Comment by vaksel | Hacker News Reader

Comment by vaksel | Hacker News Reader

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this only makes sense if its recurring income(i.e. subscriptions) and if you aren't depending on any other service for that income.

if your $5K/mo comes mostly from Google traffic you can lose everything overnight.

i.e. I have a friend who had an affiliate site that was generating $20K/mo. Then the Google Panda update happened, and that went down to $1K overnight(well it took a few weeks). Last month that site generated a whopping $24 in revenue.

Google tends to be the biggest threat here.

Traffic? Can't lose out in Google search results.

Ad Revenue? Can't get banned from adsense(impossible...since all it takes is a competitor clicking a bunch of times on your ads)

Paid Traffic? Can't get banned from adwords...which can change their policies at any time.

Payments? Can't get banned by PayPal.

Basically what I'm trying to say, is that there is a TON of risk. And you need a huge cushion to feel comfortable. Personally I'd want a $30K/mo income in order to have a $4-5K/mo lifestyle...just to be on the safe side. To at least avoid the stress...that everything can be lost overnight.

That's why these big payouts should be preferable...since then there is no more risk(short of losing it all in financial crash)

Just because you have income without a lot of effort does not mean you have a sustainable company. Granted, you don't have to make 30k a month for all that long to get to years of living expenses in the bank.

If you really want a lifestyle business you need to be able to survive even if you have to pay for advertising. As to ad-words, there are plenty of forms of non Google advertising out there. If your site is so dependent on new search engine traffic it can lose 98% of it's visitors from a few changes in Google's algorithm you have not created value your just doing arbitration. Arbitration opportunities are always short lived, that's not to say they are not worth perusing, but don't think they are anything but a quick windfall.

From the other side, just because you have put in a lot of effort that does not mean you have a sustainable company either, however, your moat might be slightly wider, should you hit the right market.

There is risk, but that's why you lessen it by diversifying your traffic streams, and even your income streams. I own multiple software products and web apps; if any of them tanks I still have more than I need to live on. Actually, at this point, more than one could totally disappear and I would be ok financially.

The odds of you selling out and making $5M are ridiculously lower, and I mean hundreds or thousands of times lower, than making a few small apps that generate a full-time income.

I'd argue there are even bigger risks in swinging for the fences which is almost by definition a low probability/high reward endeavor. You might not have to rely on the impact of a Google algorithm change as much, but you've now got to worry about a host of other issues: cofounder problems, hiring employees, raising money, running out of money, dealing with well-funded competitors, etc etc etc. There's risk in both paths.

As an aside, this why I like diversifying my portfolio (ie, I'd rather have five apps making $1K/month than one making $5K). There are downsides to this path too, but I think it's a decent way to minimize the risk if you want to do this professionally long term (as I do) and are not relying on an acquisition.

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