Side project income 2016: 0 to $100/month

January 9 2017

In 2016, I set a goal to earn money from software I built. Being an employee or contractor wouldn’t count. I wanted the product and business experience of making something from the ground up.

I’m pleased to have achieved this: as of December, my projects net about $100/month of (mostly) passive income. This post will lay out some of what I’ve learned and hopefully help others with similar goals.

The Products

I launched two consumer subscription products last year. They are:

Why did I pick these particular products? Three reasons:

  • they solve a problem I had, so I identify easily with users
  • they let me use my expertise, so I’m well-positioned to execute
  • they target a niche audience, so there’s little competition

The first two points make these projects work well, while the last one provides flexibility. I’ll use Autoplaylists as an example. Custom playlists like “my most-played metal not heard recently” were common in the days of local media players, and people like me missed them when migrating to hosted services. Other interested developers were turned off by the lack of an official api, but through my earlier work on gmusicapi, a reverse-engineered client library, I knew it could be done. And since only a small percent of Google Music users actually want this feature, the stakes are low and I don’t worry about competitors (including Google).

It’s worth noting that both projects are also open source. This is partly for philosophical reasons, but also because a public Github repo is a productivity boost. For example, Autoplaylists uses Github’s hosting for the product site and wiki for the support site, in addition to the obvious issue tracking and version control offerings. The added complexity around things like contributions and secret management has been straightforward to manage so far.

The Business

Running a small business seemed daunting at first, but it turned out to be pretty simple in this case. I run both projects as a sole proprietorship, mostly because I’m not worried about getting sued and have no intention of raising money. This is the simplest option: there was no extra paperwork besides the Employee Identification Number I got (which I can give out instead of my SSN). Bookkeeping just takes a few minutes of spreadsheet work per month, and my taxes remain straightforward. Even PCI compliance was a breeze since my SaaS uses Braintree’s drop-in iframe; I just had to click through a set of checkboxes to affirm I wasn’t doing anything obviously insecure. The trickiest business puzzle was figuring out how New York’s sales tax rules applied to Autoplaylists. For the details, check out my post on the tax and legal implication of launching a Chrome Extension.

Marketing, on the other hand, wasn’t so simple for me. I started the year out strong with the Autoplaylists launch. Here’s what I did, all of which I’d do again:

  • before launch, found passionate users for a beta and got them on a mailing list
  • at launch, reached out to tech journalists who’d written about Google Music. Gizmodo’s article landed tens of thousands of views for the cost of a few emails.
  • after launch, shared good autoplaylists to music-sharing communities

Unfortunately, I fizzled out after that. Not continuing to push Autoplaylists users onto a mailing list was a mistake, and I didn’t put much effort at all into the Autoresponder launch. While organic search and word of mouth have provided some growth, I’m planning to double down on content marketing and media outreach this year.

What’s Next?

2016 was a great start, and I’m proud to be a small business owner with happy customers. More importantly, I’ve now got the confidence for bigger ventures in 2017. Two things I’m considering are launching a product for small businesses and buying an existing product, each of which would present some interesting new challenges.

Hopefully next year I’ll be writing a similar post! If you’d like to follow along, be sure to subscribe with the links below. Also, feel free to send an email if I can be of assistance; my inbox is always open.

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