Ramen Profitability
Generate just enough revenue to cover founders' basic living expenses.
Explanation
Paul Graham coined this term for the milestone where a startup makes enough money for founders to live on cheap food and basic expenses. This isn't about luxury—it's about survival and independence. Ramen profitability gives you time and options: you can be more selective with investors, iterate without time pressure, and avoid failing from running out of money.
Real-World Example
Plenty of Fish reached ramen profitability with just one founder living modestly while the dating site grew. GitHub bootstrapped to ramen profitability before raising money. Basecamp (37signals) stayed ramen profitable for years. This milestone often comes at $5k-15k monthly revenue depending on founder count and location.
How to Apply
Calculate your true ramen number: rent, food, health insurance, minimum debt payments. Track monthly recurring revenue toward this goal. Focus on revenue, not vanity metrics, until you hit ramen profitability. This gives you leverage with investors and protects against market downturns. Many successful companies never needed to raise money after reaching this milestone.