
Ask HN: Is it possible to create a Saas for passive income while working a job? - nodelessness
Have you done it? If so what are the challenges that you faced? What tips do you have for someone trying to do that?
======
gargarplex
Yeah I did that. The biggest challenge was wanting to spend every minute
possible working on my Saas and dreading being at work.

Also, I know the intent of what you're saying when you say "passive income"
but after ~8 years of being obsessed with these ideas I offer a slightly more
experience perspective when I say You probably aren't going to earn any
"passive income" from your Saas. Let's say you get 30 customers @ 20/month.
That's $600/month but you shouldn't appropriate that as passive income if
you're still building features, performing service maintenance, etc. Maybe if
you freeze the product and don't perform any marketing work, server work, etc.
then it's "passive income".

In other words, you should focus on building a business, not a passive income.
If you invest money in bonds or dividend-distributing stocks, then that's a
passive income. Because you literally do not have to do any work or stress
over it if you take an extremely low-risk, highly-diversified, income-
producing investment strategy. How do you get the $$ to invest? By building a
business and investing lots of energy (the opposite of passive).

Can you build a business while working a job? Yes, it's done all the time.
Another tip is to wake up every morning very early and put your best cognitive
hours into your project. Then you can go to work, and by the time you're ready
to get home you can fully invest in being present.

~~~
bsbechtel
Another way of looking at this is that, in a dynamic world (especially
technology), things are constantly changing, and the very term passive implies
your product is static. If you leave your Saas product that has <1,000 hours
of dev time alone, thereby becoming a passive income, your very dynamic
competitors who are always looking for their next revenue source will be
building additional features and trying to steal your customers. The only way
this doesn't hold true is if you develop some sort of barrier to entry for
competitors that keep it from being worthwhile for them to try to compete with
you. Oftentimes, the best barrier to entry is building a product that is
difficult to replicate, which means more like >10,000 hours of dev time, which
is 5 years of work. In the small business/Saas world, you are either growing
or you are dying. It is very hard to maintain a static/passive business.

~~~
patio11
_your very dynamic competitors who are always looking for their next revenue
source will be building additional features and trying to steal your
customers._

Small software businesses are, to borrow a metaphor from DHH, a lot like a
local Italian restaurant. Nobody at BigCo wakes up in the morning and says
"There is a spaghetti joint in East Phili [+] with revenues of $30k a month?
NUKE IT FROM ORBIT IT IS THE ONLY WAY TO BE SURE."

Similarly, like spaghetti shops, small software companies do not primarily
make money because of "features." The notion that software is bought because
of features is something that running a software company will quickly disabuse
you of.

[+] Edit to add: picked randomly because I happened to just watch a TV show
set there, not to be representative of any of the Phili software companies I
happen to know. (They're all substantially larger.)

~~~
joshontheweb
> The notion that software is bought because of features is something that
> running a software company will quickly disabuse you of.

Can you expound on this? Are you saying that they have loyalty once they have
signed up with one provider. Or maybe that they only care about the main
feature and tertiary features don't tend to sway them?

~~~
patio11
Most software buyers buy for reasons which have little do to with features,
which after all are generally not perceptible at the point the sale is made.
General vibe, risk reducing copy on the website, credible endorsements, words
from friends, and the moon being in retrograde all probably matter more than
the Nth feature at the margin.

Merely having features will not magically cause customers to discover you or
convert from your free trial. Customer churn rates in SaaS are sensitive to
many things but feature parity with competitors is generally not a dominating
factor, because it's so low on the list of concerns. (The rule-of-thumb in
low-touch B2B SaaS is that your churn starts relatively high, hits 5% pretty
quickly after you work on it, and then you get long road to 2% as you get
better at everything.)

~~~
7Figures2Commas
> Most software buyers buy for reasons which have little do to with features,
> which after all are generally not perceptible at the point the sale is made.

I have worked for/with a number of Saas companies, including one that was
purchased by a major company for a high eight-figure amount, and based on the
sales cycles I observed and participated in at each company, the idea that
feature set has little to do with purchasing decisions is a ludicrous claim.

~~~
Norm1
Keep in mind this is about low-touch. Typically people stare at a webpage with
prices and buttons, and try to figure out if the service solves their problem,
if it's reliable, if the UI is comfortable, if support is readily available,
if other users like it, or how easy would be to transition from their current
solution. Not so much opening a few of them and pulling out a spreadsheet to
see which has most features.

~~~
blazespin
Service solves problem == feature.

What happens often is that you get a sale because you support some oddball
feature.

Your best bet with SaaS is try to do that. Find a cluster of customers
(realtors, doctors, train hobbyists) and over support their oddball features
and get a good rep for supporting that vertical. Word of mouth within the
cluster will get around (person to person, vertical forums, etc) and you will
dominate that space. Once you are the big fish in that small pond feature set,
branch outwards to other ponds.

------
augustflanagan
A little over a year ago a friend and I launched
[https://cronitor.io](https://cronitor.io)

Our first paying customer came on July 9th, 2014. As of today we're at about
80 paying customers. As of last month, we have started taking monthly revenue
distributions of $1000 each.

I would echo gargaplex's comment that, when building a small Saas product,
your focus should be about building a business not necessarily just building
passive income.

However, it's easy to become completely engrossed in something you're working
on (especially if it's showing a little traction). So, unless you can see a
very clear path to your project becoming a replacement for your full-time
revenue source, it's important to be conscious of your time investment, and
whether you are at the point where additional work will yield diminishing
returns.

This is something I've been thinking about a lot with my project lately. I'm
not sure if we're there, but, unlike a year ago, when spending 10 hours of
time to improve a mediocre product was clearly adding value it's less cut and
dry these days.

When I look at what has made Cronitor successful (this is a relative term)
this past year there are a couple of things that stand out.

1\. We launched with a _really_ basic version of our product. It had limited
functionality, was far from robust, and didn't even include help docs. But,
you could sign up and pay money for it.

2\. We hounded our users for feedback. If you signed up you got at least one
email from us asking for feedback. Most of the features that exist today on
paid plans are because users asked for them. We'd say "sure, we can do that it
will be part of plan X. would you be willing to sign up for that?" Not all of
them said yes, but getting that validation before investing in features was
key.

3\. We took breaks from working on it. For myself especially this has been
key. I'll have a feature I want to build, or some part of the infrastructure I
want to improve. Tackling this feels just like a regular programming sprint,
but when it's done I usually take at least a month before moving onto the next
"big" thing. This has helped me avoid burnout, and gets me excited to come
back and work on it every few weeks.

Hope that helps, if you'd like to chat further about getting a Saas project
off the ground you can email me august[at]cronitor.io.

~~~
bigtunacan
How did you go about getting customers? For me building a product is the easy
part. I'm at a loss for how would I advertise this type of service?

~~~
mod
Posts like this one probably go a long way, considering they're only at 80
users.

~~~
augustflanagan
HackerNews posts have yet to produce a single paying customer :)

OP, I'm hesitant to share that strategy out in the open. Customer acquisition
has certainly been our biggest challenge. Feel free to DM me if you'd like to
chat privately about it.

~~~
mod
That's strange, considering I'd expect a lot of your target market to be
browsing here.

------
mangeletti
I've been trying to do this for a long time, but I have to admit something
rather peculiar about my frustrating attempts to do so.

I started a company with my brother in 2010. It involves websites, and it
takes up about 10-20 hours of our time per year. It costs us about $150/mo to
run and earns us anywhere from $1000-$2400/mo (probably $1,600/mo average).
It's earned around the same income for about 3 years, and before that it
earned $400-$800/mo for most of time during the first 2 years.

We could continue working hard to increase the amount our business earns,
perhaps until it reaches $8,000-$10,000/mo (very realistic, but would require
about 2 man months or so each), but for some reason neither of us are ever
excited to work on it. In his spare time, he's busy doing his stuff
(completely unrelated work), and I'm busy working on the next big thing
(creating an SaaS, or at least trying to determine one to work on). It's
really stupid, because we have this boring thing that earns us huge returns on
our time invested, and currently pays us nearly $1,000/mo each for doing
basically nothing, but we somehow find every excuse to work on something more
exciting with little monetary returns, or perhaps simply scratching our own
itches.

I think the lesson you can take from this (which I clearly haven't learned) is
that you shouldn't seek to "create a SaaS", necessarily. Instead, figure out
the path of lease resistance to the dollars you want, and don't worry about
the "passive" nature of it. You can automate things later, in theory. Worry
first about finding easy money. It really is out there.

I know that money isn't everything, but it is pretty important. If you have
passive income coming in, you can work on all the fun and world changing
projects (or charity, etc.) you want, and all without worrying about going
broke.

~~~
justincormack
Why not sell it to someone who wants to invest the time and sees the
potential?

~~~
mangeletti
This business isn't the kind of company a VC would invest in, which means it's
also not the kind of company that somebody would see and think, "We could blow
this thing sky high!" (unless $8-10k/mo is sky high). It does have great
potential, but there is no chance of it growing exponentially (like a social
network or other highly successful SaaS). Because of this, I couldn't imagine
getting more than 3 years revenue for it, and it's such a consistent income
earner that it's not something I would want to sell for less than (perhaps) 8
years revenue.

~~~
moistgorilla
I am 100% sure there is someone out there on one of those websites where you
sell businesses interested in buying your website

~~~
andyakb
This is true, but it is very, very unlikely that anybody would pay 8x yearly
revenue for it

------
shubb
If your idea is good, why not hire someone to do the grunt work? If you have
the skills to make it yourself, then unlike a lot of people who commission
software, you have the knowledge to get a good deal and make sure the work is
quality. If it's unaffordable, you probably wouldn't have had time to make it.

------
jakozaur
Patio11 did that, he created Bingo Card Creator while working as Japanese
salesman: [http://www.kalzumeus.com/](http://www.kalzumeus.com/)

He wrote a lot on that subject.

~~~
jeremyw
s/salesman/salaryman/

------
joshontheweb
I'm doing this right now with [http://zencastr.com](http://zencastr.com). It's
still in beta so it hasn't made money yet.

Not sure if I'm very qualified to give tips but one thing that has helped
immensely is that I work remotely and have a job where I can choose my hours.
If I have an emergency with my side project I can usually tend to it
immediately. I also don't have to work a full 40 hour week so that gives me
time to work on Zencastr.

Sometimes it has been hard to keep things moving on it. It is quite easy to go
a week without making any progress. Especially if I am up against a bug that
is proving hard to figure out.

One thing that really helped push forward consistently was to make a trello
list of todos. Then every day (almost), I make sure to cross something off of
that list. It might only be a small copy change, or simple style tweak. As
long as I cross something off every day I'm making progress. Typically I find
that once I'm making a small change it gets me in the zone to work on bigger
stuff while I'm there as well. Then weekends are typically when I really dig
in and get stuff done.

We had our first baby right in the middle of all of this as well. Having a
supportive partner definitely makes a big difference.

Hope that is helpful.

------
LoSboccacc
Finding a job where you don't sign off your intellectual right on secondary
works has been my limiting factor.

~~~
crystaln
As long as you work on your own time, equipment, and ideas, why would this be
a problem? Seems like an invalid limiting belief.

~~~
guiambros
Many companies require their employees to give away any and all intellectual
rights while working for them, even when created on your own spare time and
equipment.

You may request an exception, but it'll need to be reviewed and approved
beforehand by their lawyers.

Previous discussion here:
[https://news.ycombinator.com/item?id=2208056](https://news.ycombinator.com/item?id=2208056)

~~~
Will_Do
In most U.S. states (even WA) [Law
here]([http://apps.leg.wa.gov/rcw/default.aspx?cite=49.44.140](http://apps.leg.wa.gov/rcw/default.aspx?cite=49.44.140)).
Employers often still make you sign something saying that they own your soul
and blah blah but they aren't enforceable.

Now, in some states (WA but not CA or NY) your employer can fire you for
moonlighting if they want to but that's about it. You also have to watch out
if you signed a non-compete and are arguably competing with your employer.

~~~
lfowles
These states seem to be a minority, see Intellectual Property and the Employee
Engineer[1]

    
    
        California CA Labor 2870 -2872  
        Delaware 19 Del.C. s 805  
        Illinois 765 I.L.C.S. 1060/2  
        Kansas K.S.A. 44-130  
        Minnesota M.S.A. 181.78  
        North Carolina G.S. s 66-57.1  
        Washington RCWA 49.44.140, 150  
        Utah UT ST s 34-39-3
    

[1]:
[https://www.ieeeusa.org/members/IPandtheengineer.pdf](https://www.ieeeusa.org/members/IPandtheengineer.pdf)

------
jon-wood
Fool I am, I'm doing this on hard mode, by starting a year after our first
child arrived.

It's hard work, and not earning me any money so far because I'm still working
on the MVP, but I hope to get there sooner or later. Most of the work so far
is the odd hour here and there in the evening, and a few hours a week during
my commute.

I am however greatly reassured by a colleague who is doing the same thing with
an iOS app which is bringing in a reasonable amount of money - he works on it
during his lunch break most days.

~~~
nextweek2
> works on it during his lunch break most days

That is very dangerous thing to do, using company time or equipment would
entitle the company to between some and all of the revenue.

Whilst you can claim it's within your own lunch break, a lawyer might argue
that it is hard to separate the time. Using the companies Internet access and
hardware would certainly constitute using the companies resource.

Unless you have explicit written confirmation from your employer, DON'T do
your own projects in their time or at their place of business.

~~~
vijayr
You are assuming he is using company equipment. He might not be - may be he
takes his lunch outside and uses his own computer to work on his stuff?

------
thrwwy71215
Do you think it's a reasonable risk to work on my SaaS at work? My context:

I have 1-2 hours of free time each day max, if nothing comes up. This is
because I have a baby. The 1-2 hours sacrifices perfect sleep.

My job on the other hand is not always demanding. I might be able to get a
good 2 hour block in for myself. In addition, I have private space and my
company is not in software, so they are more likely to be unaware.

My SaaS idea is intended to be a personal scale business, so even if caught
it's unlikely my company would be interested in it. Totally unrelated to their
business as well. There is a slim chance my idea can catch on larger than I
expect, but I'm not banking on it.

I also do not come from a CS background, so it takes me triple+ the time of
what some of you can hack out a site. I've only created one app and I have to
learn new tools for this new one. Thus the time crunch is even more extreme.

I can work on my app through a web IDE and private IP (HTTPS). Will the
company be able to detect it? Alternatively I can shell out for a new Macbook
I suppose, since I have private space to work.

My idea if successful will need some network effects to keep away copycats, so
I'd like to be able to work full bore. However I cannot afford to quit my job.

I'm in California. My employer is not based there. I did not have to sign any
IP agreements.

Would you work on your SaaS on the job if you were me?

Thanks.

~~~
HeyLaughingBoy
No. I've done my share of stupid/risky things, but I'm simply not going to
work on a side business while actually in the office at my day job.

That said, I used to know someone who did exactly this successfully. However,
while he was an engineer, his day job had absolutely nothing to do with
software development and gave him lots of free time "at work" when he would
just have been bored.

~~~
thrwwy71215
What is your biggest concern in the risk?

The way I see it for me there are four outcomes: 1) Company discovers and I am
fired. 2) Company discovers and has no interest. 3) No one finds out and I
have decent side income. 4) The app has good success and I quit one day with a
phony excuse before they become aware of it.

In my case, 1/4 is actually bad but the likelihood of discovery is low because
my company is not in that field. I'm not likely to be fired without warning
and it's not likely to be discovered while the app is transitioning from side
income to success (before I can leave, if the app is worthwhile to litigate
over).

~~~
HeyLaughingBoy
Worst case is company discovers, fires you, and takes all rights to the code.
The IP belongs to them and you have to decide if it's worth the legal risk of
continuing to develop it commercially. Hint: it's generally not.

It's easier to avoid this problem than deal with it after the fact.

------
kiliancgn
Yes, I did it with significant monthly profits. I solved a problem many eBay
sellers had at that time. Tips from me:

1\. Try to outsource as much as possible and do not try to solve everything
yourself. Upwork & Co. is your friend. There are people who are better in
coding, designing etc. than you. After a while I outsourced time consuming
customer first level support too. Of course you need some money to do it but
you will make way more progress if you have a great team. Be VERY careful in
selecting the people you work with. There are several good ones out there but
a lot of not so good ones too.

2\. Developing the Saas platform is not the difficult part. Winning/getting
customers is. Customers won't come just because you published your site.

3\. Think twice before you want to start something where you face a 2-sided-
market. Building this next to your job might be very challenging.

4\. Go for it! You (and others) will never know until you built it. Don't let
others stop you but consider their feedback.

Good luck!

~~~
rufugee
Any tips for hiring workers on thinks like Upwork/eLance/etc without them
stealing your idea?

------
hansy
Passive income often connotes building something once, then sitting back while
money pours in. More often than not, this doesn't happen (at least initially
anyway).

Most of your time with your side project will be allocated to customer support
and marketing. Others on this thread have correctly pointed out that
approaching the project in terms of a business is the appropriate mindset to
possess. You'll constantly be tweaking and iterating until you hit product-
market fit, then you'll have to go out and sell the product.

It took me about a month to build
[https://www.onhand.co](https://www.onhand.co) then double that time to reach
enough users to sustain the server costs (still not profitable).

Honestly the best advice I have is similar to the advice startups receive,
which is first figure out a pain point others are willing to pay to alleviate,
then spend time building your side project/business/passive income.

------
empire29
IME there are two main challenges

1) Pre-launch: Finding the time while working to create your SaaS (prior to go
launch).

2) Post-launch: Ensuring you have the time to support your customers, and
resolve issues in a timely manner. (Paying) customers come with the extra
responsibility of taking care of them.

The latter can be much harder to manage since you need to react quickly and
not push it off until when you have time.

------
andersthue
Yes, besides Patio11 a lot of those attending MicroConf has done it!

~~~
benedikt
Is there an European equivalent of MicroConf?

~~~
jot
Yes: [http://www.microconfeurope.com/](http://www.microconfeurope.com/)

------
foxhop
Yes, look to my profile for proof.

Do you have anything specific in mind that would cause you to believe
otherwise? Possibly I can offer up my experiences.

~~~
nodelessness
Not that I believe otherwise but challenges and realities of trying to do so
that I can think of:

1\. Being able to contribute to expectation / well at work while trying to do
so.

2\. As a developer, you will likely have to retain a deep domain knowledge so
shifting between the domain of your own creation and the one of your employer
isn't going to be lossless.

3\. Having the discipline to ship when you are the only one working on it and
not keep on building because you can.

4\. Technical skills aside, doing the marketing work to get buyers for the
product. Marketing tends to be a shot if you don't have a pre-existing
audience to pitch to in the dark until you test and tweak down to the the
source that converts the most while keeping you profitable. Where do you even
start? etc.

5\. Keeping yourself motivated though to completion.

6\. Not burning out and managing your emotional well being while making your
product as well as doing your job. How much of your free time are you okay
with spending on this idea?

All of this for even a simple product is not a trivial undertaking. All things
considered, technical skill is only one of the many requirements for someone
to be able to pull this off. Technical skill may be just a very tiny portion
of what you will need to succeed.

