Where to reinvest your revenue — Phil McParlane on going full-time and outsourcing SEO

Phil McParlane (@philmcp) of 4dayweek quit his job as a data scientist to go all-in on his side-project. But he stresses that it's important get something in front of customers before quitting. In fact, he's got a whole approach, which I've gotta say is pretty solid.

In a nutshell: Start with a landing page, then build an MVP, get customers, build runway, cut back to 3 days per week, and then quit.

My favorite part, though, is that he reinvests his revenue back into the business. That's smart.

Here's what he had to say.

When and how to quit your job (MRR and runway)

Phil waited until he was making about $1K per month before he quit, and he had a decent amount of runway.

Phil: When I was working full-time, I dedicated an hour or two per day to 4dayweek. I decided to go full-time when I started making some sales but didn’t have enough time to spend on the project.

It was scary, but 4daywek was making about $1,000 per month when I quit and it was growing. And I had about 12 months of runway. Plus, I figured I could probably get a job if it didn’t work out.

But he didn't go cold-turkey

Phil: I initially dropped down to 3 days per week at my day job, before finally quitting in February 2022.

Cutting down was much easier than I expected! I just asked my boss and he said yes. But I think the key is to only ask to cut your hours after 1 or 2 years of good work. At that point, from the employer's perspective, it will be more effort to replace you, so it’s in their interest to retain you by offering you a part-time contract.

He mentioned that his runway is still looking good, and his business is making enough to live off now (though he isn't paying himself yet)

What to build first (landing page and the shortest path)

Obviously, before you go all-in on a side-project, you've gotta build the thing. But don't get carried away.

Phil: When building a side project, time is limited. So definitely don’t try to perfect your app. Build your first version in No-Code, WordPress, Webflow, or something simple. In fact, I wouldn’t even build the thing you're building first — create a landing page and drive some traffic to it first with Google Ads, Linkedin DMs, etc. Get feedback, and then build it.

I created a simple landing page for 4dayweek using Webflow. There were no jobs on it, only a concept. I posted it to HackerNews and got about 300 signups within the first 3 days. I knew this could be something at that point.

From there, I focused on “the shortest path to ‘good enough’” — a mantra I live by.

I built only the major features and no more. I wrote code that was “good enough”. I copied code from old projects and adapted it for my purposes. I used automation. I outsourced as much as I could (content and virtual assistant). Oh, and I spent 70%+ of my time on marketing once the app was live.

How to work (6 focused hours and Pomodoro)

And he's living the productivity dream by limiting himself to 6 focused hours per day.

Phil: I aim to work less than 6 hours per day. I’m a big supporter of asynchronous work with a focus on deep work, and working longer than this has been shown to be counter-productive. I do it in 25-minute sprints, using the Pomodoro technique.

Plus, I don’t try to write perfect code and have never written a unit test. Speed over perfection!

I also now have a baby to look after so my time is extra limited. I try to be as ruthless as possible when it comes to efficiency — easier said than done though! Personally, I prefer to work at night when it’s quiet.

How to grow (SEO and outsourcing)

I was pretty surprised that he is focusing on SEO for growth since it's generally thought of as such a long game. But it's working for him.

Phil: I’ve gone all in on SEO. I’ve heavily optimized every part of my website for it, from speed, to programmatic SEO, to blog content. Once I found a strategy that worked (i.e. traffic from Google to my blog posts), I doubled down on it. And since then, I’ve spent a significant proportion of my revenue on outsourcing keyword research and blog content to an agency — the best decision I’ve made!

I spend $1,500 per month which gets me 5x 1,500-word articles and 1x 1,000-word guest post on another website (for backlinking purposes). They handle everything, from the keyword research, to the brief, to the writing. I then use a virtual assistant to post the article to my site.

I started focusing on SEO almost two years ago, and started getting traffic from it over a year and a half ago.

So it only took a few months to see the benefit of SEO. Here's the number of impressions 4day week got on Google over the past year and a half:

What to do with the revenue (pay yourself or reinvest)

Most of us try to pay ourselves as soon as possible, as it relieves some of the burden and extends runway. But it might be better to reinvest it.

Phil: Recently, the business has been making enough to live off, but I’ve not taken a single month's salary yet. I’ve reinvested everything into the business. From this month, however, I plan to take out $1k per month — my first wage.

If you can afford to, I’d always say reinvest it in the business. Grow it as fast as you can.

In the long-term it works out to be more profitable. For example, if you can add $1k of extra revenue per month, this equates to $12k per year. If you ever decided to sell the business (say at a valuation of 5x annual revenue), this extra $1k per month would equal $60k in additional sale value.

And even if you don't plan to sell, the long game is often the best way to play (as long as your immediate needs are met).

How to cope (community and sick days)

These days, loneliness is rampant and it's super important for indie hackers to come together.

Phil: I love having no boss, complete flexibility, and creative freedom. But It's tough having so little human interaction.

To counter this, I joined https://www.highsignal.io/ which is run by @petecodes. It’s a community of entrepreneurs who meet each week on Zoom to talk about our businesses.

That's not the only downside to this lifestyle, though. There are many.

Phil: It's also tough not having sick days — I got COVID and the business had to shut down for a week. Funnily enough, I had my best week in terms of traffic. SEO is the gift that keeps giving!

Unfortunately, though I couldn’t respond to my customers as efficiently as I wanted to, so I’ll need to think about how I can outsource this going forward.

And it can be really, really hard.

Phil:** I think building a profitable business is one of the most difficult things to do. Even with traction in a growing market, I still find it really difficult. It’s way harder than my experience in any job or university.

But at the same time, it’s waaaay more rewarding - I want to do this for the rest of my life

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