How much is enough to stop working?
A deep dive into one of the most taboo topics nobody talks about but secretly really wants to.
Hi, it’s Melissa, and welcome to “your founder next door”, a bi-weekly column with relatable stories of my journey bootstrapping eWebinar to $5m ARR. No BS, just straight-up truth bombs on what it’s like to build a company without an abundance of resources or friends in high places.
Money is a weird subject. Whenever I write about it, people either love or hate it. The biggest problem with money (outside of not having enough) is nobody openly talks about it, or at least it feels like they don’t. It’s so taboo. The result is people have no idea what to do with it once they have it. Ironically, behind closed doors, between close friends, it’s a topic that gets talked about a lot..
In the last year, I’ve been asking myself how far I want to take my current startup. I’ve been at this for 14 years. eWebinar is my third company and we’re in year 5. I teeter between “I think I’m ready for this to end. I’m tired.” to “It’d be irresponsible to squander this opportunity and not push it as far as we can.”
Which begs the question, “How much money is enough?” Because, let’s face it, we are doing it for the money; it’s what will ultimately buy our freedom.
So, when we ask ourselves that question, we’re really asking, “When can I stop?”
In hopes of finding my own answer to this question, I've been actively asking my bootstrapped founder friends what they’re striving for, if it’s a number, and their reasoning behind it.
In this column, I’m going to dive deep into this topic by sharing with you:
• How I learned you don’t need much to live large (including how much of my exit I spent to drastically change my lifestyle)
• The most common number that people like you and me are striving for
• What “enough” means for me (now)
PS. None of this is financial advice. Everything here is simply opinions of my own – isn’t that what you’re here for? 🙃
How my disrespect for money made me delusional 😇
Let me take you back to 1987, I’m 5 years old. My dad took me window shopping to educate me on the most expensive clothing and watch brands: Hermes, Brioni, Patek Philippe, Breguet…you name it. I remember flipping through the latest issue of Robb Report with him, looking at luxury homes, mega yachts and super cars...all the things I could buy when I had the money. When I tell people I grew up in a mall, they laugh. It’s not a joke, I really did grow up in a mall.
I’m from a materialistic culture where you're judged by where you live, what you have, and what you wear. My parents didn't come from money so they overcompensated by hoarding stuff they could show off to other people. This way of life really messed up my idea of success. I desperately wanted to be rich so I could have all the things. I wanted my parents’ validation and for them to be proud of me.
My parents gave me everything they had and more because they didn’t want me to suffer like they did. I had the coolest gadgets and the biggest allowance. Until late into my teens, I thought we were much more financially well off than we were.
I thought money came easy because, for me, it did. I didn't respect it.
"If you get good grades and work hard, you'll be successful." They said. So, that’s what I did. I studied, got good grades, and waited to grow up to collect my big payout.
They never talked about how hard it was to earn money. They never talked about how much they made or how much things cost. I had no concept of what it took to live the pretty good but not extravagant life we had. I thought being able to live like a page out of Robb Report would be the natural progression of my life if I worked hard.
Once, a friend said to me that his goal was to have $100m. That sounded like a good number to me, so I made that my goal too. I was completely delusional.
Post graduation, I got into sales and always had commission jobs. I was making $100k selling real estate as a 22 year old. That was double what my friends were making! I thought I was well on my way to millions, even though I had no idea how to get there.
At 27, after hopping around companies in different industries and never keeping the same job for more than a year, I quit my last job at SAP to start my own company…for real this time. I had always tried to dabble in side projects with friends, but nothing serious. I saved up $100k which I thought would last me 2 years. I ended up burning that in 9 months on some bad ideas and mediocre hires. But this wasn't a risk for me because I saw money as an abundant, limitless resource. I went for it without any inhibitions and knew no fear.
I'm not from an entrepreneur family so I had no idea how hard it would be to start a business. Everyone says it's hard, but nobody tells you why. I hadn’t experienced failure up to that point and was so deluded in my own abilities. It was incomprehensible to me that I’d start a company that wouldn’t make money. I had always been great at sales, so I thought I’d come up with a product and people would buy it because I’d sell it to them.
Learning to respect money changed my perspective 🧐
The years that followed were some of the toughest years of my life. My first company, Flat World Apps, was an agency where we built marketing apps on the iPad for real estate developers. Instead of being given a printed coffee table book about the building they were selling when you walked into a showroom, you could download the development project’s app and look at floor plans and galleries on an iPad. It sounds useful, but the iPad was new and didn’t have adoption, and the industry was never going to move past print. Every sale was an uphill battle. Anyone who’s run an agency knows that you’re either chasing the sale or chasing the invoice. It sucked.
That startup did get me into real estate tech though. I started traveling to New York where the industry congregated, built a professional network, and eventually moved there to pursue bigger ideas. My first company transitioned into my second, Spacio, which was an open house check-in system – imagine instead of writing your name and contact info on a piece of paper when you walked into a property for sale, you’d type it into an iPad and then get an automated follow-up. That was Spacio. We were an enterprise SaaS solution that real estate brokerages and franchises bought and offered as a perk to their agents.
My first company lasted 5 years and Spacio was acquired in year 4. For the first 7 years of my founder journey, I never had any money. I always paid others before myself, and they only ever got 50-75% of their market rate. I got a loan against the revenue from the first company and put everything into the second company as starting capital.
I hugely underestimated how difficult it would be to come up with a product someone would pay for – it took Spacio 2.5 years before making our first $10. I burned so much capital in that time trying to find product market fit that we had to take on side projects to make ends meet. Surprisingly, we never missed payroll. I was living in New York with $100 in my account daily and would only pay myself enough to cover rent and immediate expenses at the end of the month. Bootstrapping forced me to learn to live with very little, much less than most college students. Thinking back, I have no idea how I did that. It was intense. I don’t recommend it.
Reality had slapped me in the face and I finally realized how difficult it would be to make millions. All of those $100m exits I’d read about, what I thought would be a rite of passage for every startup, was going to pass me by. I wasn’t cut out for it. I didn’t want work to be my whole life. I didn’t want the sacrifice.
I discovered a newfound respect for money, but mostly for the effort and dedication it takes to earn it.
This realization brought me back down to earth and deflated my ego. The irony is, I started a company to be rich. After a decade of bootstrapping, I learned to live with as little as possible. During this period, what made me happiest was possibilities, adventure, and meaningful connections…not stuff. Stuff became meaningless because I was happy without any of it, something I never thought possible. Bootstrapping gave me tremendous joy through experience. Because of my startup, I moved to New York, met my life partner (David), nomaded around the world, found community, and built a new home in Amsterdam. None of these things came with a price tag attached. I began to question the reasons I was doing this for.
In year 4 of Spacio, we were acquired for a modest amount (in startup terms). I went from years of not having disposable income to a million dollars in the bank and zero debt. This seemingly small amount changed my life drastically.
You don’t need much to live large 🤩
I spent $25k and treated David and me to a week-long trip to the Maldives in an overwater bungalow, a bucket list item I had dreamed about since the beginning of time. Then, I spent $400k on half of a one-bedroom apartment in Amsterdam. I put $100k into starting eWebinar and lived off my savings for four years until I began paying myself when we broke even.
David and I collectively spent about $10k a month before we started paying ourselves. We travel most of the year so our biggest spend is hotels and Airbnbs. We enjoy comfort but are not extravagant. Aside from material things, we are surrounded by a loving family, a supportive community, and work 100% on our own schedule with a fully remote team. This is the lifestyle I dreamt of, and life was pretty darn great. I went from feeling like I had nothing to feeling like I had everything.
I didn’t have “everything” I wanted, but nothing was lacking.
My original $100m goal seemed preposterous. What would all that be for?! I learned that getting to $100m meant giving up the “minimum work, maximum play” lifestyle I was striving for, which would be unacceptable.
"Financial freedom" is often thought of as "having the freedom to buy everything you want." What it really means is "being free from making decisions only because of money." With what I had, I was already financially free.
It turns out that you don’t need a lot to live large. In tech, we’re conditioned to believe that only millions can change our lives. In reality, a few hundred thousand can already do that when you start with nothing.
I learned that wealth has nothing to do with the exorbitant amount of money you have in the bank. I was already living a richer life than most people who were financially better off than me.
The question changed from, "How much do I want to end up with?" to "How much is enough?"
Work used to be my only focus in life. As I’ve grown older, I have come to appreciate so many things that have nothing to do with work and I fantasize spending all my time on those things. In asking myself this question, I was also hoping to find out where the light at the end of the tunnel is. When can I stop this grind?
“The number” people like you and me want to get to 🤑
The interesting thing about having (even some) money is it makes other people at similar levels more open to sharing their own experiences. All of a sudden, asking questions around this topic becomes less taboo, more accepted, and sometimes even welcomed.
Thus, in the last year, I made it my mission to ask my bootstrapped founder friends what number they’re striving for so I could figure out what “enough” means for me, too. This mission was part research, part curiosity.
A lot of my peers had come to similar conclusions. We're all asking ourselves the same questions because we don't want to spend years and years slogging away for our companies. It’s too hard and too exhausting.
Surprisingly, common threads around “the why” no longer had anything to do with passion or changing the world, the fire that ignited us in the first place. After overcoming unimaginable obstacles to get to where we were, finally, life was good. The reason we keep doing what we’re doing it to keep up this good life, a life that most people in the world would consider great and unachievable. We do the math to figure out how to keep this good life going without putting in more work.
$5m in investable assets is the number most people quote.
(Investable assets = easily liquidated and invested.)
Why this number?
At 4.5% APY (annual percentage yield) which you can get from companies like Wealthfront and Interactive Brokers, that amount gives you $225k/year income, which is close to $19k/month. That’s approximately the amount most bootstrapped founders I talked to pay themselves, from $1m-3m ARR. FYI, for venture-backed companies, that’s the median founder salary after $10m+ raised. (According to the Founder Salary Report 2023 by Pilot, link below.)
To maintain our lifestyle without working (or putting in the same amount of work), we need $5m in the bank, generating a minimum of 4.5% a year. It may not be the number where you stop; it’s the number where you can.
For people like us, money is no longer the currency for nice things, but rather the tender for a life of complete freedom. The most luxurious thing money can buy.
It’s incredible how much more achievable your financial goal is when you tailor your expectations. You might already be there. In that case, congratulations! 🎉 I hope you know how frikken cool that is.
What’s enough for me (now) 🙌
Before I started eWebinar, my intention was to build a company that could pay me $500k/year ($42k/month). After David joined me as my cofounder, I cut that number in half assuming a joint income. Once we hit that recently, I started to feel unmotivated to work. My number had been hit, and my drive dissipated. Perhaps that’s why I’ve started thinking about maybe having a new goal.
It’s been 5 years since we started this company, and now, community has become the most important thing in our lives. The friends that we travel and party with bring us happiness beyond any measure. Money can buy many things, but it cannot buy love. Ultimately, the greatest measure of success is how many people you love, love you back.
I have been daydreaming about a life that we can share with our community every day. Whether that’s a compound, a building…I don’t know yet. What I do know is that to turn that dream into reality, we need significant capital.
With that, $30m has become my new number (to exit for).
Why? That’s the number I believe we can realistically get to if we hit $5m ARR with eWebinar (and I’m sharing everything with you on our way there). That’s also the number my COO, Todd, can retire with when his equity cashes out. Todd is basically the third cofounder to this startup, and without him, we would not have evenings and weekends. He is the reason we are where we are today, and making sure he’s taken care of is as much of a priority as our own.
The idea that David and I are jointly doing this for our friends has reinvigorated the fire I once lost. I now feel responsible because those who can, should.
Last words…
There’s no right or wrong answer when it comes to, “How much is enough?” What’s enough today can also change tomorrow. The most important thing is you’re doing it for yourself.
The media has messed up our idea of success by making us believe that if we don’t have a unicorn exit, we’re not ambitious enough. That narrative is toxic because it could drive us to live a life that isn’t true to what we want.
Ask yourself, “What is my definition of success?” Then stop caring about what other people think. We drown ourselves in hustle culture and pass those expectations and judgments on to the people around us.
I've learned that the worst thing you can do for yourself is to live up to someone else's idea of success.
Never let someone else define that for you, and don't define it for someone else.
Some stuff you should know about
LinkedIn post: I used to think founders should get paid last and the least. Now, I'm in the opposite camp
LinkedIn post: This is the story of my darkest entrepreneur moment from the last 13 years in startups
LinkedIn post: What does it mean to "enjoy the journey"?
LinkedIn post: I wanted to sell my last startup because I was no longer having fun
Forbes article: How SaaS Founder Melissa Kwan Went From Burnout To Breakthrough
Pilot’s founder salary report
MoneyWise podcast with Sam Parr: What high net worth people do with their money
Thank you for reading!
Melissa ✌️
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The only way this grows is by word of mouth, so I’d really appreciate all the help you’re willing to give.
Thanks Melissa. Great perspective!
Insightful post, Melissa!
Your LinkedIn posts should find a home here too!