
How to Come Up with Profitable Business Ideas - ChanningAllen
https://www.indiehackers.com/round-table/how-to-come-up-with-profitable-online-business-ideas
======
MattRogish
For a B2B SaaS company, the easiest/most likely[1] algorithm to succeed[2]:

1) Be embedded in the industry for a while

2) Make lots of connections, build credibility

3) Build SaaS app to solve key pain point you experienced in #1

4) Sell to the folks you know from #2

5) For bonus points/de-risking: find 25 potential customers (from #2) and
reach out to them and validate this idea (Jobs-to-be-Done). Get a handful of
them to commit, even verbally, to buy this when you've got an MVP built.

[1] Clearly this is not the _only_ way to be successful, but "I have a random
idea lemme build it" is a great way to be not successful

[2] Succeed = your business that makes enough revenue to support you and a
reasonable lifestyle, equating (and/or eventually surpassing) what you would
typically make at a W2 gig, from a diversity of customers and not trading your
personal time for money.

~~~
ggg9990
This is exactly the recipe I used and sold a company for $10m. Also, I am a
absolutely terrible programmer and v1 of the product, with which this recipe
was executed, was full of copy pasted code, unhashed passwords, all of the
hallmarks of terrible programming. I got to $100,000 revenue before a friend
of mine joined who actually knew how to program and rewrote the whole thing
(literally zero lines of my original code were preserved).

~~~
hoodoof
Can I ask a little more please?

How much of the company did you own when you sold it?

How did the sale happen - did someone just turn up and offer you money, or did
you go find a buyer?

Was there negotiation from a higher price down to $10M?

Did they buy the entire company from you or just buy the software assets?

How long did the sale take from when the buyer turned up till money in your
account?

How much money did you end up with after paying tax on the sale?

What did you do to celebrate?

What did you do next - another business, get a job, sit at home watching TV?

Would you have handled the sale process differently if you could do it again?

~~~
ggg9990
I made just over $1m because we raised a bunch of money for growth that didn’t
pan out. Because LOL California the money went straight into a house. I still
have a mortgage and a day job.

~~~
sheeshkebab
And I guess the moral of the story - don’t raise money if you got to $100k+
revenue alone by yourself?

~~~
ggg9990
Bigger lesson is to buy a house as soon as you can. I’ve made more money on
paper living in this house than building the company.

I kind of needed to raise the money. The wheels were falling off the bus
because the software was so bad and it needed to be professionally written. I
should have raised less and sold sooner though.

~~~
mrhappyunhappy
Unless you live in Japan where real estate depreciates.

------
davidjnelson
Business models of the companies with over $240k ARR:

\- outsourcing to humans

\- asset acquirement leverage

\- education

\- outsourcing to ai

\- event organizing

\- adding a missing feature to a platform

\- internet marketing saas

\- copied a website and added a missing feature

\- micro feedback as a service

Copying a website and adding a feature is great for someone who spends their
time becoming a better software craftsperson.

Micro feedback as a service is a fascinating market I had never considered.
Exceptional creativity there. Could be applied generally to many domains.
PullRequest is doing code review as a service which is a great example of
applying it to another specific domain.

Edit: formatting.

~~~
tchock23
I'm a little confused. The companies from the post that dealt with feedback
had far less than $240k ARR. Which "micro feedback" companies are you
referring to?

~~~
bcyn
I think SubmitHub

~~~
davidjnelson
Exactly. SubmitHub states 55k/MRR.

------
ian0
A interesting one Ive come across recently are technical founders that run a
solutions company where a retired exec of a large company in a particular
industry is an advisor/investor and assisting with leads.

Screams of corruption but in practice not really so. The exec knows there
industry well, finds out where they struggle to find solutions, passes info
down to the company. The company then creates specialised software to deal
with it and joins a tender. As they have a trusted person on board it assists
in getting in the door. Also the competition will usually not be very
technically advanced.

Revenue streams are variable from rev-share to cost + maintenance. In a lot of
cases the same solutions can be sold to others within the same vertical or
outside it. Anecdotal but founders Ive met in this area seem far more
successful than those on a more traditional VC / bootstrapping tract. Perhaps
because a lot of the hard part of enterprise sales is solved by the advisor.

This may be an asia-specific style of business, not sure.

~~~
cfitz
This is not exclusive to Asia. I know more individuals whom have found success
doing this than attempting to sell software which is the result of a one-off
idea.

It might seem rare in the States, but only because 1) the entrepreneurs
heading these ventures do not want to give away profitable niches in the
market and 2) they are not as fun to talk about as startups with lofty billion
dollar goals.

------
thelastidiot
The main issue with going after random ideas, is that suddenly 3 months down
the process of building some proof of concept, you lost so much of the initial
thrill and focus (build B in order to build A, build C in order to build B,
learn D in order to build C...) that you've eaten all the energy, end up
burned out, depressed and browsing TC and sites like this one to reflect on
what went wrong.

~~~
ryandrake
This is called Yak Shaving and happens all the time when building complex
systems, especially by yourself. It’s happened to me many times: you start out
wanting to do “simple” thing X, and end up with a tree of task dependencies 20
layers deep. After spending a whole lot of time, all you have to show for your
planned mansion is a pile of foundation.

~~~
marcosdumay
But it's great, because once you have all that foundation you can quickly
iterate on your top layer and quickly discover new pieces you are missing and
must build before completion.

~~~
thelastidiot
Except by the time you get there, you need to figure out how to make a living
(bills don't suddenly disappear when you are in "sabbatical" mode.) Trust me,
I am in this right now as we speak.

------
monkeydust
Over 10 years I have had about half a dozen side enterprises whilst doing a
very demanding full time job.

Several of these made money, most didn't. The best one was an ocr app which
netted around usd 24k before the market got saturated.

It's very difficult to manage work with a side job and a family!

However, unexpected to me, the biggest benefit from these side gigs is that I
am better at my day job. I have learnt new techniques and skills vs my peers.
I am able to manage new situations better than others and make better
predictions on outcomes. This has been the biggest benefit.

There's a lot to be said for companies that allow employees to officially
pursue other (non conflicting) interests.

------
slackoverflower
The reality of business is you don't have to be innovative. A lot of
successful businesses are not even new ideas. Of course there is the whole
concept of the first-mover advantage but in the world of SaaS there is plenty
place for competition. Making a 30% improvement on one specific feature of a
popular product or service can very well be a business on its own. I think a
lot of people get held up on the idea that it's unethical to just steal an
idea so they try and start something brand new. Innovative businesses are the
riskiest.

~~~
bmpafa
"good entrepreneurs copy ideas, _great_ entrepreneurs steal ideas"

~~~
Bekwnn
> "good entrepreneurs copy ideas, _great_ entrepreneurs steal ideas"

Worth mentioning that the original quote was "artists". There is a lot of
valuable inspiration to be derived from other creative professions in this
industry. "Measure twice, cut once" is one I've quoted a lot, originating from
carpenters.

------
jotm
It is amazing reading these tbh, always wanted to start a non-physical
business, but the real world is always in the way.

Right now I sell spare parts salvaged from home appliances headed for scrap,
it is surprisingly profitable, so much that 2 people can't keep up with it
(having full time jobs, though). Selling to small repair shops and directly to
end users. Would be a great full time business, but unless an investor is
interested, it will take a while.

~~~
52-6F-62
Others are questioning some of your choices around this so I thought I’d weigh
in a little with my experience.

I never sold directly but I did work for a company earlier in my career that
served high amp tractor trailer generators, power distribution equipment
(later the department I ended up bootstrapping for them), lighting, and grip
equipment to the film industry.

Early on my time there I was tasked with unloading and either stripping down
or full on demolishing multiple 50 ft tractor trailers stacked to the ceiling
loads of old stands (scrap metal), lamps (scrap metal, wiring, ceramic
housings, aluminum housings, electronics), and high-amp ballasts for old Xenon
and HMI lamps (a lot of electronics including some pretty hefty transformers.
I have a stupid story about almost killing myself crippling a 20year old
capacitor in one of those things...).

I worked on that for at least 60hrs a week for many weeks at not a great wage
but they willingly paid me a lot of overtime to do it.

A lot of those parts weren’t going into new products but repairing high value
equipment that the longer it all lived the more profitable it was. They’re
probably still using some of that stuff.

I would have never thought to have started a business doing it though! I think
most places are more willing to exploit young employees for it.

~~~
HeyLaughingBoy
There's a huge market in repairing and retrofitting capital equipment. I've
been working with someone doing just that for a while now as he gets his
customers to validate the device I built.

Just like we'd use a bit of code to glue software utilities together, the same
concept exists in hardware. Build simple interfaces to connect bits of
hardware that were never designed to work together. A common, and cheap
example are the USB to Serial converter dongles.

It's a great way to fix a 40 year-old machine that you can't get spare parts
for: figure out a way to interface it to a more modern controller at a small
fraction of the cost of a new machine.

~~~
52-6F-62
I've definitely done it to interface with old scsi drives externally by
cannibalizing old power supplies and connectors — and also because I was
cheap... [read: poor].

------
kalonis
Another tip for finding business ideas: be good at ms excel and offer people
with a non technical background your help with their existing spreadsheets. As
far as I see it seven out of ten spreadsheets contain at least one idea for a
simple saas product. Those spreadsheets have often been tailored to fulfill
exactly the needs of a certain industry but the people who created them know
they are far from perfect and are often willing to pay for a more convenient
solution.

------
ynniv
These filtering options make me tear my hair out. Please don't use radio
boxes... almost ever. Users are almost always interested in some but not all
or none, and minimums / maximums. There is no way to see "everything that
isn't free or advertising based", or "more than $4,000 / mo", which is
probably what most people are interested in.

------
swoorup
I have pondering of an idea, which encourages local economy. Products,
services or goods would be preferred of the local area. This is to allow
visibility of local businesses and encourage spending locally. This also would
provide jobs for the local people. Its frightening that globalised economy
while beneficial takes jobs or sucks out of local economy. What do you think?

~~~
sudouser
hey, me too!

~~~
ClassyHacker
me three

~~~
sudouser
sir, what’s your background? me ux/ui research and market research

~~~
swoorup
programmer :)

~~~
tk999
me too. programmer. Love to work on SMB product.

------
coreymaass
So proud to be included in this. A lot of solopreneurs started with WordPress
and moved to SaaS. I went the other way and still see so much opportunity in
WordPress plugins, plugins-as-apps, and SaaS.

~~~
petra
What about WordPress as a web app development tool for non-programmers ? Is it
possible now ? Or could reasonable scale plugins will make it possible ?

~~~
coreymaass
Obviously, it depends on the app you're trying to make. But I recently worked
with a founder who found a niche, used Gravity forms to collect data, Gravity
view to display and export the data, (your basic CRUD in programming parlance)
and this solved the basic needs of the problem.

I presented on this a couple years ago at a WordCamp, and am giving the
updated version in a week at WordCamp Belfast.
[https://wordpress.tv/2017/06/05/corey-maass-rapid-web-app-
de...](https://wordpress.tv/2017/06/05/corey-maass-rapid-web-app-development-
on-wordpress/)

------
danieltillett
I will add make a product focused on the decision maker, not the needs of the
business. Make their life easier, or make them look like a genius, and you
will have a successful idea. Don't fall into the trap of making a product that
saves the customer money, but makes life more difficult for the decision
maker.

------
justonepost
I don’t know about this but I have an interesting marketing idea. Pretend
you’re making a lot of money and go around talking to a lot of different
people who might be interested in your product and saying what a successful
business it is.

Simple truth is that any successful business person does not go around talking
about how much money they make unless they have to because it just encourages
other businesses to copy their features.

------
laurex
It's kind of amazing how many ideas are framed in terms of a "problem" as
though it is divorced from people. A good place to start for building
_anything_ that people will want to pay for is Cindy Alvarez's book "Lean
Customer Development".

~~~
reagan83
Shout out to Cindy and her book. She is a former colleague and I’m a big fan
of her work.

------
aantix
If you don't have a clue as where to start in finding a profitable idea:

Ramit Sethi had an interesting article a while back about finding profitable
ideas. TLDR; look for reoccurring themes in the types of tasks/data/processes
people are requesting in UpWork's marketplace (UpWork use to be oDesk).

Researching there has the built-in advantage that these are obviously things
that people care enough about to pay money for, so that can serve as some
preliminary validation.

[https://growthlab.com/how-i-validated-my-business-idea-
using...](https://growthlab.com/how-i-validated-my-business-idea-using-
upwork/)

[https://www.upwork.com/i/job-categories/](https://www.upwork.com/i/job-
categories/)

~~~
quickthrower2
Yes but they are not paying a lot of money. I think a lot of those upwork
postings are from hobbiests, arbitragers and really tightass businesses.

~~~
noitsnot
I think he's suggesting finding a common need. You're not going to do the work
on those sites for pocket change. You're going to create a solution then sell
it Xtimes to multiple business who need it.

------
fredguth
I would strongly recommend watching Jason Cohen's presentation on MicroConf
2013 ([https://vimeo.com/74338272](https://vimeo.com/74338272)).

------
njsubedi
TLDR; The most earnings are generated by software that solve problem for a
niche of entrepreneurs/companies who don’t have programming
knowledge/programmers in house.

~~~
stillworks
Interesting and possibly exceptional counter example here.

I worked for a product company and I was supposed to add a set of new features
to the product.

The way the company was setup, we were able to setup demos/calls with existing
customers quite quickly.

Two of the existing customers are industry giants and as I walked them through
the demo, they were able to actually name the exact API calls I would have
been using for the demo. And then one of them actually effectively said "take
my money already and ship it"

I quite lieterally asked them if they had such fine grained information on
what we were going to sell them, then why are they even bothering to buy from
us ?

The answer was, getting a well packaged solution as a feature set in a product
they are already using is far more useful for them than to have to spend time
themselves writing ad-hoc/free-standing programs which do the same things even
if they have the resources to do it themselves.

~~~
mikro2nd
I'd add that by outsourcing it to you they've done two things:

1\. They've transformed a capex project to a single, monthly opex line item,
and

2\. They've eliminated a host of risk management -- if anyone asks about any
of a myriad of risk factors (password storage, gdpr, DoS attacks, whatever...)
they don't say a word, they just point at you.

------
timvdalen
It's not the greatest sign that some of these great, profitable ideas go to
404 pages. Not all of these companies made it.

------
teslacar
The 'free eth' business is booming cuz twitter is too inept to ban domains
that spam its site and ppl are too stupid to know better.

[https://medium.com/@robertyusert/there-are-free-ethreum-
spam...](https://medium.com/@robertyusert/there-are-free-ethreum-spam-botnets-
ravaging-twitter-68b25d12c2a)

------
davidjnelson
This is awesome! Here’s a list of companies with over $240k/year in revenue:

[https://www.indiehackers.com/round-table/how-to-come-up-
with...](https://www.indiehackers.com/round-table/how-to-come-up-with-
profitable-online-business-ideas?revenue=20001%2B)

~~~
tome
Huh? Isn't that just the same page?

~~~
davidjnelson
It adds the filter of over 20k MRR.

~~~
tome
Oh, that makes much more sense. Thanks! That's a very cool site.

------
woogiewonka
I have a bunch of app ideas if anyone wants to build one with me. I am a UX/UI
designer, would need a developer (probably iOS or Android, but web would be
helpful too). Reply with contact info if interested.

~~~
woogiewonka
I should mention that I will be validating these ideas before proceeding so we
are not building a junk app. Cheers.

------
amelius
If only the people who need certain functionality knew how to express
themselves and to speak up, we wouldn't have to go through the messy and risky
process of looking for business ideas all the time.

~~~
HeyLaughingBoy
If only you knew how to communicate with those people _in their own language_
, you wouldn't have to go through the messy and risky process of looking for
business ideas all the time.

People who need stuff say it all the time. You know what happens when non-
technical people say, "I need xxx" on a developer forum?

\- They're told "just google it"

\- They're told (implicitly) that they're stupid.

\- Devs pretend not to understand what they are asking for because it isn't
phrased _exactly_ how they'd like to see it expressed.

I've made money from simply hanging out on certain forums, listening to what
people want and then approaching them politely to offer a simple solution,
asking questions along the way. It ain't rocket surgery, people!

~~~
amelius
Still, it's the opposite of what you'd want. Instead of those people asking if
you could help them, you have to go out and find forums where people might
need your help. Imagine that doctors had to find patients like that. In fact,
perhaps I should start a consultation hour for people in need of IT solutions.

------
notadoc
These are fun/interesting to browse through.

Finding pain points is perhaps the easiest way to get business ideas. But as
always, ideas are only a starting point, the implementation is what matters.

------
allenleein
For startup founder, just master the concept of leverage.

The opportunity exists in the business world because when companies become
successful is when collective leadership becomes most focused on maintaining
success. Usually, leadership tends to see more risk in the downside of the
current plan and than upside in taking on new things.

Few things companies doing regularly:

1\. View a temporary trend as a competitive advantage. 2\. Focus on building
reputational momentum. 3\. Believe it’s easy to span across generations. 4\.
Love being right. 5\. Love the new idea, not new way of thinking.

Being right and staying right is totally different. Doing well reduces the
incentive to explore other ideas, especially when those ideas conflict with
your proven business model.

The idea is not important as thinking. And knowing how your idea evolving is
more important to have a good idea. Because you will realize how to generate
your own point of view.

Usually, the traditional Business Thinking Process is:

Dissect the dominant business model in your industry. How big is the remaining
market? Find a way to get in.

Instead, in order to master and beat the odds, you should just totally ignore
“the market things” and think about:

What’s the business model other people can’t/hard to clone? What’s the
opportunity cost of building it? What’s your advantage to build that business?

First, why can you ignore the market? Because Which market does not depend on
you, it’s on the user. You’re not in the market you think you’re in – you’re
in the market your users think you’re in. Most failed companies made the wrong
“Awesome product” by choosing the wrong market and following the wrong
standard.

If your business fits in a market design by someone else, your dead. Pepsi
never catches Coke. Bing never catches Google. The real question is can you
design a market that you can dominate.

Second, market-size is not important at all. Numbers are about the past if you
wanna create new things, you need to focus on what’s the one that can’t be
copied and people don’t know they need it yet.

If you thinking about market-size, the market you are talking about is old and
full of competitors. Market means buyers not a customer segment or existing
category.

So. Igore competition.

Create your own category.

Original
post([https://github.com/functionalflow/brains/blob/master/_posts/...](https://github.com/functionalflow/brains/blob/master/_posts/2018-04-12-strategy-
to-master-theodds.md))

~~~
icebraining
What products have you built following this philosophy?

------
matte_black
I have a small business building training data sets for neural networks.
Struggling, not very sure anymore.

~~~
neospice
Maybe you’re early. Can you PM me your MVP? This is a problem I will be
encountering soon.

------
whataretensors
Another risky way to setup an extra income source is to invest capital setting
up blockchain services that give rewards.

~~~
whataretensors
Mention anything about working with blockchains on HN and you get downvoted.
I'm not sure how this place became so close-minded, or if HN was always this
way and I changed.

A side project is risk. It's time and money that you invest into something.
Working with chains requires technical and engineering solutions. You can
build dapps, tokens, chain integrations, or just set up some mining/nodes.

~~~
romanovcode
My guess is that the hype is over and nobody cares about blockchain anymore.

------
more_corn
Step 1) create value Step 2) make sure cost of creating value < value created
Step 3) profit

~~~
encoderer
These are primarily SaaS businesses. You missed the "grind" step.

~~~
vram22
Startup opportunity? Grind as a Service? (GaaS). Not kidding, although the
acronym might make it seem so.

I mean, paying a middleman (the GaaSer) to do something better / more cost-
effectively than you (aka any SaaS startup founder) can (if it is an area they
can specialize in, and so achieve economies of scale). SaaS's (and other cos.)
already use many SaaS's anyway - at least some of them do, I've read. It's
like why we pay e-commerce companie like Amazon, rather than scouting for each
item we want to buy at separate vendors or vendor's sites.

~~~
Swenrekcah
Isn't that's either: a consultant if you get paid in money, or a co-founder if
you get paid in a share of the product.

~~~
vram22
I was somewhat speculating, hence the 2 question marks in my comment. But to
make it more clear: I don't think that it needs to be only either a consultant
or a co-founder. I was thinking (maybe an unconventional approach, I know) of
a GaaS company that has studied and has experience with, and then specializes
in removing the obstacles (of the 'grind' \- word from original comment I
replied to) that startups commonly have trouble with. Could be with customer
acquisition or customer retention or other areas, and they provide this as a
service. In fact I would not be surprised if there already are companies doing
this - there probably are. At least for different aspects of marketing I know
there are.

------
jiveturkey
Oh is the news not out? Ideas are a dime a dozen. Ideas aren’t the problem.
Execution.

~~~
digianarchist
Ideas can be a problem. Like the guy selling disposable SMS. Sure to land
themselves in legal trouble.

~~~
izolate
How so?

~~~
daveguy
Because the disposable SMS are probably being used for illegal activity and it
is illegal to support illegal activity?

