On the Professor Game podcast, Matt Dalio made the comment
“If you could be profitable, even if it’s just barely profitable, then it allows you to live forever. And then it allows you to grow and crescendo upon something very real.”
Matt Dalio
Since 7 Generation Games is now profitable, hearing this just made my day, and it is totally true. So much of what is broadcast by founders is having that $1 million contract or raising that $500,000 seed round. We have been there and that is very cool to be able to tell people. The fact is, though, no matter how much revenue you have or the size of your Series A, if at some point your income doesn’t exceed your expenses, your company is going to die.
In one of my favorite essays, Paul Graham said the secret to startup success is simply not to die.
We WERE Profitable, and then this happened ….
In fact, we were profitable making customized educational games for anyone who wanted to teach anything (we still make games, let me know if you’re interested in having us make a game for you or just check out our game about why you should have us make a game.) Then, a couple of years ago, we got very excited about creating a platform that would make it as easy to create an educational game as it is to write blog. We doubled down on research and development, made a prototype, that was not user friendly enough. Made a second prototype using generative AI that was too expensive, and finally, finally hit on a winner. As you can see from the screenshot below, if you can type and click, you can make a game.
We’re already signing up school districts for professional development on using the blocks. If you’re not in a district, you can still sign up. We’ll do a couple of online sessions for the general public in late May and in August.
What are we doing now that we are profitable (again)
When you are just trying not to die while building a new product, you focus, and a lot of things get put to the side. We paid for what we needed to keep the business running, like software licenses, Internet, etc. Just like when you have a tight household budget, everything else got put aside. We didn’t update our computers, we filed an extension on the taxes, made the payroll out of our savings and forgot about drawing a paycheck for a while.
Why becoming profitable doesn’t start out all that profitable
I submitted our Q3 report required by one of our investors today, and even though we are in the black, the report didn’t show our financial picture looking near as good as it actually is.
Here’s why: You can’t put off maintenance forever, unless one day you want to end up on the shoulder of the 405 because your tire blew out.
Now that things are back on track, we are paying up. We hired an accountant and paid the taxes, on time. We replaced the laptops that we had been holding our breath would last until the cash flow improved.
We hired back contractors to do bug testing because, while we make money creating new games, we have tens of thousands of students playing existing games, and over time, with new software updates, new devices and for a bunch of other reasons, bugs creep into the software. If we are going to be telling people to get 7 Gen Blocks to make games, the games out there we’ve made ought to be a good advertisement for it.
The technical debt that no one talks about
Okay, you get it. Once we have some money, we need to pay those expenses we put off. Then, there are the two kinds of technical debt. First, there is the kind you probably already thought about – those fixes for the bugs that testers found, documenting the blocks in the wiki and the developer version of blocks on the 7 Gen Blocks website.
Then, there is the kind of technical debt no one talks about, which is the need to be like Alice through the looking glass, running as fast as you can to stay in the same place. I spent six months building an app with Gemini and Vertex AI, for a prototype we ended up not using. During that time, there were a lot of other applications out there I didn’t learn.
The videos we create for our games could be better, so I am now learning Create Studio. Productivity Tip: Even though the crew at Startup Chile thought it was a horrible American idea, I almost always take coffee breaks and eat lunch at my desk, during which time I watch videos to learn about a new programming language, code library or application. That’s the topic for another day.
I’m learning more about both Zapier and Google Apps scripts as possibilities for automating some of our business processes.
Why am I telling you this?
So much of start-up life is the Instagram/ Tiktok / Youtube version – We’re killing it! #theNextUnicorn
In fact, I’m very proud of the fact that 2026 will be 7 Generation Games eleventh year in business. As I mentioned at Próximo Avance, we’ve pivoted three times, but in the process, we have built a solid code base as a foundation, found loyal customers, and, most importantly, not died. As Paul Graham said, in a startup, the lows can be really low.
I want you to know that even companies that make it ten years and counting have their lows. When you come out of the low points into the black again, it’s not as fast as you think because now you have to pay off that debt you incurred when you were just trying not to die.
However ….
“If you could be profitable, even if it’s just barely profitable, then it allows you to live forever.
- Matt Dalio
And life is very good.