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I discuss this pretty deeply in my indie founder bootcamp but the main point is, if your revenue goals are something like $20k/month (and not to build a unicorn

I discuss this pretty deeply in my indie founder bootcamp but the main point is, if your revenue goals are something like $20k/month (and not to build a unicorn) then one of the lowest risk decisions is to try to get a very tiny percentage of a “proven” very large market. The reason is that getting a few hundred or a few thousand customers in a proven market with millions of customers is a very achievable goal over a few years. No need to compete on price, just compete on great customer service and support. Be someone that your customers know and like and love dealing with. And of course you do need to make a great product and find a marketing channel(s) to reach that small segment of customers.

Akcium 6y ago
Interestingly I changed my pricing quite a lot, because many people were complaining that competitors are cheaper and it's kind of hard to hide this fact. But still I got some ideas which I'm going to implement, and hopefully increase my value. For me, $20k/month is surreal. But for someone it's nothing.
- jv22222 6y ago
  That probably means that you need to rethink the top of the funnel. If your main marketing efforts have been to scrappy student startups etc then price will be a big deal for them, but if you can shift to marketing to small business that do have an income and present Yourself as very easy to deal with and talk to then you might be able to shift the dynamic. Again, in the bootcamp, but there are many different types of buyers and you just have to work out how to reach the ones that align with your goals.
xwdv 6y ago
$20k/month is really a paltry amount of revenue for a business. If your expenses are like $5k a month and your getting maybe $180k a year in profit before taxes this is really more like a job than a business. A business making revenue of $20k a month must be a very small idea, for example a service that pings some servers and alerts customers of downtime or maybe some kind of file storage. Conceivably that means you can quickly pump out a lot of similar sized ideas and perhaps get multiple revenue streams going, each averaging $20k a month or so. Now you can afford to hire talent.
- HeyLaughingBoy 6y ago
  I think you might be amazed at how many businesses are quite successful at levels well below that. Perhaps for a technology business it's a small amount, but it can sustain one family quite comfortably in most parts of the US. That quibble aside, I agree that if you can multiply that kind of success 3 or 5x and automate the living hell out of everything, you could be doing pretty well.
  - xwdv 6y ago
    Since it's a tech forum I always assume we're talking tech money.
- amelius 6y ago
  > A business making revenue of $20k a month must be a very small idea, for example a service that pings some servers and alerts customers of downtime or maybe some kind of file storage. I don't think this paints a correct picture. For example, there are many developers out there who'd love to work on FOSS 24/7 while having some income from a simple side-project like you mention. But many of these developers still struggle, which says that it just isn't that simple.
  - xwdv 6y ago
    You cannot be working on FOSS 24/7 and also be working on a side project to make money. If it were that easy, many people would do the simple side project and then skip the FOSS part altogether and go do something fun. FOSS is what you can do when you're no longer tied up in the mundane day to day tasks of running a business; when you have employees who keep the business processes you put in place running while you simply make high level decisions and provide capital. And of course these small kind of businesses rarely last forever. Instead of thinking long term, think of this small business as a temporary opportunity to extra value from a market while it is still there. Eventually the opportunity is exhausted the way a mineral field gets harvested and you must find a new opportunity to mine. There's not much time to do both things well. My advice to developers who want to build FOSS for a living is to make money from the software itself by providing implementation and consulting services around it. This way your interests align well with the things that pay your bills, and you can excel at both simultaneously.
onion2k 6y ago
Trying to take 0.01% of a market from existing businesses who'll fight hard to retain their customers is immeasurably harder than trying to grow the market by 0.01% by looking for businesses who aren't yet buying a product in that market. Unless you're launching something in a completely saturated marketed it's always better (cheaper, faster, easier) to find new customers than trying to take existing one from other business. Bonus: Growing the market by 0.01% gets you more customers than taking 0.01% of the existing market.
- chrismorgan 6y ago
  > Bonus: Growing the market by 0.01% gets you more customers than taking 0.01% of the existing market. I see what you were getting at, but you erred in this case: the two are identical. If the market is a million people, growing the market by 0.01% causes you to have 100 of the 1,000,100 people in the market, while claiming 0.01% of the existing market causes you to have 100 of the 1,000,000 people in the market. So the absolute figure is the same, and the fraction you have is smaller.
  - onion2k 6y ago
    This is why I shouldn't try to do math at 4am. You're absolutely right.
- jv22222 6y ago
  The main reason why it isn't immeasurably harder for an indie founder is they can target market segments that are just not interesting to market leaders who already have a tight/clear idea of who their target customer is. Additionally, as an indie founder you essentially have an invisibility cloak because you won't even be on the radar of the market leaders. These two reasons are why someone like Less Annoying CRM can build a $1m/year business and Intuit couldn't even give a tiny care about it. You can even study the market leaders and tackle things they are not interested in fixing - but that some customers have asked for on forums and such. Of course, the indie founder invisibility cloak effect diminishes the smaller the market is, or the larger market share you take. It's pretty hard to go un-noticed when you enter a market that just has 1,000 customers. Likewise, it's pretty hard to go un-noticed when you start getting 1%+ of a larger market. But that's ok, because if you do get that big, you most likely know what you're doing.

Akcium 6y ago

Interestingly I changed my pricing quite a lot, because many people were complaining that competitors are cheaper and it's kind of hard to hide this fact. But still I got some ideas which I'm going to implement, and hopefully increase my value. For me, $20k/month is surreal. But for someone it's nothing.

jv22222 6y ago
That probably means that you need to rethink the top of the funnel. If your main marketing efforts have been to scrappy student startups etc then price will be a big deal for them, but if you can shift to marketing to small business that do have an income and present Yourself as very easy to deal with and talk to then you might be able to shift the dynamic. Again, in the bootcamp, but there are many different types of buyers and you just have to work out how to reach the ones that align with your goals.

xwdv 6y ago

$20k/month is really a paltry amount of revenue for a business. If your expenses are like $5k a month and your getting maybe $180k a year in profit before taxes this is really more like a job than a business. A business making revenue of $20k a month must be a very small idea, for example a service that pings some servers and alerts customers of downtime or maybe some kind of file storage. Conceivably that means you can quickly pump out a lot of similar sized ideas and perhaps get multiple revenue streams going, each averaging $20k a month or so. Now you can afford to hire talent.

HeyLaughingBoy 6y ago
I think you might be amazed at how many businesses are quite successful at levels well below that. Perhaps for a technology business it's a small amount, but it can sustain one family quite comfortably in most parts of the US. That quibble aside, I agree that if you can multiply that kind of success 3 or 5x and automate the living hell out of everything, you could be doing pretty well.
- xwdv 6y ago
  Since it's a tech forum I always assume we're talking tech money.
amelius 6y ago
> A business making revenue of $20k a month must be a very small idea, for example a service that pings some servers and alerts customers of downtime or maybe some kind of file storage. I don't think this paints a correct picture. For example, there are many developers out there who'd love to work on FOSS 24/7 while having some income from a simple side-project like you mention. But many of these developers still struggle, which says that it just isn't that simple.
- xwdv 6y ago
  You cannot be working on FOSS 24/7 and also be working on a side project to make money. If it were that easy, many people would do the simple side project and then skip the FOSS part altogether and go do something fun. FOSS is what you can do when you're no longer tied up in the mundane day to day tasks of running a business; when you have employees who keep the business processes you put in place running while you simply make high level decisions and provide capital. And of course these small kind of businesses rarely last forever. Instead of thinking long term, think of this small business as a temporary opportunity to extra value from a market while it is still there. Eventually the opportunity is exhausted the way a mineral field gets harvested and you must find a new opportunity to mine. There's not much time to do both things well. My advice to developers who want to build FOSS for a living is to make money from the software itself by providing implementation and consulting services around it. This way your interests align well with the things that pay your bills, and you can excel at both simultaneously.

onion2k 6y ago

Trying to take 0.01% of a market from existing businesses who'll fight hard to retain their customers is immeasurably harder than trying to grow the market by 0.01% by looking for businesses who aren't yet buying a product in that market. Unless you're launching something in a completely saturated marketed it's always better (cheaper, faster, easier) to find new customers than trying to take existing one from other business. Bonus: Growing the market by 0.01% gets you more customers than taking 0.01% of the existing market.

chrismorgan 6y ago
> Bonus: Growing the market by 0.01% gets you more customers than taking 0.01% of the existing market. I see what you were getting at, but you erred in this case: the two are identical. If the market is a million people, growing the market by 0.01% causes you to have 100 of the 1,000,100 people in the market, while claiming 0.01% of the existing market causes you to have 100 of the 1,000,000 people in the market. So the absolute figure is the same, and the fraction you have is smaller.
- onion2k 6y ago
  This is why I shouldn't try to do math at 4am. You're absolutely right.
jv22222 6y ago
The main reason why it isn't immeasurably harder for an indie founder is they can target market segments that are just not interesting to market leaders who already have a tight/clear idea of who their target customer is. Additionally, as an indie founder you essentially have an invisibility cloak because you won't even be on the radar of the market leaders. These two reasons are why someone like Less Annoying CRM can build a $1m/year business and Intuit couldn't even give a tiny care about it. You can even study the market leaders and tackle things they are not interested in fixing - but that some customers have asked for on forums and such. Of course, the indie founder invisibility cloak effect diminishes the smaller the market is, or the larger market share you take. It's pretty hard to go un-noticed when you enter a market that just has 1,000 customers. Likewise, it's pretty hard to go un-noticed when you start getting 1%+ of a larger market. But that's ok, because if you do get that big, you most likely know what you're doing.