From $0 to $10K in Passive Income
Phassive is a project, journey, where I will build numerous startups, that collectively will earn $10K/month of passive income. The whole process will be thoroughly documented and presented in an easy to digest form. Revenue and all information related to it will be shared openly
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A noble goal, and I wish you good luck. If I learned anything from when I tried it[1], it's that idea selection matters a lot, and that just because something is a good idea for someone doesn't necessarily mean it's a good idea for this particular goal and under these time/income constraints.
If I was doing it again, I would religiously restrict myself to ideas which folks would pay $50+ for up front, and would equally religiously avoid anything for consumers and anything with network effects. I'd probably also try to focus on ideas whose value proposition can be measured in something concrete (like extra dollars earned) instead of something abstract (like extra units of fun or efficiency).
In any case, good luck. Hope your efforts prove more fruitful than mine. (Although I did end up accidentally reaching the goal some years later.)
[1] https://player.vimeo.com/video/43036150
"Focussing on concrete value measurement" is a very good way of condensing what I would have expressed like this:
"Make it easy on yourself to communicate the value of your product. People understand discrete units (like dollars or hours saved from tedium), but have a hard time weighing things like 'more fun' or 'less effort' against a price."
Thanks Rob for always finding ways to make things more succinct.
You know me, I hate extra words ;)
Thanks for the comment. I think I made it semi-clear in the blog post, that I am not focusing on "fun" stuff, but rather on tools I am missing in my life (utilities/improvers). And not my life, as "I like to watch this TV series, so I will make a search engine with quotes from it", but rather "This part of my life is unoptimized, there is no tool to fix it, so let's make it". This is why the first tool I will be releasing is a Task app since I cannot find an app that will have a few very basic features, that I really need.
I am fortunate to have quite extensive experience both business and marketing-wise, so I should be fine with creating utilities, rather than something like the Facebook for tractor drivers ;)
The goal is revenue-based, so I will surely avoid "fun coupons" to be any form of validation. I will try to make each startup to add to the "ecosystem" I am building, so they complete each other, rather than compete.
How did you reach it accidentally? That sounds like a great post.
I wrote a book which ended up growing fairly well through word of mouth. It hit 10k/month in profit fairly recently, about 6 years after publication. I wrote it intentionally, of course, I just didn't expect it to do so well financially.
very cool. Fiction, not function?
Interesting that you say you would avoid anything with network effects. Any specific reason?
My thinking has been (so far) that network effects in B2B, at least, could be desirable under appropriate conditions. I'm thinking of things like marketplace-type products, re-using existing data inside a product to provide new products/features (i.e Stripe Radar) and such.
It's because network effects don't kick in until you've already reached scale, which means it doesn't really help on your journey from 0-10k. Rather, network effects help on your journey from 100k-100million. So if you want to get a billion dollars, then yes, pursue network effects. But if you want ten thousand, then then they're working against you at the early stages. (Edit: in my opinion. I don't have a billion dollars though.)
Gotcha! Thanks for the explanation.
$10,000 / month =
10 users at $1,000 / month
20 users at $500 / month
100 users at $100 / month
1,000 users at $10 / month
I know this is simplistic math but its interesting to think about. I feel like the sweet spot is at the $500 / month to $100 / month price point.
To get 20 customers, you'd need to get in front of ~1,000 qualified leads assuming 2% convert (which is not a terrible conversion rate). If you get lucky and get on the front page of HN or PH, you could get 10K+ pageviews. It isn't crazy to think you'd get 20 sales from that (but it isn't easy to get 10K+ HN or PH views).
You could also just email 1,000 leads -- it isn't fun but you could do it in a week. Or you could write a blog that gets maybe 1K monthly pageviews and 2% of those convert to purchases. Or get a booth at a conference.
Or you could get 5 people in your network to love the product so much they tell their friends, 1-2 of whom become customers / month, and after a few months you'll have 20 users.
To get 100 customers, assuming 2% conversion rate, you'd need to get in front of 5,000 qualified customers. You could maybe get 100 customers from an HN or PH launch, but you'd need a product that's perfectly targeted for IH or HN. You could email 5,000 potential users, but it might take a month to do that. You could get 5 users from your network tell their friends, but it would take a while to get to 100 users. You could go to a conference, but the ROI may not be positive.
If you have a $10 / month product, you'd need 1,000 customers. You'd need to get in front of 50,000 qualified leads. Product Hunt or HN launches -- even on the front page for a while -- are unlikely to get you there. Getting 50,000 qualified pageviews for something is hard.
Charging $1,000 / month for something feels like it wouldn't be that passive -- you'd probably have to do support or something time-intensive like that.
The starting point for me will be a product that cost a few bucks and has widest possible user base (in my case this will be Task app). I will keep testing different strategies though. I will release 4-5 projects this year, so there will be a lot of ground for testing different approaches. I will definitely think about a solution with premium price once my following is large enough though.
Thanks!
Good luck with the project. You can literally not lose here. Either you reach the $10k/month and things are good, or you don't reach them (yet) and have become an expert in all the fields that didn't work.
As you want to solve your own problems, I would suggest you make sure not to only look into technical problems. As a developer myself, when I think SaaS, I think of dev-focussed tools. Things I need for my work productivity. But those are the first things every developer thinks of. So the quality of the tools out there is already substantially high - and the market is quite saturated.
However, I see you start with a Todo-app to fill your own needs. That is a great start, as you are making it specific. Who knows how many people organize their lives just like you and have the same issue. I wonder if there is more to that than just organizing tasks. But that will be tool #2 :)
Looking forward to seeing what come of your journey. Have fun!
Thanks for the comment. Yeah, I am fortunate enough to be a business person first (I learned business and marketing way before I dipped into programming), so I definitely don't think like a developer. In my case, it is an advantage.
Most likely the second project will be a non-invasive and opportunistic user surveying. So it is much more focused, but then, still broad enough. We will see though.
Thanks for checking the blog, I really appreciate it!
Beyond the learnings, you (potentially) also end up with an audience and mailing list, both of which are certainly worth more than zero.
Definitely!
The value is indeed in the list :)
I'll be following this journey! I added my email to your newsletter.
Thanks a lot!
Great comments on this thread already! About to embark on a similar journey myself so will be watching closely. 👌 Godspeed!
Sounds great. Keep us on IH updated!
Will be following your journey. Best of luck!
Thank you, I really appreciate it!
Question to other people who successfully developed their SaaS projects:
Is it something like passive income in the world of SaaS?
I worked in a company that had a nice project for social media marketing and they decided to start a new project. Most of the manpower in the company was moved to the new app. Result? After one year many of old customers abandonned product which was our first project. There were many refunds. Growth numbers stopped and then decreased.
If one want to just count money growing in the pocket while new customers knocking to the doors but without spending some serious amount of time on the project..I wouldn't call it passive income.
I actually knew some guys that would earn from SAAS startups for years with minimum maintenance. Their products were:
-very niche with pretty much no competition
-aimed at small brick and mortar businesses that were not tech-savvy
-non-problematic enough for businesses to not look for alternatives
You can check the site flipping brokers to find sometimes a SAAS that is pretty automatic to run and maintain their size for a few years.
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How do you feel about the word “startup” ?
😂
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Yeah, MVP was a good concept, but it was run down. The trust in the MVP model is at a low point in my opinion.
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Not ones, that are set in stone, but within a year and a month or two I am going to travel a bit and I want to be finished by then. I hope I will reach the goal by summer though, maybe faster (depending on many things really).