What are the building blocks of starting a side project that generates income?

Coding > Branding > Audience > Product > Income Flow > etc

I'd simplify things a bit. Monetizing a project ultimately boils down to…

1. solving a problem…
2. for a particular niche of people…
3. who are willing to pay you for the solution.

It's that simple (but of course not "easy" by any means). So things like "coding" and "branding" shouldn't necessarily get tossed into the bin of required building blocks.

For example, @amyhoy, who's a veteran indie hacker, explicitly recommends starting with a tiny product that doesn't require code. And I largely agree with Amy; even if your project does include code, it should definitely be tiny — and you should be prepared to iterate on it many times toward the beginning, and quickly. (There's a great book I'd recommend on this called Little Bets by Peter Sims.)

So it really comes down to finding a problem to solve and then solving it. And as it happens, @csallen once made a great post on how to do that.

I like to think of it in terms of 4 building blocks. In order from most to least important to figure out:

1. The problem you solve (including knowing who has the problem, how important the problem is to them, how frequently they experience the problem, how they're currently solving the problem, whether or not this is a problem they'll pay to solve, etc.)

2. The channels you reach your audience through (i.e. how in the hell are you going to find the people who have the problem and get in front of them, e.g. cold calling people, SEO, Kickstarter campaign, Facebook ads, influencers on Instagram)

3. The solution to their problem (i.e. the product or service you're going to build that's tailored to these people, their problem, and ways you'll reach them)

4. The business model you'll use to make money.

All of these need to fit together. For example, your channels have to make sense for your problem/customers. You shouldn't do SEO as a channel to solve a problem that your customers aren't searching for to have solved. You shouldn't use Twitch influencers to reach an elder non-tech savvy audience. And your solution needs to fit your customers. You wouldn't make a command-line tool for non-programmers. Your solution needs to fit your channel, too. A visual product might be good for IG ads, but not as good for Hacker News. Etc. Everything must fit.

It's hard to figure this all out upfront. But I think it's worth having some idea, then iterating as you go and learn.

I built a profitable SaaS and a profitable newsletter.

I have been answering a lot of questions to my email subscribers around similar questions. I am writing a little bit about that here https://microsaashq.com/the-micro-saas-builders-handbook