Specifically, consider whether building one or more $X,000/month apps can help you achieve a similar lifestyle that a $5M payday would bring. For me, I want the independence to work on what I want when I want, have the flexibility to take breaks to spend time with my wife and future kids, take a nice vacation or two each year, etc.
This will obviously depend on your life situation, your savings, your spending habits, etc, but for me, I think I can achieve that with $4K-$5K profit/month. And making that much via a few niche web apps is much, much more likely than selling for a few million dollars down the road. (I currently have two ~$1K/mo web apps and am still at my day job for the moment, so getting to that point from where I am should definitely be doable.)
If this appeals to you, I recommend checking out Rob Walling's Micropreneur Academy, which is a great start for anyone going down this route: http://www.micropreneur.com/
Curious: are you also outsourcing small tasks? (I'm in that page of the book)
I currently make $7K a month with 10 minutes of work a month (creating a newsletter), so I agree - the path to residual income is much easier than creating a startup. But it definitely doesn't feel like I can quit my job anytime.
My point though is that for every person there is a monthly mostly-passive income which, if achieved, would let them live a similar lifestyle as being part of a multimillion dollar acquisition. And it's a hell of a lot easier to reach.
Do you think it's easier for you to make $5K/month passively or make $5M from a acquisition? $10K? $20K?
Edited to add: Why not invest more time into your newsletter so that you can leave your job? If you truly invest 10 minutes per month and believe that there's still room for growth, why not spend more time getting it to the point where it does cover your health insurance and 401K? Or if there's minimal room for growth why not try to replicate it? Or does the money not even matter: do you want to stay with your day job because it gives you purpose and socialization? Your situation is fascinating and I'd love to hear more about how you got to where you are.
For those curious, the newsletter has to do with a very niche product that people usually order every single month. I'm simply an affiliate and write a newsletter with tips for that product along with a coupon code.
The affiliate program is pretty friendly as I get paid a commission every month even if I don't get them a new customer (but get an existing customer to order it through my link).
if your $5K/mo comes mostly from Google traffic you can lose everything overnight.
i.e. I have a friend who had an affiliate site that was generating $20K/mo. Then the Google Panda update happened, and that went down to $1K overnight(well it took a few weeks). Last month that site generated a whopping $24 in revenue.
Google tends to be the biggest threat here.
Traffic? Can't lose out in Google search results.
Ad Revenue? Can't get banned from adsense(impossible...since all it takes is a competitor clicking a bunch of times on your ads)
Paid Traffic? Can't get banned from adwords...which can change their policies at any time.
Payments? Can't get banned by PayPal.
Basically what I'm trying to say, is that there is a TON of risk. And you need a huge cushion to feel comfortable. Personally I'd want a $30K/mo income in order to have a $4-5K/mo lifestyle...just to be on the safe side. To at least avoid the stress...that everything can be lost overnight.
That's why these big payouts should be preferable...since then there is no more risk(short of losing it all in financial crash)
If you really want a lifestyle business you need to be able to survive even if you have to pay for advertising. As to ad-words, there are plenty of forms of non Google advertising out there. If your site is so dependent on new search engine traffic it can lose 98% of it's visitors from a few changes in Google's algorithm you have not created value your just doing arbitration. Arbitration opportunities are always short lived, that's not to say they are not worth perusing, but don't think they are anything but a quick windfall.
The odds of you selling out and making $5M are ridiculously lower, and I mean hundreds or thousands of times lower, than making a few small apps that generate a full-time income.
As an aside, this why I like diversifying my portfolio (ie, I'd rather have five apps making $1K/month than one making $5K). There are downsides to this path too, but I think it's a decent way to minimize the risk if you want to do this professionally long term (as I do) and are not relying on an acquisition.
10% of something is better than 100% of nothing.
It gets rid of anything that isnt pertinent to the article and allows you to customize viewing conditions.
It's hard going from light text on black back to most other sites as you end up having those lines in your eyes where the white writing has burnt it into your retina!
> Yes, there is some real bias against single founders when
> it comes to fund raising, though it's not impossible.
Do you think this bias has grown in the two years since you posted this?
Perhaps there's something else wrong with your tumblr setup?
What sort of companies get bought for $17m?
The companies that're commonly talked about on HN are just a small subset of the startup world.
For example, look at this list. How many companies do you recognize?
Everyone complains about coporate CEOs who are so focused on the stock price that they forget to make good products. Focus on the product, and the $$ will take care of itself.
The value of this article IMO is to offer a counter-point to the multiple-founders mantra. A lot of people take that as gospel, but I think if you are spending time looking for a co-founder you're doing it wrong. Rather, if you know the right person to be a co-founder, by all means extend the offer ASAP, but if you don't then get to work and stop fretting.
To maximize your chance of success you have to focus on the greatest ROI at every moment in time. Hiring the right person is the biggest ROI a one-person operation with a lot of work to do can achieve, but on the same token, finding the right people is often nearly impossible.
Compensation should be relative to value added rather than relative to time-to-get-on-board. That's because typically both sides know the value contributed and if one side tries to slant the division in their favour this will inevitably lead to trouble down the road.
Start-ups are fragile, if you build in tensions right at the beginning you'll get that back when you need it least.
For instance, during negotiations about an acquisition your key co-founder that you successfully screwed over during the founding days now has you over a barrel. After all he/she has very little to lose and you will stand to lose a lot. You could of course try to take care of that in your articles of incorporation and your shareholder agreements but you can't actually force someone to perform unless they are willing.
Keeping your goals aligned is good for everybody and fairly sharing a much larger pie is the best way to have the story end happily.
"After you gain traction" is sufficiently vague that I don't think that is a good criterion. Better would be that you would take into account the amount of capital already sunk and the risk that you perceive at the moment of joining. Lots of traction can actually mean more risk rather than less.
Go have fun at StartupWeekend and if you find some people you like working with then do a real startup with them later.
I like the idea of doing one of those every 3-5 years for the rest of my life rather than go for the glory IPO and... then what?