What Entrepreneurship Actually Looks Like
Not sure if it’s just me, but this guy only started his own project after being stabbed in the back by his manager at work (they’d promised him a promotion, then went back on it), and he’s pretty bitter toward Google as a result (all that time wasted with no promotion to show for it).
After talking with the HR committee, he had a breakthrough: why provide services to Google and earn money for them, when he could provide services to himself instead?
Years of unfulfilled ambitions
He originally wanted to make money by building software and deliberately avoided trying to monetize his blog, but at the end of the year, his blog turned out to be the biggest revenue generator (his venting about unmet ambitions at a Big Tech company resonated with many people and kept drawing steady traffic).
In the first year, he lost $21,000, while his blog brought in $12,000 in revenue. Most of his expenses probably came from hiring five freelancers to work on his projects.
The most important point is that he only tracked his project returns but didn’t account for his personal living expenses. Since he was working full-time on his own project, his monthly expenses averaged around $7,000, with rent being the biggest chunk—about $5,000 a month.
After a year, he realized this approach wasn’t sustainable, so he bought a house, which cut his living expenses down to $2,000 per month.
His main SaaS project didn’t generate any revenue in the first year.
Year one of running a side business
His losses were smaller in the second year—around $2,000 overall. Part of the reason was that moving to his own place halved his rent and other expenses. Then he shifted his mindset: the combination of increased income and reduced spending generated roughly $18,000 in value, which was quite reassuring.
What kept him going despite continuous losses? S&P 500 index funds. Aside from buying a house and lowering his rent, his previous savings were used to buy index funds, whose returns helped cover his expenses since he was only spending $2,000 a month.
In the second year, his software generated $5,000 in revenue. Factoring in reduced costs, the total revenue came to about $12,000. Since software development costs were nearly zero, the main expenses were just maintenance and sales.
Because he stopped actively运营 his blog, traffic dropped, so it didn’t generate much revenue anymore. He also didn’t plan to rely on his blog for income.
One thing worth noting is that his income trend was growing, reaching over $1,000 in the final month. (Of course, he also tried some small side projects, but none of them made money.)
He had hoped to make good money, but instead his software income dropped to $300 per month. However, building something to solve his own problems led him to develop a piece of hardware that sold well: TinyPilot. Sales brought in over $50,000, though after $5,000 in losses, the gross margin came to just under 15%, mostly dragged down by high paid consulting costs.
Most of his other blog projects didn’t really make money either. His personal blog launched a paid membership program and did profit, while his health-focused blog, where he hired writers to produce content, lost money. He then shifted to affiliate marketing and made some money selling leads, bringing in over $10,000 in revenue from the two blogs combined. His total annual income, before deducting costs, exceeded $60,000.
He quickly shifted his focus back to the hardware product he developed and worked on sales together with his girlfriend.
Year three of the side business
This year he finally turned a profit: $14,000 in net earnings. (Total costs were $460,000 and total revenue was over $470,000. Selling physical products always comes with high material costs—$250,000 in this case.)
On top of material costs, he officially incorporated the business and hired three developers to help build the hardware, bringing labor costs up to around $120,000.
On the personal blog side, he dropped affiliate ads and switched to selling courses and memberships, earning over $7,000.
His other health blog ran ads and affiliate marketing, also bringing in over $7,000.
His software made $2,500.
Overall, the lesson is to try different approaches until something clicks. If a project isn’t showing strong growth, pivot to another one and concentrate your energy on those with better momentum.