When is “One”?

When starting a company, the talk is about “Going from Zero to One”.

Peter Thiel, the famous entrepreneur and investor, wrote an equally famous book about creating a product and starting a company called “Zero to One” (if you're into entrepreneurship, do yourself a favour and read it if you haven't already), emphasising the transition from nonexistence (zero) to the creation (one) of something out of nothing - a novel idea that did not previously exist.?

I talk a lot about it myself; that I’m still “on the journey of going from Zero to One”. This blog is even titled “Square One” because I am indeed back at Square One, starting from Zero and trying to build a company to get to “One.”?

But when is “One”, in the context of starting a new bootstrapped Software-as-a-Service business?

I did some research, trying to find the answer. There are some different ideas on when “One” is.

• Product Development Completion: Reaching "one" can mean that you’ve developed a functional minimum viable product (MVP) that meets the basic needs of customers. It's not just about having a product idea; it's about translating that idea into working software that people can use.
• First-Paying Customer: Another indicator of reaching "one" could also be acquiring the first paying customer. This validates that there is a market need for your product and that customers are willing to pay for it.
• Market Validation: Reaching "one" can mean the market has validated your product. This could be through feedback from early users, initial sales, or positive responses from market tests. Market validation shows that your product has a fit in the market and can scale.
• Operational Setup: Establishing the fundamental business operations necessary to support your product and customers, such as customer support, billing systems, and other back-end processes, also signifies reaching "one." It means you are prepared to handle customers' needs and business logistics.
• Initial Team and Culture: Building your initial core team and establishing a company culture can also indicate that you have moved from "zero to one."?

While I agree that all of the above are necessary building blocks for starting a business, none of them are in themselves clear-cut indicators that you’ve reached “One”. You’re still on the journey of establishing the business.

So, I came up with this:

When starting a company and going from Zero to One, you arrive at “One” when there’s enough revenue to be profitable, including a reasonable salary for the founding team.

In other words: You arrive at “One” in a bootstrapped, self-funded Software-as-a-Service business, when you are cash-flow positive.

It became clear to me earlier this month at a mentor meeting.?

A few weeks ago, I proudly told my mentor that I’ve finally earned enough revenue to cover all the costs associated with running Herodesk (around €1.300 MRR). He looked at me funny and said, " But that’s not including your salary, is it? This isn’t a hobby business!”?

Ouch. Spot on. It’s not.?

Until there are enough customers and revenue to cover all costs, including the founder's salary, the company is in a phase of establishing itself. It is going from Zero to One.?

I’m planning on reaching “One” (by the new definition above) by the end of the year.?

There's a plan for how to get there, and we're right on track!

I’ll let you know when that happens.?

Until then: Let’s go!?