8 ms·

Daring Adventures with Passive Income

77 points by dgarner 14y ago

technotony 14y ago
People confuse minimum viable product with low quality all the time. Minimum viable is really about the smallest set of features a customer needs to spend money on your product. It doesn't mean a low quality product rushed out quickly. A minimum viable product could still take you months to build, and require design help, if the features demanded were hard to build.
- kposehn 14y ago
  > A minimum viable product could still take you months to build, and require design help, if the features demanded were hard to build. Oh so very, very true. A hard lesson to learn, that. We're about to release a new product and man it has taken longer than we ever thought. Still worth it :)
dgarner 14y ago
in case the server didn't make it: http://webcache.googleusercontent.com/search?q=cache:tyEeSk8_kGYJ:www.patrick-wied.at/blog/daring-adventures-with-passive-income-1+&cd=1&hl=de&ct=clnk&gl=ch&client=firefox-a http://webcache.googleusercontent.com/search?q=cache:tyEeSk8...
binaryorganic 14y ago
Cache: http://webcache.googleusercontent.com/search?q=cache:J2NfrdeDMO4J:www.patrick-wied.at/blog/let-the-adventurous-journey-begin-passive-income+&cd=1&hl=en&ct=clnk&gl=us http://webcache.googleusercontent.com/search?q=cache:J2Nfrde...
anovikov 14y ago
Passive income is a return on equity. Not 'an ec2 instance that makes money'.
- barryfandango 14y ago
  I want the second thing. Where do I get that?
  - _delirium 14y ago
    Luck? Honestly, I've found the return I've gotten on various endeavors to be pretty baffling. Wholly dominated by external factors as far as I can tell, many of which are themselves dominated by random contacts. My most profitable projects have been totally random things I put very little work into, and I could not have predicted they'd be the ones to take off.
    - anovikov 14y ago
      I used to have that i couple times in my life. Related to SEO and online betting. But those holes are usually closed in 1-2 years. It's not a startup, not even a lifestyle business, just a sort of an intellectual game.
  - MiguelHudnandez 14y ago
    If someone had that, I'm sure they would sell the answer to you. :)
Kerrick 14y ago
I must say that making $1,000 in a year from passive income is a pretty low goal. I make that in under three months with my "now passive" income. (I prefer to call it "now passive" income because it came from a lot of hard work in the past, but requires little to no upkeep.) The author mentions that he plans to set another goal once he reaches the $1,000 goal. My advice: definitely do so! It may not be easy, but it is possible. And yes, reaching an originally low goal may give you the motivation to continue. My personal goal is to eventually have enough "now passive" income that if I were to lose my job, I could lower my standard of living and survive unemployed without dipping into my savings.
- crafter 14y ago
  It's not a low goal if you're just starting out, it's a realistic goal. It takes time and triangulating over a lot of ideas before one gets good at coming up with passive income winners. I think the author is right on track and he has a great giver mcgiver attitude. Also, the marriage proposal app is a pretty good idea FWIW.
- yitchelle 14y ago
  I think that the first goal is totally dependent upon his current situation. It is very much a low hanging fruit scenario, so that grabbing the low fruit will provide some motivation and inspiration to continue one. Nothing worse than setting the bar too high, missing it and getting depressed about it.
tnorthcutt 14y ago
I would encourage the author to read patio11's blog (http://www.kalzumeus.com/blog/ http://www.kalzumeus.com/blog/). You could be aiming higher, and I think you'd do well to switch your focus away from penny-producing efforts like Flattr and toward more scaleable things.
kposehn 14y ago
I think that one of the classic problems with the notion of passive income is the belief that it cannot have any ambition. A case in point is that my wife and I created a web site 3 years ago. This site has not been touched in over a year, and that was the first and only update to the site in over 2 years. It has been consistently banking $2,500-$4,500 per month for the entire time it has been online. I put in maybe a few hours of time each quarter just to check in on it. Now, there is a catch - you can't just make a site and call it a day. You first have to do market research, come up with an angle, partner with a merchant or five, write a content plan, build it, market it, etc. Now, assume that your time is worth $100/hour. If you spend a full 2 weeks on it at 40 hours/week, you'll rack up $8,000 in overall opportunity cost. At first glance, that is a steep price. However, if you've picked right, you'll make that money back within a few months, probably less. This does mean there is going to be an upfront cost to you in order to get it out the door, but you will also have a better long-run profitability.
- helipad 14y ago
  What is the site? Sharing is caring.
  - steveplace 14y ago
    In this case, it isn't. Sharing would remove their competitive edge.
    - kposehn 14y ago
      Hit the nail on the head there. Affiliate marketing is intensely competitive - the reason I can make a fair amount of money in the field is because we pursue every advantage at our disposal. The plethora of competitive intelligence tools in the field and the low barrier to entry make it extremely tough. However, there is a high barrier to success as well.
      - steveplace 14y ago
        Yup. That's why I moved to my own products and have affiliates work for me, as the stuff I create can't be replicated.
unreal37 14y ago
The author makes a good point about support being a big hassle, but I think misses the lesson from it. When you're selling something for $7.50, customers demand a lot of support if something goes wrong. But who says they are entitled to that support? You should craft a carefully worded answer to support emails around "support being through the existing web site and documentation". And quote a nice high hourly rate if they want custom services. Zero support should be the model for software priced under $100. Looking at ThemeForest, most authors respond to all comments in the forums for their template, but politely say they cannot assist with customization or make even small changes to their theme for people.
- steveplace 14y ago
  Support becomes an upsell. I've seen that model used in a lot of software I've bought, seems to work very well.
ashray 14y ago
Passive income is pretty great but no source of income is truly passive. You'll always have certain issues like maintenance, customer support, etc. i.e. when you're talking about software. If it were a website/webapp you'd still run into issues with bugs, security fixes. This doesn't even take into account the fact that new competitors might come in, search algorithms may change, etc. That said, a well SEO'ed site (for a popular keyword) is possibly the best kind of passive income one can have. No marketing expenses, the content is already there (presuming that's what got it SEO'ed well..) and you'll keep getting visitors. Awesome :)
- kposehn 14y ago
  > If it were a website/webapp you'd still run into issues with bugs, security fixes. This was really true a few years ago, but changed as of late. Right now we are running all of our sites on a Sinatra-based engine on Heroku. It has no admin backend, no security fixes to make, nothing. There isn't even a database! The whole thing is compiled and cached. Any changes made on a live basis come through git or via a unique caching system I did with S3/Cloudfront. The upshot of this stack is zero overall maintenance. It doesn't break as there is simply nothing to break (except Heroku/AWS)
  - ashray 14y ago
    That's interesting but definitely not a global use case. Most apps will require some sort of bug fixes and security updates. Even the linux kernel requires security updates and I do think that's some tight code right there =) Not every app can be compiled-cached-served. I think 99% of them can't go that route.. Would love to see how you can run relatively dynamic code/functionality by the method you're suggesting.
    - kposehn 14y ago
      Ah, I think I didn't make it as clear. I'm talking about the typical affiliate site that is SEO'd or run with PPC. Many of those don't require much and you can often do dynamic functionality without requiring a database. I have one site where you can look up physical locations of the merchant. Instead of a database, there is a YAML file that is dumped into MemCache - doing a search hits that and I don't need to maintain any Postgres instances.
oh_sigh 14y ago
Can someone give some examples of (hypothetical or real) "passive income" service/site? Every time I hear about the concept, the person is always very circumspect of revealing anything about their business(rightfully so), so it's hard to visualize for me.
- chunkyslink 14y ago
  Here you go: http://www.smartpassiveincome.com/how-to-build-a-niche-site/ http://www.smartpassiveincome.com/how-to-build-a-niche-site/

77 points by dgarner 14y ago

People confuse minimum viable product with low quality all the time. Minimum viable is really about the smallest set of features a customer needs to spend money on your product. It doesn't mean a low quality product rushed out quickly. A minimum viable product could still take you months to build, and require design help, if the features demanded were hard to build.

kposehn 14y ago
> A minimum viable product could still take you months to build, and require design help, if the features demanded were hard to build. Oh so very, very true. A hard lesson to learn, that. We're about to release a new product and man it has taken longer than we ever thought. Still worth it :)

dgarner 14y ago

in case the server didn't make it: http://webcache.googleusercontent.com/search?q=cache:tyEeSk8_kGYJ:www.patrick-wied.at/blog/daring-adventures-with-passive-income-1+&cd=1&hl=de&ct=clnk&gl=ch&client=firefox-a http://webcache.googleusercontent.com/search?q=cache:tyEeSk8...

binaryorganic 14y ago

Cache: http://webcache.googleusercontent.com/search?q=cache:J2NfrdeDMO4J:www.patrick-wied.at/blog/let-the-adventurous-journey-begin-passive-income+&cd=1&hl=en&ct=clnk&gl=us http://webcache.googleusercontent.com/search?q=cache:J2Nfrde...

anovikov 14y ago

Passive income is a return on equity. Not 'an ec2 instance that makes money'.

barryfandango 14y ago
I want the second thing. Where do I get that?
- _delirium 14y ago
  Luck? Honestly, I've found the return I've gotten on various endeavors to be pretty baffling. Wholly dominated by external factors as far as I can tell, many of which are themselves dominated by random contacts. My most profitable projects have been totally random things I put very little work into, and I could not have predicted they'd be the ones to take off.
  - anovikov 14y ago
    I used to have that i couple times in my life. Related to SEO and online betting. But those holes are usually closed in 1-2 years. It's not a startup, not even a lifestyle business, just a sort of an intellectual game.
- MiguelHudnandez 14y ago
  If someone had that, I'm sure they would sell the answer to you. :)

Kerrick 14y ago

I must say that making $1,000 in a year from passive income is a pretty low goal. I make that in under three months with my "now passive" income. (I prefer to call it "now passive" income because it came from a lot of hard work in the past, but requires little to no upkeep.) The author mentions that he plans to set another goal once he reaches the $1,000 goal. My advice: definitely do so! It may not be easy, but it is possible. And yes, reaching an originally low goal may give you the motivation to continue. My personal goal is to eventually have enough "now passive" income that if I were to lose my job, I could lower my standard of living and survive unemployed without dipping into my savings.

crafter 14y ago
It's not a low goal if you're just starting out, it's a realistic goal. It takes time and triangulating over a lot of ideas before one gets good at coming up with passive income winners. I think the author is right on track and he has a great giver mcgiver attitude. Also, the marriage proposal app is a pretty good idea FWIW.
yitchelle 14y ago
I think that the first goal is totally dependent upon his current situation. It is very much a low hanging fruit scenario, so that grabbing the low fruit will provide some motivation and inspiration to continue one. Nothing worse than setting the bar too high, missing it and getting depressed about it.

tnorthcutt 14y ago

I would encourage the author to read patio11's blog (http://www.kalzumeus.com/blog/ http://www.kalzumeus.com/blog/). You could be aiming higher, and I think you'd do well to switch your focus away from penny-producing efforts like Flattr and toward more scaleable things.

kposehn 14y ago

I think that one of the classic problems with the notion of passive income is the belief that it cannot have any ambition. A case in point is that my wife and I created a web site 3 years ago. This site has not been touched in over a year, and that was the first and only update to the site in over 2 years. It has been consistently banking $2,500-$4,500 per month for the entire time it has been online. I put in maybe a few hours of time each quarter just to check in on it. Now, there is a catch - you can't just make a site and call it a day. You first have to do market research, come up with an angle, partner with a merchant or five, write a content plan, build it, market it, etc. Now, assume that your time is worth $100/hour. If you spend a full 2 weeks on it at 40 hours/week, you'll rack up $8,000 in overall opportunity cost. At first glance, that is a steep price. However, if you've picked right, you'll make that money back within a few months, probably less. This does mean there is going to be an upfront cost to you in order to get it out the door, but you will also have a better long-run profitability.

helipad 14y ago
What is the site? Sharing is caring.
- steveplace 14y ago
  In this case, it isn't. Sharing would remove their competitive edge.
  - kposehn 14y ago
    Hit the nail on the head there. Affiliate marketing is intensely competitive - the reason I can make a fair amount of money in the field is because we pursue every advantage at our disposal. The plethora of competitive intelligence tools in the field and the low barrier to entry make it extremely tough. However, there is a high barrier to success as well.
    - steveplace 14y ago
      Yup. That's why I moved to my own products and have affiliates work for me, as the stuff I create can't be replicated.

unreal37 14y ago

The author makes a good point about support being a big hassle, but I think misses the lesson from it. When you're selling something for $7.50, customers demand a lot of support if something goes wrong. But who says they are entitled to that support? You should craft a carefully worded answer to support emails around "support being through the existing web site and documentation". And quote a nice high hourly rate if they want custom services. Zero support should be the model for software priced under $100. Looking at ThemeForest, most authors respond to all comments in the forums for their template, but politely say they cannot assist with customization or make even small changes to their theme for people.

steveplace 14y ago
Support becomes an upsell. I've seen that model used in a lot of software I've bought, seems to work very well.

ashray 14y ago

Passive income is pretty great but no source of income is truly passive. You'll always have certain issues like maintenance, customer support, etc. i.e. when you're talking about software. If it were a website/webapp you'd still run into issues with bugs, security fixes. This doesn't even take into account the fact that new competitors might come in, search algorithms may change, etc. That said, a well SEO'ed site (for a popular keyword) is possibly the best kind of passive income one can have. No marketing expenses, the content is already there (presuming that's what got it SEO'ed well..) and you'll keep getting visitors. Awesome :)

kposehn 14y ago
> If it were a website/webapp you'd still run into issues with bugs, security fixes. This was really true a few years ago, but changed as of late. Right now we are running all of our sites on a Sinatra-based engine on Heroku. It has no admin backend, no security fixes to make, nothing. There isn't even a database! The whole thing is compiled and cached. Any changes made on a live basis come through git or via a unique caching system I did with S3/Cloudfront. The upshot of this stack is zero overall maintenance. It doesn't break as there is simply nothing to break (except Heroku/AWS)
- ashray 14y ago
  That's interesting but definitely not a global use case. Most apps will require some sort of bug fixes and security updates. Even the linux kernel requires security updates and I do think that's some tight code right there =) Not every app can be compiled-cached-served. I think 99% of them can't go that route.. Would love to see how you can run relatively dynamic code/functionality by the method you're suggesting.
  - kposehn 14y ago
    Ah, I think I didn't make it as clear. I'm talking about the typical affiliate site that is SEO'd or run with PPC. Many of those don't require much and you can often do dynamic functionality without requiring a database. I have one site where you can look up physical locations of the merchant. Instead of a database, there is a YAML file that is dumped into MemCache - doing a search hits that and I don't need to maintain any Postgres instances.

oh_sigh 14y ago

Can someone give some examples of (hypothetical or real) "passive income" service/site? Every time I hear about the concept, the person is always very circumspect of revealing anything about their business(rightfully so), so it's hard to visualize for me.

chunkyslink 14y ago
Here you go: http://www.smartpassiveincome.com/how-to-build-a-niche-site/ http://www.smartpassiveincome.com/how-to-build-a-niche-site/