It's awesome when anyone can make a living doing what they choose. But for practical purposes, I think most people think of "living off their start-up" as making money from things other than an individual doing contracts/hourly work; in other words, a product or service that can scale in some sense. If you were making money by paying others to do the work, that would be a different story!
I actually agree, and i'm taking steps to make that happen and move from a freelancer to a sustainable boutique iOS development shop. That's more startup-y, right? :)
Only if you're building your own products that you can sell in a scalable way - not just becoming a larger consulting shop. That's not to say it isn't a good idea -- just that building a business is a little different in most people's mind than a "startup".
Really, the goal is both. Consulting is a much more reliable way to generate income in the iOS market, but the app store is steadier if you can get a good performer out there. I'm trying to use consulting (and grow the business that way in the short term) until I can get a serious product in the app store that can support the business.
In our case we were able to convince some of our clients to let us keep ownership of the iOS code developed for them as long as we didn't sell it to their local competition. We basically gave them a license to do whatever they wanted with the code while we kept all ownership/IP/ability to create a product with it.
After 5 months developing a fairly complex iOS app for a local cable company (think i.TV + Netflix like vod recommendations) it sure feels that we have created some value as we can go out and create spinoffs or repackage the same solution to other (non local) cable providers.
I am, but that's because our costs are incredibly low. I have a team of 3 with a monthly burn total of $1,000. We have our seed funding from i/o ventures. Company is called Skyara if you want to check it out.
ParkWhiz (http://www.parkwhiz.com) is fully bootstrapped and paying full-time salaries to both founders. It took us 3 years of being ramen-profitable to get to that point, though.
I get about 10k and 15k uniques per day. I charge direct advertisers between $0.75 and $2 CPM. I fully realize this is a pretty low number (considering how targeted the audience is) but I've spent some time contacting businesses and the only companies that can afford to pay me can only afford $1 CPM rates.
I basically get around a million page views per month, which is the figure I use when I sell ad space.
How are you selling your ads? Do you have your own ad server? You should really check out isocket if you're interested cutting out all the logistical crap. Granted I'm biased as the sales guy, but seriously, you should check it out/email me (jason@isocket.com)
Chalked the SHIT out of college campuses, basically IRL spammed as much as I could. Paid for some reddit advertising as well as StumbleUpon. That's pretty much it.
I got lucky with a good name and a ton of early exposure from college humor.
scribophile.com is paying my salary right now. Not as much as working as a developer at a big company, but enough to live, and I'm much happier :)
Completely bootstrapped. The only cash I put down was $100 for some small graphic design work, $500 for an initial Adwords campaign, and $20 for a server.
Left full time employment two years, was profitable within three months, now employ three full time staff and profits into seven figures. The best move I ever made.
I have been thinking about telling it for while, I have considered starting a blog to help other start-ups especially people who are a little older and get caught in the full employment trap with the needto pay the mortgage. Also considereddoing a mixergy interview. But always go back to 'head down, work your arse off', there is always work to be done. One day, one day soon. I need to pay back to the community.
I am with my startup Codesketch (http://www.codesketch.com). We've been designing and coding apps (mostly iPhone, but some web apps too) for various companies. We are also working on some apps that we will sell directly to consumers on the App Store.
- 2 partners (one of them is me)
- 3 board member who contribute several hours a week gratis
I took some funding at the beginning, but we are now completely self-sustainable. We did this by being hungry. Our burn rate is incredibly low. Our downtown office we rent we got for next to nothing (thank God for karma). The only thing we splurged on is we bought the best tools for our employees. Getting married in 230 days also helps you to keep your foot on the gas.
Between high school and college I took a year off. I decided to spend 6 months in South Africa to help people help themselves out of poverty.
I did this by writing a curriculum that covered basic computer office skills. We got about 15 laptops donated from the states and began our mobile lab. Our first 2 class rounds were people that we hand picked to be teachers in later classes.
The next round of classes launched with the teachers that we just trained running the show (we still attended all of these sessions just to help out). The classes were self sustainable (teachers got paid a small amount from students, and the students were then committed to the program).
Jason (the guy who hooked me up with the downtown office) was a part of my team.
http://ridewithgps.com/ is paying my "full-time" salary, which is barely ramen level. But, it's doing that right now in the off-season, off donations and a small licensing deal. Releasing premium features within the month, and negotiating a larger licensing deal right now. Then, I'll be up to spaghetti profitable :)
I am, but I'm taking my bare-minimum salary at this point (thank god for my lovely wife). We're actually doing quite well money-wise, but I just keep reinvesting everything we make.
If you're self funded and not even launched yet you're not actually living off the business. I'm not having a go at you or anything, just saying thats what the question was.
You are obviously right. As per mkramlich definition the startup is currently living off us (given only founders have invested in the corp) and we will live off non founder investors before being in the black.
I initially hesitated to reply but as the original post did not differentiate between type of investor I assumed it would be acceptable. I stand corrected.
Please have a look at what we do at http://grabcad.com/ - may be there are some ways for future cooperation. We're based in Estonia, saw you guys are Finnish :) You can ping me at jk@kaljundi.com.
OOOOHHH -- If tinker cad is like the Lego+Sketchup of CAD, then I am excited. Sounds great (based on what I can surmise from the pic and the name) -- hopefully it is easy enough to use that my 6 year old can use it too!
When I started out in 1999 my business partner and I took $1,200 and turned it into $1M (revenue) in 12 months...100% online sales. We started out buying 3 beat up laptops, fixing them and selling them. Within 6 months we were buying containers (semi-truck loads) of off-lease laptops and shipping up to 150 a day. 60-70% profit margins. We grew for a couple of years and then we ran into our first wall.
By 2003, our product commoditized and margins started shrinking fast. All of a sudden the used laptop business turned into the used VCR business. New laptops were cheap and our margins went from 60-70% to 5-10%. Our world was changing and we needed to pivot fast. We had to lay off our entire staff, sell our office building (yea, we bought our own office building) and start over...but not from scratch.
During the good times, we would always throw new ideas around. If we agreed that an idea was solid, we would build it out and let it sit on the back burner. When the time came, we were able to jump into a new project that was already setup and ready to go. We just needed to start executing.
Fast forward to today. Our website (services, subscriptions, advertising) currently does about $400k annually (up from $250k last year) with a substantial profit margin, zero debt and miles of growth in front of it. It has been WAY harder this time around, but we are building something much more substantial.
While my business partner and I whole-heartily believe we are about to enter a hockey stick phase of growth, we do have a couple of ideas built out and simmering on the back burner...just in case.
tl;dr I have been bootstrapping and making my living online since 1999.
That's not necessarily the case. There are many niches that aren't obviously profitable. From the outside, it seems like they'd be a waste of time until someone discovers a way to make money with them.
also, certain niches may have limited time windows where it's relatively easier to make profits and/or there are no competitors active in it or only a few. after this window, profits are driven down to commodity levels and/or a large number of strong competitors enter the same space and bite off some percentage or all of the market that was previously yours
It'd be fun if, every once in a while, a post was just dropped on HN pointing out a time-limited niche as it begins. The result would be somewhere between a flash-mob and a gold-rush: hundreds of competitors popping into existence in the same space over the course of a weekend.
Part of the reason many niche markets exist is due to a need for domain knowledge, be it about the product itself, or the particular community you are servicing. I would argue that most niche players have either or both of these attributes, which allows them to hold their ground against would-be competitors.
If domain knowledge is the main barrier to entry, the competitive advantage is not the fact that it's a niche, but the fact that you know something that your competitors don't about that niche.
I created/run a couple web apps (http://w3counter.comhttp://w3roi.com and a few more). Everything is profitable and I've lived off it for the past 6 years. All bootstrapped, no outside funding.
S3stat (http://www.s3stat.com) brings in enough to live on, and funded me while I was traveling last year and bootstrapping the next thing. It also has the advantage of pretty much running itself on autopilot, so I can sometimes go entire months without opening the IDE or doing anything beyond responding to the odd customer email.
I'd highly recommend building something like that (a low-maintenance income generating business) as opposed to the sort of zero income "shorten urls then tweet them from your location on your camera phone" thing that requires 14 billion users and a Google buyout before you see your first dime.
It's a strange niche to be in because it's something people are looking for but there was basically nobody doing it when I started out. It goes squarely against the two most fundamental pieces of business advice you can get: "Never build a business based on a missing feature of a popular software product", and "If there's no competition in the space, be warned: there's probably no market there".
Evidently, there are actually a few good left ideas out there that nobody ever thought of doing before.
It's something I've heard many times, and something that I agree with.
You want to build a business, not a feature. Unless you can come up with more features, it's difficult to grow the business.
Then of course there is the risk that your feature will come standard in the next version of "popular software product." If your audience is niche, then you are likely safe, but if your feature appeals to all users of the product, it's inevitable that it will eventually be included in a future version of the product. You end up doing the R&D for free.
As somebody else deduced, the public site is ASP.NET.
The heavy lifting is done in C# as well, on a pile of EC2 machines that gets spun up each night. Back before EC2 Windows instances came out, it was running under Mono, with the help of a bunch of Ruby scripts to handle everything that Mono let me down on (such as ALL the downloading, uploading, talking to webservices, etc. that require pieces of .NET that is hard to implement and non-sexy and thus didn't get implemented by the Mono team).
Now it's all C#, leveraging a half dozen Amazon Web Services and running on EC2 Windows instances.
I so very much agree with you. And once you make a small self sustaining site, you can then think of stuff that need not necessarily bring in money instantly but can be exciting to work on.
Making more than I did as a full-time system engineer. http://www.glasscodeinc.com based off IT services alone. Soon to invest the profits into some software for managing enterprise infrastructure and hopefully grow from there.
I think there are differences between an "aspiring startup" i.e. self-employment, small business, cooperative etc. and a startup. To me you are running a startup when you are ready to take funding that will mainly be used for growth. People can of course call their businesses whatever they want, but using a term like "seed stage startup" would be helpful for clarity.
Why does being a startup have anything to do with taking external funding at any particular stage? I would say being a startup is more defined by whether you are at an early development and market research stage or whether you have an established, significantly profit-making product/service. How that early development and market research happens to be funded seems irrelevant.
I don't agree. Readiness for funding should not be a litmus test for whether a business is a "startup." There are plenty of startups that never need funding.
I think that if you want to differentiate between startups and self-employment, a good litmus test would be to ask yourself whether someone would potentially buy your business. If the answer is yes, then it means that there's something more than the income stream from an individual's labor.
189 comments
[ 3.0 ms ] story [ 143 ms ] threadAfter 5 months developing a fairly complex iOS app for a local cable company (think i.TV + Netflix like vod recommendations) it sure feels that we have created some value as we can go out and create spinoffs or repackage the same solution to other (non local) cable providers.
Now when do we find out what Acorns are for? ;)
Name: Eric Lavigne
Email: lavigne.eric@gmail.com
Twitter: ericlavigne
Something I made: https://github.com/ericlavigne/island-wari
Acorns are currency.
Currently working on Djangy.com, hopefully that will "supplement" thathigh :-)
I basically get around a million page views per month, which is the figure I use when I sell ad space.
If so, I talked to you :-)
(I currently use Google DFP)
I got lucky with a good name and a ton of early exposure from college humor.
Completely bootstrapped. The only cash I put down was $100 for some small graphic design work, $500 for an initial Adwords campaign, and $20 for a server.
Did the adwords campaing success?
- Only 1 fulltime employee (um...me) + 3 remote freelancers.
- Works from home.
- Based in Penang island (somewhere between Bangkok and Singapore with its living cost much lower than both of them).
is that an intentional mistake for SEO purposes?
- 2 partners (one of them is me)
- 3 board member who contribute several hours a week gratis
I took some funding at the beginning, but we are now completely self-sustainable. We did this by being hungry. Our burn rate is incredibly low. Our downtown office we rent we got for next to nothing (thank God for karma). The only thing we splurged on is we bought the best tools for our employees. Getting married in 230 days also helps you to keep your foot on the gas.
It's been a lot of fun.
I'm curious to how you got a free office. Would you mind sharing?
I did this by writing a curriculum that covered basic computer office skills. We got about 15 laptops donated from the states and began our mobile lab. Our first 2 class rounds were people that we hand picked to be teachers in later classes.
The next round of classes launched with the teachers that we just trained running the show (we still attended all of these sessions just to help out). The classes were self sustainable (teachers got paid a small amount from students, and the students were then committed to the program).
Jason (the guy who hooked me up with the downtown office) was a part of my team.
Moral of the story: Be nice and help people.
I initially hesitated to reply but as the original post did not differentiate between type of investor I assumed it would be acceptable. I stand corrected.
I signed up for info...
(Did you work on the SketchUp team at Google?)
By 2003, our product commoditized and margins started shrinking fast. All of a sudden the used laptop business turned into the used VCR business. New laptops were cheap and our margins went from 60-70% to 5-10%. Our world was changing and we needed to pivot fast. We had to lay off our entire staff, sell our office building (yea, we bought our own office building) and start over...but not from scratch.
During the good times, we would always throw new ideas around. If we agreed that an idea was solid, we would build it out and let it sit on the back burner. When the time came, we were able to jump into a new project that was already setup and ready to go. We just needed to start executing.
Fast forward to today. Our website (services, subscriptions, advertising) currently does about $400k annually (up from $250k last year) with a substantial profit margin, zero debt and miles of growth in front of it. It has been WAY harder this time around, but we are building something much more substantial.
While my business partner and I whole-heartily believe we are about to enter a hockey stick phase of growth, we do have a couple of ideas built out and simmering on the back burner...just in case.
tl;dr I have been bootstrapping and making my living online since 1999.
If domain knowledge is the main barrier to entry, the competitive advantage is not the fact that it's a niche, but the fact that you know something that your competitors don't about that niche.
I'd highly recommend building something like that (a low-maintenance income generating business) as opposed to the sort of zero income "shorten urls then tweet them from your location on your camera phone" thing that requires 14 billion users and a Google buyout before you see your first dime.
http://www.s3stat.com/web-stats/cheap-bastard-plan.ashx
It's a strange niche to be in because it's something people are looking for but there was basically nobody doing it when I started out. It goes squarely against the two most fundamental pieces of business advice you can get: "Never build a business based on a missing feature of a popular software product", and "If there's no competition in the space, be warned: there's probably no market there".
Evidently, there are actually a few good left ideas out there that nobody ever thought of doing before.
First time I see this, is it really a fundamental piece of business advice?
You want to build a business, not a feature. Unless you can come up with more features, it's difficult to grow the business.
Then of course there is the risk that your feature will come standard in the next version of "popular software product." If your audience is niche, then you are likely safe, but if your feature appeals to all users of the product, it's inevitable that it will eventually be included in a future version of the product. You end up doing the R&D for free.
The heavy lifting is done in C# as well, on a pile of EC2 machines that gets spun up each night. Back before EC2 Windows instances came out, it was running under Mono, with the help of a bunch of Ruby scripts to handle everything that Mono let me down on (such as ALL the downloading, uploading, talking to webservices, etc. that require pieces of .NET that is hard to implement and non-sexy and thus didn't get implemented by the Mono team).
Now it's all C#, leveraging a half dozen Amazon Web Services and running on EC2 Windows instances.
Congrats. Your app looks beautiful.
It's been 5 years though, so I'm not sure one could easily qualify us as a startup any longer.
I think that if you want to differentiate between startups and self-employment, a good litmus test would be to ask yourself whether someone would potentially buy your business. If the answer is yes, then it means that there's something more than the income stream from an individual's labor.