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Ask HN: How long did it take for your startup/side project to break even?
55 points by j-rom on Mar 22, 2014 | hide | past | web | favorite | 51 comments



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.


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.


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"...


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.


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.


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.


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.


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.


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.


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. :-)


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.


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 ?


It's in an industry ancillary to web development.


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


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.


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


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.


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.


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.


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.


It took us about year and a half, as a side project to breakeven at 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.


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.


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.


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


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. :-)


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.


We became profitable at 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.


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.


> - 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.)


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

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


I put ads on 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.


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



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.


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


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.


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.


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


What product is this, if you don't mind me asking?


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.


Day 1? Apps are great side projects.

If you consider my time...well.


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.


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.


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


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.


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.


Nice, what's your project, if you don't mind me asking?


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).


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.


30 days. A manufacturing training and certification business.


kitestring.io

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




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