
Ask HN: Are side-projects still a good way to generate passive income? - vommina
I recently had the opportunity to read the famous personal finance book - &quot;Rich Dad, Poor Dad&quot;<p>I&#x27;m thoroughly inspired by the book. The bottomline being, use income to maximise assets and eventually use assets to maximise income.<p>In my case I&#x27;m starting at ground zero. Reasonably good income. Minimal liabilities. Absolutely no assets yet (except my software-making skills that I&#x27;ve acquired over these years)<p>I&#x27;ve decided to write softwares (likely a SaaS product) that would generate passive income, which would serve as my first asset and then start from there to maximise them.<p>I know this isn&#x27;t as easy as it sounds. Anybody who&#x27;ve gone down the same road that I&#x27;m about to take? Stuff that I should watch out for? Is this too silly?
======
louisswiss
My experience is that yes, it is possible to generate a passive income with
side projects (by passive I mean <5h work per week).

As someone who has built and sold a SaaS company however, I'd strongly
recommend against starting off with one. They are almost never passive!

If your main goal is to make some money on the side, I'd recommend you first
try:

\- An info product (a course, ebook, video course etc)

\- Something in the ecommerce space (check out lasertweets.co by Josh Pigford
for inspiration)

It's a lot easier to make $1-10k/month with just a few hours work per week
(and time invested upfront of course) doing something like this than it is
with a SaaS.

SaaS is just too time intensive with support, sales, product dev etc.

Source: Have built a SaaS, an ecommerce project and am now working on my first
info product.

~~~
louisswiss
Am being seriously downvoted. Anyone care to explain why?

I know the idea of software (and SaaS in particular) being a tricky passive
side project is unpopular amongst the HN crowd, but unfortunately it's true.

~~~
jftuga
> It's a lot easier to make $1-10k/month with just a few hours work per week.

$10k/month with just a few hours per week is BS. $120k / year would be a lot
more than many peoples salary.

~~~
justaguyhere
Other than a few western countries, $120K USD per year is a lot more than many
people's _multi year_ salary

------
madamelic
I'm going to go somewhat opposite to altariumblue.

Don't try to come up with a good idea. Come up with a few or even a lot of
pretty decent ideas that can easily be monetized. After you figure out these
ideas, figure out the shortest path to solve the problem they are after.

Build the shortest path in a decent way but don't spend years on it. Launch
it. Did people like it? Did at least one person give you money? If not, go
onto the next idea. If you love the idea, no need to slash and burn but if
you're not sure the next step, play with another idea for a while.

"That's just luck!"

Uhhh... yeah. You're making your own "luck". Don't scam people obviously but
don't feel like you need "That One Great Idea" either. Try out lots of things
to help people in exchange for money until you find "That One Pretty Good
Idea"

source: I wasted two years trying to build "That One Great Idea"

~~~
derekp7
Would you recommend launching a new saas product in demo mode first, to gauge
interest? For example, allow users to create a free account that works for two
weeks to a month? Then hook in a way to get people's money after you have
received enough feedback in the form of "Can I please throw money at you to
purchase this product"?

I think one major hang up for first-timers is crossing that threshold of
taking money, because now you have liability. Which includes dealing with
support issues (will customers be satisfied with 24 - 48 hour turnaround time,
will they be OK with web/email support only because you have a day job?), and
also you need to deal with fraud and other legal issues.

~~~
madamelic
>Would you recommend launching a new saas product in demo mode first, to gauge
interest?

If you think that would work. I have tried it before, people did use it but
they never bought. You bring up that issue later in your post though. :)
People are cheap. I never really dug into this idea further because I was
cautioned by others that "Free SaaS" and "Paid SaaS" are different people.

You even bring up the issue of support around "Free SaaS" people. That crowd I
think generally thinks "Free SaaS" == "VC". In my experience, as long as you
get back to people within 12 - 24 hours, they don't mind. I go on walks during
my day job and respond to support emails. ;)

>I think one major hang up for first-timers is crossing that threshold of
taking money, because now you have liability.

Definitely! That's still kind of a hang-up for me. I feel kind of bad asking
for money for something I built. It is slowly going away though the more that
I do it though. I think this is a common thing though.

>also you need to deal with fraud and other legal issues.

I guess that depends on what you're building. Stripe, for the most part,
handles the fraud and legal stuff. While we are talking about Stripe, I would
recommend against Stripe Atlas. It is too much if you aren't going VC. An LLC
(provided you're from the US), if even that, is enough.

\---

Honestly, you should just try out all these hypothesis and apply what you
learn. That's what I've been doing. Try something new, apply, try something
new, repeat. It's the best you can do in my opinion. Reading books + blogs is
great, I totally still do it, but beware analysis paralysis. ;)

------
altairiumblue
\- to generate income you need to either provide something valuable, scam
people or get extremely lucky

\- if you want to provide something valuable you need a good idea, some skills
and hundreds or even thousands of hours of work on your idea

\- all that work on creating and maintaining your project makes the potential
income not passive at all

My impression is that the people who succeed at this usually start with a good
idea, work on it for a while and somewhere down the line potentially turn it
into an income stream. But the interesting idea comes first. On the other
hand, the people who begin with the goal of making money and just the wish to
"have passive income" or "be an entrepreneur" usually don't get anywhere.
Unless they scam people or happen to get lucky, of course.

Also, everything from Robert Kiyosaki including "Rich Dad, Poor Dad" is
somewhere on the scale between questionable advice and scam.

~~~
stevekemp
It's a matter of scale. How many teenagers do you know who make $5 here, or
$10 there, just mowing lawns, cleaning windows, or doing babysitting?

They're making money without luck, without scamming, and without being
terribly valuable.

The problem is those things don't scale. I can imagine a couple of happy
teenagers raking in $400-$500 a week, if they really push themselves, but it
will be very seasonal work.

Hrm. uber for lawns? facebook for windows? (There are a lot of agencies that
work as middlemen for childcare, where often vetting and background checks are
involved. I'm not familiar with such a thing for pet-walking, window-cleaning,
or lawn-mowing. Perhaps they exist, or perhaps there's your cheap and easy
idea! Physical labour is cheap, anyway :)

~~~
aurelius12
Pet-walking: rover.com

~~~
gaius
Rover.com seems to be pretty shady [https://www.gofundme.com/rovercom-sitter-
killed-my-dog](https://www.gofundme.com/rovercom-sitter-killed-my-dog)

[https://www.gofundme.com/my-rover-sitter-killed-my-
dog](https://www.gofundme.com/my-rover-sitter-killed-my-dog)

[http://www.roversdirtysecret.com/tag/killed/](http://www.roversdirtysecret.com/tag/killed/)

------
caymanjim
Have side projects ever been a good way to generate passive income? For some
people, sure. For most people, I'd argue it's a terrible financial decision.
Most side projects fail and never generate any revenue. To stray from the
software focus, how many people actually make money trying to sell Avon
products (or Amway, etc.)? How many people lose money becoming a realtor to
attempt a side job? Set up a booth at a flea market to hawk wares? Advertise
their gutter cleaning service and never get customers?

The vast majority of non-mainstream money-making ventures fail. That doesn't
mean they're a waste of time, especially if you enjoy the activity anyway. And
there's something to be said for taking a chance. I applaud entrepreneurs on
all levels. The idea that a side project in any field makes good financial
sense is unfounded, though.

------
ForHackernews
It's great if you're inspired, but be aware Kiyosaki is primarily a salesman:
[https://johntreed.com/blogs/john-t-reed-s-real-estate-
invest...](https://johntreed.com/blogs/john-t-reed-s-real-estate-investment-
blog/61651011-john-t-reeds-analysis-of-robert-t-kiyosakis-book-rich-dad-poor-
dad-part-1)

~~~
dotdi
Thank you for this. I wasn't aware Kiyosaky was such a con. Friends of mine
religiously adhere to his teachings (hint: no one got rich, yet).

------
kodablah
In my experience, money as a side-project motivator or measure of future side-
project success is folly. Make your side projects for fun, find other
motivating factors to finish, or don't finish, it's all good. If you make
something and gain adoption, then you can consider monetization. But
otherwise, I've found building an imaginary future income on your not-yet-
built, not-primary-work software does not result in happiness or success.

Granted, this is just my experience and only applies to side projects.

------
seanwilson
> Anybody who've gone down the same road that I'm about to take? Stuff that I
> should watch out for?

The major trap is to make sure people are willing to pay for what you're
building. Don't spend ages building it in secret attempting to make it perfect
and then find out nobody is willing to part with cash for it.

I'm making income from [https://www.checkbot.io/](https://www.checkbot.io/), a
Chrome extension that crawls your website looking for SEO, speed and security
issues you should fix. I started building it to help automate what I was doing
for clients so I knew the results were valuable and web developers I showed it
to said they'd be willing to pay for it as well.

~~~
throwingdin
I don't often see people making money from extensions. Could you share what
you are making? I understand if not.

------
goatherders
Passive income is not starting a SAAS. That's "starting a SAAS." If you are
able to build it and market it in a way that later on you dont have to do as
much work THEN it can be passive income. But the idea of "I'll build a saas
and make some easy money" is a terrible idea in almost every case.

------
p0d
I think the people making most passive income are those selling the passive
income books and advertising :-)

My friend in the IT business says I am the only person he knows making close
to passive income. I have a side project which has been generating income for
the last 10 years. The sideline involved a lot of work to setup and after
years takes little of my time.

So I would say go for it if you want to swap some of your time for money. I am
proud of my sideline but most good things come at a cost.

------
calibas
Gambling is a great way to generate passive income so long as you always win.

Personally, I've found side-projects to be valuable even if they're not
profitable. You gain experience, knowledge and you might even enjoy yourself
too.

------
SatvikBeri
I know about 100 people who made a moderate to serious attempt at passive
income, and the hardest part is finding something people will pay for. I can
categorize them all into a few buckets:

1\. Got industry experience through freelancing, and used that to find
something valuable

2\. Worked on their "passive income" project fulltime for > 6 months

3\. Both, or

4\. Made less than minimum wage

Now, anecdotes aren't data, and most of these people aren't software
engineers. But I would encourage you to try taking your product ideas,
freelancing in that industry with small contracts, and using that to refine
your sense of what the market wants.

------
quarksplitter
Maybe a bit off-topic. Say I have an idea for a web app. More like a service.
I also have a person who's willing to go out to the targeted group and present
the product/get feedback.

Personally I'm a Java backend developer, and building MVP for the backend part
is a piece of cake.

But I lack UX and mobile development skills, which is the crucial part of the
idea.

Is there a place/site to present the idea (no need for any NDI - not that kind
of person) and get someone on board for development in needed areas?

~~~
gremlinsinc
Drop me a line.. I'm full stack... read: Not a designer, and not an x10 dev,
but I can use vue+vuetify, or Quasar, or Ionic Framework to build out the
frontend. Been trying to find a coder to team up w/ for a VERY long time...
Wouldn't mind helping out on back either, I haven't had a chance to do much w/
Java, would love to put that on my resume. patrick @ Zvive.com

------
eden_hazard
I was thinking about making apps catered towards places where android devices
are just getting popular. Like imagine a country like Bangladesh. A homogenous
population of 180m where most of the people probably have similar needs and
speak the similar language. The playstore barely has apps to cater to the
people. I think the absence of apps can probably be attributed to developers
unable to hire UX designers and maybe lack of good hardware. A lot of the
current Bangla apps that are out there are very poor in terms of design. They
look like they were made by a solo dev. And the devs are probably missing the
point that a lot of "pointless" apps are able to make money in the states.
They probably don't see the opportunity. The hot startups in Bangladesh are
trying to copy Uber and Grubhub.

That's my current goal right now. I've been trying to learn android dev for a
while but it's hard to manage with a fulltime job...maybe I'm making excuses.

------
mooreds
If I had time for a side project I would either do:

* an info product (a book on a popular new technology, or an evergreen topic, preferably related to software development). The best example here was the stripe rails book. I bought it for $40 because it saved me hours of dev time. Used it once. Never opened it again. Was worth every penny. [https://www.masteringmodernpayments.com/](https://www.masteringmodernpayments.com/)

* Or, if I was looking for a longer play, find a local niche business type where people spend money and search online. Prefer if data is already collected by someone else (data.gov or the state agencies are good places to check, for example child care facilities). Use a WordPress directory plugin to gather demand side up and then monetize by ads plus premium listings.

No coding for either of these.

~~~
justaguyhere
About your second idea : do directory sites still make money? Doesn't Google
frown on these?

~~~
mooreds
I don't know about the SEO implications, but I think a well made directory
site that provides value to consumers would work. I run one for CSAs that I
haven't monetized thoroughly and several of my competitors have done a much
better job of. And I don't see Google penalizing them. #anecdata

------
JoeSmithson
The problem with passive income is someone else will be prepared to do the
same (i.e. not much!) for very little money.

The market is likely to _eventually_ price stuff that requires no effort to
make, very cheaply.

You may be able to get quite a lot of money out of it before that happens,
depending on how brilliant your idea is.

------
gremlinsinc
A SaaS can fail... if you're the solo dev on it -- nothing you build is ever a
failure. Most other business ventures - like someone mentioned 'info products'
\-- none of those has inherent value unless it's a success and you make money.

The value in ALL side projects is that as long as it's 'live', it's something
you can use on your portfolio, and worst case scenario -- open source that
baby -- and now you're an OSS maintainer.

------
amoitnga
> that would generate passive income.

I am also a big fan of "Rich Dad, Poor Dad". Coupled with "The Richest Man in
Babylon", I think these two small books told me pretty much all I wanted to
know about how to get rich.

Passive income is great. However recently I learned a new term - delayed
income. Delayed income, or lack thereof, is what all my side projects have
been about. I start with an idea that I'm gonna sell this product to 1000
people at $30/mo, it'll generate 30k monthly for me, and I dont' have to work
for anyone. Then I either "gonna sell it to 30 000 ppl for a $1" or "gonna
sell it to 300ppl for a $100" or "gonna sell it to 50 per $100" cause 5k
monthly isn't at all bad... I'm only gonna work like 10/20 hours a week, but
wherever I want, and not reporting to anyone... Needless to say, it's all very
stupid, but my point isn't about that.

My point is that I never took into consideration the time I need to spend
upfront. Assuming you need to work, say, 3 months. You're a software engineer,
who makes "Reasonably good income". That's what? 3 months * 4 weeks * 40 hours
* say 40/hour ~ $20k.

So you work for 3 months in hopes to later make more than 20 grand later. So
when later you finally, if you're very lucky, start making money, it's not
really all that passive, it's delayed. You just weren't paid. And most of the
time, unfortunately \- nobody is interested in your project \- or you didn't
finish it \- or you just don't make back the money you invested. \- or
something else.

Passive income is when you buy stock and don't do literally anything. Or
something similar.

Maximizing your income is a different thing, getting paid 40/hour or 100/hour
is a different conversation from passive income and feels like something you
might want to think about.

So yeah,

> I know this isn't as easy as it sounds. Anybody who've gone down the same
> road that I'm about to take? Stuff that I should watch out for? Is this too
> silly?

Don't work for free, especially for yourself. Every hour you spend on your
project must be accounted for. You could be doing contract work and getting
paid during this time, so ask yourself: is it worth it?

Starting a new project is very easy, completing it is super hard. So if you
want to do this, maybe try to do a simpler project, something you can be done
with sooner, which would mean risking less. Ideally of course, do something
you enjoy, in which case it won't be such a drag doing it as work, because if
it's successful, it's nothing more than more work.

------
keiferski
As a few other people have said, running a SAAS will probably be more time-
intensive than you anticipate. An informational product like a book or video
series is much less time-consuming and requires less upkeep. Your business
model (selling a product) is also a lot simpler and easier to experiment with
than a monthly subscription plan.

------
akudha
How much of books like Rich dad, 4 hour workweek etc is practical? Kiyosaki is
more of a salesman than an investment wizard. Tim Ferriss is successful, but
works his ass off, far from 4 hours a week. Not saying these books are
useless, but wondering if we should take them at face value.

~~~
jammygit
Tim Ferris's literally used to do sales too. I read his book as more of a
philosophy book personally

------
wordpressdev
To me, passive income is to make content based sites, streamline traffic
sources, paste ads and check back twice a month to see how it goes.

So, if I have 10 sites each making $100/month "passively", that's some nice
passive income on the side.

------
saluki
The hope the dream, chasing the SaaS.

Lots of developers succeed with side projects, products/SaaS. It isn't easy,
but it's possible, worth chasing.

Checkout @DHH's Startup School Talk for some inspiration.
[https://www.youtube.com/watch?v=0CDXJ6bMkMY](https://www.youtube.com/watch?v=0CDXJ6bMkMY)

Check out the StartUpsForTheRestOfUs.com podcast if you haven't already.

Rob is a great story to follow, from drop shipping, to job sites, invoicing
app to founding and exiting drip.com. He calls it the stair step approach
building up to a SaaS.

Start in the archives Episode 1. All the advice is still relevant.

Good luck.

