There's an interesting dynamic at play with things like this. When you first build one of these "earn money in your sleep" SaaS products, it really doesn't make you all that much money. After a few months of being launched and signing customers, it's not at all uncommon to be bringing in something like $50/month.
At that point, it's tough to keep motivated to tweak, market, A/B Test and otherwise keep moving forward. Especially when you look at your consulting rate, or make the dreaded calculation to see how much your effective hourly rate has been for this f'ng side project.
But here's the thing. After a while, that $50/month starts looking more like $500/month. Then $1,000/month. Then $2,000/month. Sure, that's still, what? Two days worth of consulting revenue? Even then it's a bit hard to stay particularly excited. Consulting will pretty much always blow the doors off of what you can make on a side project.
But the thing with consulting is that as soon as you stop consulting, people stop sending you money. Products don't work like that. Want to take a month off and go backpacking through Honduras? Cool. Your product will pay you $2,000 to do that. Want to take a leap and try to build that shoot-for-the-moon startup idea you've always had kicking around? Go for it. Your product will take care of the rent for you.
Even better, products that charge by the month have a way of making you more money every month. Until attrition really kicks in, you're going to be signing more customers than you lose. Even if you only sign a few per month, that's revenue that just keeps piling on top of itself. So now, a couple years after that trip to Honduras and that woefully failed startup, check it out: you're bringing in $5,000 or even $10,000 every month on that silly little product. You really don't need to work anymore if you don't want to. Wow!
So yeah, products are actually pretty cool. They just don't seem like it at first. Stick with it though. It gets good.
Do you think that if someone told you that you wouldn't have built BCC? What I'm really asking is can you make everything reoccurring or are their certain markets that won't tolerate it.
I believed very strongly in 2006 that teachers would never go for recurring purchases. I also thought that there were only ~1,000 people in the entire world that would ever buy bingo card creation software. Belief #2 is demonstrably catastrophically inaccurate.
That's a week or two of work (BCC is kinda creeky) and a whole lot of future customer support headaches to do that test (+), and the future revenues of BCC are the least important thing for my business success. I'd much rather spend the time on e.g. marketing AR and trying to 10x it's current revenue, or just do a week of consulting.
+ Despite having a totally consistent policy on this for the last five years, I have customers who either a) can't read and understand that BCC is a one-off purchase or b) actually think that BCC is billing them monthly (for free trial accounts) and want to cancel them to stop the billings on their Googles.
I agree with you, but there's something important to remember: If you want to make this work, you have to build your product in a way that someone else can support it when you're not actively giving it attention.
Indeed. Though I tend to lean towards building my products in a way that they need as close to zero support as possible.
That's actually tougher than it sounds, since it means picking a market full of people who are smart enough to not need much hand holding, then building your thing to be self explanatory enough that even the dumbest of those people won't be sending you emails every week.
It also means building on top of the most boring technology stack you can find, to avoid any whisper of doubt that you might need to touch the server for any reason during the times you'd rather be focusing your attention elsewhere (such as when you're off the map in Honduras, a full day's dugout ride from electricity.)
I help myself keep going when a project like that is slow to bring in revenue by measuring it in terms of what that can buy. My little $50 a month site is almost a new iPad a year and I don't spend any time on it.
I hate to seem cynical about this, it was an interesting article, but I can't help noticing that all the product examples were for a market of other web developers.
I doubt this is a sustainable market; surely, all web developers can't just sell to each other. The market for web development products can only be created and paid for by having a sustainable web product market for non web developers.
patio11's Bingo Cards feels a lot more 'real' to me as a product business, and I would be interested in hearing other examples done by small teams.
"patio11's Bingo Cards feels a lot more 'real' to me as a product business"
Why? He's basically selling only to teachers.
What's wrong with a web developer selling a product to a niche of other web developers?
And, actually, if you're selling byproducts like rejected logos or vector images or stock photos or Wordpress themes, wouldn't that actually be for more than just web developers? We've bought vectors for our mobile app in development and just because bloggers who are in the market for a custom theme are technically "on the web" doesn't mean they're developers.
Sixty/forty or thereabouts, actually. There's also Fortune 500 companies, people planning a birthday party for grandma, a whole mess of ladies planning baby showers (baby shower bingo is A Thing), assisted living communities, churches, NGOs, and if I remember correctly every branch of the military.
I emphasize the teaching bit when talking about BCC because that's how I thought about it, that's generally how I think about it, and it makes a very good story, but it isn't 100% of the business
It's much easier for us techies to sell things to non-techies than it is for us to sell to techies. To a fellow techie, we have just created a simple django basic application. To a non-techie we have done magic.
He's not saying a web developer can't sell a product to other web developers — he's saying that all web developers can't only sell products to other web developers. In other words, beware of myopia.
Any company selling to a group of people has to understand the needs of their customers.
Many companies do this by hiring people called "marketers", who specialize in studying the needs of other groups of people.
An alternative is to create products for a group you belong to.
Hence, if a web developer (who is not also a marketer) is going to develop a product by themselves, it might make sense for them to create a product for other web developers.
Note that this doesn't mean all web developers will only make products for other web developers. Many web developers work for companies that have marketers to handle the "understand the needs of your customers" part. Other web developers have (or can teach themselves) sufficient marketing skills to develop products for people unlike themselves. Still others develop products for other groups they are members of (e.g. web developers creating products for people who share one of their hobbies).
I don't know why the original article didn't include these last 2 categories of developers, though.
I doubt this is a sustainable market; surely, all web developers can't just sell to each other. The market for web development products can only be created and paid for by having a sustainable web product market for non web developers.
This is an interesting idea to me. Why not?
The group of "all people" sell to each other and no one else. Literate people could certainly make a living selling only to other literate people. In theory, why couldn't web developers do the same if no other customers were available?
Sure, you could if you didn't need food, shelter, transportation, new hardware, et cetera. But since web developers DO need these things they need to sell enough to others to get the money to buy them. In international trade, this is called the import-export balance, or balance of trade.
Just as a quick example for other people who are thinking about doing this, I sell UI design & development tutorials at Design Then Code (http://designthencode.com/) for 1) designers learning how to code, and 2) coders learning how to design. I've been selling them since March and the total money earned is now about 1/3rd the salary I earn at my full-time job. Not enough to fully supplant it, but jumping my income up 33% has been pretty awesome.
Waking up in the morning to check out how much money you made last night is an incredible feeling. Or, getting an email while out at dinner that you just sold a thing that paid for your dinner? It's tough to explain just how satisfying it is. And anyone can do it. I write about the things that I do every single day. All of us have special, deep knowledge about a subject that other people might want to become more knowledgable about, it's just a matter of putting that knowledge into a compelling package.
I have the same feeling with my iOS applications. The day my son was born (a day I didn't go near a computer) I made just over $1.5k on the app store (normal sales are a small fraction of that). The feeling you get from making that much money when you didn't even think about your products that day is pretty amazing.
I think the best decision I made was finding a niche (UI development for iOS) and sticking with it, trying to build up my knowledge so that I was a very knowledgeable person in the field.
The niche worked out because it's what I'm most excited about :)
I use Quixly for payment processing, it's the service that Pictos icon set uses because Drew, the creator of Pictos, wrote it himself. It's outstanding and very cheap. I highly recommend it for selling digital goods online.
So true...I've been publishing apps on the iOS app store for the last 3 years and get an hour of sleep during development. But once the app is live and earning money, I can rest easy and sleep 8-9 hours a night. Over a span of 5 years, it basically averages out to about 5-6 hours of sleep a night, which seems normal.
Not really. If your day job is designing icon sets, then pumping out one more on the side isn't really all that hard. Especially if your day job is designing a client site that happens to need a whole bunch of icons for a client who doesn't consider things like generated IP to be worth protecting.
There are lots of examples of this sort of thing that make it pretty straightforward to take something that you're doing anyway and spin it off as a product that brings in revenue. If fact, the product that pays my rent (S3stat) was exactly that: something we needed in house that turned out to be something other people would pay for.
So yeah, it's probably not anywhere near as much work as you expect. And like people are telling you elsewhere, once it's built, it stays built, and the money keeps rolling in.
Are you kidding? The last think I want to do after I do my day job is more of my day job. I think lots of people feel this way and that's why they find the article valuable, the realization that their extra time can be parlayed into future earning. But yeah, it will take time and work, sometime time and work some of us just can't bring ourselves to do, no matter the future value.
The difference between the two is that work for a client can typically only be sold once. Work like creating an icon set or writing a book can be sold infinitely and require virtually no post-support. Additionally, those streams of income can continue while you're working on more client work if that's your thing.
Not necessarily, for some client work I've reduced my price in exchange for full ownership (or rather, co-ownership) of the product I've developed. That way I can do with it what I want.
Except you can also scale your consulting business by hiring or tying up with other devs. This means you can still earn while others are working for you!
One thing to keep in mind is that projects like Dribbble and Pictos would've not nearly as successful if they were not launched by people with a lot of existing exposure. Getting noticed and acquiring critical mass that would self-propel project's marketing is a really damn big issue.
Second thing to notice is that all listed examples are of an exceptionally high quality. The title of the post sort of implies that you can just ruffle through your recycle bin, pick something that doesn't completely suck, stick it on a website and it will magically earn you $$$ in your sleep. It will not. Regardless of how by the byproduct is, it will still require a lot of attention and effort to be brought into a marketable state.
Going back to Pictos as an example. It would've long disappeared from the radar if Drew would've not been very busy promoting himself (and Pictos) on Dribbble and in other places. He might not be working on the Pictos much, but he certainly puts a lot of effort in keeping it afloat.
Earning money while sleeping is not that difficult. I (living in Europe) run a site with many visitors from US and Japan. Most of the revenues are generated during my sleep time. ;-)
When I read this article I thought immediately about keynotopia from a fellow HN member. He created those keynote ui templates (which he used in his day job) and sells them, bringing in between 5'000 - 10'000 $ revenue per month, which is pretty huge. Those kind of examples just make it look easy and I'm questioning my own projects when I see something like that. Nonetheless, good article.
Isn't that the difference between an entrepreneur and a freelancer? Freelancers only get paid when they're working and entrepreneur's set up businesses bigger than themselves where they can make money while they're not working (sleeping).
I see the main difference as whether you're making the decisions on what to build/sell, versus doing it to a specification given by a client.
It somewhat correlates in tech, but in most industries entrepreneurs aren't defined as making money while they sleep. For example, a very traditional kind of entrepreneurial activity is to open a brick-and-mortar shop. A mom-and-pop bakery doesn't make money when they aren't there, but is entrepreneurial (in fact opening a bakery is basically the economics textbook example of entrepreneurship).
At that point, it's tough to keep motivated to tweak, market, A/B Test and otherwise keep moving forward. Especially when you look at your consulting rate, or make the dreaded calculation to see how much your effective hourly rate has been for this f'ng side project.
But here's the thing. After a while, that $50/month starts looking more like $500/month. Then $1,000/month. Then $2,000/month. Sure, that's still, what? Two days worth of consulting revenue? Even then it's a bit hard to stay particularly excited. Consulting will pretty much always blow the doors off of what you can make on a side project.
But the thing with consulting is that as soon as you stop consulting, people stop sending you money. Products don't work like that. Want to take a month off and go backpacking through Honduras? Cool. Your product will pay you $2,000 to do that. Want to take a leap and try to build that shoot-for-the-moon startup idea you've always had kicking around? Go for it. Your product will take care of the rent for you.
Even better, products that charge by the month have a way of making you more money every month. Until attrition really kicks in, you're going to be signing more customers than you lose. Even if you only sign a few per month, that's revenue that just keeps piling on top of itself. So now, a couple years after that trip to Honduras and that woefully failed startup, check it out: you're bringing in $5,000 or even $10,000 every month on that silly little product. You really don't need to work anymore if you don't want to. Wow!
So yeah, products are actually pretty cool. They just don't seem like it at first. Stick with it though. It gets good.