In 2010, I began an experiment which transformed my career for years to come.
I decided to launch a new tiny business every month. This experiment got away from me; my first product covered my rent for months, and I became an indie entrepreneur, although a very disorganized one who was making everything up as he went along. As far as I can tell, though, that’s pretty much what “entrepreneur” means.
Here they are:
- Venture capitalists spend more than necessary.
- You need great role models.
- “Free traffic” does not exist.
Let’s look at each one in turn.
VCs burn cash
This is basically conventional wisdom now, but when I started in 2010, it was still a somewhat rebellious and unproven idea. (In fact, my whole goal in 2010 was just to test this notion; my first product surprised me by doing far better than I expected it would.) Between open source, remote work, and commodity hosting, the cost of launching a tech business has gone through the floor. You can launch a business without any investor. Even when a startup does need investment, it often only needs “tiny” amounts (by VC standards) far less than a million. One reason Uber and Lyft have such astronomical valuations is that big investors are desperate just to remain part of the tech industry at all. Every investor that wants to get in on the next big thing drives the valuation up by getting involved.
It takes almost nothing to launch a product online. One time I wrote a mini-book (about 60 pages) in about 5 days — maybe a week — and launched it with nothing but a post on my blog and a note to a friend who ran an email newsletter. I did it because I had a budget shortfall of about $500. I figured a 60-page ebook could cover it. Between the normal traffic to my blog and my friend’s boost, the book made about $20K or $25K in its first week or two.
This is an extreme example, an outlier, and to be honest I’m guessing about the numbers. I know it was less than a week of writing and it paid my rent for months, but that’s all I really remember. I think it had made $40K by a month or two later. I tried to track down more exact details, but I switched sales platforms at least once, maybe a couple times, so guesswork is unavoidable now.
Either way, I’ve had a bunch of experiences like that, where a small amount of effort produced a very profitable product. If you want to scale it out to a more typical software business, plenty of SaaS apps have been launched on very low budgets, as side projects. GitHub is one such example, although it also ultimately became an outlier, when it was sold for billions.
GitHub is an outlier in another sense; its price, in billions, reflects a proven business model and a logical expectation of future profit. Often, when you see a startup with a billion-dollar valuation, you have to ask yourself, “does this show that the startup has a lot of value, or that the investor’s dollar does not?”
you need great role models
One of the biggest setbacks I experienced came from a moment where I looked at my blog and thought, “oh, shit. I’m turning into Jeff Atwood.” My blog was the center of my business. This led me to occasionally provoke controversy for its own sake, which I have no real problem with, but when I found myself posting inane bullshit with no real point to make, this kicked off a minor existential crisis for me. I ended up looking for a full-time, salaried job rather than do that again.
Another way in which the role models thing bit me: when I started, there were a few SaaS apps which had been bootstrapped, but not many. Most of the internet marketing success stories were sales and marketing people who didn’t give a flying fuck about the content they produced. They were guys who found out that a market existed for teaching parrots to talk or building potato guns in your dorm room, just by looking at search volume on Google and eBay, so they built these products with much more attention to salability than value. I imitated them a couple times out of curiousity and regretted it.
Conversely, Gary Bernhardt’s Destroy All Software demonstrated that programmers will pay good money for a much, much higher standard of quality than I would have guessed — maybe even a higher standard than I would have guessed was possible. This changed my approach to making products and revitalized my enthusiasm for it. Wes Bos’s products had a similar effect, a few years later on.
“free traffic” does not exist
My product sales were a function of the traffic my blog had, but because I was blogging a ton anyway, I didn’t notice this cost of the business. As the realization dawned that my blog was a money-making asset, my relationship towards blogging changed. I started my blog in 2006 with the idea that I needed to market myself as a developer, but I wrote it with the assumption that mistaken ideas could cause no harm and I should essentially document every last discovery.
This idea has Google’s fingerprints all over it. The Google paradigm was that bad ideas would disappear anyway, due to their badness — which was probably always delusionally idealistic, and is no longer even remotely tenable, in the Facebook era — while the long tail would reward the production of almost any content. Anyway, what’s important for the purpose of this blog post is that, once I started to recognize my blog for the traffic magnet that it was, I wasn’t sure what to do with it any more. It just started feeling weird.
This ambivalence killed my blog. In the early years of my blog, I would often post more than once per day. But the front page of my old blog, which shows the ten most recent posts, spans the years from 2016 to 2019. There isn’t a single post from 2018 at all.
(As you can probably guess from the fact that I’ve launched a new blog, I’ve reevaluated my approach to blogging, but that’s a story for another post.)
Even ignoring these more subtle costs, I put a lot of time into blogging. I stand by the assertion that VCs spend way more than necessary, but if your time has value, then blogging is not free. Likewise, it’s ridiculous to assert that you get “free traffic” from a YouTube channel with great lighting, expensive cameras, and videos that take a week to shoot. It’s really effort traffic vs paid traffic. You can get traffic from effort by blogging; you can get traffic from Facebook by paying for it. Effort traffic pays off better in the long run, but paid traffic is simpler in the short term. A smart business is probably going to use both.
Anyway, in my case, this effort traffic also had a dollar cost. Although I didn’t think of it this way at the time, I was also promoting my blog — and thereby my products — by speaking at conferences, making my travel a hidden cost of doing business.
I know a lot of developers want to launch their own products. I’ve had that experience, and I learned a few things as a result. So remember: you can launch products very cheaply, but you should choose good role models when you do so, and be aware of the hidden costs in so-called “free traffic.”