Ask HN: Is it possible to create a Saas for passive income while working a job?

https://news.ycombinator.com/item?id=9872969

by nodelessness • 11 years ago

90 76 11 years ago

news.ycombinator.com

Have you done it? If so what are the challenges that you faced? What tips do you have for someone trying to do that?

jakozaur• 11 years ago

Patio11 did that, he created Bingo Card Creator while working as Japanese salesman: http://www.kalzumeus.com/

He wrote a lot on that subject.

jeremyw• 11 years ago

s/salesman/salaryman/

LoSboccacc• 11 years ago

Finding a job where you don't sign off your intellectual right on secondary works has been my limiting factor.

crystaln• 11 years ago

As long as you work on your own time, equipment, and ideas, why would this be a problem? Seems like an invalid limiting belief.

abrookewood• 11 years ago

Not necessarily. In Australia it is increasingly common to see 'moonlighting' either prohibited outright or have the company attempt to claim ownership of it.

guiambros• 11 years ago

Many companies require their employees to give away any and all intellectual rights while working for them, even when created on your own spare time and equipment.

You may request an exception, but it'll need to be reviewed and approved beforehand by their lawyers.

Previous discussion here: https://news.ycombinator.com/item?id=2208056

andersthue2• 11 years ago

Yes, besides Patio11 a lot of those attending MicroConf has done it!

darkxanthos• 11 years ago

Oh it looks like I just missed 2015's. Hopefully next year. Microconf sounds interesting.

andersthue2• 11 years ago

It's held twice a year, in Vegas in april and in Europe in the fall, previously it was in Prauge, this year it is in Barcelona sep 30'th - aug 1'st.

The conference is made by Rob & Mike from the essential bootstrap a business on the side podcast "Startup for the rest of us".

There might be a few tickets left for Barcelona - I'm attending (and my saas startup http://timeblock.com is sponsering !)

Hope to see you in either!

benedikt• 11 years ago

Is there an European equivalent of MicroConf?

hnrc• 11 years ago

http://www.microconfeurope.com

jot• 11 years ago

Yes: http://www.microconfeurope.com/

mangeletti2• 11 years ago

I've been trying to do this for a long time, but I have to admit something rather peculiar about my frustrating attempts to do so.

I started a company with my brother in 2010. It involves websites, and it takes up about 10-20 hours of our time per year. It costs us about $150/mo to run and earns us anywhere from $1000-$2400/mo (probably $1,600/mo average). It's earned around the same income for about 3 years, and before that it earned $400-$800/mo for most of time during the first 2 years.

We could continue working hard to increase the amount our business earns, perhaps until it reaches $8,000-$10,000/mo (very realistic, but would require about 2 man months or so each), but for some reason neither of us are ever excited to work on it. In his spare time, he's busy doing his stuff (completely unrelated work), and I'm busy working on the next big thing (creating an SaaS, or at least trying to determine one to work on). It's really stupid, because we have this boring thing that earns us huge returns on our time invested, and currently pays us nearly $1,000/mo each for doing basically nothing, but we somehow find every excuse to work on something more exciting with little monetary returns, or perhaps simply scratching our own itches.

I think the lesson you can take from this (which I clearly haven't learned) is that you shouldn't seek to "create a SaaS", necessarily. Instead, figure out the path of lease resistance to the dollars you want, and don't worry about the "passive" nature of it. You can automate things later, in theory. Worry first about finding easy money. It really is out there.

I know that money isn't everything, but it is pretty important. If you have passive income coming in, you can work on all the fun and world changing projects (or charity, etc.) you want, and all without worrying about going broke.

justincormack2• 11 years ago

Why not sell it to someone who wants to invest the time and sees the potential?

mangeletti2• 11 years ago

This business isn't the kind of company a VC would invest in, which means it's also not the kind of company that somebody would see and think, "We could blow this thing sky high!" (unless $8-10k/mo is sky high). It does have great potential, but there is no chance of it growing exponentially (like a social network or other highly successful SaaS). Because of this, I couldn't imagine getting more than 3 years revenue for it, and it's such a consistent income earner that it's not something I would want to sell for less than (perhaps) 8 years revenue.

mdevere• 11 years ago

I see quite a few stories like this on HN. They are v intriguing. Incredibly high return on time-investment, allowing you the freedom to work on other things.

I used to think my cash cow (freelance management consulting and putting together pitch deck presentations) was pretty awesome. But examples like this dwarf it in terms of ROI ratio.

Can you give more detail on what it is this business actually does? Or else, do you have other examples of high ROI side projects?

jon-wood3• 11 years ago

Fool I am, I'm doing this on hard mode, by starting a year after our first child arrived.

It's hard work, and not earning me any money so far because I'm still working on the MVP, but I hope to get there sooner or later. Most of the work so far is the odd hour here and there in the evening, and a few hours a week during my commute.

I am however greatly reassured by a colleague who is doing the same thing with an iOS app which is bringing in a reasonable amount of money - he works on it during his lunch break most days.

nextweek2• 11 years ago

works on it during his lunch break most days

That is very dangerous thing to do, using company time or equipment would entitle the company to between some and all of the revenue.

Whilst you can claim it's within your own lunch break, a lawyer might argue that it is hard to separate the time. Using the companies Internet access and hardware would certainly constitute using the companies resource.

Unless you have explicit written confirmation from your employer, DON'T do your own projects in their time or at their place of business.

vijayr2• 11 years ago

You are assuming he is using company equipment. He might not be - may be he takes his lunch outside and uses his own computer to work on his stuff?

jon-wood3• 11 years ago

It can be a dangerous thing to do, but the company are fully aware and fine with it happening - there are actually a few of us with side projects that we'll sometimes work on during lunch breaks.

philsnow• 11 years ago

hard mode, by starting a year after our first child arrived

It isn't likely to get easier. I have kids aged 4 and 6 and I want to spend 100% of my time on four different things: spending time with my wife, spending time with my kids, my day job, and side/fun things.

The light at the end of the tunnel [0] is that I'm sure the kids are eventually going to have their own things they want to spend 100% of their time on (and while I hope I'm one of them, that still means I'll probably only get 25%), which will free up time for me to spend on the other things.

[0] very tongue-in-cheek, this phrase is implying that I'm in a dark period of my life or something, but I'm the happiest I've ever been right now with all these things pulling on me and my time.

jon-wood3• 11 years ago

I feel your pain - I'm constantly feeling guilty about neglecting one thing or another, but there are only so many hours in the day, and I'm slowly getting used to the fact that I just can't do everything.

gargarplex3• 11 years ago

Yeah I did that. The biggest challenge was wanting to spend every minute possible working on my Saas and dreading being at work.

Also, I know the intent of what you're saying when you say "passive income" but after ~8 years of being obsessed with these ideas I offer a slightly more experience perspective when I say You probably aren't going to earn any "passive income" from your Saas. Let's say you get 30 customers @ 20/month. That's $600/month but you shouldn't appropriate that as passive income if you're still building features, performing service maintenance, etc. Maybe if you freeze the product and don't perform any marketing work, server work, etc. then it's "passive income".

In other words, you should focus on building a business, not a passive income. If you invest money in bonds or dividend-distributing stocks, then that's a passive income. Because you literally do not have to do any work or stress over it if you take an extremely low-risk, highly-diversified, income-producing investment strategy. How do you get the $$ to invest? By building a business and investing lots of energy (the opposite of passive).

Can you build a business while working a job? Yes, it's done all the time. Another tip is to wake up every morning very early and put your best cognitive hours into your project. Then you can go to work, and by the time you're ready to get home you can fully invest in being present.

bsbechtel2• 11 years ago

Another way of looking at this is that, in a dynamic world (especially technology), things are constantly changing, and the very term passive implies your product is static. If you leave your Saas product that has <1,000 hours of dev time alone, thereby becoming a passive income, your very dynamic competitors who are always looking for their next revenue source will be building additional features and trying to steal your customers. The only way this doesn't hold true is if you develop some sort of barrier to entry for competitors that keep it from being worthwhile for them to try to compete with you. Oftentimes, the best barrier to entry is building a product that is difficult to replicate, which means more like >10,000 hours of dev time, which is 5 years of work. In the small business/Saas world, you are either growing or you are dying. It is very hard to maintain a static/passive business.

patio112• 11 years ago

your very dynamic competitors who are always looking for their next revenue source will be building additional features and trying to steal your customers.

Small software businesses are, to borrow a metaphor from DHH, a lot like a local Italian restaurant. Nobody at BigCo wakes up in the morning and says "There is a spaghetti joint in East Phili [+] with revenues of $30k a month? NUKE IT FROM ORBIT IT IS THE ONLY WAY TO BE SURE."

Similarly, like spaghetti shops, small software companies do not primarily make money because of "features." The notion that software is bought because of features is something that running a software company will quickly disabuse you of.

[+] Edit to add: picked randomly because I happened to just watch a TV show set there, not to be representative of any of the Phili software companies I happen to know. (They're all substantially larger.)

vijayr2• 11 years ago

What kind of business did you build?

gargarplex3• 11 years ago

It really was closer to a "Saas for passive income" than a business. Anyway it was a Twitter marketing tool. Got a few high profile customers here on HN, then did some back/forth emailing with TechStars but I was 22 and couldn't understand or pitch a business. I was also inexperienced at engineering. Not to mention project management, because I failed at that, too.

Still not rich yet, but continuing to grind it out on various projects. I recently raised my first outside angel financing, ever. Come to think of it, I've really been at it for 13 years now. And "just as a hobby" programming for 7 years before that.

Keep at it..

sjs382• 11 years ago

I did too.

Mine was truly passive income, after launch. I'd spend about 3- 4hours per month, post-launch, on support requests, and that's it.

I had a similar challenge, but not exactly the same. Rather than wanting to work on my SaaS and dreading being at work, I've been thinking about the next thing to do, to create another passive stream. :)

shubb• 11 years ago

If your idea is good, why not hire someone to do the grunt work? If you have the skills to make it yourself, then unlike a lot of people who commission software, you have the knowledge to get a good deal and make sure the work is quality. If it's unaffordable, you probably wouldn't have had time to make it.

joshontheweb3• 11 years ago

I'm doing this right now with http://zencastr.com. It's still in beta so it hasn't made money yet.

Not sure if I'm very qualified to give tips but one thing that has helped immensely is that I work remotely and have a job where I can choose my hours. If I have an emergency with my side project I can usually tend to it immediately. I also don't have to work a full 40 hour week so that gives me time to work on Zencastr.

Sometimes it has been hard to keep things moving on it. It is quite easy to go a week without making any progress. Especially if I am up against a bug that is proving hard to figure out.

One thing that really helped push forward consistently was to make a trello list of todos. Then every day (almost), I make sure to cross something off of that list. It might only be a small copy change, or simple style tweak. As long as I cross something off every day I'm making progress. Typically I find that once I'm making a small change it gets me in the zone to work on bigger stuff while I'm there as well. Then weekends are typically when I really dig in and get stuff done.

We had our first baby right in the middle of all of this as well. Having a supportive partner definitely makes a big difference.

Hope that is helpful.

empire29• 11 years ago

IME there are two main challenges

1) Pre-launch: Finding the time while working to create your SaaS (prior to go launch).

2) Post-launch: Ensuring you have the time to support your customers, and resolve issues in a timely manner. (Paying) customers come with the extra responsibility of taking care of them.

The latter can be much harder to manage since you need to react quickly and not push it off until when you have time.

foxhop• 11 years ago

Yes, look to my profile for proof.

Do you have anything specific in mind that would cause you to believe otherwise? Possibly I can offer up my experiences.

blinduck• 11 years ago

Cool just checked out linkpeek? By any chance would be comfortable sharing usage numbers?

nodelessness• 11 years ago

Not that I believe otherwise but challenges and realities of trying to do so that I can think of:

1. Being able to contribute to expectation / well at work while trying to do so.

2. As a developer, you will likely have to retain a deep domain knowledge so shifting between the domain of your own creation and the one of your employer isn't going to be lossless.

3. Having the discipline to ship when you are the only one working on it and not keep on building because you can.

4. Technical skills aside, doing the marketing work to get buyers for the product. Marketing tends to be a shot if you don't have a pre-existing audience to pitch to in the dark until you test and tweak down to the the source that converts the most while keeping you profitable. Where do you even start? etc.

5. Keeping yourself motivated though to completion.

6. Not burning out and managing your emotional well being while making your product as well as doing your job. How much of your free time are you okay with spending on this idea?

All of this for even a simple product is not a trivial undertaking. All things considered, technical skill is only one of the many requirements for someone to be able to pull this off. Technical skill may be just a very tiny portion of what you will need to succeed.

augustflanagan2• 11 years ago

A little over a year ago a friend and I launched https://cronitor.io

Our first paying customer came on July 9th, 2014. As of today we're at about 80 paying customers. As of last month, we have started taking monthly revenue distributions of $1000 each.

I would echo gargaplex's comment that, when building a small Saas product, your focus should be about building a business not necessarily just building passive income.

However, it's easy to become completely engrossed in something you're working on (especially if it's showing a little traction). So, unless you can see a very clear path to your project becoming a replacement for your full-time revenue source, it's important to be conscious of your time investment, and whether you are at the point where additional work will yield diminishing returns.

This is something I've been thinking about a lot with my project lately. I'm not sure if we're there, but, unlike a year ago, when spending 10 hours of time to improve a mediocre product was clearly adding value it's less cut and dry these days.

When I look at what has made Cronitor successful (this is a relative term) this past year there are a couple of things that stand out.

1. We launched with a really basic version of our product. It had limited functionality, was far from robust, and didn't even include help docs. But, you could sign up and pay money for it.

2. We hounded our users for feedback. If you signed up you got at least one email from us asking for feedback. Most of the features that exist today on paid plans are because users asked for them. We'd say "sure, we can do that it will be part of plan X. would you be willing to sign up for that?" Not all of them said yes, but getting that validation before investing in features was key.

3. We took breaks from working on it. For myself especially this has been key. I'll have a feature I want to build, or some part of the infrastructure I want to improve. Tackling this feels just like a regular programming sprint, but when it's done I usually take at least a month before moving onto the next "big" thing. This has helped me avoid burnout, and gets me excited to come back and work on it every few weeks.

Hope that helps, if you'd like to chat further about getting a Saas project off the ground you can email me august[at]cronitor.io.

bigtunacan• 11 years ago

How did you go about getting customers? For me building a product is the easy part. I'm at a loss for how would I advertise this type of service?

mod2• 11 years ago

Posts like this one probably go a long way, considering they're only at 80 users.

thrwwy712153• 11 years ago

Do you think it's a reasonable risk to work on my SaaS at work? My context:

I have 1-2 hours of free time each day max, if nothing comes up. This is because I have a baby. The 1-2 hours sacrifices perfect sleep.

My job on the other hand is not always demanding. I might be able to get a good 2 hour block in for myself. In addition, I have private space and my company is not in software, so they are more likely to be unaware.

My SaaS idea is intended to be a personal scale business, so even if caught it's unlikely my company would be interested in it. Totally unrelated to their business as well. There is a slim chance my idea can catch on larger than I expect, but I'm not banking on it.

I also do not come from a CS background, so it takes me triple+ the time of what some of you can hack out a site. I've only created one app and I have to learn new tools for this new one. Thus the time crunch is even more extreme.

I can work on my app through a web IDE and private IP (HTTPS). Will the company be able to detect it? Alternatively I can shell out for a new Macbook I suppose, since I have private space to work.

My idea if successful will need some network effects to keep away copycats, so I'd like to be able to work full bore. However I cannot afford to quit my job.

I'm in California. My employer is not based there. I did not have to sign any IP agreements.

Would you work on your SaaS on the job if you were me?

Thanks.

blooberr• 11 years ago

Do you have to physically be in the office?

Would it work if you were in the library or a coffee shop 5 minutes away?

thrwwy712153• 11 years ago

I do need to be in the office. No strict schedule, but generally available.

If company property was an issue, I could always get my own laptop and use a personal hotspot. Someone would have to prove I worked on my app in my office, which is hard without surveillance I imagine.

HeyLaughingBoy2• 11 years ago

No. I've done my share of stupid/risky things, but I'm simply not going to work on a side business while actually in the office at my day job.

That said, I used to know someone who did exactly this successfully. However, while he was an engineer, his day job had absolutely nothing to do with software development and gave him lots of free time "at work" when he would just have been bored.

thrwwy712153• 11 years ago

What is your biggest concern in the risk?

The way I see it for me there are four outcomes: 1) Company discovers and I am fired. 2) Company discovers and has no interest. 3) No one finds out and I have decent side income. 4) The app has good success and I quit one day with a phony excuse before they become aware of it.

In my case, 1/4 is actually bad but the likelihood of discovery is low because my company is not in that field. I'm not likely to be fired without warning and it's not likely to be discovered while the app is transitioning from side income to success (before I can leave, if the app is worthwhile to litigate over).

IndianAstronaut• 11 years ago

I am doing something like this. But my side business involves solving some tricky technical problems. My work has those same issues, but no kne is really working on them or addressing them. By working on those at work I am also learning some skills to do so for my project on the side.

jake_morrison• 11 years ago

One option would be to just learn to program better or market products during your less busy time on the job. Maybe you can start by making some application to improve your day to day work, or operations in the company. So if anyone asks, it is clear that you have time on your hands, but you are using it in a relatively productive way. Then you can apply what you have learned later outside of work, probably after the baby is bigger and you are not so sleep deprived.

In my experience, non technical companies can be a bit irrational about releasing software. They don't understand it, so it's hard for them to value it. They will have a knee-jerk reaction and just say no. Or think that it's more valuable than it is and want to keep it for themselves, and be unable to do anything with it.

hansy• 11 years ago

Passive income often connotes building something once, then sitting back while money pours in. More often than not, this doesn't happen (at least initially anyway).

Most of your time with your side project will be allocated to customer support and marketing. Others on this thread have correctly pointed out that approaching the project in terms of a business is the appropriate mindset to possess. You'll constantly be tweaking and iterating until you hit product-market fit, then you'll have to go out and sell the product.

It took me about a month to build https://www.onhand.co then double that time to reach enough users to sustain the server costs (still not profitable).

Honestly the best advice I have is similar to the advice startups receive, which is first figure out a pain point others are willing to pay to alleviate, then spend time building your side project/business/passive income.

kiliancgn• 11 years ago

Yes, I did it with significant monthly profits. I solved a problem many eBay sellers had at that time. Tips from me:

1. Try to outsource as much as possible and do not try to solve everything yourself. Upwork & Co. is your friend. There are people who are better in coding, designing etc. than you. After a while I outsourced time consuming customer first level support too. Of course you need some money to do it but you will make way more progress if you have a great team. Be VERY careful in selecting the people you work with. There are several good ones out there but a lot of not so good ones too.

2. Developing the Saas platform is not the difficult part. Winning/getting customers is. Customers won't come just because you published your site.

3. Think twice before you want to start something where you face a 2-sided-market. Building this next to your job might be very challenging.

4. Go for it! You (and others) will never know until you built it. Don't let others stop you but consider their feedback.

Good luck!

rufugee• 11 years ago

Any tips for hiring workers on thinks like Upwork/eLance/etc without them stealing your idea?

Ask HN: Is it possible to create a Saas for passive income while working a job?

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