3 Years, 6 Months, and $0 MRR

http://retromocha.com/learn/3-years-6-months-and-0-mrr/

13 18 12 years ago

noso• 12 years ago

Life is too short - Good luck with your experiments!

fearless• 12 years ago

Welcome to the unfortunate reality of most internet businesses. The default outcome of a lifestyle business is a lot closer to this than a patio11 style runaway success. The lifestyle entrepreneur myth is so pervasive on HN that the common mindset of non startup people is "Oh, I don't want to do the startup thing, I'll just build a steady slow growth business and make $10K a month". The reality is that a side project making $10K a month is even less likely than a multi million dollar acquisition of a venture funded startup. The median outcome is not that you'll get 0.01% of a niche market, it's that you'll get 0%

programminggeek4• 12 years ago

Thanks, in my experience that's basically true. I've never really wanted to go after funding or go for acquisition, but I can see how that path in some ways has a higher probability of success than hustling on side projects.

sskates• 12 years ago

Ouch. 3 years is a long time to go with nearly 0 revenue. If you're selling to businesses, the most important thing is you go talk to people who will be your customers. In person. Build it and they will come is a total myth, you need to actually get out there and sell! patio11 did the same with Appointment Reminder.

mechanical_fish• 12 years ago

No, your second sentence is factually incorrect (except for the first clause, of course). Don't let the fact that you're not interested in building a business fool you into thinking that building a business is more difficult than it is.

You're not interested in building a business. That became clear when I read your sentence: "At the end of the day we aren't that driven by money, and we aren't really running a business." I didn't even need to glance at your "anti-sales page", though that page certainly hammers the point home, then jumps up and down on it for good measure.

It's not a radical act of rebellion to do good work at your day job, get paid, go home after work, and have fun building things in your spare time without any thought of profit. This is how most of my favorite people live their lives. This is all fine. What is not fine is trying to define this happy life as a "failed business" and trying to calculate the "ROI" of your fun, then lapsing into despair because the spreadsheet has a zero in it. That hasn't been doing your happiness any favors, it isn't doing your audience any favors, and it isn't leading you to draw sensible conclusions.

Stop being an uninspired businessperson and become an inspired maker of stuff. You're almost there.

patio11• 12 years ago

The default outcome of a lifestyle business is a lot closer to this than a patio11 style runaway success.

Maybe this is a matter of perspective, but I don't consider my business a runaway freight train. There exist many, many, many businesses in your town which make more than I do.

I know literally hundreds of people who have businesses which are roughly similar (consultancies / SaaS shops / infoproducts / etc, created without substantial non-founder investment), and believe me when I say this, I neither optimize for nor have achieved an unattainably high watermark.

amyhoy2• 12 years ago

Our business makes several times what patio11's does and we are not a runaway success, either, not by a long shot.

If you do not actually attempt to make a business — by selling something people need and already are willing to pay good money for — then yes, you don't tend to make any money. Just stabbing out in the dark with "good ideas" doesn't work.

I have helped my students gross more than $2 million in revenue from "lifestyle businesses." It is absolutely achievable and not rare.

This:

The reality is that a side project making $10K a month is even less likely than a multi million dollar acquisition of a venture funded startup.

…is factually wrong. Multi-million acquisitions are rarer than being struck by lightning, some 400-500 a year. There are at least an order of magnitude times new bootstrappers every year making well over $10k a month than there are acquisitions.

Startup acquisitions seem more common because they get talked about. Your basic availability heuristic (aka cognitive error) at work.

"The median outcome is not that you'll get 0.01% of a niche market, it's that you'll get 0%"

There are so many assumptions in here that it's useful to unpack. What makes you think you need to aim for 0.01% of a niche? Why do you think you need a niche? What's a niche mean to you?

It's the unspoken "knowledge" about "how to do it" that holds people back. Everybody "knows" you have to "find a niche." Meanwhile there are millions of painful business problems all around you that get ignored in favor of looking for some weird little niche market.

davidw3• 12 years ago

It's logarithmic. But your time as a consultant is worth more than some number of 9's of people on the planet (99.99% for instance). You've got one business that runs itself, and another one ticking along pretty well. Maybe you haven't made all the money you want to make, but you're well on your way to financial freedom, appear to be doing something that makes you happy, and have a family (congrats!), friends, and seem to be fairly happy with the world.

If you look at things in absolute terms, rather than relative terms (someone always has more), you seem pretty successful to me in a way that not a lot of people manage. I wouldn't belittle it too much.

tptacek• 12 years ago

If by "lifestyle business" you mean "something I stuck in a private Github repository, set up a web page for, tinkered with Google Adwords a bit, and hoped for the best", you are absolutely right.

Patrick's businesses aren't viable because he got lucky with the right lines of code and the right blog posts. He's viable for approximately the same reasons that a decent local bookkeeping firm are. It just happens that he generate value with small amounts of Ruby code instead of accounting services.

davidw3• 12 years ago

a decent local bookkeeping firm

I have a good friend here in Padova who has started two of those, and they've been quite successful. He also works his ass off from morning til night running the things despite hiring some good people. Something like BCC, which seems to mostly run itself and generate some decent money, is, in some ways, far more "successful" than that, in my book. Generating even modest money without doing anything is a nice accomplishment.

bdunlap• 12 years ago

Sounds like people are consistently willing to pay money for Paint Colors; i.e., it provides real value to real people.

So why not focus on it?

programminggeek4• 12 years ago

That's a good idea that we are tinkering with. However, the economics of the app store aren't awesome.

At an average revenue of say $1.50 per sale, we need sustained sales of like 10,000 or more units per month. We are in the 100-200 sales a month currently. I can see us getting to 500 sales a month maybe, but growing sales 50-100x is not something we have figured out how to do.

At some point we would run up against the low revenue per sale and lack of recurring revenue. I have some ideas, but I don't see it being much more than a $10,000-$25,000 per year app.

3 Years, 6 Months, and $0 MRR

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