The myth of interesting, bootstrappable side projects with great business potential
Hey Indiehackers,
I'd like to share with you a dilemma that I am repeatedly facing with my side-projects, bringing me to paralysis in starting my next business. Maybe someone has a good take on how to resolve it.
The dilemma is based on my perception that creating a new project has an interesting trade-off for people, who like myself are first and foremost engineers/creators/designers and only secondly someone interested in running any business.
The trade-off of a side-project is between it being:
- Interesting. For an engineer this means the product having foundations in novelty, or something cutting-edge.
- Great business potential. 1. Having a market ready to adopt your product 2. Having good unit economics 3. Technological & Regulatory feasibility
- Bootstrappable. Even if you end up raising money, you’d like to derisk your product before investing your or an outsider’s capital.
The following arguments are not rock-solid syllogisms, more like an encapsulation of my thinking and my current state:
- If it is interesting for an engineer this means it is cutting-edge and usually requires some intensive R&D. Thus you cannot simply take of the shelf products (or can’t trivially combine them). It requires either a lot of time and/or money, hence not bootstrappable as a side business and often high-risk in terms of how great of a business potential it is.
- If it is has a great business potential and is interesting, it usually means there is massive competition from VC backed teams.
- If it is Bootstrappable and Interesting, but doesn’t have a Great Business Potential it is then hard to justify a fancy project.
Most advices on starting a business leaves out the personal motivation from the equation, which means most start with ‘Find a Problem’, forgetting that most people don’t just want to run any business, but a business that they see long-term impact and personal growth in.
So far I have created projects that died because it didn’t have one of the three:
- I was bootstrapping a project full-time for 2.5 years that had Great Business Potential™ and was super interesting. It died because we wanted to bootstrap until we saw validation of our ideas, but as it required proper R&D it was hard to get a proper reality check through paying customers. Although we were in constant talk with
- After failing with the startup, I turned to ideas that were not massively scaleable, but which like lot of the projects on IndieHackers can provide a steady income for the founder. These were easily bootstrappable projects that could be built really fast and had Great Business Potential (as in great business potential for a one-man or two man team). The problem is, because the projects sole purpose was to make a business and drive in money, it really fast became a burden to maintain. The risk of investing time was too great as. If the business didn’t bring in money, there was nothing that could be salvaged.
I think this thought simplifies the dilemma:
If I were offered a really profitable “traditional” business, say a chain of cosmetic saloons, I’d probably turn it down, even if I’d be richer – the tradeoff being that I have to sacrifice my time for something that I don’t see any other value apart from making money.
If you have any thoughts on what steps to make to overcome this problem, I'd appreciate it. My domain expertise is Architecture and more specifically Computational Design -- I am now exploring startup opportunities within the field.
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@serey - I think you've encapsulated the dilemma most entrepreneur's face as it pertains to launching projects.
The things that are missing from your analysis, from my pov are:
Part of me responding is simply to help me synthesize the obstacles I've faced in the many projects I've created or participated in the last 10-12 years, some of which have failed, or had only moderate success.
Intensive R&D
I'd like to take this one off the table for the time-being, because anything that requires intensive R&D is likely an outlier project, possibly something that has the potential to be disruptive.
Intensive R&D and bootstrapping don't usually go together. With one main exception -- if the project is so very interesting to the maker, it doesn't matter to them how much time/effort they put in. Sometimes it doesn't even matter if it can make any money.
So with that out of the way, let's talk about the other two elements you identified.
GBP
Almost anything can have Great Business Potential (GBP) in the eyes of the creator. So this element is somewhat intangible. Ask me about an idea I came up with, and I can likely rationalize how it could help people and also be a great business venture opportunity.
Though, believing that an idea/project has GBP is likely the catalyst which has brought us nearly every product we use & love.
GBP has also brought us the most ridiculous products as well. Just because a product is great, doesn't mean it will succeed.
Interesting
This is important, and key to the formula. Most projects/business take years to reach even moderate & sustainable success, so it has to be interesting enough for the creator, so they can persevere the long, hard journey.
1. Focus
One of my failures is lack of focus. Or rather, spreading my interest & time across too many projects. Sometimes I can't help myself because I see potential is so many projects.
Plus, I have an insatiable desire to learn new & different things.
The problem is that I've done myself a grave disservice, because I'm not giving any ONE of the projects the focus it deserves and needs to be successful.
As a result, the projects have either failed, or resulted in very little net income/profit. So they're not sustainable long-term.
So, part of what I've been doing over the last 2-3 years is winding down and getting rid of every side-hustle, so I can give the lion-share of my focus to one project.
I should be done ridding myself of all these non-performing projects by early 2021.
2. Marketing
I can't emphasize this enough -- Marketing is likely the #1 thing that determines a products/projects success. Sure, there are outliers, but they are rare.
Here's a link to a text file that I've been keeping related to the challenges related to growing a brand:
https://www.dropbox.com/s/mlpvauw6z683czp/growing-brand-challenges.txt?dl=0
It pretty much sums up what I've observed related to creating products/brands over the last 12+ years
3. Team
Another failure of mine is attempting to start projects without a team -- even if that team is simply 2 people.
In retrospect, I believe each of my failed (or moderately successful) projects would have been more well served if I collaborated with others on it. Each person having a stake in the success, and responsible for their own part.
Teams are powerful for many reasons, so I've decided that if I can't find a way to collect a small team together to work on an initiative, I'm going to put it on a back-burner until I can.
Any thoughts about the above?
Hi Mike,
Great insights, thanks for sharing them. I think your post is addressing a slightly different view of business creation and brings another perspective.
Here are my thought on them.
Focus: What I have noticed, is that my lack of focus is due to the project not being interesting enough. I get high on learning and creating new stuff, but get fairly quickly bored once the progress curve flattens and I only see incremental progress. This is were most of my projects fail to become a sustainable side-business.
Marketing: Super resource, thanks. I agree, but I'd like to add that for some business (eg.: most B2B) understanding the sales process is crucial.
Team: I think adding another person won't actually solve the dilemma I have expressed above, as it arises from personal alignment with the business. If you add another person to the equation then it becomes even more convoluted and even more difficult to optimize. I'd like to first see what kind of project I would be happy invest 10 years of my time and then find somebody in that domain that can be part of the journey as a co-founder.
Hi Semy. Interesting model. Your reflections suggest you should be in a team with (VC) funding as you'll only settle for (technically) interesting - which by your observation is not bootstrappable.
Hi Rab!
Thanks for the input -- I think you are correct. However, this is also about risk taking: there are numerous posts on how you should validate your ideas before quitting your job. There is then a contradiction: something is interesting, because it is cutting-edge with high risk; this also often entails that it is very hard to validate meaningfully.
Yeah for cases you are referring to maybe view gaining funding as the validation needed to quit your job. Someone on IH once used the phrase "bootstrapped moonshot" which to me suggests "p(low) * p(very low)" chance of success for indiehackers.
There is a fairly large set of indie projects which, after some high upfront effort, can be sufficiently automated, not be a burden to maintain, and bring in comfortable passive income.
Yes, my assessment could be coming from lack of statistically relevant data: my businesses might have failed because I couldn't see fast profitability for them, rather than me getting bored in maintaining it. As I read success stories however, I see a lot of side-businesses succeed due to perseverance and pivoting multiple times. If the project is not fun from the beginning, it will be dropped as soon as it becomes burdensome.
This is very true, and a good additional observation.
I've heard the PayPal nearly failed or ran out of money several times.
In another post here on IH, I pointed out that the founder of Under Armour once commented, roughly speaking, that it took him 10 years to become an overnight success :)