Definition · also called ramen profitability
A startup is ramen profitable when it makes just enough money to cover its founders' living expenses: rent, food (ramen) and the basics, but no salaries worth bragging about.
Paul Graham coined the term in a July 2009 essay. His point was that this kind of profitability doesn't prove the business is big; it buys time. You no longer need to raise money or shut down, which changes how you build and how investors treat you. (source)
Ramen profitable formula
Ramen number = (founders' monthly living costs + business costs) ÷ (1 − tax rate)
- Use your real minimum: rent, food, insurance, transport, debt payments.
- Fees and taxes come off revenue first: $3,000 of MRR is not $3,000 in your pocket.
Worked example
Living costs $2,400/month, business costs $200/month, about 25% set aside for tax and payment fees.
Ramen number = $2,600 ÷ 0.75 ≈ $3,470 MRR. Two founders need roughly double, which is why duos often hit it later than solo makers in cheaper cities.
Why ramen profitability matters for indie makers
- It is the real quit-your-job number. Not $10K MRR: the amount that keeps you alive, so you can work full-time on growth.
- It makes you [default alive](/glossary/default-alive/). Every month after that is runway you don't spend.
- Geography matters. The same product can be ramen profitable in Lisbon, Bali or Lagos long before it would be in San Francisco, one reason so many indie makers are nomads.
- It is a floor, not the goal. Graham warns against drifting into consulting to stay afloat; the point is to keep building the product.
Ramen profitable in practice: how indie makers use it
Makers in the directory who said publicly that they reached ramen profitability:
Four months into Makerkit, in December 2022, reported about $3.5K in monthly sales and called himself ramen profitable. By month six revenue was $8,606. (source: indiehackers.com)
Senja hit ramen profitability at $7.5K MRR in July 2023, a number covering two co-founders, about a year after its first paying customer. (source: indiehackers.com)
Built Saas UI in public while travelling around Europe and reached ramen profitability with a premium membership within its first months. (source: indiehackers.com)
Kept his job until Bidsketch's MRR replaced his salary, then quit in 2011, a stricter version of the same rule. (source: saasclub.io)
Documents his solo journey toward ramen profitability as an iOS developer in his newsletter. (source: newsletter.jjvalino.com)
From our data: how long indie makers took
| Milestone | Makers who reached it | Median time (dated makers) | Middle half |
|---|---|---|---|
| $1K MRR | 112 | < 1 yr (n=22) | < 1 yr – 1 yr |
| $10K MRR | 97 | 1 yr (n=15) | < 1 yr – 2 yrs |
| $1M ARR | 49 | 3 yrs (n=13) | 1 yr – 4 yrs |
| $100K MRR | 40 | 3 yrs (n=9) | 2 yrs – 4 yrs |
Years from the year a maker started to the first year a self-reported figure reached each level. Medians use only makers whose crossing year is pinned down. Full method and every data point: maker journeys.
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Frequently asked questions
What does ramen profitable mean?
It means a startup earns just enough to pay for its founders' basic living expenses, so it can survive without raising money. Paul Graham coined the term in 2009.
How much MRR is ramen profitable?
It depends on where you live and how many founders there are. Add up monthly living and business costs, then divide by roughly 0.7–0.75 for taxes and fees. Indie examples range from about $3.5K for a solo maker to $7.5K for a duo.
Is ramen profitable the same as profitable?
No. Ramen profitable covers founders' minimum living costs; a normally profitable company also pays market salaries and generates a surplus.
Related terms
Keep reading
Maker examples are paraphrased from the cited sources and from each maker's IndieMakerList profile; revenue is self-reported unless marked verified. Spotted an error? Tell us.