
Running a Software Business on 5 Hours A Week - patio11
http://www.kalzumeus.com/2010/03/20/running-a-software-business-on-5-hours-a-week/
======
eps
Using Slashdot terminology - Interesting, but not Insightful.

Patrick is trying to derive generic advice by formalizing his personal
experiences. While it is useful to know what worked in his case, it is still
just one project, an isolated experience.

I've been in a similar situation myself. I have sold a startup that settled me
and my family for life, and things unfolded pretty much as I expected them to
from the start to the acquisition. But the more I think about the whole
experience now the more I am becoming convinced that there was a great deal of
chance involved. And over the years I started describing my startup less in
terms of how things _should be done_ and more how they worked _for me_.

In other words, once you are lucky, twice - you are good. Once you are
"twice", then it will be Insightful. Until then it's just Interesting. Feel
free to disagree ;)

~~~
Periodic
We tend to have quite a problem with survivorship bias[1] on HN. We like to
look at the cases where things went well and we assume that is because they
did something right that the others did not, and since the founder believe
this, he will list the things he intentionally did that he thinks helped. In
reality, it may have been something he was taking for granted, or it may have
been that he happened to miss some common pitfalls. From one data point it is
impossible to know if those are the factors that pushed him over the edge or
not.

Of course, one data point like this is useful if we look at all the other
stories we get here on a daily basis.

[1] <http://en.wikipedia.org/wiki/Survivorship_bias>

~~~
webwright
One thing that he did (dunno if he takes it for granted) is get a URL that
matches with the top search phrase. If he'd named his company "GridFriend
Creator", we'd be reading a VERY different article. Every time anyone links to
him, it's like the George Bush "miserable failure" googlebomb
[<http://en.wikipedia.org/wiki/Google_bomb> ]... Except that it's not frowned
upon by Google.

~~~
patio11
I think that is of fairly minor consequence to the overall success of my
business. I've been #1 for that phrase for almost four years now -- and as of
four years ago, it was worth about 150 visits a month, or substantially less
than five sales. "Whee."

It is worth more these days, but that is because people searching for [bingo
card creator] are probably looking for Bingo Card Creator (for example, with
five seconds of checking into my stats, I can guarantee at least 30% of folks
searching for it last week and clicking on my site already have an account
with me).

(Have I mentioned that "Google owns navigation on the Internet"?)

~~~
ericd
Doesn't that help it also rank for "Bingo _" and "Bingo Card_ ", though? I'm
very hazy on how Google uses anchor text, but this is how I assumed it works.

On a related note, I'd be very happy to pay you for an SEO consultation.

------
dangrossman
Works for me too. I often spend less than 5 hours a week working, and I have a
6 figure income. My web applications compete directly with Google and
Microsoft, among others, so the "no competition" argument is out.

I generally buckle down for a few weeks of hard coding (meaning 4 hours a day
for 3 or 4 days a week), once or twice a year, and the rest of the year I'm
just doing customer service, system administration stuff, and limited
marketing. Just maintaining the architecture for the sites is the biggest time
sink -- one of the webapps has two different kinds of database servers
(MongoDB in the front, MySQL in the back), web servers, worker servers doing
incremental processing/rollups... and I keep things PCIDSS compliant which
means self-audits, lots of security patching, etc.

Running affiliate programs for my products and encouraging customers to use
them to refer others has been extremely important. Affiliates do all the PPC
marketing, article marketing, social bookmarking FOR me, with their affiliate
links.

Just goes to show there are a hundred ways to run a successful business. The
venture backed 60-hour-week startup isn't the only option.

~~~
jseliger
_Works for me too. I often spend less than 5 hours a week working, and I have
a 6 figure income. My web applications compete directly with Google and
Microsoft, among others, so the "no competition" argument is out._

I realize that HN doesn't encourage heavy self-promotion, but what is this
business? Where is its website? Your story sounds wildly implausible, though
it obviously isn't impossible.

Still, it reminds me of the comments I got on my post about "You’re Not Going
to be a Professional Blogger, Regardless of What the Wall Street Journal Tells
You:" [http://blog.seliger.com/2009/06/17/youre-not-going-to-be-
a-p...](http://blog.seliger.com/2009/06/17/youre-not-going-to-be-a-pro) .
People would say things like, "I run a group of online entrepreneurs, and am a
member of another, and between the two groups there are well over 200 people,
a majority of whom are pulling down 6 to 7 figure incomes based _primarily_ on
the advertising on their blogs, not by “selling ancillary services.”" But they
wouldn't link to the sites in question! To me, such claims smell bad.

~~~
dangrossman
<http://www.awio.com> or <http://www.dangrossman.info/folio/> if you'd like to
take a look.

I'm extremely open about my business. I've thought about writing this type of
article to share on HN before, but it always comes across as bragging instead
of sharing so I can the idea soon after starting.

This is not an overnight success story. I earned my first paycheck on the
internet when I was 15 or so, 10 years ago. I've had a long time to build my
skill at development and marketing, try ideas, and build up my user base
across the websites.

Some of the sites took a year or two to break even on up front costs and
hardware. But since I build services that require almost no ongoing
development or support beyond basic "how do I sign up, where do I find feature
X" questions, each customer added in the following years is almost pure
profit.

Very incremental, steady growth, and sometimes a leveling off. A bigger
business wouldn't want a site to level off at a couple thousand a month in
revenue, but if it's only supporting and supported by one person, a couple of
those and yes, you hit 6 figure annual profit.

I also sell websites from time to time, if they level off and it seems like
it'll require more work than I'm willing to put in to reverse that trend.
Here's a site I sold on Flippa for $90,000 earlier this month. It generated
over $200,000 in sales in the 18 months leading up:

[http://flippa.com/auctions/84185/11000month-Revenue-No--
1-In...](http://flippa.com/auctions/84185/11000month-Revenue-No--1-In-
Market-1500-Customers)

~~~
paraschopra
Oh, wow, you run W3ROI? Please do write about your experiences. I (and many
others) can learn a lot from it.

I'm trying to do something similar with <http://visualwebsiteoptimizer.com/>
\- hopefully I will also be able to join the "5-hour workweek" club.

~~~
sunir
Hey Paras, I'm one of your beta testers. I can assure you that you will go a
lot further if you put in a consistent 40 hours a week for the next five years
around the core idea of website conversion optimization rather than abandoning
the product at some point in the future.

~~~
paraschopra
Hi Sunir,

Thanks for replying. Yup, I am committed to the product and thankfully it has
been positioned as one of the easiest website optimization products available.
What I meant by the comment was that I was quite impressed by W3ROI as a
product and thought it was a consistent effort. But when I realized it is a "5
hour" effort, I was really surprised.

Rest assured the product isn't going anywhere. I have built a team (not a
single man effort anymore) and is a serious startup now. What I said was a bit
like hyperbole, sorry if it came across as I am abandoning the product :)

------
wglb
A marvelous post about Patrick's start of his "wee business" and how he got
there on the time left over from his salaryman day job with a three-hour train
commute to boot. Whether this overall will work for any of the rest of us,
given what seems like incredible focus Patrick seems to have, is unknown.

And this is not "work four hours per week to gain huge success in life". Like
everything else he writes, this is backed by expedience, external constraints,
and data-backed experience.

Patrick's business is what I call the Chicago School of Startups. (I might
have just made that up.) (And at the risk of tweaking Joel, as Fog Creek
Software seems to be following the Chicago model.) This is, like 37Signals, a
self-funded operation, and eventually self-sustaining. The SV School, or more
precisely, the YC school, emphasizes the path of seeking venture capital, and
has the side benefit of a seriously enviable network of other founders and
former founders.

What has been most interesting is the data-driven nature of his decisions.
Many longwinded discussions on HN have focused on the importance of design,.
Patrick, among others, points to A/B tests (not to mention highly successful
sites like Craig's List) indicating that such design obsession might be
misplaced. _Minor heresy: while Mac developers are very graphically intensive
people who will buy software just to lick it if the UI is good enough, many
Mac users are just regular people. My Mac version has a conversion rate fully
twice that of the Window version, and it is not noticeably pretty._

Perhaps there is a little leeway to tease Patrick--it does not seem that this
five hours per week is sustainable. It is successful enough that he is
quitting his day job, and I bet he now can't help but spend more than five
hours per week on it. Congratulations.

~~~
patio11
_I bet he now can't help but spend more than five hours per week on it_

It is a very open question how much I'm going to be working after I go "full
time", but I've rarely seen myself do great things after ~20 and that would
leave me with plenty of time to catch up on living, so I think I might try
that on for size. But hey, if I decide to do more or less in any given week,
there won't be anybody to tell me not to.

~~~
jacquesm
Start another project.

If you can do this one on average at 5 hours per week, theoretically after the
initial burst you could sustain 8 such jobs in parallel.

------
tptacek
_(Aside: I know many Americans consider the last option shockingly
irresponsible. My ability to prevail over my employer — a major multinational
— in a lawsuit is effectively nil. A contract is just a formalization of a
promise. In Japan, the ongoing relationship with my bosses is the part of the
agreement that provides security, not the piece of paper.)_

This is one of the more important bits of advice I've seen Patrick give, and I
think it applies to those of us full-timing with our companies _even more_.
Your lawyers are going to tell you that contracts matter a whole lot, too. And
just like Patrick with the company in Nagoya, your ability to prevail in a
dispute, contract or not, is usually going to be nil.

This is something I think a lot of us learn the first time they get into a
dispute (for instance, when we are first aggrieved by a giant business partner
who breaches our carefully-considered contracts.)

~~~
sachinag
This is a large part of why I advocate waiting to incorporate until you can do
it right. The instacorp LLC won't really protect you when you need it most.

~~~
tptacek
I think that's pretty misleading. What protects you when you've incorporated
is that your contracts are between your _company_ and your customers, vendors,
or partners. It's not the nature of the contracts themselves. Consolidated
Gypsum can put your _company_ out of business by dragging you through a
lawsuit until you BK. It can't take your _house_.

The reason contracts don't protect businesses is that they cost too much to
enforce. When you're not in the same league as your adversary, they will
simply outlast you. The same dynamics do not apply to an attempt by
Consolidated Gypsum to make themselves whole on a debt by _trying to take your
house_.

Incorporate early. There's no good reason not to.

~~~
theBobMcCormick
Good advice. Also, in most states setting up an LLC is cheap and easy. Here in
Colorado, it's only $50 and a fairly thin form that only ask for the obvious
stuff like; what's the company name, what's your name(s), etc.

------
benwalther
As someone who struggles to come up with 'lifestyle business' ideas, his
advice on just talking to people was like a punch in the gut. So obvious it
hurts, yet I ignore it and spend time 'thinking.'

~~~
wildmXranat
So, how would you describe your experience with part-time development ? I'm
wondering if working 20+ hours a week on top of a regular 9-5 is enough.

~~~
gridspy
I agree. See relevant blog entry - [http://blog.gridspy.co.nz/2010/02/part-
time-entrepreneur.htm...](http://blog.gridspy.co.nz/2010/02/part-time-
entrepreneur.html)

------
Aegean
I acknowledge the fact that a product is more likely to be successful if it is
made simpler. And I face the difficulty of trying to create a complex product
every day. Hence his advice:

"Are you considering starting up a business because you wish to work on
wonderfully interesting technical problems all of the time? Stop now — Google
is hiring, go get a job with them. 90% of the results of your business, and
somewhere around 90% of the effort, are caused by non-coding activities"

But... then who is eligible to build a complex product? Like writing a
database from scratch, or some other complex piece of work. I think a startup
should also be able to do it somehow.

~~~
nostrademons
I thought that was the best line in the piece, because it's so true. Probably
90% of the engineers at Google are there because they want to work on
wonderfully interesting technical problems all the time, and don't want to
deal with all the other bullshit that comes from running a company. And I
suspect that a major part of the reason my startup failed was because I wanted
to work on wonderfully interesting technical problems yet _also_ wanted to get
rich. There're a limited number of problems that people will pay you to solve,
and most of them are boring.

As for who is eligible to build a complex product? Nobody. If you set out to
build a complex system from the start, it invariably won't work at the end.
Remember Gall's Law:

<http://en.wikipedia.org/wiki/Galls_law>

Before you cite counterexamples like Linux or Google, it's worth considering
what they looked like when they started. Linux started as a terminal emulator
that would spit back "ababa" when you turned on the computer. Google's early
webserver was a dozen or so source files that looked vaguely like Tornado,
except that instead of having all those webframeworkey goodness like regexp-
based dispatch rules and templates, it would just issue "prints" on the file
descriptor for the user's connection.

If you want to write a database from scratch, you should start with some sort
of basic persistent key/value store. Then give your values a column-like
substructure. Then figure out how to index it. Then figure out how to index it
based on multiple columns. Then figure out how to handle joins and sorts. Then
slap an SQL parser on top of it, and you'll have something similar to MySQL c.
late 1990s. Then endure all the laughs as people say you're not a "real"
database, and put in 10 years of incremental improvements while you add
transactions, and better SQL compliance, and query optimizers, and wire
protocols, and replication, and clustering, and all that stuff.

------
sekizaru
Congratulations on making the move to full-time!

At the beginning of last year I made a similar move from being a Japanese
salaryman to my own business. I was writing code in a notebook on my 1.5 hour
train commute and on my lunch break and then typing it up on weekends. After I
went full-time on my own business I found that the scope of what I wanted to
do expanded and my productivity dropped. Also, the time-management skills that
worked well on a part-time basis didn't work as well when I went full-time. I
also found that it was easy to get sidetracked by side-projects and that
personal life (time with friends, holidays) became a larger part of my life. I
also found that a lot of things that I wasn't so great at (web design,
graphics) etc. took up a large amount of my time.

So I would be interested to hear your thoughts on time-management,
prioritization and working from home once you go full-time if you decide to do
this as a series.

------
tsally
_In our periodic bouts of crunch time, such as the last three months, I end up
sleeping at a hotel next to the office (about 25 times this calendar year)._

Oh man. Maybe it's just me being an ignorant American, but doing that for
anything but a company you founded is just crazy. I can't believe that's the
norm in Japan.

~~~
dimarco
It Japan, as far as I know, it's not "periodic bouts of crunch time" that
brings salarymen to small hotels instead of home, but "nightly bouts of
alcohol".

~~~
patio11
I do not drink. Most of the engineers in my company go straight home to their
wives and children when they leave the office. (Our salesmen appear to have
the more traditional salaryman attitude.)

~~~
dimarco
patio11: I certainly wasn't implying you drink. (A few downvotes to my post
tell me that people thought I was attacking you)

------
garply
I appreciate the point that running a software business is only 10%
development and 90% business. "If you want to spend your time writing code, go
work for Google."

This hits close to home as I am gradually learning that I provide far more
value to the world by using my knowledge to have others do technical
implementation than if I were doing it myself. For someone who loves code,
it's a painful transition. But I think you can learn to love business just as
you learned to love code.

~~~
nostrademons
That's a complicated statement. The depth of your own technical knowledge sets
a ceiling on the depth of the people willing to do technical implementation
for you. After all, most people are unwilling to do grunt work for people
dumber than themselves. The main thing your workers get out of it is a
learning experience and the chance to be mentored by others more experienced
than themselves, so if you're not more experienced, why should they work for
you?

So yeah, you get more leverage by using your knowledge to mentor others to do
the development for you. But you could end up getting stuck as CEO of a
startup that's in a backwater corner of the industry, rather than as a
developer in a company that's doing interesting world-changing stuff that you
can then leverage when you start your company later.

~~~
synchromesh
It's a simple statement. You confuse naïveté with stupidity. If there is a
"ceiling" as you describe, then Sergei and Larry must have godlike
intelligence to have 20,000 engineers working for them.

The point is not "I'm not capable of coding this, I must hire someone
smarter", it's "I'll manage someone to do the coding I don't have time for,
and they can observe my attempts to run the rest of the business (or
whatever)."

------
phatbyte
"...However, you’ll quickly find that there is literally a world of people out
there who are willing to work for $1.50 an hour and would be terrifically
overpaid at that price..."

That's the number one reason why some clients of mine comeback to me saying
their last developer didn't quite accomplish what they wanted. And the reason
why sometimes I have to struggle to fix bugs and identification (yes, many
low-cost devs don't have a tab key) on other peoples code.

You normally get what you paid for, but I hope it worked nice for you.

~~~
phatbyte
identification/Identation

~~~
ido
That's one of those little things that really annoy me- not because they are
important, but because it's so easy to get right!

Hell, most IDEs would indent your code correctly for you, I'd have to actually
work to override eclipse's auto-indentation!

------
Erwin
I find it incredible that he's a Japanese Salaryman having recently read
another such peron's Q&A on reddit:
[http://www.reddit.com/r/IAmA/comments/bewof/iama_salaryman_僕...](http://www.reddit.com/r/IAmA/comments/bewof/iama_salaryman_僕はサラリーマンです/)

Seems like once you've finished working 10 hours every day for your lifetime
employer, there's not much to do than the obligatory heavy drinking!

~~~
mds
See also patio11's own IAMA Salaryman:
[http://www.reddit.com/r/IAmA/comments/9g79p/i_am_a_japanese_...](http://www.reddit.com/r/IAmA/comments/9g79p/i_am_a_japanese_salaryman_ama/)

------
tortilla
Have you thought about writing an ebook like Getting Real?

~~~
tptacek
<http://news.ycombinator.com/item?id=1186157>

~~~
ja27
Yes, but he's already written large parts of the book on his blog. He could
outsource an editor or even ghost/cowriter to assemble it. Could be a possible
project for after he quits the day job, but there are probably others that
would pay better.

~~~
patio11
This advice is written from the perspective that writing is 100% of the
project. Writing is 10% of the project. Writing a salesletter, a marketing
site, linkbaits, and obsessive promotion is the other 90% of the project. That
is time debt that I take on as soon as I sit down and say "OK, I'm going be
become an author."

The upside to it is miniscule: I know I can sell thousands of copies of
software for $30, because I've done it, and am reasonably certain that I could
sell accounts at a new SAAS for $100 / month, given time to work on it. I am
not sanguine about my ability to sell thousands of copies of a book/ebook --
my most loyal blog readers number in the hundreds, if that. I'd also expect
massive pushback on the prices that I think make sense -- for examples, take a
look at every launch of a non-software info product on HN. (I think I'd be
particularly at risk for that because a non-trivial portion of my audience
likes the fact that I started a business for $60 -- and when you have $60 in
your budget, $X00 on a book is right out.)

There are also psychic costs to me. I kind of value my participation at HN and
the Business of Software, for example. It is my sanity-preserving lifeline.
I'd really hate to have every post carry the implicit disclaimer "Warning! He
is trying to sell you something."

~~~
lsc
Now, there's absolutely no money in it, but getting published dead-tree can
give you a lot of credibility and publicity, and it's not as hard as it once
was (see the bit about 'there is no money in it')

As far as I can tell, writing a dead tree is /easier/ than writing a ebook,
and distribution is easier, etc... you keep less of the money, but more of the
credibility.

------
vaksel
I think a large part of it is competition...you don't really have any so you
can work as much or as little as you want.

If you have competition like in 99% of the niches...you'll be working a lot
more than that

~~~
patio11
There are three companies listed on the American stock exchanges with over
1,000 employees who sell products which directly compete with me. (They are,
of course, much less important to those companies than they are to me.)
Software-wise, there were ~15 shareware products and ~7 web applications last
time I checked a few years ago. At least three of them actually know what
they're doing (and one of those was launched by a participant from another
forum I'm on who, ahem, paid me the sincerest form of flattery).

In a broader sense of the word "competition", my program is a proper subset of
Microsoft Excel, I compete with the world's savviest Internet publishers (like
Demand Media) for large portions of the queries of interest to me, and a
portion of my queries are dual-use for a multi-billion a year industry.
(Teachers are not the only folks interested in the top ten for [bingo cards].)

I mean, its not like I went and made a URL shortener or zip file extractor,
but I also didn't go make something so staggeringly unique the world had not
heard of it before or since.

~~~
theycallmemorty
Just out of curiosity, have you ever thought about adapting your bingo card
creator to make cards for plain old bingo. You know, with the numbers and not
words?

------
wglb
An additional interesting number is the number of hours that freelancers have
worked on this project, if that wouldn't be telling too many secrets.

~~~
patio11
Yikes, no clue. That would be upwards of 10 freelancers and $6,000 worth of
projects.

(I have always paid by task, not by hour -- as you might have noticed I tend
to center on small, well-defined projects with easily verified deliverables. I
cultivate trust with my freelancers such that they know I'm not going to screw
them on a neverending scope-creep deathmarch for the $400 project. Thus, I've
really got no clue whether they're taking their sweet time doing projects or
figuring out ludicrously efficient ways to do them and earning more per hour
than I do -- and if they have done that, _bully for them_.)

------
threepointone
Hey patrick/patio11, there are quite a few things I disagree with you about,
but I love that you're a genuine guy. I wish you all the success and happiness
in the world now that you're following your dreams full time. I'm very glad
you're a hacker; the decisions you make and the thought you put into them
always inspire me.

Peace.

------
thaumaturgy
Wow, this was amazing, and better than almost all of the other time management
posts out there.

------
ph0rque
Patrick, what is the best way to contact you a la PM for startup advice?

~~~
wglb
Alternatively, if he isn't able to do the contact, I would highly recommend
reading all of his comments <http://news.ycombinator.com/threads?id=patio11>
and all of his blog <http://www.kalzumeus.com/>

------
scorpioxy
Before even reading it, I just wanted to say thank you for finally writing up
your experience.

------
Aegean
How large is his business now with 5 hours a week?

~~~
patio11
<http://www.bingocardcreator.com/stats/sales-by-month>

------
DTrejo
We look forward to the next part in the series!

------
dsspence
How many articles can you write on Bingo cards?

All the power to him however.

~~~
jacquesm
This article is not about bingo cards, it is about the 0 to 55 Mph stretch
that you face when you're starting a 'side' job, and achieving the point where
you can quit your day job.

