Why I quit 12 million dollars to 500k a peaceful life.
How and why the hyper growth VC dream tanked my health and how making a slow, high margin niche software tool got me my life back.
There was a time when I believed that with one thing I could make my way in the tech world.
Hyper-growth.
I didn't think you were bringing on 40 people at an open plan office, if you didn't have millions of dollars to spend on VCs on Sand Hill Road I thought you were playing a game.
This was a dream that I had to wait 3 years to come true.
The first startup that I did was an inventory management system. We had raised a seed round, 12 engineers and we were working 24/7 to achieve 20 percent growth week over week. I got to sleep in an office on a couch. It was a bit too cold for my liking. I was in a sort of feverish panic all of the time.
That's what I thought was your greatness fee?
One Sunday afternoon, then, as the rain fell, I sat down with our financial forecast.
On paper we had 12 million worth. It was great to hear in pitch decks. However, it was even worse than that.
That's all that was left 45 days of runway. My cofounder and I were on sixty-thousand a year in salary. It was nothing more than a treadmill! In 90 days if we are not able to raise another round of capital then the company would end up folding. We were on death's doorstep every day, it was only three weeks.
Tonight I dined out with an old friend.
He designed some handy little software he developed himself to help the independent dog groomers communicate with customers and to schedule dogs for grooming. He did not have any yen. Hired no workers. He worked about 15 hours a week out of a coffee shop or off of his kitchen table.
He earned $500,000 a year from his software.
There was a very low overhead so 90% of that revenue was pure high margin money that was deposited in his bank account. He was relaxed. He was healthy. In the afternoon he hiked with his family.
There I sat and gazed at his calm face and wondered about my hypertension and I and my poor personal checking account.
The image comparison between is a stressed founder with large engineering team vs. a happy founder who is alone on a laptop with other office in background, no one working.
I had a very different change of feelings.
I was wrong. I was in corporate heaven.
Creating a unicorn that would most likely never work out costing me my youth, my health and my peace of mind, and my friend got rich, and rich, and rich, with his cash machine that no one knew about.
I wanted to get out of the rut of life. So I brought the company to a halt and took control of my life once again while making it a quiet software company.
Margins niches are solid and numerous high niches.
First thing I learned is don't try to change the world.
Unicorn builders have an appetite for disruption of industries on the planet. The software is for all to use and that is why they need to get involved with the large companies, and get millions of dollars to market their product.
The other extreme is the quiet business builder does the following:
You choose a niche that no one else has much interest in working on – not so sexy niche – and you do a good job on it.
Why This Matters
There's no competition, if you've got a small and clearly defined market.
Developed very simple tool to assist local/independent nurseries in monitoring stock and the different prices for the stock in various seasons.
This market, from a Silicon Valley investors' point of view, is a small market. It will never be as large as a billion dollar company.
However, it's a treasure trove for me.
Nursery owners are crying out for software that will really grasp the particular challenges of managing nursery inventories. They don't have to have an involved enterprise resource preparing system. They desire a straightforward dashboard that indicates them which plants are on hand, and when to order more.
We address a real problem, a very specific pain point and they willingly pay us $100 per month.
We receive 48 thousand dollars a month for 4 hundred customers.
Architects give lifestyle design a makeover
In the older companies they're working with the notion of growth. They employ people, establish elaborate hierarchical structures, and establish procedures for dealing with scale.
When the founder is cool, a business is created to fit his lifestyle.
Picture a completely stripped down calendar application that includes customisable time slots for coding and processing, an automatic customer support check/rejection and longer private afternoons.
This includes picking automatic over greater numbers of people.
I replicated my own very customized AI Customer Support Assistant with structured documentation in 2 weeks, to save on a Customer Support team. It is able to respond 85% of the time on customer queries.
The last 15% go straight into my email, and only take about 30 minutes to read.
Why This Matters
It's a shift in your perception of yourself on a day to day basis.
No longer the manager who is stuck with the issue of the employees, the problem with payroll tax and the problem with having to review employee performance.
- No Overhead: Your overheads cost of less than $500.00 per month.
- Work Any Time, Any Place: Work anywhere and anytime and in the world.
- You spend your time coding, communicating with customers, but not in a ton of coordination meetings.
What is "Enough"?
What does the word enough mean?
The more VC the better – for VC. Once you have attained 10 million revenue, you will have to march for 100 million. The goalpost is continually shifting and that's the constant of constant dissatisfaction.
A major secret of an enjoyable business is to establish the monetary goal right from the beginning.
Do some math and determine how much money you will save with a good and stress-free life.
Most builders would prefer to have at least $300,000 to $500,000 in personal income. This will include a nice home, family vacations, safety and health, and retirement when you are still young.
Once you've reached that, then it's all voluntary growth.
Why This Matters
It allows you to become a big boy anytime.
When you're not forced to grow your profits by 100% each year in order to meet investors' demands you can take the time to make your product extremely reliable.
You don't need to push and shove to get new business, simply work on happy customers. There is a grand plateau, where this sense of not being at the top doesn't exist.
Calm Nursery Tool is a Case Study.
Let's now dive into the blueprint of my niche software business in detail:
- The problem: Challenge: Living things like plants at local plant nurseries are difficult to maintain since the worth depends on how they grow and the weather.
- Solution: Low footprint Web application to automation seasonal pricing rules based on a serverless approach.
- The Team: 1 person. Me.
- Marketing: No advertising. Wrote informative articles to nursery trade papers and visited local garden centres to see articles.
- The result: 380 Customers, $450k ARR and 95% margin.
Here are the not so great downsides of Calm Path's Reality.
Being a calm and solitary entrepreneur isn't all good news: I don't want to have any secret.
- The Revenue Cap: Not the way to a hundred million dollars. It's not going to be the career that you become famous to the general public or business magazines about your name.
- If it crashes on Saturday night, it's all on its own, because there is no DevOps team to take responsibility. It's up to you to open up your Laptop and fix the database hook.
- The Lonely Road: No cofounders to brainstorm with, and a serious need for discipline and to work alone.
Should You Care?
This cool attitude is not for the guy who want to be a big platform, raise VC money and have a lot of workers this is for the guy who wants to manage an organization with a small team of people.
However, if you’re:
- The Stressed Engineer: Has had it with the rat race and wants to make an investment that is very profitable and personal.
- Technical Founder: Who wants to work in a way that is compatible with their way of life, health, family etc.
- The Creative Creator: the one that favors freedom, autonomy and a known profit to a paper value which has a large quantity of risk.
Your 3 Step Action Plan to Calm Profitability!
When ready to abandon the quest for the unicorn and take on the business of earning a high margin, cash machine, follow this plan:
- Do some research on your local service businesses: Know Your Three Unsexy Problems. Know what kind of spreadsheets they use on a day to day basis, and create a basic software system to replace it.
- One feature, one customer: Don't have a long and complex list of features. Write software just for them and for a price of $20 per month, somebody will pay you.
- Overhead has automatic shipping, automatic customer service portal and payment links. Run your operation in such a way you can operate it out of your mobile phone.
An Intentional Building’s Horizon
There will be a golden age in the future in which Micro-SaaS will reign.
In 2026, one person, a single builder, will be able to achieve what one department of a company used to manage.
The unicorn syndrome with venture-capital is over and the quiet beauty of the calm business is taking over.
What we don't need is more stressed out founders, building social networks that we don't need.
Happy, healthy, creators, creating tools to help local businesses a little more.
Ever wonder why you're not at your financial number of enough or been secretly clinging to the infinite growth myth? Leave a comment and discuss!
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