in the article puzzling and something of an indicator of the gap between "startup media" and what real companies do. Both venture firms re-committed additional capital to the venture on the basis that the Harry's model is working well and that tighter control over production, R&D, and supply chain will benefit the business over rivals stuck in white label/OEM.

To me this is the opposite of a "tech bubble" and more an indication of what's supposed to happen to tech startups- they grow out of the startup phase and develop into expansion stage / established companies. This is the goal!! If your goal is to forever remain a startup you're doing it wrong- particularly in manufacturing, where economies of scale rule. If you want indicators of a tech bubble, observe the myriad of seed stage software startups with anemic growth going nowhere. Let's not throw manufacturing companies under the bus for doing what manufacturing companies are supposed to do as they mature. Full disclosure: I have a beard. :-)

Pretty amazing. Are the founders/management team working towards what might be considered a high rate of growth or an incremental one? In other words, is the staff level, revenue, expenses, and earnings in some way optimized at the current level? Kudos for focusing on your people- this mix is difficult to achieve for what I am assuming is a bootstrapped business and impossible in a venture-backed one.

As a HW entrepreneur starting to move into software-enabled devices, his comments about the opposing forces of rapid iterating software teams and slower more conservative release hardware teams is really on point.

“We issue cash bonuses at the end of a good period, whether it’s a month, quarter, or year. It actually ends up being a better outcome for most employees."<

With all the obsession we see over the stock options/startup lottery, I think this point bears consideration. A stable, low employee churn organization with great cash flow can make you plenty rich if the founders and board put aggressive profit sharing and bonuses in place. I think for bootstrapped businesses this is a great alternative to complex options plans that have no value until an exit/IPO. Wish this approach gained more publicity, even if they've offshored the bulk of the operation.

This kind of seething diatribe is what's wrong with HN.

make an exit or die trying.

Or grow a sustainable business from something small to something huge that produces a lot of cash along the way while your enterprise value increases ahead of a large exit (or die trying).

--startups do not fall into the category of traditional businesses with strong P&Ls and great balance sheets--

So as a bootstrapper are you still taking this approach past year 3 or 4? At a certain point you need to hone in on that repeatable / scalable business model and put up some numbers or fold.

If you're a couple years in and have bootstrapped past breakeven your funding options AND odds of survival are greatly improved- so why not orient around that outcome?

I'm not here to defend the absurd behavior and ignorance of commercial banks just pointing out that sometimes the game changes if you can afford to take a slower more incremental approach to growth than what is typically demanded by VC.

Sounds like you've had some negative experiences with your bank. I would beware of "specialized finance firms" that have "sprung up overnight". Typically their lines are very limited and come with huge rates. I don't think there's really much complexity to technology businesses that most competent finance guys can't figure out. They are looking at your P&L and financials for some key ratios, pretty simple. Regardless of whether you're selling lawn mowers or SaaS they want to see strong cashflow. If you're trying to get a loan on MAU growth projections you're probably right.

I think one of the distinctions is that for bootstrapping you can start with something (very) small and end with something big over a long period of time. Whereas when you take on venture capital the expectation is to build something very big very fast.

The latter requires more capital to expedite the ROI for the VC whereas the former is typically a much slower, organic process that may not reach an equivalent scale for 10+ years. I'm a firm proponent of bootstrapping and organic growth. After a few years of positive cashflow and growth you can walk into a commercial bank (gasp!) and setup revolving lines of credit or expansion capital to fund more growth.

I run a bootstrapped manufacturing business that sells through a large network of resellers- I'd say I'm squarely in your target market :-)

I have looked a lot at this space and there is a surprising lack of software to handle this that doesn't start to bleed into complex ERP or that isn't a poorly integrated "wholesale" feature for a traditional e-commerce app.

We use a SaaS called NowCommerce to handle this. It is designed with a bridge to our Quickbooks company file and it works really well though with limited functionality.

One key takeaway I've had looking at how orders are placed/processed/fulfilled in my business is that wholesale purchasing practices are VERY ingrained. Typically there is one person responsible for accounts payables and material purchasing in a small business. That person will most often place orders via Purchase Order (if the business is setup on credit terms). In my experience that AP person will simply enter their PO directly into Quickbooks and email it directly to the supplier- whose email contact is already setup in QB. For them to use your portal they would need to separately login to your application and duplicate their PO there by entering the info again.

The Purchase Order is critical for handling the payment of your invoice and for receiving items into inventory when they come in- so not having a PO in Quickbooks is not an option.

A small but growing segment of my customers use our wholesale order portal but you may find that when your customers have the capability right in front of them in QB it might be a trickier adoption curve than you think.

BTW if I had a magic wand I would create an email parsing application that can READ that emailed PDF purchase order and auto-populate an order form or Quickbooks invoice on the portal.

Best of luck from a fellow bootstrapper- please get in touch if I can be of any help!

I think it also illustrates that going into business with your family can ruin not only your business but your family relationships as well. Obviously Market Basket is an outlier case that progressed over decades but some of board meeting excerpts are pretty crazy:

http://www.boston.com/business/news/2014/08/14/the-market-ba...

As a bootstrapped startup I was a bit skeptical of their pricetag but once I dedicated a full time person to train and exclusively work on it I've been incredibly impressed. Huge ROI and a strong increase in inbound leads requiring us to ramp up sales. Integrates well with Salesforce and they have a very rigorous onboarding program that must be contributing to that high burn rate. Glad to see a SaaS IPO in Boston stick around- they could well have been acquired years ago.

Agreed- it's also driving a lot of new construction housing in the South End- cranes all over downtown it seems

Seems like they're leveraging the buzzword "full stack" to build an email list for a product that doesn't exist.

From someone running a growing hardware business and living these headaches I'd recommend you take a close look at your systems- accounting, order management, shipping, billing etc and see where there are opportunities for automation and integration. The work is not fun but you're better off understanding how these things work and handing it off to someone to run instead of having them come in and build their own systems and processes. What happens when that person leaves and no one knows how the day to day is setup to run?

I have saved an enormous amount of time transitioning our business off of spreadsheet and manual processes to putting a remote-hosted Quickbooks Enterprise accounting environment, Salesforce CRM, and Hubspot marketing platforms in place. Each of theses platforms are integrated and we have dedicated staff operating in each environment and responsible for them. Constantly switching from one operations area to another is not only time consuming but highly prone to errors, especially shipping. Outsource your shipping asap with someone like Shipwire. Congrats on the growth in the business- I have found that starting up is hard but growth can be even more difficult!

Does the new Compute Module share the same increased USB ports (with more power available)? Have had nagging issues prototyping Pi's with cell modems due to power consumption and was looking at the Compute for an embedded application

Agreed- all the more reason to not apply mass market, VC-backed product economics to your niche technical application. We are working on a niche desktop OSX app that we will price +200 USD. It's for business users with a budget and has a demonstrable ROI for exactly that kind of buyer, why cater to the $.99 or free crowd?

>But...why is it paid?

Because he wants to be rewarded in a small way for his efforts? Geez it's 99 cents - 30% Apple cut.

"The biggest challenge is distribution. Our data shows SaaS companies rely heavily on direct sales — at nearly twice the rates of every other channel, but can afford only modest sales teams of 1 or 2."

Is the primary issue here that the recurring revenue models of SaaS companies are less compatible with existing distribution networks?

I've been researching this and found that hardware companies that sell through dealer networks and authorized distributors have an unrealized opportunity to introduce recurring revenue products for their partners, who typically are operating with narrow margins on "one and done" box sales. The challenge is implementing a revenue sharing or commission model that is both attractive and straight forward.

Couldn't agree more. Step 1 toward this is to completely eradicate any VC/startup investor blogs or threads from your browser and substitute them with real daily communications with potential customers.

I look at the entire VC model and see it as a huge waste of most entrepreneurs' time and energy. Why entrepreneurs seek validation from accelerators, investors, and the media is beyond me. The usual response is that to build an enormous company at a very high growth rate requires a ton of money and doing anything other than that is mailing it in infamous lifestyle business approach. I reject that entire premise- you can make quite a large dent in the world, build a large business, and generate a big income by bootstrapping in one niche market after another- the major tradeoff is time.