At the same time, while all this sounds so promising, in my humble opinion, I would say this wouldn't apply to everyone. Whether you know it or not, Nathan seems to have a solid plan - 'This is what I should do. This is how I should do it. And this is how much what I do might generate.'
I see a lot of people quitting their jobs just because it's become more of a cool factor now and most importantly because they think they could become like Nathan easily or rather quickly (like it's some get-rich-quick scheme). You should understand that Nathan has put in some significant, rock-solid hardwork (like developing his own apps, writing some quality books, etc.) into all this. If you just quit your job dreaming of cash flowing in the very next minute, that might not happen.
FYI - I quit my day job too. I wrote some apps too, dreaming of becoming someone like Nathan someday. Here I am, commenting here on Nathan's success story instead. Life ain't that easy dudes :D
1. I had freelanced before in college, so that life wasn't totally new.
2. I had a lot of connections so finding work was never a problem.
3. I had almost $30,000 in savings to even out the slow months.
4. I had iPhone apps that I had built in my free time while I was employed that were making $2k+ a month.
So quitting my job was not risky at all. In fact, I really dislike risk.
All that said, I did come fairly close to running out of money this last August when I had put all my time into the first book and a consulting client didn't pay a rather large sum of money. Now had I not been working on the first book, I never would have used up my reserve cash.
going solo means you not only spend time on building/creating stuff but also devoting time on building up a pipeline of work - which is initially a lot of unpaid work.
good luck to you nathan!
Once again congrats.
I occasionally see posts on HN by people right as they are quitting their day-job (or dropping out of school). Those posts are filled with enthusiasm, and they frequently suggest that everyone else should follow their brilliant decision.
Hearing the RESULTS of Nathan's first year was very powerful (moreso than hearing about his hopes or plans for his first year would have been). At the same time, your comment was valuable to remind me that Nathan's experience may not be representative.
I hope to see more of these 1-year-after-my-decision reviews. Thanks for sharing your experience.
It's not that easy and for those of us who are trying, are there pointers? Make everything snazzy, yes, but some days I spend so much time on polish it seems like it is for nothing! (disclaimer: some things I've done are very nonpolished.)
Built a dozen Web Products for clients. I thought I could sustain developing Products for others. But unfortunately, payment was the biggest factor. If I charged someone $10,000 totally for a finished product, I would have been paid something like just $2-3k. Of course, I could revoke the license to my product or disable the product itself, but that didn't work out. Simply because my clients were confused. They would let the product stay alive for a couple of weeks, without marketing it, expect it to convert well and become rich overnight. And when that didn't happen, they would kill it. They would stop paying for the AWS boxes and Linodes. There went all my hardwork down the drain. And since it didn't work well, I would be paid just a fraction of the project's total cost. It was unfair, but it was a very valuable lesson. Right now, I charge 50% upfront and then proceed working on the project with well-defined milestones.
>What was your Plan?
My plan was only one thing. (Not joking). I wanted to buy a BMW 320d after building a dozen profitable web apps. The problem was, there were a lot of weak spots in my plan. (read below)
Working space - I live in an apartment. I assumed I could save couple of hundred dollars by working from my apartment instead of a posh office. I learnt that this is the last place where you should work. There is no motivation within an apartment. You eventually become lazy because everything is easily available to you - TV, BED, Dining, etc. So you lose focus much easily. When I was working in a company before, I was much productive. I would come home very late and still make some significant progress w.r.t to my Web apps (the ones I build for myself, not for clients). When I quit work, I thought I could use all this time for myself. I was wrong. My productivity went down. Drastically.
Team - I am a very fair person. I never like to live my life abusing someone else's hardwork. Because that's why MNC's exist (most of them). I hired some interns, they were really talented, but in the end, I didn't want them to work with me because I didn't want them to develop a web app in return for a couple of hundred dollars. Because that would be unfair. I tried seeking co-founders too, but the problem was I didn't like the idea of getting close to someone with a pre-determined self-benefit in mind. Because that would be a 'fake' relationship. Of course I did have some valuable friends who could have become great co-founders. Unfortunately, I figured out that they wouldn't be able to add value to my company (because I can code and design myself; I'm primarily a designer) and I shouldn't add anyone into the company for fuck's sake.
Burning the cash - I invested a LOT of money into buying domains. The problem with me is that I come up with some really really good ideas (and names) for startups. I would evaluate the idea's potential and quickly buy a domain name for it(simply because it would be available at that point). I invested over $1000-2000 in just domains. I didn't feel the pinch when I invested the first year. But the next year, especially when I was bootstrapping, it became a burden when these domains auto-renewed. If you are seeking for a great start-up name or a domain for it, please, please let me know!
Investors - Initially, I wanted to seek funding. I even applied to YC (and got rejected) as a single founder. But later, I was able to conclude that some (many) ideas don't require funding and can be monetized from day one. Hence I avoided a lot of investor meet-ups, camps, etc. and sat home working on my product (which is what I'm doing currently too). Because of this attitude, I'm forced to bootstrap. Bootstrapping teaches a lot of valuable lessons, but, you will feel much restricted without some 'cushion' cash with you. For example, if you thought a particular stockphoto would make your web app beautiful, but it costs $100, you would have to wait till you get a new client (which means you need to work on his product first, which will take more time to complete yours).
I wasted a lot of time arguing myself going with Play/Scala instead of ROR simply because it would scale well. Heck, I even learnt Scala simply for this reason and in the end, I realized it wasn't worth it, simply because ROR helps me (in my case) getting my idea up and running in no time (which is VERY important) rather than learning something complex and building my product with half-baked code. I realized I'd rather do it in ROR and have it re-written when I need to scale, because I would have the money to do it by then, obviously.
I also invested a lot in software at a very early stage. For example, I bought the Adobe Creative Production Premium 5.5 suite just for photoshop and After effects. While it's a really good bargain, I found myself short of cash in the following months. Of course I feel proud to own a legit copy of these softwares, but the compromise was painful in the sense that I had to work a lot to take back the money I invested in these softwares.
>Did you after a few months decide to go back to work for someone again?
Once you taste this kind of freedom, I think it's difficult to go back. I got offers from very prominent people, investors, MNC's to work on their ideas/products. But I simply refused because of my current lifestyle. In life, one thing I realized is that you should be the negotiator for your own life and not someone else. You should decide what you should do and how you should do to achieve what you want, and not someone else.
Despite these people giving me good offers (monetary-wise too) I decided not to work with them simply because they had their own rules. When I build something, I want to be a decision maker - I don't want to be following orders, simply because I'm getting paid. Currently, I'm working on my own product and also I am a freelance consultant for several start-ups helping them develop their MVP's and helping them choose what works best. I still have a couple of debts (=credit card), but I'm confident I'll clear them in no time. It's never about the money, it's always about the happiness.
I would like to remind everyone here of a beautiful quote -
'If you don't build your dream, someone else will hire you to help them build theirs.'
My suggestion is to halt thinking on these lines. Even your clients would come to you because their value-perception of the output of your work (web app) would far exceed the money they pay you. That's what you would do with anyone you hire -- the value-perception of the output given by them (e.g. building the webapp) would far exceed the money you pay them. This is how businesses earn profit. If everyone paid their employees exactly what they themselves would be charging the customers, companies wouldn't earn profits.
This is a lesson for countless others who start with building products for clients on their own (thanks for articulating the situation). Milestones are the key, as well as sticking to the stringent "No further development without milestone payment" policy.
And happiness - I am happy. I don't know what made you conclude otherwise. I am not working for someone else. I am offering a service, and people who are interested are paying for it. I still make the main decisions, including business and technical-wise. Because these are the kinds of clients I specifically want to deal with. In a company, things are different. You follow orders, no matter who you are (designer, developer, etc.) I have this freedom now.
I am not just a dreamer. I am an avid dreamer. And I am proud of it. But most of my dreams have come to life too. Thank you for your comment.
Haha! Thanks a lot Tinco, that makes me feel good :D
Man, do I ever sympathize. I was finding myself standing in groups of friends, outside on beautiful sunny days, and we'd all have our phones out looking at Facebook and commenting (out loud) on people's statuses (and the comment is always the same - "yeah, I saw that"). Its so lame!
For me the answer was really easy - just uninstall the app from your phone. You don't have to do anything drastic like quit FB, just uninstall the app from your phone and stop letting it fill up every free moment you have.
Do it now, before you do anything else. It will take 30 seconds and could change your life. Uninstall the FB app.
That's actually what I really needed right now. Both Twitter and Facebook are now gone from my phone. Thank you!
I have wondered about this as well. I am considering two strategies:
1) Stop checking HN at all, and subscribe to Hacker Monthly (http://hackermonthly.com/), which is the best articles of the month in a nice format.
2) Schedule a time to check it once a week, and only look at the list of posts with over 200 points. http://news.ycombinator.com/over?points=200
We have to stop spending time on these sites, even when it seems valuable. Nothing is as valuable as actually building something and interacting with users.
It's so frustrating. I don't want the goddamn app.
It's a Sony Ericsson Xperia. Does anyone know how to nuke it forever?
Just pay attention to your guests instead of making the phone the center of attention.
This is exactly why I left the consulting biz too. I had a web development agency with a bunch of friends & ex-colleagues that was about to make $1M in profits after 3 years. That number would be much higher, had it not been for clients (mostly startups and small businesses) that weren't able to pay (so they claimed) or went out of business. This is despite collecting a deposit of 50% of the estimated costs up-front.
Before we broke $1M, I saw a great opportunity to develop a product, so I shifted my focus and have been doing that ever since.
Consulting is good for getting (relative) immediate cash up-front, while products can take a long time to begin earning that same amount of cash. However, if done well, products can scale and earn much more revenue in the long run.
Nathan is definitely taking the right approach for an individual entrepreneur. He's diversifying his income (consulting, apps, books) while presumably moving his focus away from consulting as his income from apps and books increases.
Good luck man!
Like you said, a balance of consulting and products is a good way to go.
What is your thought process for charging 100% up front if you don't mind me asking.
One of the problems is also, that some clients are not realistic enough, they are very optimistic, which may lead to not being able to pay you.
But you're happy furnishing work to people they've yet to pay for?
I agree that it's possible to build a roster of clients that always pay you, but when you start casting your net wider (which we did), you encounter a greater variety of clients. We grew to a team of 20+ developers and aimed to keep our pipeline near 100% utilization.
With that said, we only had a handful of clients that didn't or couldn't pay. This was early in our existence and we learned quickly how to avoid, and dump, bad clients.
Depends on your strategy. Building a consultancy with employees can be great strategy. Just ask places like Thoughtworks.
I'm using my consulting work to fund our product development work. The stuff I'm doing isn't angel/VC friendly and using consulting work as a funding source seems to be a pretty good strategy to me ;-)
All clients enter into a contract with us. So when they don't pay, we have legal recourse. In #1, there's little we can do, except go to court and get in line as a debtor. In #2, we ended up with a promissory note stating they're legally bound to pay us as soon as they are able to. There are other avenues one can pursue, this is just the deal we worked out with them and all the lawyers involved.
The biggest problems are:
* The client doesn't have any money to get - especially common with startups.
* The company disappears - bankruptcy almost always means that you will see nothing to very-little since you're likely one of many debtors.
* The amount of time it takes. Every hour you spend on dealing with debt collection, legal issues, etc. is an hour you're not spending on making clients happy, finding new work, developing your own product, etc.
The most cost effective solution is often to just write it off - and learn from the mistake you made in picking a client who could not pay.
Occasionally you can sell the debt on to a third party for some %age of the total figure - but that only works if the company looks like it can pay, and still involves admin work on your part.
How is it excusable to have a finite sum of money, commit to paying you some of it, use all of it and then simply say "crap, we ran out of money". Some of the founders I've seen in the valley come off as incredibly immature and irresponsible, but this just amazes me, I genuinely cannot imagine being a businessperson and doing that.
The simple answer is "it's not." You're completely right that the people who do this crap are immature, irresponsible and have no business having the financial well-being of their employees in their hands.
If you've got $10k earmarked and you need it for something else (such as electricity), it's your responsibility to contact the vendor, cancel work immediately, pay whatever portion of the $10k you're legally obligated to pay them because you signed a goddamned contract and hope that you have enough left over for whatever you need.
My consulting contract specifically states that not only is the agreement between myself and the client company, but also between myself and the client company's principal(s) personally. I make it exceedingly clear both in the contract and in face-to-face discussions that I run a business, I'm not in the business of doing work without getting paid, and I will not waste months trying to get my money before turning to more serious measures (such as litigation, which has only had to happen once and was settled for the full amount within 24 hours of the original summons).
Don't be so quick to judge.
I am a consultant and have to deal with clients not paying on-time too - so I am not excusing it, but these things happen much more frequently than you may think.
I don't understand. Do you NOT think people who do what you said above are irresponsible? If you have 50k in the bank and will need to use all of it on your employees and whatnot in the next 4-8 weeks, you absolutely, 100% should not be committing 10k to a project, it seems super irresponsible and amateurish. If I'm committing 10k to a project, I'm going to make damned sure I actually have 10k set aside for it. If you don't you absolutely should not be hiring anyone.
It's easy to judge people when you have never been through it. As much as you are responsible, the very art of starting a company from scratch means you have to deal with things that come up that were unexpected - on a regular basis. i.e. you can't plan for EVERY. SINGLE. Eventuality. It's literally impossible.
Yes, you may have gone through it and never had that issue - but not everybody has the same experience that you did. Don't assume because they don't have your exact experience that means they are irresponsible.
I say this as someone who ran a business, lost a lot of money, had checks bouncing, and all that. It was not pretty, but I didn't for one minute try to pin the blame on anyone but myself - I made poor financial decisions. I was irresponsible. It didn't seem like it at the time, but it was.
I'm not asking anyone to plan for every eventuality, but if you can't afford to pay someone, and still hire them anyway, I frankly don't think you deserve to run a business ever again. I feel like these founders should be named and shamed every single time this happens.
I 'believe' that many who come here and quit their day jobs are usually doing it for _startups_ and/or _app dreams_.
Nathan is working hard, doing as many things possible. Not many people can do this (unless/until they reach some desperation factor which makes one realizes the need to _hustle_ and get stuff done).
Bottom line, it's hard work and all sweat. Of course, knowing what industry sells and finding what niche your skills fit in work too.
That's my takeaway from this article, and your comment. Trying to go solo with only one source of revenue/income is foolish. Do as much as you can, as long as the return on investment is sound.
I lend an ear to freelancers and consultants quite a bit and a lot of the focus is on how hard they're having to work, and how surprising that is to them. The first thing I say is that yes, it's an incredible amount of work. You can ease the pain a bit here and there, but in general there are absolutely no short cuts.
To "make it" being self employed, or selling products, or both, takes an incredible amount of desire and persistence. So much that you really have to enjoy the process, otherwise most quit before they reach any reward simply b/c it's too much work combined with too much risk.
I thoroughly enjoyed reading your book and also learn a great deal from your blog, especially as you are so transparent with your failures and successes.
It would be great to hear a little more about how your time management differed in both roles. Are you working less, the same or more hours now? Also it would be good if you could divulge a little more on how the networking you've done has affected your success (if that's possible to describe or even measure!).
Very well done that man.
I was just wondering how many hours each day it took to crank out the thousand words? I'm assuming that research time was minimal as these appear to be howto books - the research was in launching two successful applications.
What I'd also like to see is a breakdown on the time spent doing things you'd rather not be doing (i.e. doing work), and how that compares to your previous salaried position.
Generally I work about 40-50 hours a week, spread out throughout the day, 7 days a week. Most of that time is spent designing or writing.
Best of luck for the coming year!
When people say "stop bragging" it usually translates into "stop making me jealous". It's not your look-out to cater your writing to those that don't want to hear about the results of hard work.
There will always be those that will explain others achievements away as talent or point to luck or resources.
Please continue to be open & write for the majority who will appreciate the assistance and use it as motivation to step towards building their own successes.
Hence I felt I should point out that I liked this post because it's nothing like the ones I just mentioned :)
Depends on where you are.
In my experience it seems to vary quite a bit - generally a complete no-no in the US, a little less extreme but uncommon in the UK, can be talked about among friends/co-workers in France/, topic of casual small-talk in Japan.
I think it's more likely that it's human nature for people to be jealous. Some people keep it to themselves, and others lash out on forums like this one.
I'm genuinely curious about this. Most successful consultants (that I know) have decades of experience in a specific industry or specialty, thus they have a large amount of knowledge based on actual, real-world experience and that is why clients seek them out. They are very successful, but that success seems solely based on their years of experience and insight.
I see so many people claiming they consult, when infact they freelance. They get assigned work, as a temporary employee. Nathan sounds like he started freelancing and now he gets a bit of consulting in the mix too.
When I first did freelancing I was 15 and 16, so it was much more difficult then.
Is it something mundane like saving for a bigger house, or your pension, or are you reinvesting?
I'm not sure what I'm saving for, but the more money I have, the more reluctant I am to purchase things. For example, I have wanted to buy a Lotus Elise for a long time. My theory was I would get a used one for about $30,000. I convinced my wife that I could buy one when we had $100k in the bank. Now that we are close to that number, I don't want to spend it on something so frivolous.
We'll probably continue saving for a house. For now I am going to do some more traveling and continue to live as inexpensively as possible. For example, my current rent is $650 a month.
I have freelancers I work with who tell me: "I'll just be fine when I've got 2 months of expenses in the bank". I tell them they probably won't, then they laugh, then eventually some of them see what I mean.
Sounds like you've got about 2 years of 'runway' in the bank - with no income and stable expenses, you could go for 2 years. I'm in a similar situation, and have found myself wanting less and less to spend any money. Some of that comes from simply remembering the effort it took to build up that amount, and then spending it literally in an instant on anything feels weird now. Yeah, I'd like a bigger TV (ours if 42" but 7 year old "ED" TV, not HD), but see little point in it as this one still works. Newer car? Yeah, would be nice - I can pay cash for a nice used car, but will probably hold on to this 8 year old one for another year or two.
The only things I'd like to buy, I want to pay cash for, and I'm still a long ways away (things like a private airplane, much larger house, etc). We do travel some - my wife will be going to Australia and I'll be going to Russia - buying those sorts of experiences with our families is one of the few things that we agree on spending money on. Outside of that, just continuing to pile up cash until there's a compelling case for spending it (or a true emergency need) is probably all you can do.
This is where true freedom comes from.
With a runway like that, one can afford both psychologically and literally to double down and crank out a lot more products or businesses to get oneself up to a 5 or 10 year runway (or even "financial independence" if one is very lucky).
I think the best thing to do once a little momentum is gained is to grab onto the pendulum and get it swinging big so one can travel, buy a house, and all those sorts of things in 3-5 years. (This is not a direct advice to you since it seems you are already thinking this way :-))
However, what I've noticed is that instead of "no, we can't do that now - let's try to work on a plan to set aside 8 months of savings to let you focus on your idea", it's been just "no, you're not doing that". But... are you going to divorce someone over that?
Both our cars are older (7 and 13 years old) and have been paid off for some time. Not having a car payment is great!
The interesting thing is that with the years this has also affected other broader considerations.
Nowadays I don't really think about buying a house anymore, as it is too big of a 'money and time' commitment and also because it would make it harder for me to move somewhere (which I've been doing quite often now).
Same applies to having a car. While I agree that having one can be incredibly convenient (and, sometimes, even necessary), I feel so much better not having to worry about gas, taxes, or maintenance.
Gas - certainly a concern, but so is bus/subway fares, which replace gas if you don't have a car but still need to move around.
Taxes - for 2 cars we pay about $150/year.
Insurance - possibly $1000 per year.
So... maybe $100/month for taxes/insurance on 2 cars - for most people this won't break the bank. This also allows us to live in a more rural area with a somewhat lower cost of living (lower taxes for a start).
Maintenance - yeah, some. I don't think we worry about it, much like you don't 'worry' much about your electric bill or internet bill. It's a factor in life - there are repairs that come up, but again, the ability to be mobile when we want, in areas that aren't otherwise served by mass transit - is, for us, a plus right now.
Replacing gas/tax/insurance with monthly subway tickets, which I'd probably need to do if I lived in a major city, seems like it might be about the same (IIRC, a two week pass in Moscow cost be about $50?).
But my point was not really related to cost, but to "freedom" in some sense. After the money saving, then no longer wanting to spend money on unnecessary things (but travelling), then moving around, I feel I no longer want to have a car.
Mainly for two reasons:
- I don't miss being stuck in traffic on the drivers seat, or trying to find parking spots. If I'm on a bus, and there is traffic, I don't mind as much as I can read, or browse the Internet, or game or whatever.
- If I don't have a car, I don't need to worry what to do with it if I want to move. No worries about trying to sell it, or wondering if it is worth it to take the car to the new place, what's the traffic legislation on the new place, etc.
Yet another part of my PoV is that, even if a car is necessary, I no longer want a new/expensive car. For example, before moving to the city where I currently live, I had to have a car (as there wasn't much of public transportation there). But at that point all I wanted was a used car that's good enough for the daily needs; and that I wouldn't mind getting rid off later.
Common sense would suggest that having a load of $$$ would make you free with your money, but instead (if you're smart), it makes you feel very protective of it.
Get a high-deductible policy ($3.5k - $10k) and your premiums for an average family could be between $300 and $600/month. (blue cross blue shield in north carolina, husband and wife in 40s and 2 teenage kids - sample quote).
Overall, congratulations on your success.
I do have one question regarding consultancy though - how did you crack this one? How did you make the transition from web designer to consulting for clients and what does 'consulting' entail? (thanks to Swannie for providing a nice outline initially)
Thanks again for the transparency and inspiration Nathan.
I thought the write-up was great. There is something about your writing that comes across as humble and thankful for what you have, which is pretty refreshing seeing so many blog posts come across as a little too "know it all".
Like could we work on a plan for her to help with my apps, etc. ? How do you guys do it ? Great family btw :)
I'm in the middle of making the jump myself, and am currently paying that $4000/mo for our family of two. Did you simply save up enough to live on that for a few months to make more of it? How did that work?
Thanks for the inspiration and congratulations again on your successful year!
Quitting a job isn't for everyone — no matter what anyone says, it requires tremendous discipline and focus so props to you for pulling it off. The key thing you are doing here, something that will hold you in good stead in the future, too, is the diversification of income sources.
Once again, congratulations!
It's tricky - and my first year isn't over yet, but not living in a concentrated tech city has made it difficult. Have been considering moving to a bigger city.
I prefer working in teams, which is also an issue as most freelancers seem to prefer to work solo.
I always have the same feeling.
Concentrate has helped me save thousands of hours.
Keep up the hard work, and stay writing.
Do you use a publisher for your books and/or do marketing yourself to sell them?
Also, you should have visited Glasgow instead of Edinburgh, we are a much friendlier place :-P
Next time I'll visit Glasgow. :)
One thing troubles me though, why did you goto Swansea on your UK trip of all places!?
Next goal is probably increasing the share of passive recurring income. :)