I Sold TinyPilot, My First Successful Business

My first two years as a bootstrapped founder went poorly. I could barely find any paying customers, and all of my businesses lost money. I began questioning my decision to quit my cushy Google job. In mid-2020, yet another of my businesses had flopped, and it was only kind of COVID’s fault. Desperate for a distraction, I made a little contraption that controlled my home servers through my web browser. I called it TinyPilot. I blogged about creating TinyPilot, and I could tell right away that I was onto something. 1 spot on Hacker News and several popular subreddits. I started offering pre-packaged kits so my readers could build their own TinyPilots, and they immediately sold out. With every other project, I had to beg and plead with people even to try my product. With TinyPilot, there was so much demand that I struggled for months to keep the product stocked. For the next four years, I focused full-time on building TinyPilot into a business and improving the product.



I grew the company to a team of seven people and $1M in annual revenue. A month ago, I sold the company for $600k. Over the next four years, TinyPilot evolved into a more refined product. What am I allowed to say? I specifically negotiated in the sale agreement that I could discuss the terms of the sale and the process of selling the business. I can’t say anything disparaging about TinyPilot or reveal anything about TinyPilot that would give its competitors a meaningful advantage. After years of flops, I was finally earning a consistent profit, selling a product I was proud of, and working with a great team. Wasn’t that exactly what I wanted? I missed writing code. TinyPilot is a hardware business, Glyco Care Blood Sugar Formulametabolic wellness so there were tons of moving parts beyond the software. I was the sole manager of six people on three distinct teams and managed relationships with our key vendors. I rarely had uninterrupted time for deep focus, and Glyco Care Glucose Supporthealthy glucose levels when I did, I felt too exhausted from juggling everything else.



My wife and I also wanted to start a family. TinyPilot only occupied about 40% of my waking hours, but it occupied 90% of my stress. I would have done a terrible job juggling founder stress with new parent stress. Who would want to buy such a strange business? TinyPilot fell into an odd, in-between business category. It was a hardware manufacturer, Glyco Care benefits a software company, and an eCommerce store. How would I find a buyer comfortable with all three? There were larger competitors selling equivalent devices to TinyPilot for twice the price. TinyPilot’s enterprise competitors sell similar devices for twice the price. But I didn’t want to sell out. I’d asked customers to take a chance on me as a new, unproven hardware manufacturer. Running off with the cash would have felt like a massive betrayal to my customers and the TinyPilot team. I wanted a buyer who would keep investing in the company, not a competitor who would just axe the product or bleed it dry.



In October 2022, I reached out to FE International, the only brokerage I’d ever heard of that catered to bootstrapped founders. I wasn’t ready to sell, but I wanted to understand the path to an exit. FE initially seemed interested. Unfortunately, with the current set up of two main SKUs generating roughly 98% of your revenue, this would not be a good fit for most buyers. Buyers typically want to see that a business has a minimum of 10 SKUs, and that none of these SKUs generate more than 30% of revenue. At this time we would advise, in preparation for a sale to start to consider increasing your product offering. These don’t always have to be completely new products, and this could also be USB-C cables, Glyco Care Blood Sugar Formulametabolic wellness wall plugs, ethernet cables, servers, display ports, HDMI cables etc, this would also help to increase your AOV. After FE’s rejection, I felt trapped and panicked. I had invested hundreds of thousands of dollars into software and hardware engineering to make just one product, and I was barely scraping by.