Ask HN: Do you trust solo entrepreneurs?
Hello HN!
[I'm a solo developer so this question is a bit personal to me]
Would knowing if the creator of a product is like me or fully fledged organisation affect your likelihood of using any software they create?
163 comments
[ 2.8 ms ] story [ 119 ms ] threadDo I trust solo entrepreneurs? Yes.
Would I use their software within my organization? No. Or at least, not for anything critical. Not because I do not trust the person, but because life is crazy and that product's bus factor is too high.
i found this to be a great way to sell my software
i’d offer prospects a partner agency, which will do the hosting, while i’m building the product
the customers get guarantees, while me and the agency share the profits
A single person is always a liability due to the "hit-by-a-bus" factor.
The optics solution: Don't look like a single person, hide behind an LLC (in some countries you can look up the financials though so having money in it from consulting,etc is prob a good idea so it doesn't look vulnerable)
A trust solution: You could mitigate it by having an open-sourcing pledge and/or other organizations that you list as support providers.
This could be done in cooperation with other solo-developers that isn't competitors, list each others companies as support providers and give cursory introductions to them so they could take over or help customers in case of emergencies. This could also give a side-benefit of having a clear option to scale if one of you grow successful so onboarding would be quick. (Also in terms of marketing it'd give the perception of a bigger product if there are support providers there already)
if you have friends with established companies, you could ask them if they could be your “service partner”
i’ve done this with my friends for ever now
also note, that just like individual developers companies don’t provide any guarantees unless there’s a SLA in place
So with that said, just don't actively advertise that you're solo, and fake it until you make it.
focus on the product first and foremost
the key of attracting big companies really lies in your sales talent
The reality is probably that most people don't think about if the product they're using is made by a solo dev or not. They only care if it solves their problem in an easy and nice way.
So, this is just optics. Land and expand, for example, is a way to force their arm. If you are already there then they can cry about it or buy the enterprise plan :)
Once you factor in "survival of the tribe" or ultra-massive corps, the benefits of solo development can be overridden.
Whereas the odds of a venture backed startup shutting down at any point over the next ten years is something like 30%.
So from a risk perspective, it's literally over 100x more risky to use a software product made by a venture backed company than one from a solo founder.
On all of my sales calls, I tell people that I'm bootstrapped and that I'm going to charge them extra so that I can reduce the risk to their business by staying bootstrapped, and I have yet to run into anyone who doesn't seem satisfied by that pricing strategy.
If this weren't solving a pain point and if there were other alternatives on the market, then this positioning might not work as well. But building something where folks don't really have any better choice was also a purposeful decision.
What I'm saying is that their chance of death is .2% but their chance of discovering Buddha, deciding to give up everything and become a monk, or meeting the woman of their dreams and going to live the simple life in Thailand, and so on, are much, much greater.
When he is asked to defend it, he clarifies that he's only talking about companies that solve a major pain point, have no other competitors, and a low cost of implementation. (Obviously the failure rate of VC-backed companies with amazing PMF and amazing operating margins is much lower than 30%!)
His comment is the highest voted in this thread (assuming HN sorts that way) -- this is a classic example of 'this person says something I want to believe and has some numbers so I'll upvote it without even a rudimentary interrogation!'
Death is not the only reason people quit working on a project. They could get a better offer, their family situation could change, they could get sick or injured, or they could simply get sick of it, just to name a few.
Also, keeping a SaaS online does cost money. And those costs increase as you scale. If you are small enough that you can run on a free tier, you are too small for me to have confidence that you are sticking around.
Regarding it costing money, yes, of course. But costs increases as users increase. If you're giving away your product for free, that's an issue. If you're charging, then I don't see the problem.
There's a lot of truth in this. Particularly since the free tiers on most cloud providers are explicitly designed to suck you in, then raise the rates tremendously as you scale.
A business that might be fine with 100 customers on the cloud could struggle mightily to cover the costs of dealing with 1000 customers on the same stack. The linear revenue growth doesn't match up to the insane cost increase as you go from "hobby project" to "small business" in the cloud.
Sure - you were hosting your DB just fine with 100 customers using standard SSD, but now at 1000 you're blowing your IOPS budget and need to upgrade to premium SSD. The premium SSD costs twice what the standard SSD does for the same space - your usage will not have doubled.
Or - god help you, you were hosting your db just fine with 100 customers using a small VM, and to avoid having to think about it, you've decided to move from a self-managed db on a VM to something like Cosmos DB. No growth in usage at all from you, but your costs are about to shoot way up.
Or - I've added a customer in a region that has poor connectivity to my current region of choice - oops, setting up edge services closer to them is going to hurt. Now I'm sending data between regions, incurring all sorts of costs between services that I wasn't with a single region setup.
----
My experience with the cloud (and I've been a heavy user of both Azure and AWS, not as much GCP) is this: There are bands of costs, within that band, costs will tend to grow linearly as you grow.
The problem, is that you will outgrow the band you're in. There is a hard limit on something that you weren't thinking about (IOPS, for example) and once you hit that you have to jump to a different band with a new cost structure.
Usually, that means increasing base spend by a large amount compared to usage, and then getting slightly better cost/use at the new higher base.
Everything dies. This simple minded confidence game we require each other play to validate usefulness is getting old.
You’re one of seven billion humans who will die, one of millions of programmers to pick from to prop up trade of Daddy Dollars.
You’re not sticking around either and cannot prove your contributions were truly more valuable than anyone else’s (models have been built to ascertain which human leadership traits and which technology make us more productive and all became too complex to understand).
Don’t blink though; keep pretending we’re onto something with folksy anecdotes, and nostalgia for past wins.
Sure, it depends on what you are doing, but I imagine that for most paid SAAS models, the cost of cloud computing is a small fraction of what they bring in revenue. In many cases, so small as to be effectively $0. As an example, stack overflow gets hundreds of millions of visits a month, but is run on two physical servers (plus an additional two for backup). As a more personal example, I have a small SAAS side project and my server costs run me about 0.5% of my revenue (the rest is all profit other than the value of my time). I could probably get that down to 0.1% with some code refactoring, but even with the current code, I could easily 10x my number of subscribers and not increase server costs by even $0.01.
To add to this, in my experience, the companies I've worked for have tons of extra capacity with their cloud services. For example, using t3.large vs t3.small instances at 4x the price indiscriminately. Why? Because server costs are just a rounding error compared to paying a bunch of $100k+ salaries.
AWS has a free tier, so I wouldn't apply that rule too much.
The real figure is more 2.1% (source: https://www.ssa.gov/oact/STATS/table4c6.html)
Maybe I'm immortal :)
It absolutely is in the context of a discussion of annualized mortality rates.
It’s misleading to annualize these stats because the participation rates per hour and per day are very very different. This is why sports risk is usually calculated in participation hours and not annualized, to prevent such misleading comparisons.
I feel like the indie hacking lifestyle doesn't really attract people who are at high risk for most other common causes of death at that age, in the same way that, say, raising venture capital seems to be an attractive option for people already at risk of suicide or drug overdose.
I'm in my 40s and officially more likely to have my heart kill me, than myself.
https://wisqars.cdc.gov/fatal-leading
30-39 is 2.1%
35-44 is 2.5%
40-49 is 3.3%
---------
30-49 is 5.3%
Ranges are inclusive of entire year. 30-39 is 30th bday to 40th bday
.001858 for year 31 = .998142
...
.002482 for year 39 = .997518
---------------------
.998205 x .998142 x ... x .997518 = .978997 survival rate over 10 years
1 - .978997 = .021003 chance of death = 2.1%
What does this statement mean? Are you implying to your potential customers that charging them extra translates into profits to entice you to continue the business or that the efficiencies allow for business continuity services like providing the source code in escrow?
That I'm not going to dump product on the market below cost to gain market share. Since even though doing that is obviously saves customers a little bit of money in the short term, in the long term the money raised to do that needs to be paid back ten fold, which ultimately comes out of their pockets.
It's just much easier for a business to keep its interests aligned with its customers if there isn't some third party who is trying to extract money from both.
Citation needed. I worked in startups my entire life. I thought it was closer to 90+%.
I would guess there are many cases of solo founders shutting down their business other than founder death...
Sure, but it really only makes sense to consider cases where:
A) The business has paying customers
B) It's very important to the customers that this product remain available
C) The founder is unwilling to give or license the source code to those customers
In practice, all three of these factors being present is uncommon. Usually if the product is actually important to a customer, they just pay to acquire the assets. And there is usually no reason for a solo founder not to take that deal if the alternative is just shutting down the business.
For a venture backed business, maybe the lawyers decide there is too much legal risk or whatever. But for an indie hacker, that doesn't happen.
We hear stories all the time of folks getting burned when venture backed startups shut down without giving people any time to switch to another product, or sometimes even to expert their data. When is the last time you heard about this happening from the paying customers of a solo founder? Literally never.
Software created by solo devs is used by many times fewer people, therefore it’s zero surprise that the total number of displaced customers is lower. You need to calculate the percentages, not hold up anecdotes of not having any rumors.
I don’t see how (C) can reasonably factor into any statistics. I’d love to hear how often you think this matters, but I’m extremely skeptical that shutting down a solo business and giving source to customers has happened enough times to even talk about relative to the number of times that hasn’t happened. I’d like to hear about when giving source to paying customers is even helpful. Depends highly on what kind of software we’re talking about, and depends highly on what kind of customers, but assuming that paying customers can generally do anything with source code seems like a really, really big assumption.
Oddly, most of the time its other small businesses that are worried.
Where is this number from? Googling, I see numbers like 75% of venture backed startups failing [1] and 90% of all startups failing, most of that within the first year. The suggestion that 70% of venture startups live for at least a decade smells unlikely.
[1] https://www.wsj.com/articles/SB10000872396390443720204578004...
> from a risk perspective, it's literally over 100x more risky to use a software product made by a venture backed company than one from a solo founder.
Yeah, no this is not even close to true (because, as many others have pointed out, death is not the primary risk to a solo founder, funding & motivation are). Unfunded startups fail at a higher rate than venture backed, from what I can find. YC funds solo founders, but advises trying to find a co-founder because the risks are higher. https://www.ycombinator.com/library/7P-does-yc-fund-solo-fou...
If you include acquihired teams / sunsetted products, that number is even higher.
Both types of products also have a chance of being bought for cheap when they are failing, and at least kept alive on life support.
It costs time (customer support, security updates, deprecations, third party api changes, etc, etc.) and time is a limited quantity for a person. Eventually other things are a better use of their time from either an economic point of view (other ventures, etc.) or a personal point of view (family, etc.).
It's clearly not, due to what the sibling commenters have been staying (people discontinuing products for reasons other than dying, etc.) I get the gist of your point but this 100x number is not just hyperbole -- it's silly.
Whilst I have not kept a list myself, I've seen SaaS products drastically change after acquisitions. Some SaaS products under new ownership stop serving small customers all together and focus on large enterprises. This is as a much risk as shut downs.
In terms of Bootstrapped SaaS, what I have noticed since 2004 is that bootstrapped does not mean the companies are operated by a single person.
As a bootstrapped SaaS founder, you can start building a team with revenues by hiring team mates. By doing this, you reduce the risk rate for your customers.
Until you have revenues to hire talent, you can also bring on free talent from companies like https://skilledup.life. This is my latest tech startup.
I have also been building subscription based tech products since 2004 with many failures and two Exits. I bootstrapped them all and continue to do so. The biggest issue I have during all these years is lack of capital to build teams.
I'm solving my own problem through SkilledUp Life. My team now includes 2 salaried staff and about 20+ Volunteers.
We are one solution. But there are many ways to de-risk a bootstrapped SaaS business.
All the best Manoj
I think that if there’s some traction on the market fit, a solo developer can build out enough of a value proposition to attract colleagues and investors to the point that institutional credibility kicks in.
Would I bet my Fortune 500 company on a product that goes down if someone gets COVID? No.
Would I be both personally interested and floating it past reputable angels if one person could live-demo something new?
Bet your ass.
It depends on the type of software.
"Yes" for utility software of narrow scope. I use scanner utility software called VueScan which was a solo developer (Ed Hamrick) until his son joined.[1] I also used RegexBuddy which I think is a solo dev.[2]
But "No" for critical workflow software that requires proprietary opaque data formats such as a clone for Evernote or similar note-taking tool.
Basically, it's a risk analysis of how much "investment" the user loses if the solo developer quits updating the software or goes bankrupt.
[1] https://www.hamrick.com/about-vuescan.html
[2] https://www.just-great-software.com/aboutjg.html
But most end users? They have zero idea, and would never think of such things.
They'd just use an app store, or google for something, and click->install.
If it's a self-contained desktop software, it's one thing.
If it's a 24/7 online service, it's another.
If the online component is optional or not critical, it's the third case.
Now here’s my thing about software. That baker, when you provide your PII and financial data to them they’re using third party service. They’re not _in_ the data, unless they want to be.
Again, this is my opinion. I feel that when you’re _in_ the data—making decisions about data flow, management, PII— there is a moral and ethical danger a solo-developer can make bad decisions about a customer’s data.
That might be shocking idea, but just think about a savings and loan run by one person. You could get George Bailey, or Knuckles the Loan Shark.
I try to extract the level of passion the dev has in his product, because i do trust passionate creators.
While I have no plans of stopping working on them in the near term, I have listed that in the event of my death, an entrusted tech savvy person will take over these two companies.
That said, all my users have no guarantee that I'll continue to work on these products, but that's true of just about any company. I think as a solo developer I have to earn the trust of users by building in public and being a partial public figure.
Just a word of rec. On mobile (Android/FF) the post titles are vertically stacked, which is tough to read for people. If you keep the text horizontally aligned and rotate 90 degrees (or dont and make horizontal) it'd make it easier to read.
Edit: Just checked out Closing Credits too. Super cool work
Some of the site is just ancient and I'm doing a big rebuild right now. I've added a note to fix that. Cheers!
Google Reader the first that comes to mind.
As with borrowing any money or taking any investment. Do some research about the investor and if in doubt try to reach out to an independent expert for an opinion on an offer in principle. If they're offended you do this you probably don't want to risk working with them.
(Startups are roughly in the same bucket. As is Google X where X is less than 5 yo)
If you are a pingdom clone then sure! I will easily be able to move to another pingdom clone.
If you send my emails, I can move too bit with a bit more pain and maybe some spam reputation issues.
If you organise all my teams work that is more of a headache to move off of.
If you provide a very specific breeof cloud platform, like a Firebase clone, and I am coded up to the eyeballs with a tight coupling to your api, I would be way more wary. If you go down so do I for quite some time.
But if your cloud is just a faster PostgreSQL then maybe that is not so bad.
Same thing with clients if you're a contractor — don't rely on that client to pay 60%+ of your income — you'll be in for a world of hurt if something happens with that relationship.
Cease to exist = any event that deletes you from the equation from bankrupcy to the worst case scenario - death.
If you're the bus factor of 1, then I would never use your software (speaking from organisation POV).
If there's a contingency in place, and your software solves the problem I have (speaking from organisation POV), then yes.
Don't tell your prospects that all companies big and small can fail and don't use data to prove your point. It might all be true, but telling your prospects they are doomed whatever they decide is not getting you to a 'Yes'.
In my case I have niche products that are still largely unique and don't have to compete with bigger organizations. A competition I would lose in a heartbeat if customers had the choice regardless of price or chances of success. I still make sure that I have a decent solution for the 'bus' argument and I am generous with supplying access to the code they need to keep their application running when I do get hit by bus, financials ruin or old age. At best I can say: It worked up till now.
2) If what your offering is something that involves sensitive data, financial stuff or something I need to sell on to another company I'd probably be more inclined to go for a more corporate setup so if things go bad it's not going to reflect so badly on me.
3) I try to avoid getting locked in to anything so regardless of whether your solo or a corp I'd want to be confident that I'm able to continue if you/the corp drops dead.
4) As someone who has generally been a solo developer (although freelance rather than managing to get my own 'product' out there) I've seen first hand the +/- of this. On one hand my clients appreciate that they can pick up the phone or send an email and speak to me who has inside out knowledge of what they're talking about, I'll work my arse off because I've got a lot to lose. However that might be impacted by me having a bad day, a holiday, being sick, a new shiny project or just a general lack of motivation.