It’s late 2008 and my phone rings. “Hey, George. Do you want to join me to that new startup event that’s talking place in that local coffee place tonight?”, said Lena. Lena was an ex-colleague of mine from my previous and last “proper job” I would ever had.
Honestly i get quite bored at such events. Mostly I found no reason to attent, other that networking. But even that, most of the times has very poor results. But still I thought, what the heck why not.
The event was called “Open Coffee” and if i recall well, it was the first time that was talking place in my small local city. We got there early in the afternoon. There were more less 20 people talking to each other, a laptop and a projector connected to it.
Its important to understand what my “current status” was at that time. I had already quitted my job (freaking out my parents) and I was trying to figure out that “building a unicorn” shit everyone was talking about online was.
Suddenly people stoped talking and a guy stood up to present his startup (thats what the event was about). That “guy” was Dimitris Glezos and his startup was Transifex. Transifex was then in its early days, today it’s a well established company and well known in its space.
Dimitris gave a very interesting talk and as a closure he called everyone to watch something. So he clicked “play” at the following video.DHH talk — Startup school 2008
At this talk DHH was breaking out the most simple concepts of business. For example, in order to have profits its a good idea to have a price on your product / service. So when people buy from you, you end up having profits. And how a startup can grow and have profits without outside investing, VC money etc.
Pretty simple ha?
Sounds ridiculous, i know. But if you think about it, most entrepreneurs struggle with the idea of earning money out of what they do. People are scared to ask for money. And I was too back then.
Somewhere in the first 10–15 minutes of his talk DHH says.
“There used to be a time when $1.000.000 was a lot of money. I still believe $1M is a lot of money. But all there VCs are talking about, is billion dollar companies.”
Later on, he made an analysis on why having a revenue of 1M is not that hard.
Let’s take a subscription service for example (he said).
Let’s assume that you have 2000 customers, paying $40 a month. Well, that’s 1M a year!!
I was blown away. I remember not being able even to talk for more than an hour later. It was like something clicked inside my head. Like someone just took all the thoughts I had in my mind and put them in order. The right order.
2000 customer from all over the world ? Only $40?
Its amazing how deconstructing stuff can make things so achievable. So clear. How talking the time to break down a number you target, can make you realise that the end goal (any goal) may not be that far away.
That was the day i stopped everything i was doing and focused on creating SaaS only projects. It was just so clear to me. That’s what i needed to do. And being a developer, that’s that i loved doing anyways. Win-win.
Since then i have founded and co-founded numerous SaaS services. Most failed miserably of course, but some did not. And still growing!
I know what are you thinking.
Am I getting 1M / year ?
Well, i am not at the moment. But don’t fool yourselves. I’m on my way.
When the objective is so clear, all you need is the right roadmap. The right hit. And you will have to hit many times for a wall to fall. Being an entrepreneur all my life, I know that much.
I’ll be back with an update.
David Heinemeier Hansson is a Danish programmer and the creator of the popular Ruby on Rails web development framework and the Instiki wiki. He is also a partner at the web-based software development firm Basecamp.