I made $2k from music apps & game dev this year

I've been on Indie Hackers for two and a half years now. In 2020 I made $693 and this year in 2021 I made $2193, which is roughly a 3x multiple. The income came from games, music apps, and developer tools.

I have three music apps out on Android and iOS. Here is a typical graph of the monthly sales for one app on one platform:

This year I found a lever I can pull to increase MRR. To make more side project income each month I simply have to build one new music app or port one to a new platform.

Each music app on each platform averages around $50 per month. The sales are fairly consistent month to month and they come from two main sources. The first is organic traffic from app store search. The second is web traffic driven from sites and web apps I built.

I really enjoy building these music apps and for that reason I think it is sustainable. I think it's important to find something you can consistently work on without giving up. I've also found a couple of other ways to stay motivated.

The first thing I realized is adding $50 per month is a lot like adding a new customer to a SaaS business. So each time I build a new music app it is as if I had a SaaS business and I added a new customer.

That's motivating to me because it feels like I replaced something I don't like (talking to people and trying to sell them something) with something I do like (writing music app code).

The second motivating thing I realized is that although $2k ARR seems like a small amount it actually represents a lot of intrinsic value. My friend Tobias pointed out the "four percent rule" applies to passive side project.

The "four percent rule" is a rule of thumb that says that over the long term you can expect to get about 4% return by investing capital in some productive asset class. So you can work out how much you will make from your capital by multiplying by 0.04, but you can also do the opposite. If need to make $X per year you can multiply that by 25 to figure out how much capital you would need to invest.

How does this apply to side projects? You can use the 25x rule to work out the rough "capital value" of what you have created. If you're making $1,000 per year passively from your side projects, that means you have created about $25,000 in capital in your project.

When you say "I spent two months making an app that generates $78 per month" it sounds like a waste of time. But if you say "I spent two months creating $23.5k of capital" that sounds pretty great!

Each music app I create makes about $50 per month so that means I am creating about $50 x 12 x 25 = $15,000 worth of capital every time I do it. That certainly feels worthwhile to me.

So moving forward I am changing my frame of mind from spending my time working on side projects, to investing my time into side projects.

Games and dev tools

I mentioned the income also came from games and developer tools. To help me figure out what to focus on I used a measure called "revenue per mille" or RPM. You divide the revenue by the number of visitors and multiply by 1000. So for example one of my music apps has an RPM of $191. It makes $191 for every 1000 visitors to the store page.

What I figured out is the RPM for games is really terrible. For every thousand visitors to the page for one of my games I get about $20. And unlike music apps, the revenue spikes at launch and then drops off to zero over time. Music apps are more consistent than games and have a higher RPM meaning more people will buy when they visit the page. So it makes sense to focus on music apps over games.

The "developer tools" side projects did a lot better in terms of RPM. I will probably look at building more developer tools in the future. The reason I don't want to focus on that now is it is less clear to me what people want. With music apps it is very clear. I have a good idea what kinds of music apps will make money. I will keep tinkering with dev tool ideas though. There is something there for sure.

In 2022 I am going to double down on making music apps. There are ports I can do of my existing apps, and I have a ton of ideas for new apps, and I am getting good feedback from users. Best of all I enjoy working on them.

See you at the end of 2022 for the next annual update!