Building a startup is hard.
90% of them don’t find success, but the lessons that founders learn in the process of starting up are valuable.
These lessons often lead them to start other profitable businesses and do high-impact work.
And most of all, grow and learn at a rapid pace.
There are common patterns that keep coming back when we study the success of solo founders and Indie Hackers.
This playbook is a collection of these common patterns. it's not generic business advice.
By definition, the term “solo founder” means a single person starting a business. But this playbook can also be applied to small scrappy teams of 2 or 3 founders.
The playbook is divided into 5 steps:
But before we jump into the steps, it's important to take stock of the constraints that solo founders face.
Also, the superpowers that come with those constraints👇
Constraints -
You will be mostly self-funded or bootstrapped.
But with these constraints, solo founders also enjoy a few superpowers:
An artificial constraint that you can put on yourself is doing something like a “12 startups in 12 months” challenge.
Force yourself to build and ship a product in 30 days. And do it 12 times a year.
This constraint can turn into a superpower because it will help you build a habit of shipping, and it will also help you get eyeballs on your projects.
This challenge immensely helped people like Pieter Levels, Jon Yongfook, and Andrey Azimov. Their breakout startups were conceived during the 12 startups challenge.
Nathan Barry did a public challenge where to build a profitable web app in 6 months, back in 2012. Today that web app is ConvertKit and doing almost $30M ARR.
Now let’s go to the first step of the playbook - Star then Learn.
This is the exact opposite of traditional business advice. But it’s far more effective.
How do you get your 1st idea?
Build the most barebones solution you can with your current capabilities.
Don’t worry about questions like “which tech stack should I choose?”
Listen to Arvid -
If you are a non-technical founder:
The goal of this step is not to build the final product, it’s just to get into the habit of building and dealing with interesting problems every day.
Once you do that, you can start to look towards solving real problems that people will pay money for.
Examples of Step 1:
The process of building will throw up problems that you could have never encountered otherwise.
(Example:
If your idea is a software tool that lets bloggers turn their articles into newsletters and sends them out.
Then you can offer that service to bloggers as a freelancer, do it manually for them.
And see if people are willing to pay money for it or not. No need to code up a complicated tool that interfaces with multiple other tools in the blogger’s journey. If you can find 10 people willing to pay money for such a solution, then you have some validation, and can start thinking of a software solution.)
(If the service/agency business works, you can turn parts of it into a SaaS.)
You don’t necessarily have to avoid software, if you can set up a software solution quickly, then go for it.
The goal of this step is to get used to reaching out to people with solutions, asking them for money, and identifying real problems worth solving.
Do it manually, or with code, but learn to do it fast and often.
Once you have that, you can move to the next step: Iterate and Pivot.
Examples of Step 2:
Your first idea will not be your last idea. Even your 100th idea may not be your final idea that takes off as a business.
These steps will most likely get you some initial revenue.
Congratulations, this was the hardest part.
2 things can happen now:
They don’t use it anymore, they realize that it was just a nice-to-have solution, not a pain killer for them.
Now you can either iterate more, build new features if customer conversations are still helpful.
Or you might need to pivot to a different solution.
You can even change the product positioning to cater to a different kind of user.
Example: ConvertKit is an email marketing solution focused only on creators. This positioning helps it differentiate itself from other competing email marketing solutions like Mailchimp.
If you are building a CRM solution for dentists, maybe you can try to reposition it for chiropractors or gym owners.
Such pivots will give you new ideas for features to build and a fresh new market to tap into. And have new kinds of customer conversations.
But if you think even that is not likely to work, then maybe it’s best to go back to Step 2 and find a new problem to solve.
Customers start talking about it in their circles, start sharing your product with their friends.
You can use this as social proof, and even start to market your product based on this validation.
Depending on the type of product and where you find customers you can invest in marketing via different channels:
This is not a full-scale marketing effort.
The goal is to figure out your average customer acquisition cost.
(CAC = How much money does it take to get every new customer.)
And how does that amount stack up against the lifetime value of each customer?
(LTV = The total money the customer will spend on your product from the day they start to the day they leave)
These numbers will be useful in identifying which parts of the business you need to work on.
If the LTV is low, that means customers are churning, you need to improve the product before you do any more marketing.
Find ways to keep the customers you have before bringing in any new ones. Keep iterating.
If the CAC is high that means the offer isn’t appealing enough, you need to tune your marketing efforts - the channels, the copy, the targeting. Review every aspect of your marketing funnel.
If the CAC is low, and the LTV is high then look at their ratio.
Generally, you should aim for an LTV/CAC ratio of 3:1.
Anything lower would mean that you’re losing money. Because you also have to consider operating costs for each customer.
Operating costs would include server costs, tools you are paying for, and also your own salary!
But if LTV/CAC is greater than 3, then congratulations 🥳🎉
You’ve just created a money-making machine - Where you put in $1 and it spits out more than $1.
This is the definition of a sustainable business, some people would even call this product-market fit.
You can now start looking for ways to scale the business:
Examples of Step 3:
This is more a meta step that you can start right from the beginning.
But even if you don’t start then, you should start now because now you have lessons worth sharing.
You’ve been in the trenches, you know shit that someone starting out doesn’t know.
What you share can be valuable to someone just 2 steps behind you. So start sharing your lessons in public.
Either on Twitter or in a newsletter or through both.
Apart from this, you can also join founder communities on Slack or Discord.
You will get a more intimate view of what other solo founders struggle with, and how they deal with unique challenges every day.
The relationships you build like this will outlast your current business.
Again, this step can be performed right from the start.
The audience, friends, acquaintances you make by sharing your journey openly are invaluable.
They would be around you even when you start your next business or pivot the current one to something else.
Examples of Step 4:
This is the harsh truth of any business, you have to keep going.
If you haven’t found a product that works, then go back to step 2 and iterate on other interesting problems to solve.
But if you have found a sustainable business model, and it’s growing well, then you will still have to make strong efforts for a couple of reasons:
A few steps you can take at this stage to make life easier for yourself:
Hire help - outsource, automate, delegate anything that’s not your core strength.
Get VC Funding - By this point, it will be easier for you to get Venture Capital, the business is proven, and if with more money it can grow big, then VCs will love it.
Get Acquired - Merge yourself into a larger business, you will have a boss, but there will be less pressure compared to running the entire business yourself.
Sell the business - Use platforms like Microacquire to find potential buyers.
There are some people who like to build new stuff, and there are others who like to scale and operationalize businesses.
If you’re not the 2nd kind, it makes sense to sell the business and start afresh with a new idea.
Examples of Step 5:
These are common patterns observed in most success stories of Solo founders and Indie Hackers.
Your journey might differ a bit from this playbook, but it can be a good framework to think about as you build a solo business.
It can really valuable if you’re starting from scratch. In that sense, step 1 is perhaps the most important. Stop waiting for the right idea to strike, start building right away, follow the playbook, and eventually, you will find success.
As I said at the top - Most startups fail, but all founders succeed!
Thanks 🙏
Every week, I share the most actionable insights and inspiring tips from successful Indie Hackers FOR aspiring Indie Hackers
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Cheers,
Ayush
PS: No business plans were harmed during the making of this playbook!
This is great Ayush! I love the title.
"Most startups fail, but all founders succeed(in the long run!)"
I hear many people criticize the 20 something digital nomad, startup, or creator who is barely making any money with their new business.
However, what they don't see is that a decade later everyone that sticks with it builds a viable business.
No one fails forever.
Everyone I knew from the digital nomad scene in Chiang Mai around 2010 has built something substantial. Most had to pivot from their original idea, but that's what it means to be a startup.
Those 20 something digital nomads now are all in their 30s or 40s and building a family. I know many that have had 6 and 7 figure exits already. How you start is not how you finish.
Great article!
"How you start is not how you finish."
That's the most important thing to keep in mind.
So well said John 👏👏👏
Thanks for the kind words 🙏
I've been a solopreneur for the last 6 years. Almost all my ventures failed but now I'm all set up to start another one and this time I'll be using all my learnings from the past and now I can feel that I'll definitely reach my 2022 goal of 10k MRR.
Thanks a lot for this post, I'm bookmarking it and will use it as my guide.
Awesome, thanks for the kind words Pratik 🙏
All the best for your goals, I'm sure you'll get there💪
Ayush's content never ceases to amaze me. So structured and detailed! Thank you.
Thanks Kevon, means a lot 🙏
This is quality content. Thank you @ayushchat!
Am I right in you suggesting to start online marketing when a product already has gained initial traction? Some people start putting out ads right from the start. Can you please elaborate on that?
Yes, so it depends on the kind of capital you have. Ads cost money but can be useful in validating the ideas as well.
Check out this thread -
Trevor says his agency can help you validate your idea with a landing page for as low as $2000.
That looks like a decent strategy.
But many solo founders don't want to spend that kind of money because they aren't sure what the final product would be.
The actual product evolves as you build it.
So in that case, it makes sense to start paid marketing once you have a solid product that you know is working with some people at least.
Summary:
If you have some money + solid idea for final product then go for ads.
If you don't know what build or have a rough idea - Start building, learn along the way, run ads later.
Awesome Content
Thanks a lot 🙏
Good one! Thank you Ayush!
Cheers, glad you liked it 🙌
This is an amazing resource. Thank you!!
Thank you, glad you liked it 🙌
Amazing! Thanks for sharing, it's very valuable to have all this information compiled in such a clear and concise article.
Cheers, glad you liked it 🙌
Hey Ayush, really great post! A lot of wisdom packed into one playbook. I really like your cover illustration. Did you do it yourself or hire someone?
Hey, thanks a lot 🙏
I actually got Aditi to make it, she's very good with such visuals.
This is very long post. But it's totally worth reading.
You shared lot of valuable tips. Thanks for sharing.
Thanks Atul 🙌
Glad you found value.
I read this on my inbox. epic post. and I saved it in my archive.
Thanks Younes, glad you liked it 🙏
Awesome piece!!
Thanks Ayush!!
The 4th point on sharing was what I was really missing and have been wanting to get into for a while but kept on falling down my todo list...
I finally started this morning \o/ ^^
Awesome Brice, looking forward to your journey.
And thanks for the kind words 🙏
Hi Ayush, really liked this post. Gave me some needed motivation and reassurance as to following my dream of creating a startup
Hey Hannes, glad it could help you 🙌
This is diamond level lesson, wish read it on my first journey especially on validation. thank you for sharing this ayush
Cheers, glad you liked it 🙌
This is awesome advice. Thanks for sharing.
Find niches within niches. This is gold and it opens your project up to more opportunities for monetization. This is also as I marketer that I always recommend to keep a broad audience at the start because if you niche down too quickly and incorrectly you harm audience growth.
Well said 👏👏👏
And thanks for the kind words 🙏
Anytime my friend :) Thanks for sharing!
Great article! Straight to the point but with enough details 👏👏
Thanks man 🙏
Glad you liked it.
Hey Ayush! Great post, very concise and to the point! I like the "..all founders succeed bit!"
Thanks a ton 🙏
Amazing! Thank you 🙏
Thanks Yaro, glad you liked it 🙌🤩
This is great! I find your perspective very refreshing.
The practical advice in here is useful, but as you say, ultimately the mindset of a founder should be to:
If we're lucky we might earn a bit of pocket money whilst we're at it!
Haha, well said Ric, love you phrased it 🙌
Wow, what a lengthy, but value-packed post! Thanks for sharing!
Haha.. thanks Misha.
Got too lengthy trying to cover everything, planning to turn it into an e-book 😅