Analyzing Indie Hacker Products with Verified Revenue
scrapingfish.com
scrapingfish.com
Edit: They filtered out any businesses without stripe verified revenue, which makes these numbers a lot more believable.
It took me nearly a decade to get to where I am today ($700k / year), and half of that time I had a full-time job.
The most important thing to keep in mind is not to stop.
My feeling. every. time.
Early days of a project - I have an active audience, so I simply email them when I want to try a new project. Before that though, I spent about 5 years gathering an audience by being really active in various subreddits.
Many people in society simply cannot accept that a convicted felon deserves second chances once their time is served.
It's been 20 years and I was finally pardoned a few years ago so I'd like this part of my history to be more in the foreground.
It was an issue when I immigrated to Europe the first time though.
"At the time of our analysis, there were total of 937 products with Stripe verified revenue. The information we gathered to make this analysis are revenue and product's categories."
I assume there are 10s of thousands of listings that don't have Stripe verified revenue on Indie Hackers (owned by Stripe).
Just look at Product Hunt and track to see how many of the Product Hunt of the day fail in less than 2 years.
And how much of that revenue gets eaten up by the other services is another story ranging from Google ads to AWS to other SaaS offerings like the scraping fish (the authors of the post). (Please buy more shovels from us for the gold rush.)
I still hope people follow their passion and dreams. Just good to keep in mind that the odds are stacked against you and to try to succeed accordingly.
The other which is not stripe verified because our price point is much higher and we do checks not credit cards, makes $90k/mon. Just an important point there is a business model that is excluded here. General SaaS offerings though, I would imagine would be Stripe Verified if they wanted to publicly share though.
As an example, during the last refinancing boom I stumbled into an opportunity and a couple weeks later I had an MVP. Very quickly we had customers willing to pay 5 figure sums for our product. There’s no incentive for me to go around bragging and attracting copy cats.
How do I know this? Because I have no shame in launching a competitor if I see someone’s making money and I think I can outcompete them.
As a second point, most indie hackers are cycling through ideas until they either give up or stumble into something. If your business fails, you quickly move on.
Across 5 years you could have tried 10 things and only the last one made money. But it doesn’t matter since business revenue follows a power law. So (theoretically) you retire on the last idea while your batting average remains below 10%. Not necessarily a bad outcome?
Regardless I do agree the overwhelming majority of indie hackers are wantreprenuers that will never make a dime. Just don’t discount the professionals.
The stripe requirement filters a lot of zero revenue side projects.
Also -- with SaaSes I've started, the bigger customers all paid via non-Stripe means (ACH, check, etc.) and would not show up in these stats. Would have made those businesses appear smaller than they were.
Obviously this is general advice and there are outliers that will break the mold, but from a lot of this data and indiehacker anecdotes, the more shots you fire the better chances you have of one of them being big. THe key is to spot the losers quick and move on to something different, and then spot the ones that are gaining traction quick and then double down on your efforts for that/those one(s).
Key takeaway: Take lots of chances.
A low success rate is not a sign you're doing things right. If you're solving a real problem people will not have an issue paying you. There is a real opportunity cost to starting a business and I would not advise anyone to use this strategy. For starters, I don't see how anyone could possibly have 70 projects. I can only assume they are a con artist.
There is also a fair amount of stories out there in hit based industries (startups, games) where people have documented their 50+ projects. Its hard yes. It can also make a lot of money. Few people are willing to do it or it would be more common.
source: https://entrepreneurshandbook.co/how-a-bunch-of-angry-birds-...
The counter to this is you don't know at the outset:
- whether you have identified a real problem
- whether you are solving the problem the right way
- whether the amount the buyers are willing to pay aligns with how much you need to earn for solving the problem
- how many actual (vs potential) buyers there are for a solution to this problem
- how difficult (read: expensive) it is to find people with this problem and make them aware of your solution
- how quickly a better-funded company will come in and offer a better (in some way) alternative
- how much you like (dislike) working with the median purchaser of your solution
- how much enjoyment you personally derive from providing this solution
- etc.
All of these lead to the realization that it might be possible to struggle it out with a given niche, but it might not be the best course of action for you personally.
As long as you pick a profitable & big industry and stick to it 1-2 years, you can most of the time can find a way to make money.
The startup mindset is focusing on "ideas" but probably easier to be successful if you think in terms of industries.
Then there are the variables of costs, scalability, competition, etc. but this is the game.
So if you are not heavy funded the best is to keep costs low as long as possible.
If startups are really innovative there is a difference, but most companies are hardly innovative.
This inevitably leads to failures because you get two valuable assets from spending time in one industry: (1) an understanding of what companies' actual problems are, in detail and (2) relationships and reputation within that industry.
Pressing 'reset' frequently makes success much more remote, but continuing to pick at a single (good-sized) industry over years will almost always yield some success to those who are good at listening and willing to adapt what they do to what they hear from customers. Even if the first idea or two don't get traction.
Here's the "paradox" that takes this phenomenon even further: the more choices people have, the less uniform the distribution is, and the more it favors the top producers.
While Pareto was indeed a sociologist, the Pareto distribution can be observed in many, many natural phenomena. It's literally everywhere.
How do you explain the pre and post netflix years. More movies produced more people get rich post netflix. Fewer movies produced less people got more rich before netflix.
Pareto distribution also explains wealth distribution and "income disparity". There are simply more people now, so the separation between the median and top 1% is going to be greater now than it ever has been. There's nothing political about this. It's a natural manifestation of a Pareto distribution, and as another commenter pointed out: this distribution shows up all over the place in nature.
To me, this tells me that Indie Hacker members are busy networking pretending to build companies, and not actually doing it. I say this because I don't think I'm that remarkable. I'm just going along trying to build a small business without much glamour about it.
But I can see the appeal. There is almost cult-like mindsets all hyping each other up.
I'm a huge fan of learning from others experiences so I would love to pick your brain.
Of course you are probably way too busy building your business and focusing on what matters (just like you wrote) and I totally respect your mindset.
But still, worth the try!
But honestly I wouldn’t be surprised if someone told me that $700k ARR is the top 1% of Indie Hackers. I would have been surprised if it was much lower than that. Congrats on your success!
Not that I am at all against sharing your progress or having a social presence, but it's definitely something I've noticed.
I am not there yet, but I am realizing that I need to avoid people for a while to get anything done :).
Also your niche with actors and creatives, I think it is really good one and you hit a jackpot there.
> reply
Can you at least share how you found your niche?
- ~6% of these founders have built businesses that could likely be sold for > $500k today
- ~4% have built businesses they could likely sell for > $1m
- ~3% have built businesses they could likely sell for > $2m
And for those that want to go bigger, having enough revenue that one could exit for 7 figures makes pitches to investors much stronger. (Some of these companies are doing better financially than VC-backed firms that have raised tons of money. Fast.co, which raised over $100m and produced only $600k in revenue, comes to mind here.)
(I give credence to the FEI valuation spectrum because they were the broker when I sold my last SaaS, and their valuation advice led to a successful sale. I highly recommend them, and will likely use them again in the future.)
Lower-value exits are somewhat harder to value, but I do find it striking that of the analyzed firms, perhaps 10% have built businesses they could sell for $250k or more. (And likely more of the analyzed first simply haven't gotten to that point yet, since this analysis doesn't analyze time-based cohorts. 5-year-old firms are in the same bucket as companies that joined this week.)
1 - https://feinternational.com/blog/saas-metrics-value-saas-bus...
A hardware company that makes $100k in revenue (with no profit) is very different than a SaaS product that makes $100K with 90% profit. Why don't we just use profit?
A lot of very successful businesses have zero or near zero profit (considering that paying the CEO reduces the profit, reinvesting reduces the profit, etc).
Revenue has its own issues obviously but as a quick and easy measure of how much money this business can generate its reasonably useful.
What you're looking for is gross margin, but even that is hard to pin down exactly since there can be a fuzzy line between whether an expense is required or discretionary.
It's one of the least interesting things to me compared to the actual product or ideas. I get that it's mainly content marketing to talk about how much you're making but why does it work so well?
It seems that many of these successful products turn into the "self-help" of bootstrapping and make a living off of that shortly after.
If the internet is atmosphere, marketing tools are something that emit CO2/CO.
If it was only about MRR it would not make sense compared to a full time job in IT. But all in all it's better because I was able to start other businesses, hire, and be my own boss.
A lot of people do these as side projects. A way to sort of build a model train in their basement, free from all the complexities and compromises of "real" software development... They are trying to avoid product managers, sales people, designers, testers... countless others... getting a say in what they build.
And, as a result, there's no business plan past a dream of, "If you build it, they will come." Hard to see any "indie hacker" project that wouldn't be improved with more testing, more marketing, more UX design... more customer research... but most of the time, it's just some guy with a boring day job trying to make $5 selling a widget nobody asked him to build in the first place.
Anyway not to be negative... but like, if you're a small indie hacker who is trying to make a buck, remember that all of the software we use today has a village of people involved in the creation and support of it. If you're trying to do it all on your own... man, that's an up-hill battle. Bring in others as soon as you can.
Then make sure you have a business plan that has the capacity to reward everyone, and be patient. A lot of people in tech... we're early-adopters. This means we do things well before a lot of people even know they exist, and by the time an audience has grown we've already moved on thinking our ideas were a flop. Sometimes they just take a little longer to pan out. (=
But then you're no longer profitable. Barely any of these projects can sustain 1 person, let alone 2 people.
Have a valid idea. Build a business around it. Get an angel investor.
But then they aren't indie hackers!
Touche. But they are profitable. (=
I assume most of these people just want a more or less passive lifestyle business.
Point is: you don't need a huge team to scale. You don't need to throw money at the company to grow. He's not the only one who's achieved this, but he is a great example of what's possible by one guy with mediocre dev skills and a passion to help others can do.
Much of it does. And yet sometimes extremely successful software, even a few products that entire industries have relied on every day, has been created by a single person. In software of all industries one really good dev or a small tech-heavy team can punch way above their weight.
In any case for stereotype indie hackers the goal isn't necessarily to found the next unicorn. Not everyone wants to follow that path, even among people reading HN. For some the dream is just to make a decent living doing something they enjoy without having red tape and office politics bringing down their day. I know several people who have made that particular dream come true and are entirely content with that result even if they're not going to be the next Web3 billionaire.
"If you show revenue, people will ask 'how much' and it will never be enough. I don't want to make a little bit of money, every day... I wanna make a f-k ton of money, all at once. ROI!"
In the purest form of "indie hacker" (i.e., a single person team + use your own saving + maybe part-time outside day job), % of $100k+/yr revenue is way lower than 5%.
So the better metric would be to find out what percentage of indie hackers are full time with their gigs and have enough to live ok.
0: https://www.indiehackers.com/products?revenueVerification=st...
It's not a big amount of money, but I keep going because I believe the app has potential to do much larger numbers. Also because I generally dislike working for other people.
As an anecdote, my I took down my stripe verified revenue after my project passed $200k/month. Someone took a screenshot and shared it on twitter https://pbs.twimg.com/media/EXbNBVUX0AAotOo?format=jpg&name=...
And they have more freedom etc. in terms of what and when to work on, which is hard to measure in money, but that resource (time) is arguably our most precious thing in life.
Do you feel that in 2022+ the SaaS/software/e-comm niche generally has too little of a moat, now too much competition, and small startup costs? I've been in the "life-style" for a while now - but getting that feeling to move out to other areas.
Very few of them which make revenue has something to do with apps/data on wearable, Most them listed in that category have nothing to do with wearables.
[1] https://www.indiehackers.com/products?category=wearables