Paul Graham is one of the people whose advice I always welcome, even though I don’t always agree with it. Most of the time, however, he is spot on.
This week he posted an entry called “Ramen Profitable“. Ramen profitable means a startup makes just enough to pay the founders’ living expenses.
There was a time in the life of OpenNMS when we were ramen profitable. Heck, when I first started out I paid myself solely on commission, which means I was profitable from Day One (and believe it or not, that first year I only spent $5000 out of savings to survive).
Another advantage of ramen profitability is that it’s good for morale. You feel like you’re finally earning your keep. A company tends to feel rather theoretical when you first start it. It’s legally a company, but you feel like you’re lying when you call it one. When people start to pay you significant amounts, the company starts to feel real. And your own living expenses are the milestone you feel most, because at that point the future flips state. Now survival is the default, instead of dying.
I love that last line: survival is the default. It’s something I’ve been trying to explain about our business model (spend less than you earn) but I haven’t been as succinct. Profitability gives you options. Profitability, especially in open source, means you have the time you need to build your product and your community, and you can remain true to both.
But as Paul mentions in the footnote, ramen is one of the cheapest foods out there. It is one thing to survive and another to survive in comfort. So I’m going to call us “sushi profitable”.
While we don’t pay the highest salaries out there, we are able to pay good salaries. While we work on used office furniture, we can afford new laptops. And if any one of our employees wanted to go out for sushi, they could without hardship.
Those of us who work on OpenNMS every day realize it is something special, and so we are willing to sacrifice immediate financial gain in order to help the company grow faster. That doesn’t mean that we aren’t comfortable. I’m not sure what the next phase after “sushi profitable” will be (Mercedes profitable?) but I’ll let you know when we get there.