Mistakes to avoid to build a better 1-person business
tinyempires.substack.com
tinyempires.substack.com
A medium to very large company will spend $0.95 to save $1.00. Because of tax incentives and business performance metrics, any opportunity to grow for the future is usually capitalized on so all you have to do is find a pain point for a company and pledge to solve it cheaper than they can, which is usually through headcount.
In fact, an easy way to find ideas (to the point where it kind of feels like a cheat code) is to see what companies in a given industry are constantly hiring for. If you can replace 10% of a job that companies pay $65,000 per year per head, you can pretty easily demand $6,500 or more. Unlike a W-2 employee, Your company does not cost your customer a full-time manager, nor does it increase administrative burden for HR, IT, or facilities, and does not incur costs such as benefits, payroll taxes, or accounting fees associated with personnel - which will undoubtedly be higher than the flat monthly or yearly line-item on the expense sheet that your business represents.
Choose an industry, pick a pain point, build the product, price it according to what it costs, and sell to them. You typically won’t find super interesting problems to solve here but it will be reliable as long as they don’t build it themselves.
By the way the only industry I know well (from the inside, as software engineer) is "big software product development". Nowadays I invest a lot in public markets, so I learned a lot about other industries from an investment perspective, but it is not enough to find pain-points.
This is a good place to lean on your network of friends that don't work in the same industry as you.
And if you don't have those kinds of friends... it would be good to work on getting them. It's important for many many reasons to have a diverse social network.
Just a personal thought (and please tell I’m wrong if this is not the case), I think Eastern Europe as market is ripe for good tech innovation. To my knowledge, it’s not “behind” but products and services seem to reach there after being recycled from Western and Central European companies, with translations into local languages being spotty at best and nonexistent at worst. Someone who lives in a culturally-isolated place might have the upper hand at solving specific problems and being a native speaker of the local language would you give you the upper hand and no competition should you elect to write software to help that doesn’t exist where you are. This could be especially true if you can find software that they wish they could use but is not translated into an language that makes it useful for them.
If networking events don't happen in your country, then become the organizer. You'll instantly be seen as a leader and attendees will eventually want to talk with you. When you organize regularly, they'll start talking about you. Then you're "in".
If you don't live in the capital city, then it's worth the time & money to travel 1x a month or every 2 weeks. Ask attendees if anyone has a spare couch for you to stay on.
Themes for events you can use the major happenings like AI. Or 'duplicate' Meetup events in other cities.
Post flyers near companies doors, make event on FB & Meet-up, find developers on LinkedIn, there are so many options to get the word out. Split Test and discover which one is most effective (ask attendees where they heard about it)
The rest of your advice I find rock solid!
I have been doing some Data Science consulting on the side and last year we did some analytics work for a government lottery and that contract came to us because one of my partner's girlfriend had a relationship with the team who needed the work done. Otherwise you would never hear about any of this stuff that is constantly flying around in the airwaves.
The problem with this advice is that it's not any advice. Saying business is about nepotism is unattractive and doesn't really help you, other then to say, either you are social and good at forming relationships or find a partner that is. And moreover, you can't sell this advice in a coaching class.
If you aren't a social butterfly the only way is to build those relationships over a long period of time and create trust.
It sounds like very good advice, or rather, information. If I believe this, a few decisions I might make are: (1) spend more time networking, and following up with people I've met, whether at conferences or local events, even if they are outside (2) recognize I have a handicap if I am not a social butterfly and think about ways to counteract it (or realize this as another factor working against me and decide not to start a business)
I don't think you need to be a social butterfly to have a large network. I think you just have to show up to a lot of things. Which might feel like wasted time if you don't frame it this way.
Building and keeping relationship *is work* even with your wife or kids it is not given. Building and keeping business relationship is even more work when you have to convince someone you don't know that you are worth something.
I call out nepotism only if you can clearly see someone is hired and does nothing or has no experience or skills for what they were hired for.
I got my friends/people I know hired to the company I work for, it was not walk in the park, I had to convince my friends that company is good place to work as they were highly skilled, which took me months ... guess what ... I had to spend also quite some time convincing managers that guy I propose will fit and then they still had to go through interviews and probation period.
From the outside or other employees perspective it might have looked like "X got Y into the company because they know each other and X is on good terms with management", they did not see how much work it was to "get good terms with management", they did not see how much legwork and checking up on my friends if they are available took.
No one is saying that Y does not have it hard. The claim about X-ism is that people with X never even had the chance that Y did. In your case, sure, someone worked hard to convince their boss to hire their friend, but the people who don't have those connection (i.e. because they are from marginalized backgrounds/different country) just don't have a single chance of being hired, regardless of how qualified they are.
This requires that every hire the boss ever made was based on an employee recommendation. That seems unlikely.
The claim was not "nepotism doesn't exist". The claim was that "It isn't nepotism if the person hired through personal connections can actually do the job".
Yes, people without personal connections have it harder, but the mere inequality exists does not mean the situation is unjust.
What motivates you to disparage an entire group of people, because they (correctly, as you admit) point out that success doesn’t depend on the relevant talent but on socializing?
It's also interesting that you separated 'relevant talent' from 'socializing', as if socializing is ever not relevant. People do have to at least know about you, and that indeed is a skill on its own.
Most of the time losers claim that "if they would know the right people..." or point "he/she got a job only because they knew someone", well NO because knowing right people is only part of the work, one still needs to deliver and still needs to have relevant skills/talents.
Not knowing ozim and not getting hired at their company doesn’t make you a loser.
It is not about people who didn't get specific job but it is about people complaining. "Normal people" even if they don't get some job are not complaining like that.
This is true but on the flip side it also seems that some people who end up in privileged positions attribute 100% of success to themselves, and 0% to circumstances and external factors, which is just as bad
You are misreading ozim.
The claim is not that people without connections are losers. The claim is that people who often make the accusation of nepotism generally are losers.
In other words, untalented people will make the accusation of nepotism as ego defense to avoid confronting their own lack of skill.
The people you’re disparaging know that skills/talent are also part of the work, but they’ve done that part — the part under their control. They’re commenting on the part of it which isn’t… and as far as I can tell, you’re disparaging them because you’re lucky and they aren’t.
What a low quality comment made even worse by the insult in the beginning.
The situation outlined is true. It can take time to convince outsiders (friends), and time to convince insiders (the company, manager) that X and Y are a good fit.
Hiring is not easy. Getting hired is not easy.
I don't want to start a flamewar with this controversial hot-button topic, but imo it is kind of similar to the whole incel culture. The kind of takes where they believe that women aren't interested in them because they are 5'9 or because of them not having a square jawline or because of some perceived "chad" gatekeeping them, and totally not because of their own attitudes and behaviors.
This is just missing forest for the trees. I am not saying that looks don't matter at all. But the sad part is that the heavy majority of those people look totally fine, and it is just their hyperfocus on their perceived deficiencies (and associated behaviors) that drives people away.
Same here. No one denies that nepotism exists. But 9 times out of 10 when I hear someone complaining about it, it boils down to "how dare they hire someone that they had any prior personal experience with and who they know for a fact is a great specialist due to the shared track record".
The game being somewhat rigged would be a lot easier to accept if you haven’t been told all your life that if you work hard and be a good person everything will automatically fall into place.
The logic of being upset that somebody who got worse grades in school now has a better career and how unfair that feels is the same logic as being mad that somebody with a criminal record who has no house or car can get dates easily but the “nice boy who played by the rules” cannot.
For many years I swallowed the story that companies are a 'meritocracy', and got very upset when they were not (nepotism, hiring people that under-perform).
But then realized, maybe sometimes it is 'pragmatic'. It is more like 'moneyball', they are not hiring the 'best', but maybe they are hiring the 'known quantity'.
Sure, there is some cases where you can be mad at nepotism. But I tend to think people are generally good and trying to do the right thing. Sometimes the story goes "I don't know much about programming, but I'm going to hire my nephew because he seems smart", is innocent.
Technological advancement is ultimately the only way to achieve a fair system where “systematized interview or testing” works as well as a relationship.
That sounds very far away from nepotism. Nepotism is giving relatives or friends the job without any qualifications and/or treating them different.
Observation 1: A corporation isn't a single entity, it's a stack of humans in a trench coat.
Observation 2: Humans choose what's familiar and what's worked for them in the past.
Observation 3: Humans usually get promoted based on their choices.
Corollary: Make the people who engaged you look good, and they'll keep sending money your way.
By that logic, people have big families, they have lots of friends. Why choose one family member or friend over another?
> I have been doing some Data Science consulting
I'm not trying to "gatekeep" here. Consulting is, for the most part, an ordinary employment relationship.
All businesses started as small businesses, we tend to forget that.
When I left, my network was very narrow (industry focused).
I did a hard reset and ended up first working at a YC company and then another SV VC backed startup.
When this second startup pivoted they asked if I wanted to stay on or accelerate my vesting. I left because there was something else I wanted to build.
But now being connected to this network, the founders of the company I left opened up 8-10 VC calls.
Nothing changed about me, my capabilities, my skills, my knowledge. But being plugged in to this network definitely has benefits.
The bias is obvious in the tech industry. Lots of companies get funded that aren't true VC scale businesses. I spoke with another YC founder that ended up folding his startup doing an open source product. I asked about his pitch to YC and how he framed his business model and he said he basically didn't have one.
As much as we think tech is a meritocracy, there's a lot of bias, nepotism, and favoritism.
A lot of this ultimately comes down to trust. Unless they want to do a lot more due diligence (FTX anyone?), trust is the shortcut. Trust in institutions (Stanford, MIT, Harvard, ex-FAANG, ex-McKinsey, etc), trust in people (connections), trust in the individual (serial/repeat).
I think it's unhelpful to consider this level of socialization "nepotism". A word often associated with a rich parent giving their child with no experience a directorship at a big company. Not only is the energy different, but it misleads people into believing business could be anything but social.
Business deals largely run on trust that the other party will do what they say, and hopefully do it in good faith (many people believe this isn't so because of the legal contracts we sign, in fact the need to use a contract in court is a failure of a business relationship). The only way you can build that trust is by entering someone's network of trust - you can do that through word of mouth or by talking to them, but you have to do one of them.
A 30 minute chat at a mixer is great way to give signal that you're at least not obviously a fraud and perhaps worth talking to.
The difference is that Jason Cohen's advice is based on personal experience growing four businesses to over $1M/yr in revenue. I'm not seeing what qualifies this author to give such broad, sweeping advice about bootstrapping.
[0] https://www.youtube.com/watch?v=otbnC2zE2rw
[1] https://mtlynch.io/notes/designing-the-ideal-bootstrapped-bu...
For example, to be wary of obligations like being on-call, because if you're sick or need a vacation, no one is there to do them.
Or to avoid overengineering tech, because you're the only user and you can fix quirks as needed.
Or to learn to outsource things if it lets you focus on what matters.
I don't know, anything that makes me feel like I wasn't tricked into hearing about what's promoted at the end of the page.
Don’t start something that requires physical labor - even if it’s as low intensity as say 3D modeling - if you don’t have a temp stand in available.
If you get hurt, even a little, everything stops completely and you lose repeat business immediately
Obviously, you can think of yourself as being in the service of building a product, but that doesn't nullify the distinction. In fact, it can strengthen it: devote your initial efforts to building the sellable part of the product, so that you can actually sell it as soon as possible.
(This is the "capital" part of capitalism. Use labor to build capital, then profit off the capital.)
Its hard to compete with bigger shops, but selling on platforms like Etsy (so long as you are willing to bet on yourself) can be semi-lucrative.
Running the numbers this morning since a friend asked, in the past 117 since I started my latest side-hustle selling wooden things, I've done 245 orders, selling 251 items for a total gross revenue of $5,612.19. It isn't retire to a private island money, but it covers the costs it is supposed to (mortgage & utilities). I usually let these hustles go a year before deciding to give up or invest more time and energy.
I learned my lesson early on. I was making websites for small businesses in college. If a client's site had issues, I could not tell them "sorry, I'm preparing for a very important exam". I had to drop everything and fix that right now.
That is, people (like you - thanks!) are going to offer their own suggestions, and it's going to be more varied, more interesting, quite likely some bigger names or monetarily success stories, etc.
First, I think entrepreneurship is a bit like music genres. There’s a lot of different styles. If you’re trying to start a pop punk band, the guy in the successful jazz quartet probably has a lot of good advice , but also a lot of advice that’s less relevant to your goals. It’s good if you can filter between the two.
I hang out in dvassalos discord which is filled with people trying to do 1 person business, about half SWEs and half creators / influencers. The creators seem to be crushing the SWEs. It’s just way easier to build an info product people will pay for than an app people will pay for. The info products also have the advantage that , content creation is both the product and the marketing work. But in pure SaaS, product development and marketing are completely different.
I’m working on a few different “bets” but the project I’m most optimistic about making money is www.livepokertheory.com . I still want to do SaaS since I’m a SWE at heart and think there’s more long term upside. But this project is a hybrid info product/ SaaS since I’m creating content on how to understand game theory solvers and creating a SaaS to make it easier to study and retain the content.
Poker is a niche I enjoy plus it’s quasi-b2b since there’s an ROI on the content.
If you’re looking for credibility I have very little as I’ve only made a bit. I had an iOS app that made a little more but it was too controversial (very unfairly so, but it was too much controversy to build a business around, it’s in my post history here).
But I’ve made a little plus I’m making money myself with my own content.
I’ve been a little MIA on my blog and twitter but hoping to build in public a bit more once I get ducks in a row.
Anyway, I think there are certain formulas and playbooks that get trotted out because they often work well. But they don’t guarantee success nor do alternative playbooks guarantee failure. I think what’s more important is to look at high level strategic reasons why certain playbooks exist and let the high level strategy guide you rather then rigid adherence to specific tactics (which, incidentally, is also good advice for understanding the articles on my poker blog).
That's why I read the comments here on HN first and decide whether to spend time reading TFA later. Chances are anything of substantial relevance will be directly quoted here. The discussion will probably be more interesting anyway.
- Have one customer pay you lots of money rather than many customers pay little money
- Target businesses, don't serve end consumers directly
- Find a small niche for yourself rather than try and do too much
While all of it is valid advice, I think taken to the extreme it's basically saying – be an employee, not an entrepreneur.
You are not an "employee" because you can at-will change your asking price, take on other jobs, flex your hours, and work from wherever you like.
An employee has none of those, while consultants have a bit more of those, and a B2B business probably has the most.
Not really. Only if they are willing to pay more. And only if you have no fixed contract. ass an employee you can also ask for more at-will.
> flex your hours
As an employee you can often flex hours. As a consultant sometimes less as you have to deliver.
> work from wherever you like
Many employees can do that too. Some consultants have to work in the customers office.
I run a one-person business and its advice is spot on.
I'm also more or less done working specifically for others and I'm now pursuing a market that is measured in the 1s or maybe 10s if it's a real success.
Finding a niche problem in B2B is effective if you have the B2B experience.
Technical folks who have consulted are especially in a good spot for this.
Exactly, build a few custom products for clients, then when they’re happy, build a platform to unify them, which will allow you to scale easily.
A lot of companies try to do the platform first, which is harder to iterate and less appealing to client’s who want customisation…
In the end it turned out the goal of the company was to sell it to deep pockets. Having prestigious customers is how you do that. But the employees including some of the salespeople thought we were trying to serve an entire global industry. If that had been the case we should have started with customers about 1 std below median size, and built momentum toward landing large customers.
Because what happened is that we had contracts with the big companies we couldn’t net a profit off of, and they liked to keep paying what they were already paying. If we were solid with mid sized customers first, we could have asked for more from the biggest ones because we were selling a mature product. Instead they bought a fixer upper and wanted to pay the same as we fixed issue and added tons of functionality.
The article is right. Small startups that are bootstrapping succeed via relationships, not scalability. The exception would be if you build a niche product that you can manage and scale yourself better than a well funded team could. That’s rare.
A better approach is to have a solid base of profitable business clients, customize for them, and then unify the use cases & customization later on a single platform, and go big from there once you are on solid footing.
Ideally you'd use your first (few?) customers to create a solution that can be resold to other businesses.
Any niche problem that larger businesses don't see as worth their time.
How efficiently that profit is created is up to the individual entrepreneurs.
With 10x multiples being paid for startups like this, it couldn’t be further from being an employee. Those who are not profitable are more in a position of owning a job they can’t quit because they’re so invested in it they can’t breathe or grow because the financial equation wasn’t a high enough priority.
- Don’t work for someone who has one customer that dominates their revenue.
That company will always control the requirements, even if those requirements make the application a chore to get working for other customers. Also if there is ever a problem with how that customer is treating you personally, the company always always has to preserve the revenue from that customer. They will throw you under the bus.
I did two contracting gigs in a row that were unpleasant. The first told me a pack of lies about advanced project management and architecture being their focus. The work was identical to any contract I’ve ever done, but the feeling of betrayal soured the entire experience. If they did anything to advocate for their employees, I didn’t see it. The consequence of that is that it knocked my confidence, and I took an FTE position which was definitely “settling” and I’ve stayed at that position for far too long (though COVID played a role, I can’t fully blame COVID).
It’s probably better if you work someplace that gets less than 30% of its revenue from any one customer, but 75% from its top 4. There are diminishing returns being pulled in many directions at once, yes, but there are serious dangers of being railroaded by an offer you can’t refuse.
A lot of people get into this stuff because they can't hack it as hum drum employees.
Here is my reasoning:
3) Selling to businesses can be tough because you can't automate all tasks. For a one-person business, the key is to automate as much as possible.
4) Small businesses shouldn't worry about competition. In fact, big markets are great for small businesses because they offer a vast range of customer needs. Not everyone wants the same set of features in a product. So, you can create a version of an existing product, but with fewer features. You can even advertise it as being simpler. Alternatively, you could tailor your product to suit specific uses better.
I’m not sure about 1) - scaling is easy for certain type of apps and services. It really depends.
> A man created a low-budget how-to DVD for less than $200 and sold it to owners of storage facilities who wanted to install security systems. It’s hard to get more niche than that. In 2001 selling DVDs that cost $2.10 to duplicate for $95 a piece through trade magazines, he made several hundred thousand dollars with no employees.
In this example, the (claimed) $200 production cost and $2.10 DVD cost are probably nothing relative to this large marketing cost:
> piece through trade magazines
The marketing costs and effort are conveniently omitted.
I agree with you, but also somewhat disagree on the overall takeaway. Yes, of course you have to put more effort into it than just spending $200 NRE and $2.10 unit cost. The quiet part that really needs to be said out loud (way more than marketing costs and effort) is: find a niche with really great unit economics. When you've got a product with 10% margin, you have to manage all of those marketing costs very very carefully. When you've got a product with a raw 5000% margin, it matters way way less whether your CAC is even triple the raw manufacturing cost of the product.
I have a friend who did something similar back around the same time frame and he did pretty well. His niche was doing video tutorials on how to use new camera equipment. He needed to buy/own camera and video equipment. Luckily he already had it from is other endeavor as a photographer. He needed to have the skillset to the make and edit the video. Again, he had that from being a photographer. He ended up selling quite a lot of DVDs.
So the moral is to find a niche that leverages a lot of what you already have/know.
There’s lists of publications by trade. You could buy ad space on multiple publications or individually. The model was $n per square inch of space.
The trick was finding the lists. General business magazines used to have advertisements for companies that ran/owned the lists. So it was somewhat accessible to the general public.
Cost was similar to how ad words are calculated. So the more niche you’d go the better chance you had of manageable costs (unless your niche was super expensive for some reason).
Effort is relative. Once you knew how the marketing channels worked everything else was fairly straightforward. The ads that worked were just left on autopilot. There weren’t redesigns or none of the shit that’s done today. Ads were left alone. Tracking was even rather simple. You’d have a special code, phone number, or mailbox that tied the ad to the order. Simple stuff.
You can replicate all of these today and still make a tidy sum. But you won’t do it behind a computer. Gotta go out into the wild and talk with people about all kinds.
Making money is easy.
There are one person companies that are successful with either choices, and the decision which opportunities to pursue should depend on your talents, your personality, your experience.
For example, I personally find it much easier to sell a cheap app to lots of people. I suck at selling big contracts to businesses. I only once managed to close a five figure contract, and that was a consulting job where I was basically an employee.
But I'm not saying everyone should do the same. Figure out what you are good at, and do that.
When Goldfish are in larger bodies of water, they actually grow much faster and larger.
I'm might replace "Don’t choose a large market" with "Start with a targeted niche, but one that is able to expand to a related larger market later over time".
Definitely the pond, they're freshwater fish.
> 4. Don’t choose a large market
I feel like there's also a case where the opposite is true, e.g. that there's already proof that businesses are willing to pay for solutions in the space. As long as you have a differentiating factor to the big players (ideally via something they couldn't easily shift to), my knee jerk reaction is that it's still not a bad call to launch in the space.
It's fine to choose a large market, as long as you niche down your specific offering with a differentiating factor specific to that niche which, in effect, shrinks your market.
A solo biz can't reasonably compete with Salesforce in the "B2B CRM" market. But a solo biz can prosper in the "B2B CRM for personal injury law offices with < 10 employees in the US", as a totally made up example.
The homogenization of big box board rooms needs vs. Regional cultural needs has narrowed the manufacturing focus to the average. My theory is that just in time manufacturing will move to the "garage stage". The retail price of American high end refrigerators and stoves may not reflect the cost of materials and quality of thought that went into the object. My plan is to develop a platform of appliances that is more efficient than existing offerings but available in specific sizes. Think of it like ordering custom furniture. The result could be a refrigerator that fits the space exactly using the finish materials of choice.
I have spent too many decades thinking about this but I have finally have my small run manufacturing facility (FabLab) set-up. I think it will be another 2 years before I get a product out the door.
This is an epicenter of the thinking. I personally think they are overcomplicating some aspects. I'm sure at a school of higher learning it needs all times of overthinking.
Also, I'd love to hear more about your fabrication and design pipeline. This kind of work sounds utterly dreamy to me. I used to work in hardware as a SWE and loved the mix of programming and hardware work. I've also longed to start a business, but am somewhat at a loss as to what even to do.
Currently I’m focused on my own 7 Apartments. Every big leap in living started by adding a new service to the kitchen.
fire, running water, electricity,….
Controlling the default installation for 8 kitchens should provide with a rare design freedom.
Finally I think I will be writing manifestos on technology and design. I have set myself up to only need to produce artifacts.
view.cogs.com
I have been at it since the 90s. I have answers to your question but I dont want to get into it here.
>>Target businesses. Not consumers
I was a developer with decent sense of Product Management. Hated Management and Sales related activities. Apps in App Stores targeting consumers really worked out well for me. Having been running my business for 12 years+ profitably.
Why does he assume there would be no churn? The churn would be binary and catastrophic if it happens.
Separately, I've found some businesses are hesitant to do businesses with a small/solo startup because of the risk it entails. Some of them wanted me to put our code in escrow in case something happened to me personally. Some are just hesitant to business with a smallish startup, whom they figure might not exist next year. B2C customers don't seem to care about this as much.
The hesitancy part you mentioned isn't really a churn thing but rather part of the sales cycle. One thing the author didn't mention is that B2B sales cycles are _really_ long. You can convert a B2C Netflix subscriber in 15 minutes, but it could take 6, 12, 18 months to convert a B2B customer into a paying contract.
Technically, the author is correct in that B2B can lead to more stable businesses and less work overall, but the lengthy sales cycle can be draining in its own way, even if the end result winds up being "better" for the solo founder. (It could be worse, too, depending on contract terms!)
In other words, I agree it was a poorly worded statement, but the author isn't totally wrong there, but they aren't totally right either. They oversimplified the advice, ignoring the complexities of B2B.
And on top of all that there's the strangest perception of value that can drastically change from person to person.
Companies could happily pay thousands for access to data for a single brands segmentation, then baulk at the idea of paying $7 per user for something like Slack that gets used many times a day by many people.
and step 4, i'd do the opposite. Choose a MASSIVE market. It'll be easier to get customers.
For example a good secret is using Azure. It seems more expensive until you notice it provides many security certifications.
Per-user pricing for companies works very well if you want to sell to small companies because they only need to pay for what they use. Counterintuitively, larger enterprises would rather pay more per user if they can be guaranteed of a fixed price for a given term. It makes it easier to budget.
Your objective is not so much to write good code as finding a "sugar daddy", that is, businesses, to finance all the cool Python projects that make no money.
I have a 1-person business myself, and it seems to me that it starts with an idea and/or personal skills, the two of which are inherently related. There are things that I know, and things that I'm good at. The author advises you to target businesses, not consumers, and perhaps that's good advice in the abstract, for a generic person, but for me personally it feels like bad advice. B2B is not my area, not in my past experience, not what I know. The author says "The opportunities are endless", but that's a curse as well as a blessing. How are you, as a single person, going to make an impact, distinguish yourself from other businesses? You have to rely on your personal strengths, whatever those happen to be, even if they go against the author's generic advice.
My own advice would be this: don't try to start a 1-person business unless you need to. ;-) It's extremely difficult.
The only issues is the individual has to understand what they are asking for and pay their bills. If they pay their bills their understanding of what they want is less important.
Personally I particularly struggle with charging too little. Especially early on you want to just get people use your product and it's tempting to lower prices to achieve this.
Small companies/single founders have much smaller overhead: there's no 50 person costly dev team on your payroll. So you get to offer a subset of the main competitor's product at a much lower price and still have high margin.
It's something I've thought of: many companies I've worked for over the years bought expensive products that weren't necessarily too complicated or crucial, just did things we didn't want to do divert resources to do in-house.
Yet the costs ballooned (usually $ per/user) and we kept those subscriptions for a while up until we figured a cheaper alternative. If the costs had not increased so much there'd be nothing to move off of, we'd have been happy forking over money.
The cost is in acquiring customers, as mentioned by the article. "Sales and marketing are both major time drains and you can't spend all your time doing them." I would say money drains too. A small business can't "make it up in volume" like a big business can.
Plus, small business customers can stick around for longer, because you develop an authentic relationship with them, while delivering similar or better quality product at a fraction of the price of the big ones. I.e. you have an inherent edge, and it’s more about quality than quantity, while the bigger ones simply can’t afford that.
> a fraction of the price of the big ones
These two things are inherently in conflict.
low volume * low price = low income
I think you're inventing an entirely unrealistic hypothetical scenario.
The original commenter asked, "What about tackling a large-ish market but competing on price?"
How many large-ish markets are there with $300,000K/year products, and moreover, how many $300,000K/year products can be delivered to 10 different customers for $30K each by a 1 person team? This seems completely absurd.
I'm an indie developer.
> I know a few prominent solopreneurs who are making millions/year while we argue whether this is possible on HN ;)
That isn't the argument. It was never the argument, and nobody has disputed that. So you've clearly just misunderstood the discussion here, which may explain why you keep saying absurd things.
Another good resource is "It Doesn’t Have to Be Crazy at Work", where the authors describe how they've built a highly profitable bootstrapped business, and their philosophy around that, which shares many of these thoughts.
(Obviously we come at this from different directions!)
If you're building a SaaS, don't use a front-end framework and tools like Tailwindcss. Instead, use a full-stack framework like Django or Rails and build your UI with Bootstrap.
A lot of SaaS founders underestimate the importance of time to market. I worked on 2 projects where the founders wanted their apps built using the latest and greatest tech stack loved by silicon valley startups. Turns out, using the same tech stack as VC funded companies costs a fortune in terms of both time and money, so, you end up not shipping fast enough or not at all.
You get both steep diminishing returns from adding more devs, you also get additional overhead from needing more management.
The second reality is there is no such thing as mediocre anymore so long as they use AI to code. This is precisely my point, the marginal advantage of a 10x engineer and a team of 20 + to build something awesome is now cut in 1/2, soon probably 1/4.
all rolled up in one just seems like an incredible thing.
I think this has to be 1-person businesses are usually service businesses - selling expertise. Would love to see real products which are live and run by 1-people businesses.
Relevant because it'll likely shut down by the end of the month due to Reddit's mismanagement.
amazing!
Brett @ designjoy is a 1-person business doing > $1MM/year revenue. He's on twitter (@designjoy) and had a good Indiehackers interview with Courtland from a couple years back.
It's "easy". Yes, there are some headaches, but I prefer end to end ownership. I run the entire thing, infrastructure, sales, design + engineering, manufacturing, support.
I'm in a niche, but it is doable, I guarantee you that.
I run an indie app business where overall I make more than what I used to make working a FAANG job [1]
Start from the beginning either automating things or farming them out if they're not your core business. Even if you have the skills at something, if you're not really supposed to be doing them, farm them out.
This is why Stripe (and Braintree) is so successful, because they have automated a real pain points for many people. (For that matter, AWS, etc.) It's not that it's hard to use another provider, or that you can't get payments or billing for cheaper, but when it flows together automatically you don't need to worry about it. People who are up to their necks in business administrivia and are treading water have too many annoying responsibilities that they both don't enjoy and cannot squash. If you go down the path of needing to maintain your stuff all the time, every time those pieces do not work together perfectly is a stressful time for you, focusing on things when you should be focusing on your life or your business.
It's not as glamorous nor profitable as Twitter hustle bros make it to be.
Only do it if what you want to do happens to be doable as 1-person.
Basically you're saying "get a job."
"Co-found a 2 person business" is much better advice than "don't start a 1 person business."
It was hard AF, but eventually I managed to get a 1 person business running, one that doesn't rob me of my time and I have several flywheels in action now that generate decent income (I won't shill, you can check my profile if you're curious).
You must build your business on something beyond an idea.
Intellectual property, customer relationships, the brand, reputation, quality, luxury value, etc...
It's trite but true: ideas are worthless, execution is everything.
How do you find those and market to them? I actually am trying to make a ChatGPT plugin because people wouldn't pay for the website (partly because it didn't always work great, I am narrowing the focus) and I think this will be a captive audience.
Based on this, I am thinking maybe I should change the description of the plugin (when I get it out) to something that will appeal to web design agencies rather than individuals.
I will add one note: dont waste money on marketing (google/facebook/etc... ads) when you start small, if you don't have connections that can give you projects/buy your product then pair up with someone who does.