It depends on what you define as startup and what you define as profitable. Visual Website Optimizer beta was launched in December 2009, I quit my full time job in March 2010 (yay, it will be one full year soon!) and then launched paid plans in May 2010. Within first week, sales of VWO >> my previous salary. And that's how I define the startup as profitable.
Preceden [1], a tool for making timelines, was profitable almost immediately. Heroku costs about $50/month and a premium account costs folks $29, so with 2+ upgrades/month it is profitable. Currently making ~$700/mo.
jMockups [2], an HTML5-based web-design tool, was publicly launched about 4 months ago and is still not profitable. Costs total $200/month and with one paying customer, I've got a ways to go before profitability (but it's progressing very well).
BCC was profitable within about a month of conception and has been since then.
AR will, knock on wood, probably hit cash-flow positive in May (about six months after launch) and pay back development costs in a month or two after that. I was originally targeting 12 months for surpassing BCC & consulting but, knock on wood, I have since learned something about my market which may make that pessimistic.
My apologies, I think that phrasing was difficult to parse: the 12 month estimate was excessively pessimistic (i.e. it probably won't take that long, because the market is better than I expected it to be).
I had been basing my projections off of running a medium-volume low-touch business with average yearly account values in the $500 range. It turns out there is an addressable market for which average yearly account values are in the five figure range. More detail on that in a blog post Friday-ish.
Would love to hear more about your experience in this industry and where you think you fit with the bigger players out there (televox, smilereminder etc.)
The short version is that, if everything goes according to plan, they are Big Consultingware Project Management and I am Basecamp. (Or, to put it another way, I'm not competing with them, I'm competing with non-consumption of services.)
I've worked at a few startups in the past and can give you this history:
1) First one was an ISP, boot-strapped. 4 years. Mildly profitable, sold to a larger ISP.
2) The next one was a short stint with a e-retailer. They were almost immediately profitable, but needed some serious cash to grow. So it sold within a couple of years and the founders all still work there. It's wildly profitable now, but alas none of the founders can capitalize on that success outside of a steady job.
3) Next one was a NLP middle-ware company (yes, they exist) that had been around for more than a decade, I came in near the end and worked there for 3 years. It sold right after I left (I didn't have equity). I believe it was unprofitable.
4) After a few years bouncing around mega-corporations I came back to startup land. We're 4 years in. Just hit profitability this year and then the Congressional funding disaster hit (we're almost entirely government business). We're going to see if we can make it through, but we may end up selling.
5) My wife and I just launched our new company www.kymalabs.com (her main job, my part-time job). We'll see how long that goes! We'd actually like it to grow enough to pay our bills and give us long-term employment, but who knows!
Google should have a similar service specifically for GAE users. WWWizer seems neat, but it's a risk to use because it can just go away without warning (or worse--you could have your site redirected somewhere else).
Looks like they updated their docs with ideas for domain forwarding. They tend to refer everything to GoDaddy for some reason so that's what we're using atm, looks like it all works.
I lost money the first year. I was profitable in name only the second year. I made a profit that would almost cover my rent the third year. Now I'm in my 4th year, and I'm actually making a living. January and February covered all of my expected business expenses for the year. I never thought it would take as long as it did, but when revenue really started to grow, it came as a pretty big surprise.
4 years in as a bootstrapped one-person product before sufficient profitability to reinvest and take a salary/dividend (my definition of profitability).
Bootstrapping and being just one person made it feel so much longer than I had hoped when starting out.
Bootstrapped the entire operation for three years before it started generating any revenue. Took about 5 months from turning on the monetization aspect before it broke even month to month...We're netting about $3k profit each month now.
Last hit for me: launched solo in 1998, self-sustaining though I didn't make any money personally (kept folding it back in, worked programming contracts to live), got angel funding in 2000 and popped staff to 14, first profitable month in March 2001. Became consistently profitable in October 2001 and never again went into the red. Sold to a venture firm in 2006.
Current biz: launched in 2009. Still working on profitability. This is a long tail business so I've learned I need to be patient.
In my case it was an acquisition and roll up - they acquired my company and one of my competitors, combined the two together and brought in a seasoned executive w/ IPO experience to lead the NewCo. I was retained to be the CTO, though it's tremendously difficult to go from being the boss to having a boss and left a little over a year later.
The one I've invested in lost $500k last year - I'm personally ready to cut the losing half of it loose if we can't learn to spend our money more wisely.
Hey.. Sorry about the loss. But, what advise would you give a person trying to get a startup working, in terms of certain hazard zones to watch out for?
I would watch out for any partner that is not hardcore worried about expenses. Not to the point of stupidity, but acting cavalier about them. I like people who treat a startup as a marathon, not a sprint.
Don't mean to ask something personal, but curious to know how much you sold it for. A relative figure in % to your yearly pay before would be fine too.
I can't say according to the contract. About 30% of my yearly pay before that. I gave a developer that worked with me a good cut of that, to thank him for all his effort.
Im 3 years in and still not ramen profitable. Sadly, I have been working hard at it for 3 years and still no where near where I want it to be. But I am only one person.
About a year and a half. 4-5 months into it, we pivoted quickly (back before anyone called it pivoting). We had investors, and mostly living off "ramen noodles." At 10 months in, we turned it on to make money. I still remember the fun of getting our first paying customer, and then checking everything over and over again to make sure everything went well. It wasn't until late spring of next year that we started seeing real progress and upward momentum, and could support and our operation without needing investment.
My first startup did sales force automation for palm devices - profitable after 6 years (left it after 2), but still haven't seen any explosive growth till today (9 years already). Became a lifestyle business for those that stayed
Third startup (the one I'm building today was lamen profitable after 6 months. Don't expect it to grow a lot more until we get some funding, since the next steps require a lot more than lamen to succeed.. (ah, the great wall between MVP and V2)
