One of the things Michael and I decided once we started building our own company is that we would do our very best to become something we are calling “founder profitable,” as soon as possible.
What is founder profitable?
What founder profitable means is that we will work on bringing in enough revenue to cover the (livable) salaries of the founders (us) and associated costs.
Considering that it is only Michael and I right now and on top of that we have all the pieces to build a company (mainly a “builder” and a “seller”) this allows us to do a few things:
Build the right product
Having enough money in the bank to cover the founders at such an early stage will allow us to build the right product. By covering our basic living and operating expenses through bringing in enough revenue from our initial product will not only help validate our initial product but it will allow us to take our time in building the right features and offering without the pressure of hyper growth or managing a big team.
Not accept the first money offered to us
One of the most frequent things I see with startup founders is them taking the first money thrown at them because they need to. They don’t get the terms they want, they don’t get the investors they want, all because they won’t have enough money in the bank to cover the team’s expenses and payroll if they don’t accept the terms in front of them.
By becoming founder profitable you can control your own destiny.
Breathing room
The biggest regret I hear from startup founders is that they wish they had more time. More time to find product/market fit. More time to build more features to make their product more attractive. More time to make their business successful. If they would have gone for founder profitability, they would create more time for themselves. This breathing room gives a team more time to be successful.
These are just a few reasons why becoming founder profitable is a smart path to take, if your product/offering/service allows for it.
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