I started buying broken laptops on eBay, fixing them, and reselling them with my best friend. We started with $600 each on credit cards. That turned into a large refurbished computer sales business. So large that I started shopping for a vacation home (lake home).
Well, the process of buying a vacation home was frustrating. This was back in 2002 and most real estate brokerages did not have websites, and if they did, they were static and outdated. This led to a conversation with my business partner...and we ended up buying a really good domain related to my vacation home search and launched a website for realtors. We called it our side project.
When the used laptop market turned into the used VCR market, we shifted all of our eggs to our side project basket.
Today we own a real estate brokerage with 20 offices and are pretty much considered the leaders in the lake home sales market in the Midwest. We're on track to hit a $Billion in annual sales in the next couple of years (did about $300M last year). Neither of us were Realtors (I'm still not). It's been an interesting ride so far.
A naive question - if you are selling a lake home worth $5m then you are considering that amount as your sale? Let's say you are charging 1% as your fees then $50k is your revenue? Thx
Yea, the margins went from out-of-this-world to terrible as the price of new laptops came down. We used paypal and a few other (way worse) credit card processors. We also accepted checks and money orders by mail.
Edit: Another interesting tidbit. We were such a large paypal customer at the time that we were invited into their IPO. Bear Stearns (I think) called us 5 times trying to get us to buy in...but it was right after the .com crash and we chickened out. We would have doubled our money that day ;(
I left my job. Or, more accurately, the startup I was doing contract work for went under, and I decided not to look for another contract afterwards. I worked on a few projects before starting my business, Indie Hackers, which I grew to just under $6k/mo in revenue (in 8 months) before joining Stripe.
I've done interviews with close to 300 founders. Recently, I added a sortable, filterable directory that can help answer questions like yours. For example, you can filter to only show businesses started as a side project: https://www.indiehackers.com/products?commitment=side-projec.... I'm still working on improving the accuracy, but it's coming along.
Wow, Courtland, I had no idea Indie Hackers was only 8 months old when Stripe acquired it - you already seemed super established to me. Congrats on achieving that in such a short space of time.
I was just listening to an older episode of Indie Hackers today as a matter of fact. Thank you for contributing something valuable to the ecosystem. A lot of similar podcasts/blogs focus on a lot of fluff, but you do/did a great job of directing the conversation, and summarizing long-winded guest comments that may not use the proper business jargon into concise and interesting tidbits.
One thing that was always interesting for me as a listener is that I'm actually the opposite of a lot of your audience. I'm a senior marketer who knows the marketing world inside and out, but I'd consider myself an "early" programmer[1]. It is a very different set of challenges. But one thing I noticed was the true lack of basic marketing skills many of your guests had in the beginning of their journeys.
Would you say that the "baseline" for that knowledge among engineers has increased over the last couple of years as the "indie hacker" movement you and others like Patrick McKenzie have helped foster has grown in awareness and popularity? Ie., given the propensity for developers to spend a lot of their time researching solutions online, do you find they are starting with more of the basics in place than they did maybe 5-10 years ago?
I used to read indie hackers once every 2weeks. I would go to the site and read the latest 6 or so interviews.
With the new sortable view, i can't sort by recently added. I can sort by recently updated, but that isn't the same thing.
Could you add a sort by recently added?
I've seen other attempts to build a community around this demographic before. One I really liked, I even found someone on there and we built a nice project together, though I forget the name.
Do you recall what you focused on when you started? What do you think led to your success and traction?
I find this stuff fascinating when there seems to be an idea that people want to happen but no has been able to get it right. Then finally someone (or some people) crack the code.
Long day, finally back. The key was a combination of (a) identifying the right audience, (b) finding a distribution channel that could consistently reach them in large numbers, (c) creating a product ideal for that audience and distribution channel, and (d) parlaying that traffic into its own community. And not necessarily in that order.
The answer to those questions turned out to be (a) developers who want to self-fund profitable online businesses, (b) Hacker News, (c) interviews with successful developer founders willing to tell their story and share revenue numbers in the open, and (d) getting readers onto a mailing list, then sending them links to interesting forum threads every week for a year.
Lest I seem smarter than I am, this analysis is being done with the benefit of hindsight. I did not have 100% of this stuff planned from the beginning.
I put my whole history up here: https://www.indiehackers.com/product/indie-hackers. I've got to run, but hopefully will remember to come back and edit this comment to respond to some of your questions!
It doesn't anymore, since I joined Stripe. Before that I sold ad space on the newsletter, website, and podcast, and I experimented with affiliate links when my interviewees would mention certain products or books. Selling ads was a pain, and the affiliate links weren't particularly effective.
If had to do it over again, I would've avoided most of the above and instead focused on charging for community memberships while simultaneously making the community more valuable to join.
I had been a recruiter for several years, starting off out of college with a ~200 person international firm for a couple years and then a founding member of a small boutique recruiting firm for about seven years. I eventually figured out that I wasn't getting any value from my partner, so I started my own recruiting firm.
During my recruiting career I was always writing/editing resumes and giving job search advice to my candidates, but the job search advice was always awkward because I had "skin in the game" (potential fees). I never became comfortable with that process.
On the side I started a resume writing and career consulting business, and I decided a couple years ago to make that my full-time focus. At first I wasn't sure if I'd be able to maintain my income from recruiting (wife and 2 kids in an expensive area, special needs kids), but so far it looks like I'm on schedule to actually earn more.
Beyond the compensation, I find the work far more fulfilling. I'm working more hours than I used to, but I feel I'm actually helping people much more effectively. Hearing stories about how a resume and advice got someone their dream job feels good, and I'm also writing for some interesting people both in and out of tech.
Recruiting and resume writing is what entrepreneurs call a "tie shop business." The product is already well-defined, the customers are already well-known, and how to operate the business is already well-known.
Even a software consulting firm is a "tie shop business."
Developing new technology is the polar opposite of a "tie shop business." The product is new, the customers are unknown, and how to sell the product is unknown.
The reason why I state this is that hacker news's users, and Y Combinator's businesses, are developing new technology. They aren't creating "tie shop businesses."
It's important that you know the difference when participating in a forum like this, and deciding what kind of business to start. Advice that applies to a "tie shop business" doesn't really apply to someone who's starting a business to develop new technology.
I expect most users of hacker news aren't creating any businesses at all ("tie shops" or otherwise) but are here for interesting stories and dialogue with others.
YC's portfolio and team may be creating new tech, but HN is a bit of a bigger umbrella from what I've seen, and in my several years commenting here your comment is the closest thing to a "you don't belong here" or "stay in your lane" signal that I think I've heard.
OP's question was pretty open and didn't mention anything about developing technology. I wouldn't offer expertise where I didn't have it, but if someone asks how I started my business I think I'm qualified to answer.
> Recruiting and resume writing is what entrepreneurs call a "tie shop business."
I'm a (successful) entrepreneur and I don't call any businesses "tie shop businesses." In a quick search, I can't even find a reference to that terminology. That's a pretty condescending label, whether you mean it to be or not. The polite way to make your point is to talk about how certain businesses are designed to scale up rapidly while others are designed to be profitable with steady growth. Ideally, you'd make this point while considering the tradeoffs of each and acknowledging that advice about each is going to be different. Hopefully you'd make this point 1) where it's actually relevant, and 2) without reducing all the considerable effort involved in building and maintaining any kind of business to selling ties.
In any case, it's not accurate as stated. What you're saying is a false dichotomy. Not all companies designed to scale with venture capital are legitimately developing novel technology. In fact, having spoken to many of Y Combinator's founders directly, I would say most of them aren't, and many actually have well-defined markets with which to sell their products. Most "tech startups" are something closer to the application of existing technology than they are to the development of new technology. In contrast, a machine learning consulting firm can absolutely be developing new technology, and it can absolutely have difficulty finding product-market fit.
That distinction doesn't matter much, because both sorts of businesses can encounter significant difficulties, and both types encounter difficulties not subsumed by the other. Most importantly, most users active on Hacker News have yet to build any business. The author of this post didn't specify what sort of company they were looking for advice about. Your "advice" seems utterly misplaced and discouraging.
Employee => academia (PhD in AI) => open source (Gensim) => ML freelancing (radimrehurek.com) => ML consulting company (rare-technologies.com) => ML products (pii-tools.com, scaletext.ai).
Looking back, it's hard to imagine what it would be like to jump right into full-time products, skipping the intermediate budding steps. Is it a burden to understand the whole process, from accounting, legal, HR, management, ops, sales, support? Better to outsource them right away?
It's definitely true that all that ancillary stuff is a distraction, a (stressful) time sink. Especially when you're just starting out and clueless, like I was. Bootstrapping slows you down. On the other hand, it felt kinda natural, but took many years. Not the standard (?) SV path of rapid growth.
Quit in 2009, age 28. It was not that hard financially -- I moved to southern Thailand, worked on the PhD and Gensim there. Thailand is a pretty cheap country to live actually.
Neither. After getting my degree, I continued a student project for 1 year that went nowhere. Eventually, I realized it wasn't going anywhere, so I decided to look for a job.
I went to a hackathon, summarily said I was looking for a job on stage at the end. Instead, someone I already knew came talk to me about their startup idea (which had PoC already live, a solid business plan and good proofs the project could be viable), and I decided to give it a go.
That was 5 years ago, I'm still there, learned a lot, and now we are 12 employees (we started at 2 unpaid founders, and started paying ourselves a minimal salary after a year). While it's not up to SV standard, I do consider it a success that we are still alive, and did not sell our soul doing others people project at any time of the company (which happens a lot here, companies don't die, they become contractors).
Important note: I had the privilege of a nice parental cushion that let me do that instead of absolutely requiring an income. I couldn't have done it otherwise.
Thanks for the honesty about the cushion. Often these tidbits get left out. It is really interesting to understand all the puzzle pieces and the mentality of those that made it.
Very close to my story! Only that it was the student project that worked out. We started out with 5 students living off student loans. After a year we were finished with school, and went unpaid for another year. Started with a micro salary by then, and 2 of the original founders had left.
Now, 5 years after we started we are 7 full time emps, though not yet profitable.
I started my company, https://rezi.io, 5 months after graduating college in August of 2014
I noticed that about all of my classmates were grossly underemployed since their resumes were simply trash. They didn't understand applicant tracking systems and existing resume companies don't address the issue of resume optimization (except Jobscan, but they're a little different)
It started as a side project in Wisconsin, then in November 2016, I moved to South Korea where we've successfully supported a number of the top universities with our English resume solutions and I've been able to go full time + hire our first employee. Feels great. Such a ride so far. Here is a quick article of my time in Korea
I started making video games as a teenager, and about ten years ago there was this golden age of Flash games where you could make a small video game, auction it off on a private website to various companies that ran Flash game arcades. You'd incorporate their branding, ads, links, and in exchange receive an upfront fee followed by a split of the ad revenue. Over the course of my three year degree I had five games published, which gave me a taste of the business side of game development. It was a weird, unique, fun time in game development! I don't think there's much like that now for hobbyists to transition into commercial work quite so naturally.
But I finished uni and went into the industry, writing Python/Django code for a startup. During this time I started work on the game that eventually let me go full-time, The Cat Machine (http://store.steampowered.com/app/386900). I'd work on it on Saturdays and towards the end of development I'd even get up early in the morning to get an hour or two in. I released it on Steam and a bunch of other places, where it did... better than a niche puzzle game about cats should do, I think! Other good things happened, it was featured for a number of months on the front page of the Apple Mac Store next to actually really good games like Braid and Mini Metro, so it turned out that cross-platform support was really worth it!
I have had some side projects make a little bit of money, but never enough to make any sort of headway toward replacing my full-time job.
My current effort is also a side business while I continue to work my FT job. It is definitely detrimental to the business to continue to devote 40+ hours per week to something else, but I need to feed my family (if I was young and single with no other financial obligations, I would totally just quit the day job and live on canned meat and potatoes) :/
My advice - if you're young, take your financial risks now. It only gets harder to do later :)
Depending on how far you take your business while young, you may find it difficult to go back to regular employment, especially in places where people expect you to be reliable and dedicated.
I'm not sure young people can take financial risks, unless they're already rich. If they're not rich, I'd sooner advise people to work for long enough to have a safety net of cash, as well as cash to invest in their idea first. A bonus you get while working is that you meet people who can potentially help you in your business later on. Seeing what's involved in a real business will also help you make more realistic estimates of what you'll need in your own.
The average age of the successful startup/business founder is way older than what the media lets people know by showing only the youngest entrepreneurs i.e. the outliers who are noteworthy. Those people happen to have industry experience and money that can be "risked".
> I'm not sure young people can take financial risks, unless they're already rich.
It's a lot easier to take a financial risk when you have no dependents and no mortgage.
I quit my job to start a business in my late 20s, when I was single and had no kids. I will say that another reply's statement is very true: "If I think back to the person I was in my mid-20s, I would not have had the dedication, confidence, people skills, or even the technical know-how to pull off anything approaching a successful business."
In my case, I just wanted to be in charge of my own destiny for awhile, with the freedom to screw up. (And I did screw up.) Although I wish I did things differently, the experience itself was worthwhile. Our modern upbringings are so structured that "starting our own business" really just turns into an outlet for avoiding authority for awhile.
> The average age of the successful startup/business founder is way older than what the media lets people know by showing only the youngest entrepreneurs i.e. the outliers who are noteworthy.
Interesting point. If I think back to the person I was in my mid-20s, I would not have had the dedication, confidence, people skills, or even the technical know-how to pull off anything approaching a successful business (I still may not for all I know, but I'm trying). However, I've met a few brilliant people in that age range who seemed to excel in all of those attributes I just listed :) -- but they're definitely extreme outliers, as you say.
Hah, I worry about this. I started my business at 25. I've never had a job. I'm not sure how employable I would be if I ever needed one. I rarely work the same number of hours each day, and I don't keep a set schedule.
As such, a safety net is a bit priority. Enough so I could start another business if mine ever gets problems.
This sounds very similar to my history. I've built a number of projects on the side, one of which my current employer purchased for a decent sum of money (and then hired me). I continue to build projects on the side, but I just don't have the necessary time to commit to them.
I finally bit the bullet last week and put in my 2 week notice to work on side projects full time. I have enough money to cover myself comfortably for several years, and I have no dependents - this is an opportunity I may never get again. I'm giving myself 1 year to see what I can build, and then I'll decide what to do.
As one with family but also safety cushion I would also recommend a middle option for those in fear: negotiate part-time switch. Start with 4/5 days job to heal burn-out and spend Fridays on some own side experiments.
Readit News
Well, the process of buying a vacation home was frustrating. This was back in 2002 and most real estate brokerages did not have websites, and if they did, they were static and outdated. This led to a conversation with my business partner...and we ended up buying a really good domain related to my vacation home search and launched a website for realtors. We called it our side project.
When the used laptop market turned into the used VCR market, we shifted all of our eggs to our side project basket.
Today we own a real estate brokerage with 20 offices and are pretty much considered the leaders in the lake home sales market in the Midwest. We're on track to hit a $Billion in annual sales in the next couple of years (did about $300M last year). Neither of us were Realtors (I'm still not). It's been an interesting ride so far.
Maybe this is a “gross revenue” vs “net revenue” topic.
Especially given that the OP states in the same Link that he’d love a “$20m exit”.
A $20m exit on a $300m is a no brainer.
Either way. Being your own boss. Being profitable. And growing is awesome. Congrats.
[1] https://news.ycombinator.com/item?id=2341124
You perhaps should be on Mixergy.com giving your story to a wider audience?
I've introduced quite a few people to the founder of the show over the years, and I'd be happy to do the same for you.
Meaning, it died? How did you handle the payments in those days?
Edit: Another interesting tidbit. We were such a large paypal customer at the time that we were invited into their IPO. Bear Stearns (I think) called us 5 times trying to get us to buy in...but it was right after the .com crash and we chickened out. We would have doubled our money that day ;(
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I've done interviews with close to 300 founders. Recently, I added a sortable, filterable directory that can help answer questions like yours. For example, you can filter to only show businesses started as a side project: https://www.indiehackers.com/products?commitment=side-projec.... I'm still working on improving the accuracy, but it's coming along.
One thing that was always interesting for me as a listener is that I'm actually the opposite of a lot of your audience. I'm a senior marketer who knows the marketing world inside and out, but I'd consider myself an "early" programmer[1]. It is a very different set of challenges. But one thing I noticed was the true lack of basic marketing skills many of your guests had in the beginning of their journeys.
Would you say that the "baseline" for that knowledge among engineers has increased over the last couple of years as the "indie hacker" movement you and others like Patrick McKenzie have helped foster has grown in awareness and popularity? Ie., given the propensity for developers to spend a lot of their time researching solutions online, do you find they are starting with more of the basics in place than they did maybe 5-10 years ago?
[1] https://zedshaw.com/2015/06/16/early-vs-beginning-coders/
I used to read indie hackers once every 2weeks. I would go to the site and read the latest 6 or so interviews.
With the new sortable view, i can't sort by recently added. I can sort by recently updated, but that isn't the same thing. Could you add a sort by recently added?
Do you recall what you focused on when you started? What do you think led to your success and traction?
I find this stuff fascinating when there seems to be an idea that people want to happen but no has been able to get it right. Then finally someone (or some people) crack the code.
The answer to those questions turned out to be (a) developers who want to self-fund profitable online businesses, (b) Hacker News, (c) interviews with successful developer founders willing to tell their story and share revenue numbers in the open, and (d) getting readers onto a mailing list, then sending them links to interesting forum threads every week for a year.
Lest I seem smarter than I am, this analysis is being done with the benefit of hindsight. I did not have 100% of this stuff planned from the beginning.
If had to do it over again, I would've avoided most of the above and instead focused on charging for community memberships while simultaneously making the community more valuable to join.
During my recruiting career I was always writing/editing resumes and giving job search advice to my candidates, but the job search advice was always awkward because I had "skin in the game" (potential fees). I never became comfortable with that process.
On the side I started a resume writing and career consulting business, and I decided a couple years ago to make that my full-time focus. At first I wasn't sure if I'd be able to maintain my income from recruiting (wife and 2 kids in an expensive area, special needs kids), but so far it looks like I'm on schedule to actually earn more.
Beyond the compensation, I find the work far more fulfilling. I'm working more hours than I used to, but I feel I'm actually helping people much more effectively. Hearing stories about how a resume and advice got someone their dream job feels good, and I'm also writing for some interesting people both in and out of tech.
Even a software consulting firm is a "tie shop business."
Developing new technology is the polar opposite of a "tie shop business." The product is new, the customers are unknown, and how to sell the product is unknown.
The reason why I state this is that hacker news's users, and Y Combinator's businesses, are developing new technology. They aren't creating "tie shop businesses."
It's important that you know the difference when participating in a forum like this, and deciding what kind of business to start. Advice that applies to a "tie shop business" doesn't really apply to someone who's starting a business to develop new technology.
YC's portfolio and team may be creating new tech, but HN is a bit of a bigger umbrella from what I've seen, and in my several years commenting here your comment is the closest thing to a "you don't belong here" or "stay in your lane" signal that I think I've heard.
OP's question was pretty open and didn't mention anything about developing technology. I wouldn't offer expertise where I didn't have it, but if someone asks how I started my business I think I'm qualified to answer.
I'm a (successful) entrepreneur and I don't call any businesses "tie shop businesses." In a quick search, I can't even find a reference to that terminology. That's a pretty condescending label, whether you mean it to be or not. The polite way to make your point is to talk about how certain businesses are designed to scale up rapidly while others are designed to be profitable with steady growth. Ideally, you'd make this point while considering the tradeoffs of each and acknowledging that advice about each is going to be different. Hopefully you'd make this point 1) where it's actually relevant, and 2) without reducing all the considerable effort involved in building and maintaining any kind of business to selling ties.
In any case, it's not accurate as stated. What you're saying is a false dichotomy. Not all companies designed to scale with venture capital are legitimately developing novel technology. In fact, having spoken to many of Y Combinator's founders directly, I would say most of them aren't, and many actually have well-defined markets with which to sell their products. Most "tech startups" are something closer to the application of existing technology than they are to the development of new technology. In contrast, a machine learning consulting firm can absolutely be developing new technology, and it can absolutely have difficulty finding product-market fit.
That distinction doesn't matter much, because both sorts of businesses can encounter significant difficulties, and both types encounter difficulties not subsumed by the other. Most importantly, most users active on Hacker News have yet to build any business. The author of this post didn't specify what sort of company they were looking for advice about. Your "advice" seems utterly misplaced and discouraging.
Looking back, it's hard to imagine what it would be like to jump right into full-time products, skipping the intermediate budding steps. Is it a burden to understand the whole process, from accounting, legal, HR, management, ops, sales, support? Better to outsource them right away?
It's definitely true that all that ancillary stuff is a distraction, a (stressful) time sink. Especially when you're just starting out and clueless, like I was. Bootstrapping slows you down. On the other hand, it felt kinda natural, but took many years. Not the standard (?) SV path of rapid growth.
I went to a hackathon, summarily said I was looking for a job on stage at the end. Instead, someone I already knew came talk to me about their startup idea (which had PoC already live, a solid business plan and good proofs the project could be viable), and I decided to give it a go.
That was 5 years ago, I'm still there, learned a lot, and now we are 12 employees (we started at 2 unpaid founders, and started paying ourselves a minimal salary after a year). While it's not up to SV standard, I do consider it a success that we are still alive, and did not sell our soul doing others people project at any time of the company (which happens a lot here, companies don't die, they become contractors).
Important note: I had the privilege of a nice parental cushion that let me do that instead of absolutely requiring an income. I couldn't have done it otherwise.
Now, 5 years after we started we are 7 full time emps, though not yet profitable.
I noticed that about all of my classmates were grossly underemployed since their resumes were simply trash. They didn't understand applicant tracking systems and existing resume companies don't address the issue of resume optimization (except Jobscan, but they're a little different)
It started as a side project in Wisconsin, then in November 2016, I moved to South Korea where we've successfully supported a number of the top universities with our English resume solutions and I've been able to go full time + hire our first employee. Feels great. Such a ride so far. Here is a quick article of my time in Korea
http://www.mobiinside.com/2017/12/05/rezi-korea-startup/
But I finished uni and went into the industry, writing Python/Django code for a startup. During this time I started work on the game that eventually let me go full-time, The Cat Machine (http://store.steampowered.com/app/386900). I'd work on it on Saturdays and towards the end of development I'd even get up early in the morning to get an hour or two in. I released it on Steam and a bunch of other places, where it did... better than a niche puzzle game about cats should do, I think! Other good things happened, it was featured for a number of months on the front page of the Apple Mac Store next to actually really good games like Braid and Mini Metro, so it turned out that cross-platform support was really worth it!
I've been working on my second downloadable title for the past two years (http://store.steampowered.com/app/654960/The_Eldritch_Zookee...), but that's the story so far!
My current effort is also a side business while I continue to work my FT job. It is definitely detrimental to the business to continue to devote 40+ hours per week to something else, but I need to feed my family (if I was young and single with no other financial obligations, I would totally just quit the day job and live on canned meat and potatoes) :/
My advice - if you're young, take your financial risks now. It only gets harder to do later :)
I'm not sure young people can take financial risks, unless they're already rich. If they're not rich, I'd sooner advise people to work for long enough to have a safety net of cash, as well as cash to invest in their idea first. A bonus you get while working is that you meet people who can potentially help you in your business later on. Seeing what's involved in a real business will also help you make more realistic estimates of what you'll need in your own.
The average age of the successful startup/business founder is way older than what the media lets people know by showing only the youngest entrepreneurs i.e. the outliers who are noteworthy. Those people happen to have industry experience and money that can be "risked".
It's a lot easier to take a financial risk when you have no dependents and no mortgage.
I quit my job to start a business in my late 20s, when I was single and had no kids. I will say that another reply's statement is very true: "If I think back to the person I was in my mid-20s, I would not have had the dedication, confidence, people skills, or even the technical know-how to pull off anything approaching a successful business."
In my case, I just wanted to be in charge of my own destiny for awhile, with the freedom to screw up. (And I did screw up.) Although I wish I did things differently, the experience itself was worthwhile. Our modern upbringings are so structured that "starting our own business" really just turns into an outlet for avoiding authority for awhile.
Interesting point. If I think back to the person I was in my mid-20s, I would not have had the dedication, confidence, people skills, or even the technical know-how to pull off anything approaching a successful business (I still may not for all I know, but I'm trying). However, I've met a few brilliant people in that age range who seemed to excel in all of those attributes I just listed :) -- but they're definitely extreme outliers, as you say.
As such, a safety net is a bit priority. Enough so I could start another business if mine ever gets problems.
I finally bit the bullet last week and put in my 2 week notice to work on side projects full time. I have enough money to cover myself comfortably for several years, and I have no dependents - this is an opportunity I may never get again. I'm giving myself 1 year to see what I can build, and then I'll decide what to do.
Worst case I go find another job in a year.