Ask HN: How long did it take for your startup/side project to break even? - j-rom
======
patio11
Approximately 6 weeks for Bingo Card Creator (counting from launch and
assuming my time is free). Appointment Reminder took longer -- off the top of
my head, it was cash-flow positive after about 3 months and had paid back R&D
costs (exclusive of my time) after maybe 6ish.

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dangrossman
The first few customers covered the ongoing costs (hosting, payment
processing, etc), and I picked up the first few customers the day I launched.
That can be said of my last few products. I'm not a big risk taker, I've never
launched something where I didn't expect it to pay for itself pretty much
immediately. The only real sunk cost up-front is my time.

~~~
mantrax
So the only thing you didn't answer is the actual question, which was how much
time it took you.

And "your time" counts when we discuss "how long"...

~~~
dangrossman
How do you figure that? I think I answered the question the same way every
other person here did. The question was how long it took to break even on
costs, not how long it took to develop. My time isn't a monetary cost.

~~~
pc86
Thank you. The arguments here that you need to calculate your time developing
a side project at your market rate for clients or it "doesn't count" is
ridiculous, and frankly kind of self-important.

A side project is something you _choose_ to do, and saying you're still in the
red because of your time, even though it cost you $4k to get off the ground
and it's given you $40k back is ludicrous.

~~~
rachelandrew
There are also ways you can mitigate the risk to some extent.

If possible build something your existing business needs. That way if it
doesn't take off as a product you still have something that meets a need you
have.

Launch the smallest thing that solves a problem your prospective customers
have. The smallest thing they will be willing to pay for, then iterate from
there.

Our product was something we needed in our service business (a small CMS that
didn't insert unwanted markup) and took us about 4 weekends to get to launch
in terms of the product, and about the same for the infrastructure around it
(documentation, sales site and so on). It was tiny compared to where it is
now, but enough people wanted it to make it worth continuing development.

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ef4
I see an awful lot of people dramatically under-valuing their own time in
here. Anyone who's capable of building and launching a successful software
system necessarily commands a pretty high rate.

I value my R&D cost based on what I used to make when I was coding for the
man. Which was a lot.

So three years in, I haven't broken even on my real opportunity cost. Given my
trajectory, I fully expect to. But it's not an overnight thing.

~~~
mindcrime
_So three years in, I haven 't broken even on my real opportunity cost. Given
my trajectory, I fully expect to. But it's not an overnight thing._

Same here - approximately three years in. We aren't _far_ from "breakeven" in
terms of actual dollars spent, because we don't actually spend much money
right now. But in terms of return on founders time, we're way in the red right
now.

But, we're in the B2B space, doing complex enterprise software that addresses
challenging problems using cutting edge technology. You don't go from zero to
thousands of customers overnight. TBH, we're only just now at a point where we
have a real product (two products, really) that are ready to sell to the early
adopter / earlyvangelist types. So now I get to go out and meet customers and
see if I can retrain myself, on the fly, to be a sales-person.

So yeah, nobody expected this to be an overnight thing either. It's been a
tough slog so far, but we think we're getting close to really turning a
corner.

~~~
ef4
Your story sounds much like mine: using modern software to solve a complex
problem for business customers.

One difference is that we've been out talking and selling from day one. Our
first customer was willing to be an early adopter and was sold on the vision
of what we could build for them. We couldn't have mastered the problem domain
without having real users and data.

It's actually a good deal for both sides: the customer gets high-touch,
custom-tailored software for relatively little money (because you're funding
the development and you own the software). You get a proving ground and data.
As long as you've identified a problem shared by other customers that you'll
be able to sell again and again, it can be a big win.

It also helps that we've been out selling (at least regionally) for three
years now. It adds to our legitimacy. People in the industry are getting to
know us, and that has made them more willing to say yes.

And B2B sales cycles can be absurdly long. We have heard "sounds great, but I
just finished making my budget for this year", and then eleven months later
they're back with a signed contract.

~~~
mindcrime
Sounds good. We've been out "talking" but for most of the early years weren't
"selling". But part of the reason for that is that what we're doing isn't
_entirely_ novel. There's a known market for the general class of things we're
doing, so we're not operating completely in the dark.

It doesn't help that we don't yet have a dedicated salesperson with selling
experience. So I've been working to reinvent myself as a salesperson over the
years, and I think part of it is that I'm only not starting to feel like I
know what needs to be done to go out and sell this stuff.

That said, there are things I would certainly do differently if I could go
back and do it again. :-)

------
lquist
Immediately. The beauty of a service business! Not massively scalable, but we
don't need investors and do $4M in profit (before-tax) between 2 partners. It
took us ~6 months to hit this run-rate.

~~~
not_paul_graham
May I ask what kind of service business?

a. Web Consulting (Rails, iOS, Android)?

b. Cleaning / Laundry / etc?

c. Foodservice ?

d. Niche Software Consulting ?

e. Other ?

~~~
lquist
It's in an industry ancillary to web development.

~~~
gargarplex
Is it recruiting? You cited $10k minimum customer spend.

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xpose2000
My sideproject, fantasysp.com, cost basically nothing to start around 7 years
ago. I found free baseball boxscore data online and bought the domain and ran
it on hosting I already had. The main cost was my time involved to code
everything.

"True" costs didn't arrive until I thought I actually had something worth
investing in. Which meant I had to purchase boxscore data for the sports I
couldn't find.

So to answer your question... ideally your project should cost very little to
start with. Once you discover that you might be on to something, then slowly
increment costs. Baby steps.

~~~
sdegutis
It's like they say, a one-handed hand-stand is just a half-cartwheel.

------
aaronbrethorst
It hasn't broken even yet, and I have no idea when it will. I've probably
spent $10,000 over the past seven years on gear, classes, and consumable
materials for it, but I'm finally starting to see some monetary return on my
investment.

Of course, I'm talking about photography, which I do because I love it and not
because I expect to make money at it. I'm ok with it being permanently in the
red and have no intention of ever trying to make it my primary source of
income, as that would suck all the fun out of it for me.

~~~
stevekemp
I think you echo my thoughts pretty well. I'm a photographer who probably has
about £10,000 worth of equipment, and while I get paid every two-three weeks
(Anywhere from £10-£150) it's something that I do because it is fun, not from
any rational income-generating sense.

I've absolutely zero interest in trying to be full time, because as you say it
would suddenly become non-fun.

------
rachelandrew
Perch CMS had paid back all costs (other than our time) 24 hours from launch.

It took almost 4 years for it to replace our entire income as a consultancy
and for us to stop taking on client projects. Between launch and that point we
were slowly scaling back the client work as the customer base for Perch grew.

------
thenduks
Bugrocket broke even during the beta period - about 3 months. CourseCraft
isn't SaaS, more like a marketplace, so some months it makes a lot more (from
transaction fees) than it costs and sometimes less, but overall/on average it
is break even, launched in December 2013.

------
pranaya_co
It took us about year and a half, as a side project to breakeven at
[http://startuplift.com](http://startuplift.com) \- That being said, we did
pivot a couple of times and keep changing the product, offer and pricing. We
started at the beginning of 2011 and it's not almost middle of 2014. I
recently quit my job and investing myself full-time, and now I feel we are
finally getting closer to our 'sweet spot'. Should've have quit a long time
ago, when I started seeing some intitial interest.

------
dsk139
Day 1. We do 1-to-1 mentorship for web development helping our clients go from
0 to fully functioning Backbone/Angular/Rails/Node apps- designed for people
who have time to learn on nights and weekends. Hosted free workshops and
utilized our network to get clients. Now our pipeline is mostly from internal
referrals from clients.

------
analog31
My side project is a simple and fairly specialized electronic gadget. I don't
pay myself a wage. I spent maybe a few months of sporadic evenings, and a few
hundred dollars, to design and produce a half dozen prototypes that I gave
away. My only hope had been to not lose my shirt. People who received those
prototypes wrote favorable reviews on web forums -- a boon that I actually
hadn't anticipated.

A possible milestone for break-even was when I was able to use the same PayPal
account for booking sales and for all of my business expenses. That took
roughly another few months, so maybe nine months all told.

My biggest cost is my time, even if I don't hang a number on it, because I've
got a finite amount of it. I try to keep a running estimate of dollars profit
per hour of work. To expand the business at this point, I have to let some
older models slide into oblivion, and come up with something that can attract
a higher price.

------
sniffler
8 months brought no revenue at all with me facing bankrupcy living on rice and
water. the 9th month things kicked off and I am doing about 12`000 euros a
month. Hopefully this will grow now i have figured out which side is up.
Medical Lead Gen

------
_delirium
Do you have a minimum size for side projects in mind? To take my smallest: I
have a project that costs $2-3/month to host, and it made more than $3 in ads
in its first month up, so it's always at least broken even. :-)

~~~
j-rom
No, I don't really have a minimum size. I suppose I was thinking a little
smaller since most of my projects I've done solo.

------
andyfowler
We became profitable at [http://nutshell.com/](http://nutshell.com/) about 2.5
years after we launched. Building something as expansive as a CRM takes a lot
of time. We made the decision to begin at the small end of the market (with
pricing to match), and started with a lot of small customers as we scaled the
product to bigger companies.

We also have higher expenses in terms of our support team (3 full-time) —
there are higher expectations for sharp, fast support in an industry like CRM.

~~~
not_paul_graham
If you don't mind sharing, I'd love to know some more. According to what
you've written plus your website: founded in 2010 (FOWD), so broke even
sometime in 2013, and currently supporting 14ish people + is profitable.
Kudos. That is really cool.

\- How many founders do you all have?

\- How did you get your initial set of (small) customers?

\- How are you all expanding to new customers (bigger customers): via
advertising? word of mouth? initial customers increasing seats? other?
salesmen ?

\- Why did you all pick CRM initially? (isn't it pretty crowded already:
SugarCRM, ZOHO, Oracle, et al.). I'm genuinely curious as I don't know much
about the market.

Thanks.

~~~
andyfowler
_> \- How many founders do you all have?_

There are four of us on the founding team — three of whom have some other
obligations, and myself. I spend 90% of my day coding or working on product
with our designer.

 _> \- How did you get your initial set of (small) customers?_

Primarily through Google Adwords. Initially we had an inside sales rep who
worked hard to talk to every trial, even if it meant spending a few hours
walking a 4-user shop into signing up.

We were also one of the early CRMs to be in the Google Apps Enterprise
Marketplace (i.e. integration w/ Google Apps). We got some free front-and-
center placement there, and this brought in a lot of customers. This was in
summer 2011, and for a while it doubled our monthly trials.

 _> \- How are you all expanding to new customers (bigger customers): via
advertising? word of mouth? initial customers increasing seats? other?
salesmen ?_

We’re definitely spiraling into more organic growth. We’re also doubling down
on some more marketing efforts like a booth and sponsorships at SXSW. The
product has also matured quite a bit into a place where it’s a genuine
competitor with the lower end of the Salesforce market.

And we’re doubling down on integrations with other services, which (in my
mind) is the “partner / channel program” of the SaaS world.

But this is an area of interest to me, and one we’ve been talking about a lot.
I’m interested to hear what others are doing in the heavy growth area.

 _> \- Why did you all pick CRM initially? (isn't it pretty crowded already:
SugarCRM, ZOHO, Oracle, et al.). I'm genuinely curious as I don't know much
about the market._

It was borne out of the sheer ineptitude of the market. Salesforce is ugly,
expensive and nobody likes it. Sugar is an OSS clone of Salesforce. Zoho is
trying to be Microsoft Exchange as well as CRM. </hyperbole>

We focused on bringing beautiful design and ease of use to CRM: something that
a lot of smart people are doing to various components of business software
(Freshbooks, MailChimp, etc.)

------
sdegutis
Never.

Well, in terms of money. But my side-projects that I wrote to make me more
productive have been paying off since shortly after starting to write them.
The most useful one for me is Phoenix[1]. Although that'll soon be useless to
me when I switch to Linux after finally becoming a nerd[2].

[1]:
[https://github.com/sdegutis/phoenix](https://github.com/sdegutis/phoenix)

[2]:
[https://news.ycombinator.com/item?id=7450019](https://news.ycombinator.com/item?id=7450019)

------
tburch
I put ads on [http://jsonblob.com](http://jsonblob.com) about a month ago and
didn't really expect much, but have been pleasantly surprised! I should have
put them on it when I launched it a little over a year ago...

In terms of breaking even, it's in the black if you don't consider the time I
spent building it (and rebuilding it when Grails started falling over). It
runs on a single Heroku dyno, so that's not casting me anything and uses the
free tier of MongoHQ.

~~~
stevekemp
You seem to have an issue with javascript.

If somebody enters a string value with "<script>alert(3)</script>" that breaks
it. For example:

[http://jsonblob.com/53303712e4b03569cc710b73](http://jsonblob.com/53303712e4b03569cc710b73)

~~~
tburch
Thanks! Fixed this -
[https://github.com/tburch/jsonblob/commit/4f70b44910b98224bd...](https://github.com/tburch/jsonblob/commit/4f70b44910b98224bdb76f9264f77a662475951f)

------
reubensutton
I generally don't try to make money from side-projects, letting them cost
money and just accept that the things I learn and other advantages are worth
the cost.

~~~
j-rom
I have a similar approach. But it doesn't hurt if you end up making some money
out of it either.

------
microjesus
Almost at a level where my software consulting will be replaced by the
fabrication, design and sales of hardware. The transition is painfully slow
compared to web.

~~~
sokoloff
Quick tip: your email field isn't public in an HN profile, so your last "Hire
me!" is hard to do, because no one can contact you outside of HN in an
easy/obvious way.

------
lazyjones
About 18 months ... Did have a popular product (website) before incorporating,
but had to choose and implement a business model on top of it.

~~~
j-rom
What product is this, if you don't mind me asking?

~~~
lazyjones
A price comparison website. It used to be free for merchants and users alike
and after incorporating we managed to establish a PPC model without losing but
a few merchants.

------
stefan_kendall3
Day 1? Apps are great side projects.

If you consider my time...well.

------
christiangenco
My three big projects (dbinbox.com, textbooksplease.com, and emailtipbot.com)
cost almost nothing out of pocket to get off the ground sans about a week of
my coding time, ~$8/month in server costs, and ~$10/year for the domain name.

Any money they've made gets immediately reinvested in advertising. One of
these days I'm going to make enough to pay myself.

------
bstar77
I started development on rukus.io about a year ago. Over the past few months
we've been starting to get decent sized contracts, with many more planned for
this year. We've done a great job keeping our costs extremely low, so it only
took a couple contracts to cover all of our out-of-pocket expenses.

~~~
j-rom
Interesting product. How long did it take for clients to start approaching you
as opposed to the other way around?

~~~
bstar77
My brother has quite a few industry connections, so we had some great leads to
start with. With that said, he's been relentless in seeking out new
opportunities which has benefitted us greatly.

Since we no longer have scaling limitations, we don't have to temper our
client conversations anymore, allowing us to take on much larger campaigns.

Many of our leads lately have been from new clients contacting us from word of
mouth which is extremely exciting. So it's taken about a year since we started
to get the potential clients contacting us.

------
jedicoffee
My project broke even after around 8 weeks and has done so since. We achieved
this by using social media (without paying) in combination with a niche idea
being displayed in said media.

~~~
j-rom
Nice, what's your project, if you don't mind me asking?

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ejain
Still not breaking even after two years (full-time!). But I'm getting there,
and it's an exciting space to be in (zenobase.com).

~~~
j-rom
This is a pretty cool idea. I was considering making something like this
(automate data retrieval and then analyze it) but I wasn't sure how to
approach the problem.

------
kumarski
30 days. A manufacturing training and certification business.

------
stepstep
kitestring.io

Not quite breaking even, but the cost to run the service is tiny. Been
operating for two months.

