Ask HN: What's the closest one can get to a personal Basic Income with software?

There are any number of software entrepreneurs (and, for that matter, insurance agents) who widely vary the amount of time they spend on the business and include many weeks where they look gainfully unemployed.

In terms of what to shoot for, a) recurring revenue (BCC didn't have it and _believe me_ did that radically raise the savviness bar required on the customer acquisition front), b) B2B where something is important enough to need but not enough to require a long sales cycle or urgent support if the thing hiccups, c) a well-understood marketing and sales model that you can semi-automate.

The third thing is probably hardest to build, and as your time scale gets longer, it is the most likely part to require your sustained attention to improve. (I have no information how BCC is doing these days but I rather suspect the original organic SEO strategy which served me well for 5+ years will not continue operating unaltered for 20.)

In terms of where these folks hang out: business owners who have priorities in their life other than the business are still business owners. I think the great mistake in the "passive income" community is failure to treat running a business like running a business; it becomes aspirational for lots of folks who have neither the skills nor the inclination to run a business nor, unfortunately, the desire to change either of those two things.

This makes "passive income" spaces into a whirlwind of depression and hucksterism. Meanwhile, if you ask around the table at MicroConf, you'll find some folks who had a really good year and worked really hard for it and you'll find some folks who phoned it in while taking care of parents, getting married, throwing themselves into a home-building project, starting a new business, etc.

MicroConf, BaconBiz, and DCBKK are three conferences which all had folks who were at many points along the spectrum here. All have online ambits to them, too. (I suppose one could run a not-awful conference about software businesses in maintenance mode but if you have one then flying out to a conference would absorb a few weeks of maintenance mode and be probably a lot more boring than going to MicroConf.)

Wow, thanks a lot for taking the time to answer. This is better than getting on the front page.

>a) recurring revenue (BCC didn't have it and _believe me_ did that radically raise the savviness bar required on the customer acquisition front),

Didn't know the savviness gap was that big.

To be honest, I even considered emailing you to ask if doing bingo card software localized to Brazil for instance was a good idea, since: 1) you've trailblazed its SEO and conversion optimization tactics already 2) sold it, so no conflict of interest 3) they haven't to my knowledge localized it 4) there seems to be few competitors in Brazil, and 5) you seemed to have been able to make a decent annual salary from it with ~3h/week if I'm not wrong.

I'm not nearly as savvy to tune something like it to the extent you did though, and the Brazilian Portuguese market is much smaller than the whole internet's English-speaking audience.

So B2B non-critical SaaS sounds like the best bet indeed.

>The third thing is probably hardest to build, and as your time scale gets longer, it is the most likely part to require your sustained attention to improve. (I have no information how BCC is doing these days but I rather suspect the original organic SEO strategy which served me well for 5+ years will not continue operating unaltered for 20.)

That makes a lot of sense. What I like about BCC is that the user-satisfying part of the software itself is so simple and unchanging that you had the time to devote yourself almost exclusively to optimizing traffic and conversion.

It's hard to think of a useful SaaS product that wouldn't require a good amount of code maintenance, stack upgrades, new features requested by users, etc. just to keep the repeat business of the current ones.

As a solo entrepreneur with little time available, splitting it between that and constantly tuning marketing channels sounds challenging. But as you said, a lot of it can be automated.

>In terms of where these folks hang out: business owners who have priorities in their life other than the business are still business owners. I think the great mistake in the "passive income" community is failure to treat running a business like running a business; it becomes aspirational for lots of folks who have neither the skills nor the inclination to run a business nor, unfortunately, the desire to change either of those two things. This makes "passive income" spaces into a whirlwind of depression and hucksterism.

Exactly. I was at my wits end googling around (I might be terrible at googling, who knows) for a community that didn't come off like that. I went so far as proposing one myself under the "4hww4devs" banner (https://hsribei.github.io/log/4hww4devs/), hoping the "devs" filter would bring in a more skilled and "business owner"-mentality crowd.

Thankfully I found Indie Hackers, which has taught me a lot so far. And through that post I was reached out to by Matthew Mallard, who started the ##passiveincome channel on Freenode a couple of months ago. I hope being on Freenode achieves the same kind of selective pressure I was looking for.

>MicroConf, BaconBiz, and DCBKK are three conferences which all had folks who were at many points along the spectrum here. All have online ambits to them, too.

I will definitely acquaint myself as deeply as I can with those. Thank you a lot for the pointers, and for the kindness in answering without prejudice.

I even considered emailing you to ask if doing bingo card software localized to Brazil for instance was a good idea

I'll take the liberty of answering here: it's a terrible, terrible project relative to your goals when you consider the the universe of projects you can ship with the same skill set. Bingo Card Creator is fundamentally a CRUD app which spits out PDFs; life-time value of a customer is ~$30. There are numerous applications which, for the same technical challenge, sell to businesses for $50 ~ $200 per month and LTVs in the $1k ~ $10k range. Do one of them instead.

For the same technical challenge? None occurs to me, but I'll think harder about that. Even if other options are more challenging, I guess I welcome the excuse to dabble in Elm soon :) Thanks for the advice.

Here's an example: https://jsreport.net/

It may seem like a complicated product, and I'm sure the guys behind it put in a lot of work to polish it, but the guts of the product are 3-4 well-established open-source libraries wrapped together with duct tape.

Here's a shameless plug to something I built, as another example: https://smsinbox.net

patio11 was kind enough to give me some feedback about that when I was getting started. I successfully charge businesses $75+ per month to use it, and although I'm proud of the programming work involved to build it, it is not substantially more complicated than BCC.

EDIT: I noticed your comment on Indie Hackers about not feeling as qualified for B2B since you don't have a lot of experience working for companies. One way to tackle this is to build a product that participates inside a bigger ecosystem (Wordpress plugins are an example, or Shopify plugins or something like https://baremetrics.com/ in the Stripe ecosystem or my thing in the Twilio ecosystem). The awesome side effect of this approach is that it often simplifies distribution, since there are already communities established around those platforms.

SMS Inbox is brilliant! Congrats for being successful with it.

Your suggestion to focus on a platform is also great, I hadn't thought about it. Stripe is soon going to launch in Brazil too, so there will probably be many low-hanging opportunities there. Thank you for going the extra mile :)

Curious: are you living off of smsinbox? What do you estimate is the average weekly amount of hours you spend on it?

> are you living off of smsinbox?

No, not even close :) But the customer base is growing slowly and steadily.

> What do you estimate is the average weekly amount of hours you spend on it?

Under 2, most weeks.

This sounds a lot like what I've done with my SaaS products.

I set out to build a business with the heuristic of "Maximize Jason's Vacation Time". I like to climb rocks, surf and travel through interesting parts of the world, and always found it hard to do that for, say, most of the year every year when I had to work for other people.

So I built a product that brings in recurring revenue, generally sells itself, and has a userbase of technical people who can usually solve their own issues for themselves, and are generally fun to talk to when they need help. Even so, I've also made a priority of automating everything that can be automated, including common customer service things, so that as time goes on there are fewer things that can interrupt my Days Off. (Days Off being defined as days where the sun is out or the kids of off school and I don't need a rest day from climbing or surfing, so hey, let's polish the product a bit).

And yes, as you describe, I've passed up opportunities that would grow revenues faster at the cost of more of my time being taken up by the business.

The one downside is that it took longer this way. It was 4 years before my product stuff could pay my rent, and another 2 before I could properly live off of it, buy houses, raise kids, etc.

But now that it's there, it's kinda nice. I've gone as far as not bothering to bring a laptop on the road anymore for trips less than a few weeks.

I have a blog (linked in my profile) with some possibly useful info, and it seems I do a lot of my writing about this stuff here as well. Searching comments for "jasonkester product" seems to pull a bunch of stuff up.

Good luck!

Wow, it's so great to hear that there are people out there who are actually doing this. Congratulations! That's exactly the kind of security I want to have.

Good to know how long it took you. 6+ years requires grit, and although still a bit limited by the RSI, I'm in a personal position where I can have that kind of long-term commitment.

I loved the expat software website, by the way :) It reminds me of an amusing conversation someone on Freenode (##passiveincome) sent me this link to:

myles.io/thoughts/passive-income-hacker-vs-startup-guy

Glad to see @patio11 thinks the same way. Look at his answer to this:

Q: Why are you bothering with BCC when consulting is so much more lucrative? (I can think of a few good reasons, but I'd like to hear what your reasons are.)

A: I really enjoy being a product guy. BCC has a very desirable property in that it mostly works in my sleep. Consulting is quite lucrative and intellectually engaging, but it often disrupts my life in ways that BCC does not: for example, flying off to $BIG_CITY_ACROSS_OCEAN for a few weeks is wonderful once or twice a year but would get tiresome if I were doing it every month. I very rarely get tired of BCC, and with the exception of a trivial amount of support all of my work for it is at my absolute discretion to schedule. I mean, my little brother is graduating college this spring and, without even looking at the calendar, I can say "Sure, no problem, I'll be there. Tell me the day sometime."

Money is also not a huge motivator for me. I like it, don't get me wrong, but after I've got the rent and necessities covered (oh look, bingo) money generally has to be the icing on the cake to motivate me to do something. (Shh, no telling the consulting clients.)

Source: https://news.ycombinator.com/item?id=2018936

Worth mentioning: my desires on what to optimize for have waxed and waned over the years.

If it's not too personal, I'd love to know how your, er, personal philosophy has changed over the years.

Is it work that got more interesting, so you don't mind doing more of it, or you found new uses for money you didn't think were important before, or something else entirely?

(Feel free to ignore.)

A combination of things: I had a conversation with Joel Spolsky which convinced me that people with the opportunity to contribute a lot to the world have an obligation to do so. (He grounded this in a Talmudic understanding but it largely comports with me as a Catholic, FWIW.) I've found myself vastly more interested in doing work when work impacts meaningful problems that I care about, like e.g. changing hiring in the tech industry or making entrepreneurship a transformatively better experience worldwide. I have at times had some not-so-happy health issues to deal with and when not dealing with them my tolerance for a more traditional workweek is rather higher. As I get increasingly far from my salaryman days, my raw distaste for things-that-feel-like-work declines.

I wouldn't primarily credit attitudes about or desires for money with any of this, though my personal burn rate is much higher now than it was in 2010. (I got married, had two kids, and moved to Tokyo; this makes ~$10k spend like ~$2k used to.)

I think the short answer is: (1) work for yourself, not as an employee, (2) find a niche market, (3) create a SaaS product for it, (4) outsource tasks like support to other people instead of doing them yourself.

I just recommended this book the other day in a related thread [1], but Start Small, Stay Small: A Developer's Guide to Launching a Startup by Rob Walling really is a stellar reference on this topic. He is very big on the "grow big enough to have a functional small business (buzzword: micropreneur) but don't grow forever and obsessively". They also have a (paid) forum where you can talk with likeminded devs turned founders.

[1]: https://news.ycombinator.com/item?id=13981490

[2]: http://www.startupbook.net/

Thanks for the pointers! I think (2) is the hardest, but I'll try some of the things Amy Hoy publicly shared about her Sales Safari process (can't afford 30x500 yet).

You could also get a job that pays well, live within your means, and use the extra money to buy dividend paying stocks and bonds or rental real estate (use a property manager to keep it passive).

Honestly, in my experience that would be consulting.

I've personally always failed building anything that people would like to use enough to pay for it, and I've seen many people waste (or invest) about 10x what they would put into consulting to make less than minimum wage (or even 0).

Yet, I'm still trying.

I would agree. I built something people liked enough to pay me for, and it even gave me a basic income. But I was on call all the time and generally working a lot for like 1/4 what you get working for other people around here, and going home at six.

My experience was that I could slack off and work less than full time, but doing so would damage the business and then I would have to put in a lot more effort.

I mean, if I was better at business, it would have perhaps been different. As it was, it was full time work for about what I earned when I was 17, and on top of that, finding a job after working exclusively for my self was rather harder than doing so after sporadic contracting gigs.

Nice.

May I ask what your project is/was?

What difficulties did you encounter?

http://prgmr.com/xen/ Xen-based VPS

Look forward to hearing Luke's answer - as a fellow sysadmin eneterpreneur, he's been a real inspiration (even though I'm in a different line - training).

I don't hate it, but that's a really crowded and competitive market, uh?

:-)

This is something else I want to write about. Starting a really different service is a lot harder to sell, and I knew going in that selling is what I am worst at.

Also, when I started, most of the competition was using UML or OpenVZ. Xen was unquestionably superior to those technologies for multi tenant systems, so one could argue that this market wasn't as crowded in 2005

Of course, I was big into the idea of a commodity product. Like I said, competing as a commodity requires less marketing skill. Instead of talking someone into trying something new, you start with something they already are using and then just point out the advantages of your implementation, which can be as simple as the blog I posted in the other comment.

I responded to parent; I am slowly moving towards that announcement that I've been talking about. I mean, the new folks (srn and adp) are not that different from me in terms of values, so I obviously don't want or need (and am not really competent with) corporate-speak, but I do want to come up with something that focuses more on the business and less on my own personal issues (and this note, well, focuses more on the personal issues. While I think it's probably appropriate within this thread, it's me whining on a personal level, working through my issues, not me making an announcement about the company.)

I like the idea of sort-of serializing the 'post-mortem' parts of the story; going through my diary and emails and writing up buisness-level and technical incident reports; enough time has passed for most of these that assuming I leave off names, it shouldn't be too embarrassing for anyone.

Totally got it, thanks, Luke! I would love to read that. =)

as someone else said, http://prgmr.com/xen/ - note, I've sold all but 5% to other people who are as enthusiastic as I was back when I was really into it, folks that are technically better than I am, so you shouldn't take the fact that I completely burnt out as a reason to not use them. I need to write up an announcement for them, and I haven't yet. I keep writing it and it keeps coming out sounding like a postmortem for my own failures. I mean, that's a reasonable way of looking at it, but the company is still a going concern, and I see no reason why the buyers oughtn't get another ten years out of the thing; I need to do a postmortem on my failures for me (and I need to whine about it some to my friends) - but the business needs something rather more upbeat, because the sale really isn't a bad thing for the business... really, it's a good thing. I am thoroughly burnt out, and having someone else who is enthusiastic in charge (and who mostly shares my values, too) is unambiguously good for the business.

Difficulties? Eh, I'm a really bad negotiator. I'm pretty good at picking engineers and technicians (I might reasonably say that I'm really good at doing so... almost everyone who worked for me at retail wages went on to get real jobs that pay real bay area level money.) - but I'm not a good leader. I don't think I got as much out of those excellent technicians and engineers as their next employers did. I really only have very vague ideas of why I'm a bad leader; it's one of those things where I'm bad at it largely because of a lack of wisdom. I actually just wrote another comment on the subject[1] and if that is correct, well, maybe I can become a leader someday, but there's a long journey for me between here and there. I need to become a lot more comfortable with what I refer to as nietzschean self-deception[3], and honestly, I'm not sure that doing so is worth it to me if I can be comfortable as an Engineer for the rest of my life.

It is also a market with a low barrier to entry, and lots of competition. If you can hire one pretty good, experienced Engineer and two smart, juniors you have most of the capital needs met, Of course if you want a good deal on packet and power, you end up buying a lot of that (for me, my power and packet was rather cheaper than a senior level engineer; I mean, it was less than $10K/month. Not a whole lot less. Much less scale than that and you'll have difficulty competing on price) - but the low barrier to entry is important because market opportunities are exploited pretty quickly.

I think I was also bad at strategy. At several points in time, I had overwhelming technology advantages over anyone in the same price range, (or I had dramatic price advantages over everyone with similar technology) and I mostly failed to capitalize. At one point, someone even noticed[2] and publicized this; I had a waiting list longer than my arm.

When you have a waiting list for a pre-paid, sticky, recurring revenue business? Do everything you can to get to the point where you can get capacity up fast enough that people don't need to wait. I'm fairly certain I would have been at least 3x larger at my peak, and I think there was a real chance of 10x, if I didn't run waiting lists for the six months where I had that price/technology advantage and people noticed. If I was 3x larger at my peak, that would be a $1m/year turnover, and I don't think it would have required a lot more power and packet or even labor, just because in this business the biggest problem is just having someone around to answer support often enough. I think that would have taken the business from something that paid me just enough to make rent to something that paid more than I could make as a IT contractor. And, because of me being congenitally bad at marketing, I didn't get another chance.

I think that's one of the key takeaways for me. Know your weaknesses (which I did) but then when something comes along that momentarily boosts that weakness? Jump on it with everything you have. That part was the part I missed. You can create opportunities in areas where you are strong all the time; that's what it means to be strong. But opportunities that negate your weaknesses don't come along very often at all; that's what it means to be weak. They should be treated as the very rare events they are.

I mean, I guess the key thing for OP, who wants something easy is just that running a small business is work - and for the money per effort input, it's really quite difficult to beat even mediocre contracting wages. I mean, certainly, it can be done, but it's not easy, and it's not nearly as certain as getting a consulting check. (Which isn't 100%, either, but it's much more certain)

There's a lot of risk in running a company. There's also a chance of a huge reward, but I think that running a product business is usually not that great of an idea for someone who just wants the minimum money with the minimum work. Running a business makes more sense if you want lottery tickets with better odds where you have some control (and want to feel like you had a lot of control if you win)

[1]https://news.ycombinator.com/item?id=14030580

[2]If you aren't good at marketing (and I'm not, I knew that setting out, and I knew that my values and my corporate values meant that I would always be bad at marketing) you need to jump when someone who is notices you. See https://uggedal.com/journal/vps-comparison-between-slicehost... - that was huge for me.

[3]By which I mean the lies we all must tell ourselves to continue to function as human beings. All of us need to come up with some sort of meaning - as the man points out, you can't stare too long into that abyss. The problem I have with Nietzsche in general is that while he feels right about self-deception and power, I personally find self-deception (well, deception in general) to be more uncomfortable than I find power (or more power than I have now) to be comfortable. In fact, I think I have a pretty comfortable level of power right now; I'm nobody's boss, but I have the power to walk out on my boss at any time, and I make more money than I need. (now, the last decade plus of what should have been my retirement fund was dumped into seeing if I could run a business, so I couldn't walk forever, but I've probably got a good year or so, and I've never had trouble finding work, so while I don't have "fuck you money" I don't need to deal with anything very unpleasant.) Frankly, my feelings on having more power than that are pretty mixed. (having less power than that is certainly unpleasant, of course, but I'm not sure that having more power than that is really a step up from where I am now.) - really, that might be another way I'm a bad leader. I really like being thought well of, and like most people, I do enjoy some parts of power, but I'm super uneasy, in other ways, with having significant power over other people.

Are you validating the market and focusing on a small enough niche before you start developing the product?

Not as much as I should/should have.

Great source of bootstrapping information see the videos

https://vimeo.com/user12790628

indiehackers.com is a great place to start looking at ideas. I've recommended it on a couple of threads, but it's worth a look.

Indeed! I take back what I said previously. There has been positive response and even someone who's done before giving me hope it's possible:

https://www.indiehackers.com/forum/post/-KgG2eMQ4Sv9wWUc4SKJ