I Reached $4k/Mo. But How Many Great Startup Ideas Have Died?
microfounder.com
microfounder.com
Sometimes, intentionally going after a market niche can be a good thing; you don't always have to set your sights on being the next unicorn. Especially if you're starting out as a solo dev, building the best product out there for a very specific audience can be a good strategy that leaves you with enough breathing room to continue to innovate and grow incrementally.
That's the general approach I've been taking with ProjectionLab.com (the personal finance simulator I've been building on the side for a year now) and thus far, it's been a fun and modestly fruitful journey.
Solo founder of a successful self-funded business here. A market niche is in my opinion the best place to be. A niche will be enough for a small business, but might be too small for the crazed GROWTH GROWTH GROWTH mindset of most companies. That's good! It means that you won't be competing with companies burning through VC money and selling at below cost (as in $19/month B2B SaaS) just to get GROWTH.
As to the main point of the article — pretty much all advice I was given turned out to be wrong. And nearly everything you read on HN (especially comments) is wrong. Or, more precisely, it's advice given by people who are not in your situation, have never experienced your situation, and likely never will. This applies to business strategy, but also to technology: your choices will be influenced by very different factors than those of people commenting here. You won't care about "industry-standard practices", fashions, trends, or "will it help my career" factors. You will care about line count, total cost of ownership, pace of changes (things that change quickly are expensive to use), reliability, and the ability to fix things when something breaks.
So, my advice would be to make your own choices and take all advice with a very critical mindset. Including this advice, obviously :-)
P.S. I also agree that when you hear stories of venture-backed startups trying similar product ideas but then needing to pivot due to insufficient growth, that should often be music to the ears of a solo bootstrapper ;)
I suppose the more precise word for this is a "lifestyle business", but not as many people are familiar with that term, and it can have a bit of a different connotation: https://en.wikipedia.org/wiki/Lifestyle_business
To acquaintances, I'll often just say "I'm building an app". Small business is a decent alternative, but a lot of the time when I use that term I'll feel pressure to clarify that it's not like.. a lawn mowing business or something. (nothing against those though!)
Women were mostly enamored because they thought it was like a Youtuber thing, or lifestyle in the fashion sense, or a Youtuber telling people about lifestyle fashion of some sort.
Very different from "any line of business, implied as passively w/ recurring revenue, that happens to supports your lifestyle"
(I pivoted away from that, I found other truthful things that hit pretty well.)
it just gets you press, but if there isn't really a larger TAM then you can personally wind up making less money than just keeping full ownership of the company.
thinly held companies can be conduits for really decent sums of money completely privately.
You can use fuzzy numbers to get varied output, and if you want to do MC you can use the API into your model to call it with whatever distributions you want and aggregate the output. But no, our UI doesn’t natively support doing a MC sim because the demand is frankly less than you’d expect. :)
The new kid on the block I like is cubesoftware.com . It’s priced rather affordably for a small business but maybe not a solo sized one
If I can't find something that works, this might be something I'm considering to build myself.
opinions from anyone who is not your potential customer means literally nothing. Be it positive or negative. Friends, investors, strangers on the internet. Nobody matters except for customers.
When I started a tiny design agency [1], I got the same reaction from random people (not scalable, why are you only focussing on B2B etc). We’re doing very well luckily and it’s a joy working with customers who love what you are offering.
This is the reason you often see older (person's age) entrepreneurs more successful because they've already created network of trust, or people who have exited multiple companies...getting intros to potential clients for customer development is stupidly easy because you're already pre-sold because of those relationships.
That being said, I've found in my career that as long as you're willing to listen to early potential customers most individuals of any size company are motivated to tell you all about their issues. Trust me, get someone on the phone and they'll air all of their dirty laundry. You gain trust with those early potential customers (and eventually payments) by being a good listener - replay back what you heard, explain how you're going to fix it, and then deliver.
As Steve Blank says "There are no facts inside your building, so get outside". I'm going to generalize here, but I think the reason too may technically minded entrepreneurs fail is because they're simply too introverted to get outside.
"We started with cold outreach to creators, Indie Hackers, and startup founders, who might be interested in our product." – Marie from Tally ($24k/mo)
Depending on the product, some communities can be also helpful, but this probably doesn't work for everything. It did for Julien who is building NotionForms though (now $11k MRR): https://microfounder.com/startups/notionforms
When he screams after getting hung up on--that's the 150th call he made that day. They were rude as shit with him. That rejection is too lightly touched on.
And it's like a club for a novat after you ask every girl to dance and nothing, then go ask every girl to dance again. Wander. No validation. Get their contempt.
He didn't add up to shit in the eyes of VCs. Nothing. His resume was just...and he didn't have chapitas, badges of eg graduating from the right schools, and then a smooth up-and-to-the-right career trajectory that had to trace an exponential curve. Dropouts were nothing then, like you could open up a photo booth be a hippie or yes be an inventor--sort of in the late seventies, very limited, not open to everybody by that point like in the 1920's.
VCs only got more open-minded by people like Jobs--him more than absolutely anybody--opening those skulls with the rippling effect of figurative kicks to the ass. Missing out. Getting bounced. And for a few with already open minds, absurd riches.
Work the club.
Targeting Marketing execs? Send them an email.
[0] - www.reciped.io
There's a huge difference between going in and going "try my app" and "hey I'm an app developer, building this thing, and I'm wondering if people here would find X or Y more useful".
Do it the first way and you'll get banned. Do it the second way and you'll get people asking to try it.
That way the person saw your product, saw the price, and was ready to buy it.
If you don't have that, you can "import" that knowledge but that will take a lot of effort and time, and you risk making some very wrong assumptions early on. And IMHO there are no shortcuts, to understand your market you have to walk a mile in their shoes, and if you haven't already done so before starting the startup, doing that will take out a big chunk of your runway. So it's not about some specific activities, but about choosing a project that fits your team or a getting together a team that fits your project.
so many ideas fail because they cannot get through this grind.
I got my customers from a simple tweet that was retweeted. It's literally rolling dice because when I posted the same thing years ago there was no response.
I wonder if successful people just got lucky at rolling dices early on that puts them in a good mentality position to build their chips for the bubbles in a poker tournament.
This only means it's not large enough to be investible, that's not necessarily a problem and doesn't mean it's an inherently "bad" idea.
Small ideas can net the individuals that work on them just as much as working on large ideas... the workforce might be smaller but once you divide it up it's all the same. If the idea provides value to the world, you like it, and can grow it without investment, go for it.
Some of the most important problems in the world are solved by a thousand "tiny" companies. Sure, they didn't look attractive from an investor's standpoint (most live by the 'high risk = high reward' approach), but that does not mean they are not important.
I feature new startups built by solo founders on the front page (for free) to show people that it's possible to build a profitable internet startup to pay the bills. Or, to keep the job and build a retirement fund, or travel fund, or whatever.
I'd say that every developer should think about it. Yes, of course, work your full time dev job but also start thinking and then building some small startups. Maybe you won't reach $10k MRR in a year (although I have many examples on my site who do) but still, you're starting to move in this direction.
And there's this question of "if" – can I succeed? Others are doing it, but me — me personally, can I do it? And I'd say of course, yes, 100% – because it's a matter of making the decision.
If you’re doing a micro-startup, you need valuable tools and insight today. You don’t care about 12 months from now. You certainly don’t care about $99 twelve months from now…
If it was $99/yr would it decrease your conversion rate even a little bit?
For fun, add a toggle to let people set it to not auto-renew and Tell HN a month from now how it went?
Don’t actually implement any recurring billing code until 11 months from now, just save sign-up date and what renewal preference they selected in a database somewhere?
Possibly never bother even writing the code to kick out people who don’t pay for their renewal?
Actually, maybe frame it as a way for micro-startups that succeed with your help, they will basically have a way to keep donating $99 a year to a tool that really helped them, even if they outgrow it?
Hmmm… pricing is hard. But lifetime service memberships inevitably become an albatross don’t they?
I can tell you this - a $99 customer has lifetime value of $99, but a $99/yr customer has lifetime value of $99 * 1.0 / C. Where C is churn and worst case churn is 1.00 but realistically will be less than 1.00 (100%).
In any case, it would be hugely interesting to play with that pricing model!
Exactly, the value is in the present, not in the future. This is so clearly obvious that anybody purchasing it knows that there's no value exchanged for the recurring fee and thus the recurring fee looks like a shady cash grab and is more likely to result in less overall sales.
There's a major set of difference between a startup and a small business.
Is it because of the idea, or is it because of other factors? Or the idea combined with other factors? Addressable Market? Marketing savvy? Sales leads? Product execution? Luck/Viral Posts/First Mover Status?
I like that this common criticism was brought up in the article:
> "Doesn't this exist? So many big platforms do it. Very competitive."
This is a validator in itself. A small business can see an existing, competitive market, and that's usually an indicator that there are a lot of potential customers. If you look at products like FastMail or Hey they aren't so concerned that 95%+ of people are fine with the big free email providers, because literally everyone uses email at some point.
I think my overall point is this: The "idea" part of a startup is perhaps one of the less important aspects of it, in my opinion. Maybe it's even the least important part of the equation.
Not because of the idea specifically! But I've seen in my own life and in the lives of other "microfounders" that if you're not sure about your startup idea or you don't have that much momentum going on with it (it's a new idea, you haven't thought about it much) it's much easier to abandon the idea when you hear from friends, investors, or just some random people on Twitter that this idea is not a good one and it probably won't succeed.
Even if I don't think I'm absorbing other people's doubts about whether it would work, or even internalizing their certainty that it won't work, I can be doing that exact thing outside of my awareness.
It reminds me of the quote attributed to Muhammad Ali: "I said I'm the greatest. I said that even before I knew I was."
How often do I start to doubt my dreams because I'm talking with someone who doesn't share the same dreams? I've wanted to build an online platform to train people to be world leaders, almost like a martial art created by MLK. I can vividly remember when I said this to one guy, a stranger (!), who laughed and said, "I don't think you'll be the person to do that." That has stuck with me for years, a creeping doubt deep within.
That's all to say: thank you very much for what you wrote. I think I needed to read it today.
The flip-side is that when I started to have some success, those same people who would always be so negative became angry with me. After his first time visiting my new home one guy even picked a fistfight with me and I've picked up that several family members have been running me down behind my back.
Many working-class people are prone to envy but at the same time they underestimate their own potential. It's best not to worry about them.
>What are you building?
1. An image labeling tool for making open datasets.
2. A data-centric training and serving platform.
3. I am going to index the physical world in the same way Google indexes the internet.
The hard part is implementing methods and processes that will capture the early adopters and learn from them so that you product can grow into something that is appealing to a wider audience.
Tech implementation is easy. Business implementation is hard.
This is what we tell the MBAs so they feel better. Keep up the good work!
Also it’s not just the technical implementation that I’m talking about. Creating a business is hard.
I think that's actually completely reasonable though; people take things at face value. But what that means is that all the potential in the world means nothing unless you can show via features how that's a good thing and what the impacts are.
This impacts the product I'm working on because there's a lot of stuff on a base level that seems like similar products in the space but the real value is the integration of systems and data to fundamentally change the interactions. And until recently, we didn't have much of the "Big Picture Ideas" on display for our users.
When I first read Drucker’s book I found it hard to believe that an entrepreneur would actively sabotage their own innovation. However, having now spent several years working with startups, I’ve seen that it is, indeed, a common pattern. Many entrepreneurs starts websites at least in part because they consider themselves uniquely creative and insightful, and they want the whole world to see them as they see themselves. The website they launch proves them wrong: their insights are proven false, what works in the end is something unexpected. For instance, in 1992, when Bo Peabody launched Tripod, he was thinking that the site would offer content aimed at college students. His idea failed. The company was saved because some of the programmers at the company had started a side project that allowed anyone to create their own web pages. This then became the future of the company. In his book, Lucy or Smart, Peabody says it is important to be smart enough to know when you are getting lucky. And then, you have to be willing to accept that luck. This takes humility. What’s needed in an entrepreneur is emotional resilience, the kind of strength that allows for openness to the unexpected.
Twice now I’ve seen an entrepreneur sabotage their own website because it became successful for what they felt were the wrong reasons. This emotional resistance to success is nearly always inspired by one of two factors:
1.) The success is with a small niche. The startup was suppose to grow till it was larger than Google, and success with a small niche is, therefore, extremely disappointing. The niche might be big enough to potentially generate several million in revenue, but it won’t ever be enough to catch up with Google.
2.) The success is of a conventional type and, therefore, the entrepreneur regards it as boring. Perhaps the site was suppose to pioneer an altogether new style of interaction among humans, and instead the part of the site that becomes popular is of an old type – for instance, the blog on the site becomes highly successful. The entrepreneur is then disappointed, maybe even angry, to be the owner of a boring success.
Drucker also emphasized how much self-sabotage tends to trip up entrepreneurs. I documented a case of this in my own book, How To Destroy A Tech Startup In Three Easy Steps:
https://www.amazon.com/Destroy-Tech-Startup-Three-Steps-eboo...
One other consideration has been to find other creative outlets in order to not feel compelled to constantly redesign and overhaul it into oblivion.
After all friends are just people you spent time with more than with other people, because circumstances or similar view on things. That was then but life goes on and people change.
The truth is that almost all ventures will end reaching his level of success if you simply don’t give up, and apply consciousness to your work. You’ll likely have to pivot as you learn more about your chosen market, but if you’re smart and persistent you’ll eventually figure something out.
Instead of shutting out criticism early on (like the author suggests), it’s better to listen and just throw out the unhelpful parts. I’ve actually found that investors are great at pointing out legitimate weaknesses in your business model, but they typically overstate the lethality of such weaknesses.
On the next level, many good ideas fail because they arrive too early. Apple Newton in 1992, a flop, embodies many of the ideas that made iPhone in 2007 a colossal success. Examples are many.
Sometimes it's worth revisiting a failed but promising idea, and check if the factors that made it fail are still extant.
The funniest has to be one where I spend years simplifying the description of the product because people didn't understand how it was suppose to work. The comments were persistently negative and dismissive but went from hating on one part they didn't understand to the next. The pun here is that if people are to stupid or lazy to understand your product you don't have a product. Eventually (after years) I got the description hammered down to beautiful short and easy to understand.
It was so mind-blowingly simple now that the same moaners each individually took the same entirely different angle of attack (because it are attacks): If it was that simple someone else would have done it.
The actual lesion to be learned from this process is not what you think. I look at the "negativity first" folk as sad little creatures who simply don't get it. It is behavior so pathetic and intentionally hurtful that you should go on a search to find those qualities in yourself.
Every man or woman has things that make them get up in the morning. Their own passions or things to ponder. We all know instinctively how to hide these precious things from others who want to rub poop on them. If you approach someone humbly and carefully and ask them to tell the story of their thing they will re-examine you, look closely what the intend is behind your questions. If you are honest, kind and objective long enough they will eventually tell you how they found their thing and what makes it such an interesting thing for them personally.
Identify and purge the negativity from your system when it arises, something like: "what an idiot spending all this money on model trains" or "the banjo is a dumb instrument", "this woman with her stupid hand bag collection". Listen but focus on the emotions and stories around their passion.
And then... all of a sudden... you find yourself surrounded by passionate people. It is remarkably easy to work on your own thing in the right company. You might not be sinking years into trying to bake the perfect cheese cake but your know your [proverbial] software project is not up to those standards. You go back in to check if you dotted the i's perfectly because that is what you do, who you are.
Anyways, I'm still planning to build a part of MicroFounder towards investments. Probably not legal/technical side but the marketplace, yes.
The idea is this: you're a developer and you want to build a (micro)startup that pays your bills etc. But it can be hard to find the necessary time and energy to work on it so much that it will succeed (or it takes just too long). And of course there's a risk that it will never take off.
So, you de-risk and sell part of it to an investor. Maybe even not a % of the company but you agree on a profit share for some period/amount.
Because now you have an idea for a startup and – let's say — $120k to pay your salary until you reach $10k MRR, or something like that. You will focus on this startup and see if it works out or not after a year.
Another thing is from the point of the investors. Like this whole MicroAcquire thing. I was considering selling my other solo startup RemoteHunt.com – some investors said that "hey take like $120k for 10% but I still need you on the project as otherwise I have to hire a team etc that takes a lot of money, time, etc.)
I've browsed microacquire both as a founder and as an investor. As an investor, I always come back to the same thought that I'd just be buying another job, which isn't so appealing.
Sufficiently cynical folks will never hear anything I say as anything other survivor bias.
My only advice is stay bootstrapped, avoid company-ending risk like investment, and maintain control of the company. Through learning and persistence, you'll figure out how to grow it.
Just remember that the survivors figured out two things: how not to die (much easier for the Bootstrapped), and how to adapt to changing conditions.
Copy pasted:
Entrepreneurship is like one of those carnival games where you throw darts or something.
Middle class kids can afford one throw. Most miss. A few hit the target and get a small prize. A very few hit the center bullseye and get a bigger prize. Rags to riches! The American Dream lives on.
Rich kids can afford many throws. If they want to, they can try over and over and over again until they hit something and feel good about themselves. Some keep going until they hit the center bullseye, then they give speeches or write blog posts about "meritocracy" and the salutary effects of hard work.
Poor kids aren't visiting the carnival. They're the ones working it.
Pfft. You're only saying this because you're alive. I want to hear from dead people.