Ramen Number / Guide
What is ramen profitable?
Ramen profitable means your product earns enough to cover the founders' basic living costs, so the company can survive indefinitely without outside money. Not rich, not big: alive on your own revenue, eating instant ramen if you have to. Paul Graham coined the term in his 2009 essay of the same name, and it has been the first real milestone of independence for indie founders ever since.
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Where the term comes from
In 2009 Paul Graham wrote that a startup was "ramen profitable" once it made just enough to pay the founders' living expenses. His point was not the noodles. It was the change in position: a ramen profitable company no longer has a deadline. It can keep going as long as the founders want, take money on its own terms or never, and grow at the pace the product deserves rather than the pace a runway dictates.
Two things follow from that. First, the bar is low on purpose: essential costs only, not the salary you had at your last job. Second, it is personal. Your ramen number depends on your rent, your country, your family, and your subscriptions, which is why a generic "10k months" target is useless as a milestone.
Ramen profitable vs profitable vs default alive
Profitable in the ordinary sense means revenue exceeds all costs including proper salaries. Ramen profitable means revenue covers the founders' bare living costs and the company's running costs, and nothing more. Default alive, another Graham term, means that on the current trajectory you will reach profitability before the money runs out. For a one-person company with no investors, ramen profitable is the one that matters: it is the day your side project stops being a hobby and becomes an exit route.
How to calculate your ramen number
Add up what your life costs each month, then compare it with what your product brings in each month. Three lines are enough:
- Essential living costs. Rent or mortgage, food, insurance, transport, utilities. What you would pay even in a bad month.
- Subscriptions and recurring bills. Phone, hosting, software, streaming, the gym. These are the easiest to forget and the easiest to cut.
- Your recurring revenue. Monthly recurring revenue from the product, or a conservative monthly average if it is not subscription based.
Lines 1 plus 2 are your ramen number. Line 3 divided by that number, times 100, is how ramen profitable you are. An example: rent 900, food 400, insurance and transport 300, subscriptions 180 gives a ramen number of 1,780 a month. With 400 a month of recurring revenue you are 22% ramen profitable. Every cancelled subscription lowers the target; every new customer raises the percentage.
Mistakes that make the number wrong
- Counting the salary you want instead of the costs you have. That is a different, much bigger number, and it makes the goal feel impossible.
- Forgetting tax on the revenue. Use revenue after the platform's cut and after the tax you will owe on it, or add the tax to your costs. Either way, do it once and be consistent.
- Ignoring the company's own bills. Hosting, the developer account, the tools you pay for to ship: they belong in line 2.
- Using your best month. Use a trailing three-month average of revenue. Ramen profitable is a state you stay in, not a peak you touched once.
What a good ramen number looks like
There is no good number, only an honest one. Most indie developers overestimate it because they have never added it up, and so the goal feels further away than it really is. Once you know it, the question changes from "can I quit?" to "what percentage am I at, and what moves it?" That is a question you can answer every week.