[berkanunal]

Congratulations. I have been following the retrospectives for more than 2 years now. I hope to keep enjoying your monthly posts.

My question is, did you change anything on your strategy after you were set on selling? Or the goal was still the same, optimize earnings?

[mtlynch]

Thanks for reading!

>My question is, did you change anything on your strategy after you were set on selling? Or the goal was still the same, optimize earnings?

Once I started the process of preparing the company for sale, it did change a lot of the strategy.

For example, one of the things I'd been thinking about was how to allow users to purchase recurring subscriptions to their TinyPilot Pro software licenses rather than having to remember to re-purchase every year. But once I started the sales process, that basically became non-viable because it meant I'd be investing thousands in software development, but it wouldn't pay off for another year or so, so it would weaken our profit and loss statements and result in a lower valuation.

There were a lot of things like that, where I had to reject any investment that wouldn't pay off in three months or less.

The other thing that was a bummer about preparing to sell was realizing that everything effectively becomes so much more expensive. Normally, if I want to give someone a $5k bonus, it costs me $5k. When I knew I was about to sell and wanted a 3x multiple, the $5k bonus effectively costs me $20k because it's $5k for the bonus itself and then -$15k for the sale price on a 3x multiple. I could try to argue that the $5k is "discretionary" and therefore not part of SDE, but I think the buyer would be in their right to argue that it's not discretionary, as it sets bonus expectations for future years.

[0] https://mtlynch.io/retrospectives/2023/08/#what-would-make-r...

[FireBeyond]

> I'd been thinking about was how to allow users to purchase recurring subscriptions to their TinyPilot Pro software licenses rather than having to remember to re-purchase every year.

I actually hate the 'flip' side of this. Over the last few years I've lost track of the number of services/providers who think it is just fine to renew annual subscriptions (in some cases $400+) with zero warning of upcoming renewal. It's not the amount of the service that bugs me, but the fact that that isn't a small chunk of change, and even a "Heads up, we'll be billing your card in a week for your annual subscription" email seems too much to ask for, to some.

[abtinf]

Everything was always that expensive, it was just less obvious.

What if you had moved to outsource the office tasks sooner? Could you have better invested that time and stress elsewhere?

The $100k per year improving hardware? Was that the best way to spend the money? Maybe it would have been better spent on marketing, or investing in reducing production costs with better tooling. Whatever the differential from what you spent was lost at 3x.

Gains often compound over time too. Cost reduction begets cost reduction.

Of course, thinking like this results in madness and moral hazard. I’ve seen companies do crazy, catastrophic things gearing up for sale.