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Yeah I did that. The biggest challenge was wanting to spend every minute possible working on my Saas and dreading being at work. Also, I know the intent of w

Yeah I did that. The biggest challenge was wanting to spend every minute possible working on my Saas and dreading being at work. Also, I know the intent of what you're saying when you say "passive income" but after ~8 years of being obsessed with these ideas I offer a slightly more experience perspective when I say You probably aren't going to earn any "passive income" from your Saas. Let's say you get 30 customers @ 20/month. That's $600/month but you shouldn't appropriate that as passive income if you're still building features, performing service maintenance, etc. Maybe if you freeze the product and don't perform any marketing work, server work, etc. then it's "passive income". In other words, you should focus on building a business, not a passive income. If you invest money in bonds or dividend-distributing stocks, then that's a passive income. Because you literally do not have to do any work or stress over it if you take an extremely low-risk, highly-diversified, income-producing investment strategy. How do you get the $$ to invest? By building a business and investing lots of energy (the opposite of passive). Can you build a business while working a job? Yes, it's done all the time. Another tip is to wake up every morning very early and put your best cognitive hours into your project. Then you can go to work, and by the time you're ready to get home you can fully invest in being present.

bsbechtel 11y ago
Another way of looking at this is that, in a dynamic world (especially technology), things are constantly changing, and the very term passive implies your product is static. If you leave your Saas product that has <1,000 hours of dev time alone, thereby becoming a passive income, your very dynamic competitors who are always looking for their next revenue source will be building additional features and trying to steal your customers. The only way this doesn't hold true is if you develop some sort of barrier to entry for competitors that keep it from being worthwhile for them to try to compete with you. Oftentimes, the best barrier to entry is building a product that is difficult to replicate, which means more like >10,000 hours of dev time, which is 5 years of work. In the small business/Saas world, you are either growing or you are dying. It is very hard to maintain a static/passive business.
- patio11 11y ago
  your very dynamic competitors who are always looking for their next revenue source will be building additional features and trying to steal your customers. Small software businesses are, to borrow a metaphor from DHH, a lot like a local Italian restaurant. Nobody at BigCo wakes up in the morning and says "There is a spaghetti joint in East Phili [+] with revenues of $30k a month? NUKE IT FROM ORBIT IT IS THE ONLY WAY TO BE SURE." Similarly, like spaghetti shops, small software companies do not primarily make money because of "features." The notion that software is bought because of features is something that running a software company will quickly disabuse you of. [+] Edit to add: picked randomly because I happened to just watch a TV show set there, not to be representative of any of the Phili software companies I happen to know. (They're all substantially larger.)
  - joshontheweb 11y ago
    > The notion that software is bought because of features is something that running a software company will quickly disabuse you of. Can you expound on this? Are you saying that they have loyalty once they have signed up with one provider. Or maybe that they only care about the main feature and tertiary features don't tend to sway them?
    - patio11 11y ago
      Most software buyers buy for reasons which have little do to with features, which after all are generally not perceptible at the point the sale is made. General vibe, risk reducing copy on the website, credible endorsements, words from friends, and the moon being in retrograde all probably matter more than the Nth feature at the margin. Merely having features will not magically cause customers to discover you or convert from your free trial. Customer churn rates in SaaS are sensitive to many things but feature parity with competitors is generally not a dominating factor, because it's so low on the list of concerns. (The rule-of-thumb in low-touch B2B SaaS is that your churn starts relatively high, hits 5% pretty quickly after you work on it, and then you get long road to 2% as you get better at everything.)
vijayr 11y ago
What kind of business did you build?
- gargarplex 11y ago
  It really was closer to a "Saas for passive income" than a business. Anyway it was a Twitter marketing tool. Got a few high profile customers here on HN, then did some back/forth emailing with TechStars but I was 22 and couldn't understand or pitch a business. I was also inexperienced at engineering. Not to mention project management, because I failed at that, too. Still not rich yet, but continuing to grind it out on various projects. I recently raised my first outside angel financing, ever. Come to think of it, I've really been at it for 13 years now. And "just as a hobby" programming for 7 years before that. Keep at it..
  - CmonDev 11y ago
    Wait, is HN ~13 years old??
    - gargarplex 11y ago
      No, I'd already been at it for a while when I started my "Saas for passive income". In fact I had already built and sold an app.
sjs382 11y ago
I did too. Mine was truly passive income, after launch. I'd spend about 3- 4hours per month, post-launch, on support requests, and that's it. I had a similar challenge, but not exactly the same. Rather than wanting to work on my SaaS and dreading being at work, I've been thinking about the next thing to do, to create another passive stream. :)

bsbechtel 11y ago

Another way of looking at this is that, in a dynamic world (especially technology), things are constantly changing, and the very term passive implies your product is static. If you leave your Saas product that has <1,000 hours of dev time alone, thereby becoming a passive income, your very dynamic competitors who are always looking for their next revenue source will be building additional features and trying to steal your customers. The only way this doesn't hold true is if you develop some sort of barrier to entry for competitors that keep it from being worthwhile for them to try to compete with you. Oftentimes, the best barrier to entry is building a product that is difficult to replicate, which means more like >10,000 hours of dev time, which is 5 years of work. In the small business/Saas world, you are either growing or you are dying. It is very hard to maintain a static/passive business.

patio11 11y ago
your very dynamic competitors who are always looking for their next revenue source will be building additional features and trying to steal your customers. Small software businesses are, to borrow a metaphor from DHH, a lot like a local Italian restaurant. Nobody at BigCo wakes up in the morning and says "There is a spaghetti joint in East Phili [+] with revenues of $30k a month? NUKE IT FROM ORBIT IT IS THE ONLY WAY TO BE SURE." Similarly, like spaghetti shops, small software companies do not primarily make money because of "features." The notion that software is bought because of features is something that running a software company will quickly disabuse you of. [+] Edit to add: picked randomly because I happened to just watch a TV show set there, not to be representative of any of the Phili software companies I happen to know. (They're all substantially larger.)
- joshontheweb 11y ago
  > The notion that software is bought because of features is something that running a software company will quickly disabuse you of. Can you expound on this? Are you saying that they have loyalty once they have signed up with one provider. Or maybe that they only care about the main feature and tertiary features don't tend to sway them?
  - patio11 11y ago
    Most software buyers buy for reasons which have little do to with features, which after all are generally not perceptible at the point the sale is made. General vibe, risk reducing copy on the website, credible endorsements, words from friends, and the moon being in retrograde all probably matter more than the Nth feature at the margin. Merely having features will not magically cause customers to discover you or convert from your free trial. Customer churn rates in SaaS are sensitive to many things but feature parity with competitors is generally not a dominating factor, because it's so low on the list of concerns. (The rule-of-thumb in low-touch B2B SaaS is that your churn starts relatively high, hits 5% pretty quickly after you work on it, and then you get long road to 2% as you get better at everything.)

vijayr 11y ago

What kind of business did you build?

gargarplex 11y ago
It really was closer to a "Saas for passive income" than a business. Anyway it was a Twitter marketing tool. Got a few high profile customers here on HN, then did some back/forth emailing with TechStars but I was 22 and couldn't understand or pitch a business. I was also inexperienced at engineering. Not to mention project management, because I failed at that, too. Still not rich yet, but continuing to grind it out on various projects. I recently raised my first outside angel financing, ever. Come to think of it, I've really been at it for 13 years now. And "just as a hobby" programming for 7 years before that. Keep at it..
- CmonDev 11y ago
  Wait, is HN ~13 years old??
  - gargarplex 11y ago
    No, I'd already been at it for a while when I started my "Saas for passive income". In fact I had already built and sold an app.

sjs382 11y ago

I did too. Mine was truly passive income, after launch. I'd spend about 3- 4hours per month, post-launch, on support requests, and that's it. I had a similar challenge, but not exactly the same. Rather than wanting to work on my SaaS and dreading being at work, I've been thinking about the next thing to do, to create another passive stream. :)