Hacker News Reader

Comment by grepLeigh | Hacker News Reader

1,000 true fans is an essay about a thousand die-hard fans paying a content creator $100/year, which comes out to 100k before taxes and expenses.

I'd argue that if you're smart enough to be reading this website, you're smart enough to create and sell a piece of software to 10 businesses. If you can add 2% of revenue/quarter or save 5-10% of an expense, you can name your price (as long as it's below the amount of revenue you generated or money you saved). Paradoxically, it's easier to charge lots of money vs. convince lots of people to give you a little bit of money. If you don't believe me, I encourage you to run a time-boxed experiment where you attempt to do both for 1 month. Post your findings to HackerNews!

This might seem more boring compared to 1,000 fans (1,000 people who follow you is a great dopamine hit), but it's also much easier!

View on HN

> If you can add 2% of revenue/quarter or save 5-10% of an expense, you can name your price (as long as it's below the amount of revenue you generated or money you saved)

this is fantasyland pricing. the reality is that

1) its often very hard to know how much revenue or expense improvement was directly attributable to your thing and people will err against you. you often need to be in the ballpark of 10x better than the “hire someone to do it in house” option.

2) people will look at comparables for pricing and it is very hard (not impossible) to charge above your peers no matter what business value you provide. if you have the audacity to claim, as many do, that you have no peers, then good luck convincing a remotely critical person that you should be paid for your service rather than you paying them for using their time for your market research .

i'm all for encouraging people but dont give unrealistic expectations on how hard it is to create and sell b2b software please.

I like your vision and commitment, but when I read your comment I think “that’s 10 businesses that will want support and upgrades forever, who will call you in the middle of the night, who will expect the world of you because they depend on you”.

It’s a great model and I applaud it, but I would much rather have 1000 (preferably 5000!) consumers paying me $100/ea/year than have 10 businesses paying me $100k/ea/year.

> 1000 (preferably 5000!) consumers paying me $100/ea/year than have 10 businesses paying me $100k/ea/year.

I like to have more diversity than just 10 customers, but on the other hand, having $1M of income seems very preferable to $100K ;-).

It depends. There can be several benefits of selling to businesses (based on experience):

- You may only need to be responsive to customers during business hours. Of course this changes when you sell globally.

- User-facing upgrades (new features) are not necessarily expected. They might be perfectly content with the product as is, barring a few (hopefully low-priority) tweaks/bug fixes here and there.

- If businesses are dependent on your service for mission critical jobs and can hardly tolerate outages, charge them accordingly. They should be willing to support measures that ensure your continuity and reliability. This might enable you to hire others.

- If a business has trained its people to use your offering, or spent time integrating it, they are probably not going anywhere for many years. This is even more true with highly specialized software for which there is little or no competition. This means once you have reached your threshold of customers, you shouldn't have to invest much time in acquiring new customers if you don't want to.

On the other hand, I would never become dependent on a solo developer or a small business for a critical part of my business.

I’ve been on both sides of the issue. I worked for a struggling startup that got one large customer who was 80% of our revenue. They insisted on the code being put in escrow and released to them under certain conditions.

When the company was sold for scraps, they exercised that clause and hired me as a contractor to help them transition.

On the other side, I was the dev lead at a company who was looking at using the software of a solo developer as a critical component to our business. I suggested the same clauses be a stipulation to us signing the contract. We were going to be 80% of his business.

> I like your vision and commitment, but when I read your comment I think “that’s 10 businesses that will want support and upgrades forever, who will call you in the middle of the night, who will expect the world of you because they depend on you”.

My own experience is the polar opposite to this. I run a small software business selling to enterprise customers where the minimum subscription is €5k per month and even my most demanding customers require less customer service and make less demands than I used to get for a $1 android app I used to sell.

may I ask which resources helped you start your own software business?

IF the goal is to just make money, way easier ways than fans/friends altogether. Get an office job; unsexy but it pays better. Even some blue collar jobs can pay better.

Downside vs SaaS is that an employer stops paying you when you stop clocking in.

SaaS customers keep paying until they churn, often with very little support along the way.

You’re assuming a well-functioning SaaS business, which is decidedly harder to come by than a decent job.

Oh sure, building a SaaS business that generates $100k is harder than getting a job that pays $100k. The key question is: what is the difference in difficulty, and does it justify the incremental benefit of generating a self-sufficient income stream, rather than a one-time payment?

How difficult do you think it is for any developer to get a $100K job in any major city in the US?

My “self sufficient income stream” comes from always being employable and having a strong network.

Back in 2012, the company I worked for was struggling. Guess how much sleep I lost? I saved money and when layoffs happened, I called some recruiters and literally had another offer in less than a week.

That’s close to my experience since 1996 across 8 jobs. Admittedly until the current one, most of them were uninspiring CRUD jobs at companies no one ever heard of

> My “self sufficient income stream” comes from always being employable and having a strong network.

The point is that an employee only gets paid as long as he clocks in. Once he turns in his badge, the paychecks cease. You have a self-sufficient way to remain employed (and in a high-paying field — this is great!), but that is not the same thing as generating passive income, which is what SaaS businesses aim to do.

One is not always better than the other, since it is harder to build a business than to just remain employed. But given the choice, most people would choose ongoing passive income to ongoing active employment.

And how is SaaS income “passive”? There is server support, sales, etc.

Guess how many days sleep I’ve ever lost worrying about “market fit” or customer acquisition or whether my little SaaS company would be eaten alive by a better funded competitor?

How many little SaaS companies even Net as much as the average new grad makes their first year at any tech company?

I personally gladly choose not to have the stress of starting my own business or independent consulting. Even though I have the skillset and experience and pedigree to do “cloud consulting”. I have a whole organization full of lawyers, accountants, sales people, on call technical support so I can just wait for the next assignment.

If I have an issue with an AWS service that I can’t solve, I just post my question to an internal Slack channel and one of the developers of the service answer my question.

> And how is SaaS income “passive”? There is server support, sales, etc.

It surely depends on your market, but things like sales are for generating new income. You can always stop working on sales and keep drawing existing income. I don't know how much server support most SaaS businesses entail, but in my (n = 1) experience, it's not a lot.

I"m a little confused by your reference to independent consulting, which is not at all like SaaS. It has more flexibility than full-time employment, but it's still active income that you have to work for (with a minor exception for retainers).

But it sounds like you aren't really interested in finding a way that passive income could be useful, and I'm not here to list all the reasons people like to run SaaS businesses. If the benefits don't stand out to you, then by all means you should do something else!

Or better yet, one employer. Go follow Dan Luu's advice and educate/train/practice yourself into the top 10% of software developers, then get a FAANG job. That's the surest path to financial security and a safe, comfy upper middle class lifestyle.

But if you don't want to go just be an employee and beholden to one employer, then keep that line of reasoning going and you'll see that 1,000,000 casual listeners > 100,000 sh*t fans > 10,000 mediocre fans > 1,000 true fans > 100 scary stalker fans > 10 b2b customers > 1 employer/patron.

Did I just fall into r/cscareerquestions?

“Grind Leetcode and work for a FAANG”?

You don’t have to be in the top 10% of developers to get hired. You just have to be willing and able to pass DS&A interview. The two skill sets are miles apart.

Before the gatekeeping starts. Yes I work for “a FAANG”. Yes I am (was?) a software developer. No I did not do a single coding interview to get here yet I code everyday.

I didn't say any of that, in fact I referred to Dan Luu here so that people would get the shorthand (Luu family has written that DS&A coding and whiteboard interviews are not predictive). The only reason you're picking this apart is that you're confusing necessary and sufficient conditions as well as confusing sufficing and optimizing. Either way you're not responding to the substantive point: that if you're optimizing for an expectation of regular high income rather than creative freedom, employment (being dependent on one entity) is the path. But if you want creative freedom, a large number of people that like your work a little is better than being beholden to ten business or 1000 devoted big spender fans.

> I'd argue that if you're smart enough to be reading this website...

I would agree that the average IQ (or potential in general) of the HN readers is more than that of the general population, but I disagree there is any minimum threshold here in any capacity that warrant your statement. Many readers here can't code at all, or couldn't learn to well enough to build and market software.

If you're reading this and can't code (yet), the pressure of delivering something real is an effective way to learn!

You can also accomplish a remarkable breadth of tasks with no/low-code tools, to the point where you don't need to be a software engineer to build an MVP and start charging money to validate.

Take a swing (and keep swinging even after you've struck out - you'll hit something eventually, and it'll feel great)

(edited)

I wouldn't say being able to code is a requirement to build and market software these days. You could get decently far just glueing together libs in Js/Py until VC funding.

If you're aiming at 10 clients, you won't get VC funding. If you are aiming at $100k/yr (or even $1M), you won't get VC funding.

Meh. If you're smart enough to read this web site you should find someone else to leverage some equity out of and a good salary and ride it to IPO then retire and do something else.

> IPO then retire and do something else.

Yeah, do what, exactly... Dawdle around dabbling in random stuff, only to eventually get bored and return to tech for making an impact on something and changing the world...

Friends, family, books, movies, games, food, travel, hobbies, more hobbies, coding stuff that's fun instead of merely profitable...

Most people only work so they can support those things in their off hours. There's a thousand things I could occupy a happy lifetime with if I didn't have to work.

"Work is what you're doing when you'd rather be doing something else."

Sounds great to be honest

About 1% of tech employment changes the world. Most of it doesn’t. Some of it actively makes it worse. Most of it actively makes it worse.

I live for the bits between doing the tech.

Yes because if you’re so smart , you should be able to pick the one out of 10 startups that don’t outright fail - something that VCs can’t do - and then join the company early enough to get decent equity (where you statistically have even less of a chance of choosing the right horse) and then choose the company out of the ones that don’t outright fail that have an outsized exit event.

Brilliant point.

May I ask if anyone is aware what type of businesses to target? SMB?

I always thought enterprise has super long sale cycles and won't trust a new product easily ( more decision makers) but to get 10 businesses to pay $833 wouldn't that need enterprise customers not SMB?

This is tough to give general advice for, because you'll want to tap your personal strengths. Here's a great talk by Jason Cohen, if you're trying to design a bootstrapped business. He even mentions the 1,000 true fans goal as being unrealistic compared to a handful of high-paying customers: https://www.youtube.com/watch?v=otbnC2zE2rw

Happy to brainstorm though. Here's a few questions to get the ball rolling:

What're 2-3 things that people have come to you to learn? What are the 3 problems that are top-of-mind for the person who signs your paychecks? What are the top 3 sources of revenue for your current employer? How much is from expansion revenue (existing customers paying more over time) vs. new logos? Besides the all-in cost of personnel (salary, payroll taxes, health insurance, etc), what are the top expenses of your current employer?

Follow the money! Once you start digging into how a company earns and spends money, you'll find ways to add revenue or reduce spend w/ software.

Below a certain threshold a Sales cycle length is driven by price, not customer size. I’ve sold a $300 a month SaaS product to Fortune 500 companies like Target and Apple, as well as smaller sized companies with 50-100 people. Pretty much $500 or less a frontline manager can put it on their corporate AMEX and the sales cycle was similar length (1-2 weeks)

Above a certain deal size company type does matter. I was recently invoked with two deals, both around $20K a year. One was to a medium sized company and it closed in about a month. The other was the same amount but with a large enterprise, and that took about 10 weeks, because legal had to be involved. The security team had to be involved, we had to get added as an approved vendor, etc

> if you're smart enough to be reading this website, you're smart enough to create and sell a piece of software to 10 businesses.

I gave up a Software Engineering career to become a content creator (Instagram/Blog/YouTube/magazine articles/photography/speaking/books), so I can offer my first hand experience.

What you say is, more or less, on the money. I would absolutely be earning more cash if I stuck at my software career. I willingly put my hand in the air and said "I don't want more money, I want a different life."

I realized that sitting inside every day was not the life I wanted to live, so I changed it. I don't want "an easier" way to make money, I don't want to sit and write software. I learned that doesn't make me happy.

I'm passionate about exploring the world and telling stories about that, so that is what I do now, and I love it. Yes, I have a lot less money than I used to have, and I'm much happier. Monetizing this life has been an incredible learning experience, and I'm proud of what I have achieved to date.

For me personally, life is not about finding an "easier way" to make money. It's not about how comfortable my life is, and it's not about simply having more money. So I choose this life. And, well, also The Road Chose Me.

Whatisyourchannel? I like your manifesto

The Road Chose Me

> I'd argue that if you're smart enough to be reading this website, you're smart enough to create and sell a piece of software to 10 businesses.

it's both fascinating and horrifying to think through reasons this doesn't happen, the many complications that get between raw ability/acumen/interest and such straightforward outcomes!

I'm curious thinking about this. I'm a very strong researcher, mild-moderate software developer, and absolutely gridlock terrified of contracts, formalities, getting locked into commitments, etc.

Like, I think I could do it, but I'm on the autism spectrum so my budget for variance is _so_ much lower. I highly downbudget things in my life that are higher variance so I look more neurotypical a lot of the time but sometimes with unavoidable stuff I get very much the more classical autism negative stuff (meltdowns, subtle meltdowns, shutdowns (!!!), a host of destimming and de-stressing mechanisms, etc).

I guess that's the thing I'm concerned about. Any field I can eventually become comfortable in once I know the different situations and how to leave the bad ones/find the good ones/have healthy strategies that personally work for me for my worst case scenarios/etc. The main problem is that I don't have the 5-10 years to really sink into that comfortably to get there from raw experience, or the stamina to go through what would seem to be my own personal hell in the meantime.

I could be totally wrong so I'm up for learning (especially if there are resources that are specifically adaptive to autism &etc -- it helps a lot!). I could see how this all could be a good thing in a different light with a different set of strategies.

(Also, Merry Christmas! <3 :D :D :D :)))))))))))))))) )

> The main problem is that I don't have the 5-10 years to really sink into that comfortably to get there from raw experience, or the stamina to go through what would seem to be my own personal hell in the meantime.

you've described a very difficult situation. i wish i had concrete advice for progressing with it.

you do seem to have a strong sense of your weaknesses and strengths though.

off the top of my head, perhaps developing some kind of SaaS such that you can deal with clients in a very algorithmic way / purely by API, would suit you best? as opposed to dealing with per client contracts/formalities...

sorry, i wish i had better advice and/or perspective for your situation.

in any case, merry christmas :)

> you can name your price (as long as it's below the amount of revenue you generated or money you saved).

Incremental gross profit, not incremental revenue, would be a better reference as the ceiling (and even that’s high for a stable business, who might use net profit as the reference figure for their reservation price).

The article actually defines it as $100 profit per superfan (after expenses)

Quoting from the article:

> First, you have to create enough each year that you can earn, on average, $100 profit from each true fan.

Are you rich or at least gainfully self employed?

There’s at least one person who recently put in much more effort than you recommend into making money on the internet who has failed miserably. See original discussion below.

https://news.ycombinator.com/item?id=34103896

>I'd argue that if you're smart enough to be reading this website, you're smart enough to create and sell a piece of software to 10 businesses.

Erm, what if you've tried many times to learn basic coding — and failed — like me?

As a preface: I’m sure my tone regarding “enterprise devs” is going to sound insulting. But for all intents and purposes that’s what I did most of my career until I learned “cloud”.

This is definitely not true. I have no idea where the conceit comes from that everyone can sell software to 10 businesses.

Most small businesses don’t have unique problems and are already served by various SaaS companies that do it at scale.

Statistically, if you’re a software developer on either side of the bimodal divide in the US.

A) enterprise corp dev doing boring old CRUD work working in any major city in the US with two or three years of experience [1] and one job hop you can easily make over twice the local median household income for the area

B) working for one of the BigTech companies where fresh college grads make twice the median household income - ie they come out of school with offers of $150K+

At my first tech lead job I was forced to hire your standard C# CRUD contractors for a lot of the integration work I was doing. We were paying the contracting company about $100 an hour. But the contractors themselves were making $60-$70/hour. You’re not going to get a company to pay outrageous rates for Tun of the mill staff augmentation type jobs.

On the other hand, at the last minute, management decided to “move to the cloud”. I didn’t know cloud from a hole in the wall back then. Those “consultants” made good money.

Six months later after going through one AWS certification just so I could talk the talk , I realized that they really didn’t know much, led us astray and were just a bunch of old school netOps people who treated AWS as an overpriced Colo.

That’s when I decided to switch companies, get some hands on experience with true “DevOps” - combining my development experience with AWS and specialize in what I became to know as “cloud application modernization”.

Now I could charge companies a lot for my expertise. But I didn’t want the hassle of working for myself so I got a permanent job in the consulting department at BigTech.

Reply on news.ycombinator.com