18 ms·

Mistakes to avoid to build a better 1-person business

550 points by Jthink 3y ago

solofounder99 3y ago
Most of what you do as a developer loses money. 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.
treelovinhippie 3y ago
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ngshiheng 3y ago
looking at this I can't help to think that I am going in a very wrong direction. very wrong. i check *every* mistake there is here
scientaster2 3y ago
Thoughts on this? > 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.
- rco8786 3y ago
  I think both you and the author are kind of dancing around this point: 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.
  - detourdog 3y ago
    I see what you mean. I call that a small market because it is tightly defined niche.
- m3kw9 3y ago
  I think he’s saying large markets can cause you to scope creep as you want to reel in more and will need scaling which is usually difficult with one person business
- detourdog 3y ago
  I focus on very small markets with specific needs not met by industry norms. The problem I see today is that the big box stores are replacing what had previously been regional retail buyers. 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. https://cba.mit.edu https://cba.mit.edu
  - all2 3y ago
    Let's say I buy a condo with one of your made-to-fit appliances. Will you be available to refinishing it? 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.
    - detourdog 3y ago
      I haven’t worked out all the details that is why I headquartered myself in an 8 unit mixed use studio apartment. My initial plan was to work out each appliances details in batches of 10. If something were to sell out I could make more. Once I got my CNC I realized I had outgrown my barn…. found an old model school. Spent all my development money to flip the plan. I would create 7 Studio apartments to cover my expenses and act as my market testing. 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.
- rfreytag 3y ago
  If you target a niche in a large market then you are targeting a small market. Create serial MVPs targeting those niches until you find product-market fit.
detourdog 3y ago
I agree with everything but 3. Target business's not consumers. I find one rich person trying to solve a personal problem is much better to deal with than a business. This fits the think small better to my mind. 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.
scosman 3y ago
"If you were a goldfish, would you rather live in an ocean, or a garden pond? Probably the pond." 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".
- Veuxdo 3y ago
  "If you were a goldfish, would you rather live in an ocean, or a garden pond? Probably the pond." Definitely the pond, they're freshwater fish.
  - autonomousErwin 3y ago
    Aha but the salty water will make them anti-fragile. Embrace discomfort. Especially if you're a fish.
- matwood 3y ago
  Most goldfish in a large body of water get eaten.
m3kw9 3y ago
Small teams can allow you to really focus on a tiny area where larger companies just won’t bother to focus on. I think this is very sound advice from experience
nomilk 3y ago
The examples of niche businesses at the end remind of a another niche example from Tim Ferriss's 4 Hour Work Week (paraphrased): > 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.
- fud101 3y ago
  if you're quoting Ferriss non-ironically, you have a lot of research to do on someone who is a very successful charlatan.
- jvanderbot 3y ago
  Yeah, I feel like these are the key examples missing from the post. It's clear when you read that story that they're onto something, and it requires a niche and a little gusto.
- PragmaticPulp 3y ago
  Tim Ferriss is very good at downplaying the effort and costs that go into businesses. Good for inspiring people to try, bad for actually being transparent. In this example, the (claimed) $200 production cost and $2.10 DVD cost are probably nothing relative to this large marketing cost: > piece through trade magazines The marketing costs and effort are conveniently omitted.
  - j45 3y ago
    Producing video also can be a cost.
    - Inhibit 3y ago
      Yes. As per the original post above 200$. Advertising is what is omitted in the thumbnail estimate.
  - tonyarkles 3y ago
paxys 3y ago
So: - 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.
- jvanderbot 3y ago
  I think of this more as a consultant-type arrangement. 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.
  - flakeoil 3y ago
    > you can at-will change your asking price 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.
    - jvanderbot 3y ago
      I guess it would be better to say you can flex your annual hours and pay by adjusting your contract load. A family member has lived this way for 30 years, and has pretty great flexibility on the scale of a month, but not necessarily day to day.
      - hinkley 3y ago
        I suppose that’s one of the advantages of being an intermittent contractor. The customer doesn’t know why you’re unavailable next Monday and Tuesday. It could be another customer, or it could be a trip to Yosemite.
tlogan 3y ago
I think number 3 and 4 are bad advices. 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.
- HPsquared 3y ago
  Automate, and/or outsource.
- eschneider 3y ago
  Scaling the service isn't the problem so much as scaling the customer acquisition.
dlisboa 3y ago
What about tackling a large-ish market but competing on price? As a small bootstrapped business, depending on the cost of the product, you just don't have too many costs. 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.
- carlosjobim 3y ago
  Competing on price gives you the worst type of customers. If you can deal with that then you're good. It's like some weird glitch in the human psyche - instead of appreciating that they can get their product or service for a better price, they fell like they're being cheated and will start causing problems. I have no idea why it is like this. Maybe they're pissed off for having to buy the thing and that's why they were looking for the cheapest offer to begin with?
- lapcat 3y ago
  > As a small bootstrapped business, depending on the cost of the product, you just don't have too many costs. 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.
  - dinvlad 3y ago
    While difficult initially, a small business doesn’t need as much volume though - you might “only” have a few customers, but that’s gonna be enough to feed you and maybe your family. 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.
nicbou 3y ago
I expected something more interesting, to be honest. 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.
- jimbokun 3y ago
  Sounds like you should write a follow up article!
  - nicbou 3y ago
    Another one: don't follow every sensible idea while ignoring every other sensible idea in your backlog. Sometimes you just gotta do less...
  - simultsop 3y ago
    peer pressure at its finest
- AndrewKemendo 3y ago
  Or as I found out: 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
  - nicbou 3y ago
    I'd even abstract it to "don't start something that ties your income to hours worked". If you're working alone, you will need time off, and no one can cover for you. It's easier to take time off if your project can survive a few weeks with minimal work. If something comes up in your personal life, you can set the business aside and sort it out. 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.
mtlynch 3y ago
I think the better version of these ideas is in Jason Cohen's classic "Designing the Ideal Bootstrapped Business" talk.[0, 1] 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 https://www.youtube.com/watch?v=otbnC2zE2rw [1] https://mtlynch.io/notes/designing-the-ideal-bootstrapped-business/ https://mtlynch.io/notes/designing-the-ideal-bootstrapped-bu...
- NetOpWibby 3y ago
  Thanks for sharing, this talk is transformative.
  - Share6323 3y ago
    Absolutely, he really knows the game
- jekude 3y ago
  Can't +1 enough Jason Cohen's talk, it changed the way I think about business ventures as an engineer with aspirations to become an entrepreneur.
mercurialsolo 3y ago
I would love to see an example of a scaled 1-person business. The idea is super-compelling in theory, but just the thought of everything involved. - Sales / Marketing - Product / Technology / Engineering - Support / Services (customization changes) 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.
- ronyfadel 3y ago
  Can I plug myself? :) I run an indie app business where overall I make more than what I used to make working a FAANG job [1] [1] https://fadel.io/ https://fadel.io/
- Cthulhu_ 3y ago
  https://apolloapp.io/ https://apolloapp.io/ is a great and relevant one; it's a full fledged app with monetization, back-end services, etc etc. Relevant because it'll likely shut down by the end of the month due to Reddit's mismanagement.
- theluketaylor 3y ago
  The iOS and Android app stores likely hold the most examples of high scale one person businesses. Someone already mentioned Apollo. I'd add https://overcast.fm https://overcast.fm and https://david-smith.org https://david-smith.org (maker of many apps, including the wildly successful widgetsmith). There are plenty of other really successful apps that are just one person operations.
  - balaji1 3y ago
    "Since 2008 I’ve launched 60 different apps." from https://david-smith.org/about/ https://david-smith.org/about/ amazing!
- HeyLaughingBoy 3y ago
  https://www.designjoy.co/getstarted https://www.designjoy.co/getstarted 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.
andyish 3y ago
Selling to businesses can be really hard. You can get stuck with ISO standards, data and server locations and SLAs. The lead time on sales can be many months, and there's a real chance it falls through. 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.
- toomuchtodo 3y ago
  Conversely, when you sell B2C, the value prop can be considerably more challenging ("I can build this myself!", "This is too expensive, can you provide a discount?", etc) vs B2B where the customer will happily pull a credit card out, spend $500, and thank you for the value provided.
- lobstrosity420 3y ago
  I don't think the article was saying to choose a market with few customers, of course you want costumers. Rather choose a market with few competitors.
- j45 3y ago
  These standards can largely be abstracted away by using a cloud that already does it for you. For example a good secret is using Azure. It seems more expensive until you notice it provides many security certifications.
- samtho 3y ago
  There are plenty of opportunities for a business that don’t require conforming to some standard. You also don’t hear about the multitude of businesses that had no problem selling to other businesses, only the times where it didn’t go as planned, i.e. who writes a blog post about a modestly successful business that does $1MM ARR with a 1-2 employee setup serving maybe 10-25 clients because they write a niche software integration that connects two different systems or some tiny internal tool that alleviates a pain point? 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.
nextworddev 3y ago
Don't do 1-person businesses, period (if you can avoid it). 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.
- ronyfadel 3y ago
  Let's say that I fell for the "Twitter hustle bros" spiel, and after a lot of trying, it eventually worked out. 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).
- JustBreath 3y ago
  I mean unless you are already wealthy what's the alternative? Basically you're saying "get a job."
  - nextworddev 3y ago
    No, I'm saying "consider getting a partner / cofounder"
    - JustBreath 3y ago
      That's fair. "Co-found a 2 person business" is much better advice than "don't start a 1 person business."
  - cloverich 3y ago
    Start a business with at least one other person, so you have support.
    - danenania 3y ago
      While this definitely makes a lot of things easier, you now need 2x the revenue to get to profitability, which makes bootstrapping harder.
lapcat 3y ago
I find the article a bit strange. It seems to assume that an entrepreneur starts with the goal of having a 1-person business but has no other ideas whatsoever. That's not ideal. 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.
euix 3y ago
In my experience running your own business is all about relationships. The fact is someone with capital to spend can deploy it to anyone, so why should they deploy it to you? Are you their cousin? Did you go to the same school? Met at a mixer? Before there is even a discussion about what you know and what you can do, or what your product is there is the question of who you are. 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.
- carlosjobim 3y ago
  That sounds like a narrow idea of what kind of businesses a person can start. If you target the general public with your offers, there is no nepotism or relationships involved. That's the beauty of an open society. All businesses started as small businesses, we tend to forget that.
- CharlieDigital 3y ago
  I worked in a bootstrapped startup for 10 years. 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.
zeitseeing 3y ago
Great post! Like some of the other comments none of the points were really new to me, but it's good to read them again every now and again. I think focusing on B2B is always great advice for solo hackers. 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.
IAmGraydon 3y ago
How to make a living, but not a fortune.
hamdouni 3y ago
TLDR; avoid big consumer market, target small b2b market
samtho 3y ago
The advice in this article is fairly solid and has been said and done quite a lot. Like many general-business advice articles posted here, it does seem to lack substance or really any actionable advice, so here is some based on my own experience: 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.
- cosmodisk 3y ago
  This is good advise. A lot of devs, or techies in general, often live in a bubble,so end up thinking that if their standard dev shop has all the integrations, automations,and whatnot,so it should be the same everywhere else too. It blows my mind when see businesses operate in a way as it was 1900. I still remember how I told a business owner with 50 people or so how they could use shared mailbox in the operations, so it's easier to pickup the inbound emails as multiple people work on it.. It was as I just showed the path to enlightenment. However, it's difficult to see these problems when you are an outsider,so my advice is to go out and speak with many people who work in different sectors and face very different problems than an average HN reader.
- mvkel 3y ago
  "Cost savings" is the first benefit any B2B SaaS trots out in any sales pitch. It's not as compelling as you say. The rest of your advice I find rock solid!
digitcatphd 3y ago
AI is changing all this IMO... I have a 12 person team in India that is now as effective as a 24 person team in Silicon valley was. The playing field is being leveled in many ways.
- babyshake 3y ago
  How did you go about getting this team in India? My experience is it is exceptionally easy to get a medicore offshore team, but a lot more difficult to find a very high quality team among all the average or poor quality ones.
  - digitcatphd 3y ago
    I went through dozens and when I found one I could trust I treated them like kings. The reality is most people treat offshore workers like trash, so I don't blame them for screwing over non technical people who don't understand what they are doing. 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.
- marginalia_nu 3y ago
  To be fair, teams scale extremely poorly. I'd almost always expect a smaller team to be on par with or even outperform a larger team, even double in size. You get both steep diminishing returns from adding more devs, you also get additional overhead from needing more management.
- mejutoco 3y ago
  Unless I am missing something, it would seem AI is available in both locations. I do not see how anything changed.
JustBreath 3y ago
One issue with targeting a small market and trying to grow it is if your business relies on your truly innovative/unique/original idea IMMEDIATELY it will get copied either by the big guys or by other small fish who are more than willing to race you to the bottom on profits. 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.
ilaksh 3y ago
> Think smaller markets with bigger budgets 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.
XCSme 3y ago
For me, the solution was simple: automate as much as possible and move most of the costs to the customer side (e.g. focus entirely on the self-hosted product instead of providing hosting myself and having to run and maintain servers for thousands of customers).
1970-01-01 3y ago
It is implied that this advice is specific to software. Half of this advice would not apply to a small business that produced things.
realjohng 3y ago
You can target consumers— with enough eyeballs, run ads. I had a successful little Android game that ran for a few years.
jmconfuzeus 3y ago
I'll add to that since this is Hacker News: 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.
- xyzzy4747 3y ago
  You can release a Next.js project that uses Tailwind.css really quickly though, and for free. It all depends on your skillset. It would personally take me longer to do something with Rails just because I don't know it as well.
dnndev 3y ago
Spot on great advice. The big picture is start small (niche, deep pockets) and then grow big (wide market, all price ranges). I see some comments assuming his advice is the end game for an entrepreneur, its just the start. 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.
Vixel 3y ago
I can totally relate to these tips. I used to do in-home computer service and I advertised on self made signs all around the city. Got a lot of calls but not a lot of conversions. The minute I put "Business Computer Service" on the signs, I got the same amount of calls and nearly every call was converted into an appointment. And now that they had a reliable computer person, they continued to call. I was able to raise my prices by 40%, hire a few employees, get some funding and eventually sell the business. I'll never forget how adding that one word was liked a magic trick.
gnicholas 3y ago
> On the flip-side, you could just have 1 single B2B client paying $10k per month for a service and make 10x the amount, with lower running costs and no churn. 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.
- Jemaclus 3y ago
  Generally speaking, B2B involves contracts which guarantee business for a certain period of time. Churn won't be zero, but it's not going to happen on a whim, like a B2C Netflix subscription would. You can lock in 10K/mo for 12 months and have that guaranteed income, while 1000 users at $10/mo might churn every month. 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.
- cultofmetatron 3y ago
  yea seriously.. 1 B2B client paying 10k/month is just a job with extra steps and all liabilities on you.
idlewords 3y ago
I think this kind of advice is more useful when it comes from someone whose business model has nothing to do with startup lifecoaching. Otherwise it has a tendency to get a little self-serving and divorced from useful experience.
- tptacek 3y ago
  It's a point well-taken, but I went and read this post after reading this comment, and was surprised at how inoffensive the advice was: like, a lot of this would be very high on my list of most important advice to give (rates in particular). (Obviously we come at this from different directions!)
  - idlewords 3y ago
    That's kind of the point I'm groping towards, that the people who earn their living by giving advice tend to give great-sounding advice.
talkingtab 3y ago
To put this succinctly - never start craigslist.
kumarm 3y ago
Any advise whether 1-person business or well funded startup needs to be taken with grain of salt and check if it is really applicable for you. >>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.
newaccount74 3y ago
I think most of this advise is very arbitrary. There are a million ways to make money. Choosing a small market vs. large market is not inherently better, targeting businesses is not inherently easier, and finding one customer who pays 10k€ is not necessarily easier than finding a 1000 customers who pay 10€. It's just different. 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.
projektfu 3y ago
For a 1-person business, I would add: 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.

550 points by Jthink 3y ago

Most of what you do as a developer loses money. 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.

treelovinhippie 3y ago

[dead]

ngshiheng 3y ago

looking at this I can't help to think that I am going in a very wrong direction. very wrong. i check *every* mistake there is here

scientaster2 3y ago

Thoughts on this? > 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.

rco8786 3y ago
I think both you and the author are kind of dancing around this point: 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.
- detourdog 3y ago
  I see what you mean. I call that a small market because it is tightly defined niche.
m3kw9 3y ago
I think he’s saying large markets can cause you to scope creep as you want to reel in more and will need scaling which is usually difficult with one person business
detourdog 3y ago
I focus on very small markets with specific needs not met by industry norms. The problem I see today is that the big box stores are replacing what had previously been regional retail buyers. 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. https://cba.mit.edu https://cba.mit.edu
- all2 3y ago
  Let's say I buy a condo with one of your made-to-fit appliances. Will you be available to refinishing it? 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.
  - detourdog 3y ago
    I haven’t worked out all the details that is why I headquartered myself in an 8 unit mixed use studio apartment. My initial plan was to work out each appliances details in batches of 10. If something were to sell out I could make more. Once I got my CNC I realized I had outgrown my barn…. found an old model school. Spent all my development money to flip the plan. I would create 7 Studio apartments to cover my expenses and act as my market testing. 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.
rfreytag 3y ago
If you target a niche in a large market then you are targeting a small market. Create serial MVPs targeting those niches until you find product-market fit.

detourdog 3y ago

I agree with everything but 3. Target business's not consumers. I find one rich person trying to solve a personal problem is much better to deal with than a business. This fits the think small better to my mind. 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.

scosman 3y ago

"If you were a goldfish, would you rather live in an ocean, or a garden pond? Probably the pond." 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".

Veuxdo 3y ago
"If you were a goldfish, would you rather live in an ocean, or a garden pond? Probably the pond." Definitely the pond, they're freshwater fish.
- autonomousErwin 3y ago
  Aha but the salty water will make them anti-fragile. Embrace discomfort. Especially if you're a fish.
matwood 3y ago
Most goldfish in a large body of water get eaten.

m3kw9 3y ago

Small teams can allow you to really focus on a tiny area where larger companies just won’t bother to focus on. I think this is very sound advice from experience

nomilk 3y ago

The examples of niche businesses at the end remind of a another niche example from Tim Ferriss's 4 Hour Work Week (paraphrased): > 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.

fud101 3y ago
if you're quoting Ferriss non-ironically, you have a lot of research to do on someone who is a very successful charlatan.
jvanderbot 3y ago
Yeah, I feel like these are the key examples missing from the post. It's clear when you read that story that they're onto something, and it requires a niche and a little gusto.
PragmaticPulp 3y ago
Tim Ferriss is very good at downplaying the effort and costs that go into businesses. Good for inspiring people to try, bad for actually being transparent. In this example, the (claimed) $200 production cost and $2.10 DVD cost are probably nothing relative to this large marketing cost: > piece through trade magazines The marketing costs and effort are conveniently omitted.
- j45 3y ago
  Producing video also can be a cost.
  - Inhibit 3y ago
    Yes. As per the original post above 200$. Advertising is what is omitted in the thumbnail estimate.
- tonyarkles 3y ago

paxys 3y ago

So: - 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.

jvanderbot 3y ago
I think of this more as a consultant-type arrangement. 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.
- flakeoil 3y ago
  > you can at-will change your asking price 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.
  - jvanderbot 3y ago
    I guess it would be better to say you can flex your annual hours and pay by adjusting your contract load. A family member has lived this way for 30 years, and has pretty great flexibility on the scale of a month, but not necessarily day to day.
    - hinkley 3y ago
      I suppose that’s one of the advantages of being an intermittent contractor. The customer doesn’t know why you’re unavailable next Monday and Tuesday. It could be another customer, or it could be a trip to Yosemite.

tlogan 3y ago

I think number 3 and 4 are bad advices. 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.

HPsquared 3y ago
Automate, and/or outsource.
eschneider 3y ago
Scaling the service isn't the problem so much as scaling the customer acquisition.

dlisboa 3y ago

What about tackling a large-ish market but competing on price? As a small bootstrapped business, depending on the cost of the product, you just don't have too many costs. 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.

carlosjobim 3y ago
Competing on price gives you the worst type of customers. If you can deal with that then you're good. It's like some weird glitch in the human psyche - instead of appreciating that they can get their product or service for a better price, they fell like they're being cheated and will start causing problems. I have no idea why it is like this. Maybe they're pissed off for having to buy the thing and that's why they were looking for the cheapest offer to begin with?
lapcat 3y ago
> As a small bootstrapped business, depending on the cost of the product, you just don't have too many costs. 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.
- dinvlad 3y ago
  While difficult initially, a small business doesn’t need as much volume though - you might “only” have a few customers, but that’s gonna be enough to feed you and maybe your family. 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.

nicbou 3y ago

I expected something more interesting, to be honest. 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.

jimbokun 3y ago
Sounds like you should write a follow up article!
- nicbou 3y ago
  Another one: don't follow every sensible idea while ignoring every other sensible idea in your backlog. Sometimes you just gotta do less...
- simultsop 3y ago
  peer pressure at its finest
AndrewKemendo 3y ago
Or as I found out: 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
- nicbou 3y ago
  I'd even abstract it to "don't start something that ties your income to hours worked". If you're working alone, you will need time off, and no one can cover for you. It's easier to take time off if your project can survive a few weeks with minimal work. If something comes up in your personal life, you can set the business aside and sort it out. 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.

mtlynch 3y ago

I think the better version of these ideas is in Jason Cohen's classic "Designing the Ideal Bootstrapped Business" talk.[0, 1] 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 https://www.youtube.com/watch?v=otbnC2zE2rw [1] https://mtlynch.io/notes/designing-the-ideal-bootstrapped-business/ https://mtlynch.io/notes/designing-the-ideal-bootstrapped-bu...

NetOpWibby 3y ago
Thanks for sharing, this talk is transformative.
- Share6323 3y ago
  Absolutely, he really knows the game
jekude 3y ago
Can't +1 enough Jason Cohen's talk, it changed the way I think about business ventures as an engineer with aspirations to become an entrepreneur.

mercurialsolo 3y ago

I would love to see an example of a scaled 1-person business. The idea is super-compelling in theory, but just the thought of everything involved. - Sales / Marketing - Product / Technology / Engineering - Support / Services (customization changes) 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.

ronyfadel 3y ago
Can I plug myself? :) I run an indie app business where overall I make more than what I used to make working a FAANG job [1] [1] https://fadel.io/ https://fadel.io/
Cthulhu_ 3y ago
https://apolloapp.io/ https://apolloapp.io/ is a great and relevant one; it's a full fledged app with monetization, back-end services, etc etc. Relevant because it'll likely shut down by the end of the month due to Reddit's mismanagement.
theluketaylor 3y ago
The iOS and Android app stores likely hold the most examples of high scale one person businesses. Someone already mentioned Apollo. I'd add https://overcast.fm https://overcast.fm and https://david-smith.org https://david-smith.org (maker of many apps, including the wildly successful widgetsmith). There are plenty of other really successful apps that are just one person operations.
- balaji1 3y ago
  "Since 2008 I’ve launched 60 different apps." from https://david-smith.org/about/ https://david-smith.org/about/ amazing!
HeyLaughingBoy 3y ago
https://www.designjoy.co/getstarted https://www.designjoy.co/getstarted 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.

andyish 3y ago

Selling to businesses can be really hard. You can get stuck with ISO standards, data and server locations and SLAs. The lead time on sales can be many months, and there's a real chance it falls through. 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.

toomuchtodo 3y ago
Conversely, when you sell B2C, the value prop can be considerably more challenging ("I can build this myself!", "This is too expensive, can you provide a discount?", etc) vs B2B where the customer will happily pull a credit card out, spend $500, and thank you for the value provided.
lobstrosity420 3y ago
I don't think the article was saying to choose a market with few customers, of course you want costumers. Rather choose a market with few competitors.
j45 3y ago
These standards can largely be abstracted away by using a cloud that already does it for you. For example a good secret is using Azure. It seems more expensive until you notice it provides many security certifications.
samtho 3y ago
There are plenty of opportunities for a business that don’t require conforming to some standard. You also don’t hear about the multitude of businesses that had no problem selling to other businesses, only the times where it didn’t go as planned, i.e. who writes a blog post about a modestly successful business that does $1MM ARR with a 1-2 employee setup serving maybe 10-25 clients because they write a niche software integration that connects two different systems or some tiny internal tool that alleviates a pain point? 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.

nextworddev 3y ago

Don't do 1-person businesses, period (if you can avoid it). 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.

ronyfadel 3y ago
Let's say that I fell for the "Twitter hustle bros" spiel, and after a lot of trying, it eventually worked out. 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).
JustBreath 3y ago
I mean unless you are already wealthy what's the alternative? Basically you're saying "get a job."
- nextworddev 3y ago
  No, I'm saying "consider getting a partner / cofounder"
  - JustBreath 3y ago
    That's fair. "Co-found a 2 person business" is much better advice than "don't start a 1 person business."
- cloverich 3y ago
  Start a business with at least one other person, so you have support.
  - danenania 3y ago
    While this definitely makes a lot of things easier, you now need 2x the revenue to get to profitability, which makes bootstrapping harder.

lapcat 3y ago

I find the article a bit strange. It seems to assume that an entrepreneur starts with the goal of having a 1-person business but has no other ideas whatsoever. That's not ideal. 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.

euix 3y ago

In my experience running your own business is all about relationships. The fact is someone with capital to spend can deploy it to anyone, so why should they deploy it to you? Are you their cousin? Did you go to the same school? Met at a mixer? Before there is even a discussion about what you know and what you can do, or what your product is there is the question of who you are. 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.

carlosjobim 3y ago
That sounds like a narrow idea of what kind of businesses a person can start. If you target the general public with your offers, there is no nepotism or relationships involved. That's the beauty of an open society. All businesses started as small businesses, we tend to forget that.
CharlieDigital 3y ago
I worked in a bootstrapped startup for 10 years. 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.

zeitseeing 3y ago

Great post! Like some of the other comments none of the points were really new to me, but it's good to read them again every now and again. I think focusing on B2B is always great advice for solo hackers. 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.

IAmGraydon 3y ago

How to make a living, but not a fortune.

hamdouni 3y ago

TLDR; avoid big consumer market, target small b2b market

samtho 3y ago

The advice in this article is fairly solid and has been said and done quite a lot. Like many general-business advice articles posted here, it does seem to lack substance or really any actionable advice, so here is some based on my own experience: 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.

cosmodisk 3y ago
This is good advise. A lot of devs, or techies in general, often live in a bubble,so end up thinking that if their standard dev shop has all the integrations, automations,and whatnot,so it should be the same everywhere else too. It blows my mind when see businesses operate in a way as it was 1900. I still remember how I told a business owner with 50 people or so how they could use shared mailbox in the operations, so it's easier to pickup the inbound emails as multiple people work on it.. It was as I just showed the path to enlightenment. However, it's difficult to see these problems when you are an outsider,so my advice is to go out and speak with many people who work in different sectors and face very different problems than an average HN reader.
mvkel 3y ago
"Cost savings" is the first benefit any B2B SaaS trots out in any sales pitch. It's not as compelling as you say. The rest of your advice I find rock solid!

digitcatphd 3y ago

AI is changing all this IMO... I have a 12 person team in India that is now as effective as a 24 person team in Silicon valley was. The playing field is being leveled in many ways.

babyshake 3y ago
How did you go about getting this team in India? My experience is it is exceptionally easy to get a medicore offshore team, but a lot more difficult to find a very high quality team among all the average or poor quality ones.
- digitcatphd 3y ago
  I went through dozens and when I found one I could trust I treated them like kings. The reality is most people treat offshore workers like trash, so I don't blame them for screwing over non technical people who don't understand what they are doing. 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.
marginalia_nu 3y ago
To be fair, teams scale extremely poorly. I'd almost always expect a smaller team to be on par with or even outperform a larger team, even double in size. You get both steep diminishing returns from adding more devs, you also get additional overhead from needing more management.
mejutoco 3y ago
Unless I am missing something, it would seem AI is available in both locations. I do not see how anything changed.

JustBreath 3y ago

One issue with targeting a small market and trying to grow it is if your business relies on your truly innovative/unique/original idea IMMEDIATELY it will get copied either by the big guys or by other small fish who are more than willing to race you to the bottom on profits. 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.

ilaksh 3y ago

> Think smaller markets with bigger budgets 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.

XCSme 3y ago

For me, the solution was simple: automate as much as possible and move most of the costs to the customer side (e.g. focus entirely on the self-hosted product instead of providing hosting myself and having to run and maintain servers for thousands of customers).

1970-01-01 3y ago

It is implied that this advice is specific to software. Half of this advice would not apply to a small business that produced things.

realjohng 3y ago

You can target consumers— with enough eyeballs, run ads. I had a successful little Android game that ran for a few years.

jmconfuzeus 3y ago

I'll add to that since this is Hacker News: 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.

xyzzy4747 3y ago
You can release a Next.js project that uses Tailwind.css really quickly though, and for free. It all depends on your skillset. It would personally take me longer to do something with Rails just because I don't know it as well.

dnndev 3y ago

Spot on great advice. The big picture is start small (niche, deep pockets) and then grow big (wide market, all price ranges). I see some comments assuming his advice is the end game for an entrepreneur, its just the start. 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.

Vixel 3y ago

I can totally relate to these tips. I used to do in-home computer service and I advertised on self made signs all around the city. Got a lot of calls but not a lot of conversions. The minute I put "Business Computer Service" on the signs, I got the same amount of calls and nearly every call was converted into an appointment. And now that they had a reliable computer person, they continued to call. I was able to raise my prices by 40%, hire a few employees, get some funding and eventually sell the business. I'll never forget how adding that one word was liked a magic trick.

gnicholas 3y ago

> On the flip-side, you could just have 1 single B2B client paying $10k per month for a service and make 10x the amount, with lower running costs and no churn. 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.

Jemaclus 3y ago
Generally speaking, B2B involves contracts which guarantee business for a certain period of time. Churn won't be zero, but it's not going to happen on a whim, like a B2C Netflix subscription would. You can lock in 10K/mo for 12 months and have that guaranteed income, while 1000 users at $10/mo might churn every month. 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.
cultofmetatron 3y ago
yea seriously.. 1 B2B client paying 10k/month is just a job with extra steps and all liabilities on you.

idlewords 3y ago

I think this kind of advice is more useful when it comes from someone whose business model has nothing to do with startup lifecoaching. Otherwise it has a tendency to get a little self-serving and divorced from useful experience.

tptacek 3y ago
It's a point well-taken, but I went and read this post after reading this comment, and was surprised at how inoffensive the advice was: like, a lot of this would be very high on my list of most important advice to give (rates in particular). (Obviously we come at this from different directions!)
- idlewords 3y ago
  That's kind of the point I'm groping towards, that the people who earn their living by giving advice tend to give great-sounding advice.

talkingtab 3y ago

To put this succinctly - never start craigslist.

kumarm 3y ago

Any advise whether 1-person business or well funded startup needs to be taken with grain of salt and check if it is really applicable for you. >>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.

newaccount74 3y ago

I think most of this advise is very arbitrary. There are a million ways to make money. Choosing a small market vs. large market is not inherently better, targeting businesses is not inherently easier, and finding one customer who pays 10k€ is not necessarily easier than finding a 1000 customers who pay 10€. It's just different. 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.

projektfu 3y ago

For a 1-person business, I would add: 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.