Strictly speaking about software/coding businesses all the people I know who make it work are contract devs. The most stable way is to just get an x-month contract and then rinse and repeat as needed.

From people I've spoken to/worked with who do this they mention a pay increase due to handling their own insurance etc.

Even if you "work for yourself" you still will have a "client" - the client can just be another Company.

Of course there's the "product path" you mentioned but that's less reliable and consistent. Feel free to ask more questions if interested, this is a good topic for HN and a lot of people seem interested in the topic (myself included)