Side projects are like children
ryanwaggoner.com
ryanwaggoner.com
On second thought, maybe they are a good analogy.
Perhaps it is more fruitful to think about how to work more efficiently in the present and track potentially good ideas for the future, than to keep throwing them away.
As a result, increasing diversification results in a lower overall expected value of your projects, because you're losing more and more of your productivity to efficiency losses.
I've recently realized this about me and started down the track of trying just to focus on one or two projects and put the right resources behind them. This is a recent "a ha" moment, so, we'll see how it goes. Good article!
Side projects are also like plants in your garden. Some people enjoy the gardening for its own sake, and yes that means they are going to make a lot less money than someone who ruthlessly weeds out anything that isn't going to grow into a massive oak.
p.s. FWIW, I think of side projects as attempt to answer questions. I stop work on them when I think they've gone on long enough to find the answer.
There is a market here. It is easy to see it from the point of view of someone working on small side projects around their full time job. The profit of the side project is not worth the time invested in it, and killing it is the best course of action. But you have all that sunk cost (time more than money) and no way to recoup it. Wouldn't you take a few thousand dollars to sell it off?
And on the other hand, if I were to buy up 5 or 10 promising side projects and run them concurrently full time, I might be able to lower costs (economy of scale) and extract some greater value from each one and the profit will be greater than the sum of its parts.
That said I really like considering both as organic: you plant seeds, take care of them and they hopefully grow.