

Ask HN: Enough profit to replace a day job? - MisterWebz

As far as i know, a successful startup is supposed to make you rich or well off, but what about a web app that brings enough profit to replace your day job? I've been programming for about 6 months and i don't have nearly enough experience to venture into the real startup world. Is the failure rate still really high for web apps that make, let's say, $1000-$2000 profit a month or are there tons of these, but we just never hear about it because it's so common? Can web app revenue stay stable or are web apps that make at least $1000 profit/month "doomed" to eventually grow substantially?
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cperciva
_Can web app revenue stay stable or do web apps that make at least $1000
profit/month "doomed" to eventually grow substantially?_

The user base of most web apps is driven largely by epidemic effects: Most new
users are "infected" by a previous user, either as a feature of the
application (e.g., paypal's create-an-account-to-receive-your-money) or via
old-fashioned word of mouth. As such, the growth should look approximately
like a logistic curve.

In general it takes at least 5 years to reach the saturation point on the
logistic growth curve; google reached that point a few years ago, and facebook
is reaching it now. Prior to that point, you're still growing approximately
exponentially.

Which is all a long-winded way of saying: If it takes you 5 years to reach
$1k/month in profits, you might end up staying there; but if you can reach
$1k/month in 2 years, you're probably going to end up a lot bigger than that.

~~~
patio11
Google hasn't saturated the search market. They're doing something like 50 ~
100% YOY growth in number of searches in Japan and the United States. This is
partly due to getting their toolbars installed as the default in more places
and part in moving the entire userbase towards search as an activity.

We're very quirky in our usage of computers. I live on the Internet, and
Google reports that I've done in excess of 20,000 searches. That works out to
about 25 a day. I'm going to guess many of us have roughly similar numbers.
The average user, on the other hand, does something like 30 _a month_ if you
can believe Comscore et al. Move them a little from where they are to where we
are and Google gets to make _another_ round of money hats.

~~~
cperciva
_Google hasn't saturated the search market_

I didn't mean to say that they had. Google _awareness_ however, has saturated
the market.

I'm dividing startup growth into two phases: First, an exponential "people
become aware of your product" phase, and second a much slower "convince people
that your product is useful / better than the competition / etc." phase.

How much growth you get in that second phase will depend on the market and
your competitors, but it will never come close to the first phase -- and that
first phase generally takes about 5 years.

Of course, none of this applies to you, since bingo cards don't really act
like an internet startup -- you're getting traffic from google, not from your
users saying "hey, there's this really cool website you should check out".

------
patio11
Self confidence is not a sin. You are no less well prepared than many folks
here (my previous management experience was a WoW guild, and many quite
talented folks go to YC straight from undergrad).

I know some folks with software that fits your description, but most either
consider it a failure or have it on autopilot. They typically do not talk too
much about it. Absent putting something on autopilot I think that certain
dynamics of Internet marketing favor sustained growth over statis but there
are plenty of examples of either. For example, an app reliant on Google will
tend to grow automatically over time as the site accumulates trust and Google
grows the search pie. All bets off on app store.

Do not assume existence of a profit cap. Google does not stop sending traffic
after you hit your projections.

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macournoyer
If you're not looking for a homerun, I suggest you look at niche markets.

I'm making about 15k/yr w/ my niche product: <http://createyourproglang.com/>.
Where I live it's not enought to replace my job, but it's a nice complementary
income.

There was a nice thread recently on HN about ways to find & test a niche
market: <http://news.ycombinator.com/item?id=1454221>

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gexla
This wouldn't necessarily have to be a web app. If you are talking "web" then
it could be any monetized site. This could be a blog, informational site,
simple ecommerce or even a collection of a number of each of the above to
combine for the amount that you are looking at. Of course, you are likely
going to have a smaller upside with a blog than you would with a web app. In
other words, TechCrunch (a blog running on Wordpress) is a successful tech
news site but it doesn't have the same potential as Facebook.

I don't see why there would have to be a high failure rate for web apps which
might bring in 1 - 2K per month. That's a business and as long as it's paying
for it's cost and your time then there would be no reason for it to fail other
than flagging interest of the owner. That range for two developers with no
other income would be a problem, but for someone who spends a few hours a week
on the app and has a day job, then it might be a nice income boost.

~~~
petervandijck
In many countries, 1/2000$/m is a full time income, not just a nice income
boost :)

~~~
chc
For reference: It's only a little less than I've made working at a newspaper
in California, and the savings on gas might actually make it break even.

~~~
alnayyir
Some people are way too accustomed to the consumption-driven lifestyle and
think they'll perish if they make less than $60k/year.

------
arn
Well, talking about web businesses in general. I think there are a lot of
these lifestyle web businesses around where people are making enough to
support themselves, but are not crazy rich.

It's a bit of a contrast to the VC/silicon valley world where people get
investments and try to build a massive business.

It's hard to quantify a failure rate when the cost of starting a web site is
so low. I have 200+ domains, but only a few "real" websites. In some ways each
of those un-used domains is a failure. :)

~~~
lftl
_Well, talking about web businesses in general. I think there are a lot of
these lifestyle web businesses around where people are making enough to
support themselves, but are not crazy rich._

So true. Because the barrier of entry for most of these businesses is so low,
you're competing against a huge pool for that $1k-$2k a month. You're
competing against 3rd worlders to whom $1k-$2k is a TON of money. You've
competing against stay at home moms for whom anything close to minimum wage
they can do in downtime is perfectly fine, etc. You have to have something
that makes your business not worth competing against for these people or they
WILL do it for less.

------
ra
There's no magic, web apps don't just take on a life of their own.

To build a web business takes a lot of hard work, dedication and persistence,
just like anything else in this world that's worthwhile.

~~~
kljensen
Truly. Making that amount of money is non-trivial. The web is a chaotic,
crowded place filled with free stuff. For most of us, it takes a clever idea
and persistence to make anything over small change.

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il
It's actually very easy to make a web service that makes a couple thousand
dollars a month, if you stay away from 2 startup pitfalls:

1) Don't rely on advertising to monetize 2) Don't target it to consumers/end-
users (if you're selling a web service, obviously this does not apply if you
are selling an actual product)

There are many B2B niches right now that have terrible software solutions
people are willing to pay for improvements to.

For example: About a year ago, I created a very niche web service for Internet
marketers. It was basically a PayPal subscription tacked on to a few custom
scripts I wrote to automate certain marketing tasks for myself. I didn't
advertise it at all except for posting on a couple of Internet marketing
forums I frequented. The site only had a few hundred visitors a month, however
about 10% of those converted and became subscribers. Within a couple months, I
had about 30 subscribers paying $50 a month to use the service.After I wrote
the code for myself, the site required no work to maintain, the subscriptions
were coming in on autopilot, it was an easy $1500 a month with no effort.

I was surprised at how easy it was to make a little extra money this way- the
key was focusing on a very specific, small B2B niche, and creating a paid
subscription service that was far superior to anything else that was
available.

~~~
runT1ME
How did you evaluate it was a small niche? Are you getting any growth in terms
of customer signups per month?

~~~
il
It's a web service that only marketers running certain ads on a single ad
platform would need, I know there's not that many people doing things this
way.

At the same time, since my target audience was so well defined, I could
quickly build a service that would do exactly what they need compared to
broader, non specialized services.

~~~
ecaradec
How did you get it known among this audience ?

~~~
il
A combination of several cold emails + a couple forum posts on relevant
forums, it didnt take more than a couple hours. This was really a very minor
side project.

------
JangoSteve
_As far as i know, a successful startup is supposed to make you rich or well
off, but what about a web app that brings enough profit to replace your day
job?_

That's an interesting perception. I have a web-based startup and I'm located
in the Midwest. There is a huge entreprenuerial scene here, but web-based
startups are as rare here as elevation changes.

Of all the entrepreneurs I know here, the vast majority of them make just
enough to get by with a little stability, and you'd be hard-pressed to find
someone who doesn't consider that a success.

I think a web-app making $1k-$2k a month with relative stability is a great
thing to have, a good source of income, and even potentially a successful
business, though by popular definition (as you pointed out), it probably isn't
a "startup".

------
alttab
Why do you want to do this? Because you don't want to work for the man,
because its hard to service your web app and keep your day job? Do you have a
family that is getting strained from this?

If you are young, on your own, and can manage it - keep both. Theres no reason
to go independent soon as one of your apps goes Ramen profitable. Consider the
situation where profit plummets quickly before you can figure out how to turn
it around and you can't pay your bills. You'll be scrambling for a job and you
may end up taking one you don't like.

Consider _why_ you are thinking about doing this, and look at your own
situations and emotions on the subject. We can give great advice but in the
end you'll know you situation better than anyone else - even if you explain
it.

------
minouye
The obstacles are not as high as you think. I know many people have a rather
poor opinion of affiliate marketing, but if you want to free up your time to
work on interesting projects, I'd say it's definitely the fastest way to 1-2k
a month, will very little maintenance required. If you'd like examples of
folks who are doing it in a respectable, non-spammy way, see the following
(and they are definitely doing well over 1-2k):

<http://www.getinvisiblehand.com/>

<http://camelcamelcamel.com/>

<http://picclick.com/>

------
justinchen
I wouldn't venture a guess about the actual failure rate, but I'd bet that
there's way more profitable web apps (and correspondingly, lots of failed
attempts) out there than you think. As a single or small team, $1-2k
profit/month is pretty doable when your primary costs are just server hosting.

If you can find a way to leverage SEO or inherent viralness in your product,
you can rely on a reasonable amount of consistency, but it maybe be averaged
over months as opposed to month to month.

Some people can work on things on the side of their day job until they reach a
good level. For us, we knew we wouldn't get anywhere with such non-committal
focus (my co-founder was also in a different city which made it harder). We
just made sure we had enough cash runway and quit. Reached profitability about
1.5 years after quitting and have been doing it for 4+ years now. It's amazing
how much "business" you learn along the way when you're fighting to stay
alive. It's not easy, and definitely more work than a normal job, but it's a
fantastic experience.

------
adii
I'd venture out to say that we just don't hear about the smaller web-based
businesses that make good money, because they aren't making millions or have
millions of users (mainstream tech media only covers businesses like these).
Similarly, a big VC deal is a sure way to get noticed.

So yes - I truly believe that is possible to build small, sustainable web-
based businesses selling a digital product or service of sorts. And if you're
clever about running your idea as a business, then there's no reason why you
shouldn't be able to quit your day job in favour of working for yourself.

------
Cwood
Yes, there are tons of online lifestyle businesses that make enough to support
their owners. And they don't necessarily take years to build. It just depends.

Generating significant revenue from advertising is tough because it requires a
huge audience. But a lot of lifestyle businesses are driven but a more old-
fashioned business model: you make something of value and charge a fair price
for it. The failure rate of these businesses is lower than that of VC-style
startups.

Good luck!

------
mattmanser
There are tons, we have our own frequently cited example of Patio11's
Bingocardcreator, a lot of the small optional plugin apps you can buy for 37
signals products and general tools like Balsamiq Mockups and Noble Samurai
(flash apps). They're the ones I know of just reading this site, I'm sure
there's a ton of b2b ones as well we don't know about.

But even with a simple web app you need to know a fair bit about a lot of
different aspects of web programming. On the otherhand building one is one of
the best forms of practice :)

~~~
seltzered
If you take a look at patrick's bcc sales page
<http://www.bingocardcreator.com/stats/sales-by-month> , it shows that it took
him more than a couple of years to be profitable enough to comfortably quit
his day job.

------
rubinelli
Do you know the Techzing podcast? One of the hosts has a freemium
Twitter/social media tool that's generating $1k/month after one year of
effort, between coding and marketing. You could listen to previous episodes to
hear how it evolved.

------
petervandijck
Yes, there are quite a few sites that make 1/2000$/m, and yes, you rarely hear
of them. That's not to say it's easy. It does tend to take some time to get
there (ie. a few years).

------
ahoyhere
The likelihood that your project will grow beyond what you want is very low.
After all, you can always close it to new customers.

Our app (<http://letsfreckle.com>) was growing only slightly per month, until
we really started promoting it. Now it's growing how we like.

But we could have coasted along at $5k/mo forever.

There are lots and lots of small web apps making a nice tidy living for their
owners, but yes, they don't get talked about because it's not sexy enough for
the tabloid nature of "startup" news coverage. Only the extreme win, extreme
fail, and extreme weird (bingo cards, teaching your parrot to talk) get major
traction over time.

