[HN Gopher] Ask HN: Advice for turning my side project into a re...
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Ask HN: Advice for turning my side project into a real business
I'm a product-focused dev with 10 years experience at a-list
startups. For the last few years I've been working on a side
project. It has some traction and makes ~$600/mo even though my
current product is pretty raw. I've recently put a lot of thought
into the product and realized that there is a real gap in the
market that I can fill and make this into a real business. This
requires a pretty significant amount of work, which I'm slowly
chipping away at with 2-3 hours per day. Of course there may be
unknown unknowns but the path to something like ~$1M/yr seems very
clear to me. Circumstances at my current day job have been getting
progressively worse and I think it's time to move on. I'm not full-
burnout unhappy (yet), but getting more resentful every day.
Unfortunately I don't have enough cash saved up for significant
runway. I'm 35 with family and living in the US so eating ramen and
sleeping on a friends couch isn't an option. I'm trying to figure
out my options. Maybe try to find angel funding. Maybe a business
loan (is that even a thing?). Or should I just grind it out and
stick with my current job. Appreciate any and all advice.
Especially if you've been in my position
Author : sounds231
Score : 26 points
Date : 2024-01-31 20:05 UTC (2 hours ago)
| helph67 wrote:
| Perhaps consider making a deal with a company willing to market
| your idea, paying you a share of total sales? Would be a good
| idea to ensure you have lawyer with suitable experience.
| hermitcrab wrote:
| Do you know anyone that has done that successfully? I can't
| think of any anyone and I know lots of people making a living
| from small software businesses.
|
| No company (worth working with) is going to be interested in
| marketing something making $600/mo when there are loads of
| successful products that they could be an
| affiliate/reseller/agent etc for.
|
| Also talking to an attorney is likely to eat up months of that
| $600/mo revenue.
| saluki wrote:
| Stick with your job as long as possible, there isn't any better
| bootstrap funding than being employed at a software engineer
| rate. Sounds like a good transition would be to apply to
| https://tinyseed.com/
| sounds231 wrote:
| Thanks I had forgotten about tinyseed!
| simantel wrote:
| TinySeed only works with B2B companies, and based on your
| comment history it looks like this would be B2C.
|
| I think your best bet would be trying to raise a pre-seed
| round if you wanted to bring in outside funding.
| el_benhameen wrote:
| You might already be familiar, but Startups For The Rest Of
| Us, Start Small Stay Small, and The SaaS Playbook are all
| succinct resources for the software bootstrapper.
| KeithBrink wrote:
| I would find a way to validate that there is a path to $1m/year.
| Perhaps talking to some of the folks to see if they would commit
| to paying if you're able to deliver what you're building.
|
| If you can get some written commitments in place, it will be a
| lot easier to pitch to investors if you decide to go that route,
| and you'll get a better valuation.
|
| It doesn't sound like you are able to bear a worst case scenario
| at the moment since you have dependents, so you want to be as
| sure as possible before you lose your income stream.
| takkatakka wrote:
| " I've recently put a lot of thought into the product and
| realized that there is a real gap in the market that I can fill
| and make this into a real business"
|
| Was the market gap realization from conversations with
| current/prospective customers? Or was it from solo hammock time?
| It sounds like you have a lot more the build, and because you
| have dependents, I would try to reduce risk as much as possible
| by making sure you have a list of customers (emails?) who, in
| some way, showed strong interest in paying for your product.
| Ideally a long list.
| brudgers wrote:
| [random advice from the internet]
|
| _Maybe a business loan (is that even a thing?)._
|
| It is a thing, but basically most intial business loans boil down
| to signature loans. You sign as an individual and you are on the
| hook personally.
|
| Sure an established business might get a loan collateralized
| against business assets such as inventory, real property,
| recievables, etc. Or a line of credit for cashflow.
|
| Anyway, the simplest thing that might work is charging more for
| the existing product so you can support existing customers.
|
| In part because $1m/year is not enough to make sense to an
| established angel investor. But mostly because charging more
| money is a good way to make more money; a good test of viability;
| and the simplest thing that might work.
|
| Finally, be clear on the competing ideas. One is getting a new
| job. The other is owning/building your own business. They are not
| mutually exclusive. You can get a new job and continue building
| your side project organically.
|
| Indeed a plan to build your side project organically over a few
| years is not the only option. Another is to build a new project
| that is easier to turn into a business (maybe even one that
| resegments your existing product under a new brand).
|
| Keeping in mind that getting other people's (friends, family &
| fools) money is a lot of work that doesn't bring in revenue.
|
| Good luck.
| is_true wrote:
| Can you change jobs? Maybe finding a less demanding one that
| frees some time
| tacostakohashi wrote:
| I kind of was in that situation once, I had a side hustle that
| was making about $1000-1500/month. It seems cool to be making
| "real" $$$, but if you're not properly accounting for labor,
| equipment, operating costs, taxes, etc. etc. it's relatively easy
| to be "making" a few hundred $$$/month, and might be harder to
| scale up than you think.
| willsmith72 wrote:
| I would grind it out until that's more like $10k/month. At that
| point, if you have good growth and retention, you could try to
| raise enough money to keep going full time for another year.
|
| Can you do a friends/family round?
| rcmjr wrote:
| Business Attorney Here.
|
| I would speak to an attorney to see your next steps both in terms
| of setting up your business for success as well as making sure
| there are no issues with your current employment.
| tomwphillips wrote:
| Indeed. Check your employment contract and get legal advice.
| Your employer might not be thrilled to find out about your side
| project.
| giarc wrote:
| Ask your boss for a leave of absence. You'll have the security of
| returning to your job, but will also have the time to dedicate to
| your new project. You say you can't support not having a job, but
| if push came to shove, could you not work for 3 months and
| support your family if you cut down on expenses? If you are a dev
| at a-list startups as you said, you could probably pick up a
| contract here or there.
| potsandpans wrote:
| In this climate I would not call an approved leave of absence
| security.
| __oh_es wrote:
| Depending on your salary and experience, hiring a contract
| developer/freelancer could be an option. Europe is quite a bit
| cheaper than the US salaries, has plenty of skilled people that
| have a good education and level of english. tech.london could be
| a start if you want to explore this.
|
| The option I am considering is taking 1-2 months of unpaid leave.
| Obviously this requires some savings and cutting down expenses
| however you can make it fun for the family with a little thought
| and creativity.
| hurtuvac78 wrote:
| For any 20+ years-old readers here, if you ever think/dream about
| starting a business, you should learn from OP that cash and
| savings is paramount for freedom and creating a business later
| on.
|
| _> product-focused dev with 10 years experience at a-list
| startups [...] I don't have enough cash saved up for significant
| runway. I'm 35 with family and living in the US._
|
| The earlier you start, the more you accumulate, the more
| flexibility you have later. I had 12 months runway when I started
| mine, and it is so valuable not to look for investors and just
| work on your product/company when you feel pretty confident.
| ugh123 wrote:
| 100%.
|
| I think we'd have better businesses with longer timeframes if
| people were just able to stay away from VCs for the majority of
| development.
| hermitcrab wrote:
| I bootstrapped my small software business with savings. I had
| about a year of runway. IMHO this is definitely the way to do
| it if you can. Don't even think about using your credit card.
| Obviously that doesn't help OP much. Sorry.
| debacle wrote:
| Truthfully, quiet quit, put more time into your project in Q1-Q2,
| and try to 10x your revenue.
| jmduke wrote:
| I did this. I grew my project, Buttondown
| [https://buttondown.email] from high three figures to low five
| figures while doing it as a nights-and-weekends thing at Stripe
| and then quit to work on it full time. It was a great decision
| and I'm happy I did it! (I also did it, frankly, with significant
| runway in the bank if I needed it, and no dependents besides my
| wife so the tail risk of "this goes to zero and/or I hate it" was
| not particularly painful.)
|
| My advice would be: it reads like you're commingling two
| questions that really should be separate, which are:
|
| 1. Do you want to start a business and pursue independent
| employment?
|
| 2. What are the quantitative parameters and conditions under
| which such an enterprise is sustainable?
|
| If the answer for 1. is yes (and interrogate yourself a bit! how
| many of the things that you are imagining are less "working on
| your side project full-time" and more "not working on the day job
| that you hate?"), get as concrete as possible with 2. What burn
| rate _is_ acceptable to you? How much savings are you willing to
| use during build-out, if you were to start now? What growth do
| you need to hit to feel like you're financially on the right
| track?
|
| There are lots of funding tools (using the term 'tool' loosely)
| available to you -- SBA, subsidy via full-time job, subsidy via
| contracting, lifestyle-friendly firms like Tinyseed. But you need
| to start with the numbers.
|
| (Also always happy to chat more: I'm at justin@buttondown.email.)
| s-xyz wrote:
| Great service, shows that doing something straightforward and
| not over-complicated can lead to good results. I assume you
| make sufficient MRR to have this as your only job?
| poulsbohemian wrote:
| I was you about a decade ago... I can't stress enough that if you
| don't have serious money in the bank or rich friends, you need to
| keep your day job and bootstrap. One approach I've seen work well
| even though it may be slow and frustrating - use the proceeds
| from your day job to hire a developer to do the work. You create
| the work plan, let someone else fill in the gaps. You focus on
| marketing / customer interaction to grow the product.
| Alternatively, keep burnin the midnight oil.
|
| I do not recommend anything that smells like a "loan." This is
| speculative stuff you are doing, and a loan means you'll be on
| the hook to pay it back regardless of how it works out.
| carlosjobim wrote:
| Why can't you grow progressively? You're talking about a million
| dollars a year like it's an easy thing, so a hundred thousand
| dollars a year should be ten times easier for you and you won't
| have to quit your job.
|
| People love to dream big and bet all, but nobody wants to make
| calculated risks and slower progression.
| robbomacrae wrote:
| I'd recommend Founders University which will most likely back you
| with $25k angel funding for 2.5% and you also get to join a
| community of founders and maybe appear on Jason's This Week in
| Startups. It's probably not a lot of runway for someone in your
| position and you could shop around for a better option if you
| have the time for it.
| techcofounder wrote:
| Another idea: line up some dev consulting work that would enable
| you to spend more time per week (in aggregate) than the 2-3 hours
| per day you're spending now. Consulting offers higher hourly
| wages and more flexibility, generally speaking.
|
| There are clear downsides too. You would need to source these
| contracts yourself and figure out health insurance for your
| family.
| codegeek wrote:
| Few things:
|
| 1. Unless you have real traction (2-3x growth every year) or rich
| connections, your change of getting an investment on a $600/Mo
| product is almost nil.
|
| 2. Your chances of getting a business loan is almost zero as well
| because most business loans are given against real collateral
| (e.g. physical/real estate, machines/hardware etc) and most banks
| in US wont consider a $600/Month software revenue anything real
| worth a collateral. You are most likely better of getting a
| personal loan if you have good credit but regardless, you will
| have to guarantee it personally which means they come after
| everything you got if you fail to pay it back
|
| 3. Your best bet is to keep the job and keep grinding on the
| side. If you really believe that this can become big, it can
| become big without you going all in at least in the early days.
| Get creative. Find a co-founder if possible who is willing to
| work for sweat equity. If not, do it yourself until the revenue
| is close enough to your min. expenses. Then quit the job.
|
| I don't mean to say this in a rude way but no one will give you
| money so that you can quit your job and work on a $600/Month
| product. You have to take that risk yourself. All the best.
|
| Source: A bootstrapped founder who was privileged to buy an
| existing side project (doing $2500/Month at the time. used my own
| personal savings) and grew it to low 7 figures revenue. I have
| taken small loans (SBA/personal etc much later on) and funded all
| of it myself for the most part.
| polygotdomain wrote:
| From OP's comment history, I'm going to assume this is about
| https://www.fretboardhacking.com/fretpro-app/
|
| As a guitarist myself there is incredible saturation in the
| market right now for learning guitar, whether it be apps,
| courses, or other content out there on YouTube/Ticktoc/etc. My
| first question is why to you is why you think "the path to
| something like ~$1M/yr seems very clear to me."? My second
| question is what does your app do to distinguish it from any
| other of the readily available guitar learning/fretboard apps
| (from quick google https://guitar.com/guides/buyers-guide/best-
| guitar-learning-... and https://americansongwriter.com/best-
| guitar-learning-app/)?
|
| If you're looking to potentially quit your fulltime employment or
| potentially take some extended time off, that it feels like you
| should have some pretty solid answers to those questions before
| doing so.
|
| At $600/mo, there's about a 10X gap between where you're at and
| revenues you could actually sustain yourself on, and ideally
| you'd like to hit 5 figures recurring revenue a month before you
| start seriously thinking what this would mean becoming a "real
| business". Assuming you have ideas on how to grow that revenue,
| I'd suggest focusing on some of those strategies. I'd also start
| making strides in marketing that can start to grow market share
| and get some exposure.
|
| While I don't want to discourage you, it's also okay if a side
| project stays a side project. You can continue to invest the side
| time you have and grow your passive income to supplement your 9
| to 5.
| dnndev wrote:
| I was in the same situation(wife, small children, no real
| savings) about three years ago. Long story short freelance for a
| high enough rate that you can pay subcontractors to do the work
| and free you up to work on the side project. Eventually, you can
| start paying the freelancers as subcontractors to work on your
| project as well and this is the hardest part and I don't know any
| way around it. I happen to know people that were in sales and
| know the business side of the industry I target. Eventually, one
| of them said, I'm ready to be entrepreneur and I sold a piece of
| the pie in exchange for him and his clients. Within the first two
| months our profits soared. It's a wild ride and we are just
| getting started. Build a solid product that customers love and
| lightning will eventually strike.
| hermitcrab wrote:
| >a real gap in the market
|
| Is there a market in the gap though? Often the reason there is a
| gap is because it isn't a viable market, not because nobody
| thought of it.
|
| https://successfulsoftware.net/2017/02/03/choosing-a-market-...
| dnndev wrote:
| Things are not always what they seem. I've started multiple
| companies that appear to be not viable but once you've made
| something and shown value, all of a sudden everybody wants it.
|
| I mean good gosh just think about Uber, WhatsApp, YouTube -
| like anyone would ever want that at one time. The world is a
| big place. Most undervalued lesson early in life.
| hermitcrab wrote:
| There definitely are lucrative and unexploited niches. But,
| in my experience, the majority of unexploited niches are
| unexploited for a reason.
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