Ask HN: Advice for turning my side project into a real business
I’m a product-focused dev with 10 years experience at a-list startups. For the last few years I’ve been working on a side project. It has some traction and makes ~$600/mo even though my current product is pretty raw.
I’ve recently put a lot of thought into the product and realized that there is a real gap in the market that I can fill and make this into a real business. This requires a pretty significant amount of work, which I’m slowly chipping away at with 2-3 hours per day. Of course there may be unknown unknowns but the path to something like ~$1M/yr seems very clear to me.
Circumstances at my current day job have been getting progressively worse and I think it’s time to move on. I’m not full-burnout unhappy (yet), but getting more resentful every day. Unfortunately I don’t have enough cash saved up for significant runway. I’m 35 with family and living in the US so eating ramen and sleeping on a friends couch isn’t an option.
I’m trying to figure out my options. Maybe try to find angel funding. Maybe a business loan (is that even a thing?). Or should I just grind it out and stick with my current job.
Appreciate any and all advice. Especially if you’ve been in my position
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From OP's comment history, I'm going to assume this is about https://www.fretboardhacking.com/fretpro-app/
As a guitarist myself there is incredible saturation in the market right now for learning guitar, whether it be apps, courses, or other content out there on YouTube/Ticktoc/etc. My first question is why to you is why you think "the path to something like ~$1M/yr seems very clear to me."? My second question is what does your app do to distinguish it from any other of the readily available guitar learning/fretboard apps (from quick google https://guitar.com/guides/buyers-guide/best-guitar-learning-apps/ and https://americansongwriter.com/best-guitar-learning-app/)?
If you're looking to potentially quit your fulltime employment or potentially take some extended time off, that it feels like you should have some pretty solid answers to those questions before doing so.
At $600/mo, there's about a 10X gap between where you're at and revenues you could actually sustain yourself on, and ideally you'd like to hit 5 figures recurring revenue a month before you start seriously thinking what this would mean becoming a "real business". Assuming you have ideas on how to grow that revenue, I'd suggest focusing on some of those strategies. I'd also start making strides in marketing that can start to grow market share and get some exposure.
While I don't want to discourage you, it's also okay if a side project stays a side project. You can continue to invest the side time you have and grow your passive income to supplement your 9 to 5.
I did this. I grew my project, Buttondown [https://buttondown.email] from high three figures to low five figures while doing it as a nights-and-weekends thing at Stripe and then quit to work on it full time. It was a great decision and I'm happy I did it! (I also did it, frankly, with significant runway in the bank if I needed it, and no dependents besides my wife so the tail risk of "this goes to zero and/or I hate it" was not particularly painful.)
My advice would be: it reads like you're commingling two questions that really should be separate, which are:
1. Do you want to start a business and pursue independent employment?
2. What are the quantitative parameters and conditions under which such an enterprise is sustainable?
If the answer for 1. is yes (and interrogate yourself a bit! how many of the things that you are imagining are less "working on your side project full-time" and more "not working on the day job that you hate?"), get as concrete as possible with 2. What burn rate _is_ acceptable to you? How much savings are you willing to use during build-out, if you were to start now? What growth do you need to hit to feel like you're financially on the right track?
There are lots of funding tools (using the term 'tool' loosely) available to you — SBA, subsidy via full-time job, subsidy via contracting, lifestyle-friendly firms like Tinyseed. But you need to start with the numbers.
(Also always happy to chat more: I'm at justin@buttondown.email.)
Few things:
1. Unless you have real traction (2-3x growth every year) or rich connections, your change of getting an investment on a $600/Mo product is almost nil.
2. Your chances of getting a business loan is almost zero as well because most business loans are given against real collateral (e.g. physical/real estate, machines/hardware etc) and most banks in US wont consider a $600/Month software revenue anything real worth a collateral. You are most likely better of getting a personal loan if you have good credit but regardless, you will have to guarantee it personally which means they come after everything you got if you fail to pay it back
3. Your best bet is to keep the job and keep grinding on the side. If you really believe that this can become big, it can become big without you going all in at least in the early days. Get creative. Find a co-founder if possible who is willing to work for sweat equity. If not, do it yourself until the revenue is close enough to your min. expenses. Then quit the job.
I don't mean to say this in a rude way but no one will give you money so that you can quit your job and work on a $600/Month product. You have to take that risk yourself. All the best.
Source: A bootstrapped founder who was privileged to buy an existing side project (doing $2500/Month at the time. used my own personal savings) and grew it to low 7 figures revenue. I have taken small loans (SBA/personal etc much later on) and funded all of it myself for the most part.
[random advice from the internet]
Maybe a business loan (is that even a thing?).
It is a thing, but basically most intial business loans boil down to signature loans. You sign as an individual and you are on the hook personally.
Sure an established business might get a loan collateralized against business assets such as inventory, real property, recievables, etc. Or a line of credit for cashflow.
Anyway, the simplest thing that might work is charging more for the existing product so you can support existing customers.
In part because $1m/year is not enough to make sense to an established angel investor. But mostly because charging more money is a good way to make more money; a good test of viability; and the simplest thing that might work.
Finally, be clear on the competing ideas. One is getting a new job. The other is owning/building your own business. They are not mutually exclusive. You can get a new job and continue building your side project organically.
Indeed a plan to build your side project organically over a few years is not the only option. Another is to build a new project that is easier to turn into a business (maybe even one that resegments your existing product under a new brand).
Keeping in mind that getting other people's (friends, family & fools) money is a lot of work that doesn't bring in revenue.
Good luck.
We all after 30 more or less in your position, if don't have some spare capital, like father's house (as in Ghost busters, btw, old good cinema).
Unfortunately, this is not good position, because from $600/mo to something considerable for family life in US, may be long path, and not cheap, and not predictable.
I don't think you consider moving away to some cheap place, so answer is simple - keep your day job.
America is country of freedom, so you could continue your side business, and continue grow slowly, but until it will grow much more (I think about 10x at least), it will not become attractive for much investments, and you should not consider it as your main priority - now your main priority family and day job.
BTW, $600/mo is considerable amount for 3rd world countries, and this could be real solution, but it could be not easy, to hire people abroad.
Sorry, life is hard. I believe, if you will see old good cinema, this could make things looking softer and warmer, to accept.
And tell me, if you want to talk more.
Thank you and good luck!