Some indie hackers are especially vulnerable in this recession

Last week I talked about why I think this recession will produce more indie hackers. But there are still a lot of indie hackers who are fighting to survive right now.

Most obviously at-risk are businesses in industries that have been directly impacted by the coronavirus. This includes pretty much any business that helps people travel or gather in large groups.

Airbnb is the highest-profile example. @AoverK, the founder of Growthipedia, used Airbnb's API to come up with an estimate of how much revenue they might be losing on a daily basis (assuming no tenants are currently staying in Airbnb units):

Let those figures soak in for a second. And no, you're not misreading them: they're daily estimates. 🤯

Plenty of indie hackers have also been directly impacted by the crisis. Shay Gleason runs HelpStay, which helps users travel to other countries and exchange services, like teaching or farming, for living accommodations. As you might expect, Shay's business is struggling today:

The last two weeks have seen our business disappear… The travel/hospitality sector is one of the worst hit sectors due to the current coronavirus pandemic… We have some funds in the bank and we're hoping that these funds will see us through this crisis.

But these are the unsurprising cases. Other online companies that haven't been directly affected by the coronavirus are also having a hard time. This is due to second-order effects, which Electric Capital's founder Avichal Garg explains this way:

Falling advertising revenue is a good example. It works like this: layoffs and other effects of the recession have left people with less cash to spend on products, which has left the businesses that sell those products with less money to spend on ads. In turn, internet companies that rely on advertising revenue to cover their expenses are screwed.

Online media companies rely heavily on ads, so even though they're seeing spikes in traffic, most are hemorrhaging cash and some are going out of business entirely.

Leah Finnegan, the editor-in-chief of The Outline magazine, summed up the situation in the following eight words last week on Twitter: "farewell outline. we have all been laid off."

Even Vox Media, which is much larger and more established, has resorted to requesting donations from readers in order to remain solvent. Sam Parr of The Hustle — whom I discussed in a post earlier this week — has taken exception to Vox's request:

The second-order effects disrupting online businesses don't stop with advertising.

Amir Salihefendić, one of the earliest guests on the Indie Hackers podcast, runs a popular to-do list company that generates revenue directly from users. But widespread layoffs and lockdowns have undermined people's reasons to be productive, and this reduced demand for productivity has meant reduced demand for to-do lists. Hence this painful tweet from Amir:

It's famously difficult to know how individual changes in the economy will ripple through and affect businesses, because markets have so many moving parts. The coronavirus compounds this problem because we've only rarely encountered things like it before and the rampant misinformation about the virus makes it more difficult for companies to make informed decisions.

But entrepreneurs are resourceful. And I'm sure that helpful tools for navigating the disruptions in the economy will keep cropping up, like this collaborative Google sheet that maps out the ways in which broad changes in the economy are likely to cascade through the system and affect tech companies.