Ask HN: Your best passive income?
6 comments
It's been an hour without any comments, so I guess I'll get this started with some updates on my answer:
* Improvely (https://www.improvely.com) is doubling subscribers and revenue multiple times per year, with mid-five-figure MRR. I have about 30 minutes a day of support workload during the week, and rarely anything on weekends. 2-3 days a week I'll spend a few hours working on whatever's next on my TODO list of new features, improvements, architecture upgrades and refactoring. I have a small (<$1000/mo) budget for ads, do no outbound sales, and the vast majority of new signups are referrals from existing users, whether word-of-mouth or via blog posts, tweets, etc.
* W3Counter (https://www.w3counter.com) has ~78,000 users now with 99.5% of them on the free plan. It generates a few thousand a month in subscriptions and a few hundred a month in ad revenue via BuySellAds. I haven't invested any development time into it since a redesign in February, and had a grand total of 5 e-mails for support last month. I don't market the site at all. It's very much passive income -- keep the servers up and everyone's happy.
* I started investing my savings in the stock market when the recession began and everything was cheap. That's yielded a 35% return so far plus dividends. I put aside some money to gamble on individual stocks, but most of it is in Vanguard index funds (total stock market, total bond market, dividend growth fund). A portion of each month's savings go into that, buying and never selling.
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A lot of what's made Improvely & W3Counter work so well and be so low-maintenance were learned through things shared on HN, which I'm eternally thankful for. Here's some of what I found most important for SAAS:
* Onboarding is super critical. It's all about guiding new users to "activation" ASAP, which means finishing whatever they need to do to get value from the service. To me, that means the first thing they see after signup is a walkthrough that very clearly tells them what steps to take to get started with their new account, and a set of automatic e-mails to gently remind new users about steps that haven't finished yet. Screens are never empty even if there's nothing to show yet -- show demo data, or a message with next steps to make that screen work, always.
* Track metrics that matter, not vanity metrics. I have no idea how many page views any of my sites had last month, or what their bounce rates were. I do know how much MRR changed, what the churn rate was, and what direction customer LTV is going.
* Someone whose credit card was declined isn't a lost customer. Have a good dunning process -- my users get an e-mail after 1 days, 3 days later, 7 days after that, asking to update their card on file. It's almost two weeks after the initial billing failure by then, and usually whatever the cause (insufficient funds, waiting on a new card to come in the mail, etc) is resolved by then and the subscription isn't lost.
* Someone who cancels isn't gone forever. People have financial issues, get too busy to use the service, are in the midst of changing jobs or winding down a business, trying alternatives, or a million reasons other than not liking your service. Reach out in a few months with a discount and they might come back. A lot do.
* A few FAQs go a long way. So do a few sentences of explanation/help on the screen itself, or tooltips on jargon/acronyms some users might not be familiar with.
* Pricing matters a lot. Try different pricing schemes, you're probably charging too little. Optimally, your pricing tiers should be tied somehow to the value you create for users so that your revenue grows as your customers' businesses grow. Your customer LTV from customers you've already acquired goes up every month, while they still get more value from the product than they're paying -- everyone's happy and growing together.
* Don't outsource or compartmentalize support if you can help it. Answer e-mails yourself for as long as possible. The most consistent feedback I've gotten the past 2 years is how much people are surprised and delighted to get a same-day reply to their e-mail from someone that understands their technical question. If you go above and beyond with support, you'll win customers for life.
Recommended reading:
http://www.groovehq.com/blog
http://www.kalzumeus.com/greatest-hits/
* Improvely (https://www.improvely.com) is doubling subscribers and revenue multiple times per year, with mid-five-figure MRR. I have about 30 minutes a day of support workload during the week, and rarely anything on weekends. 2-3 days a week I'll spend a few hours working on whatever's next on my TODO list of new features, improvements, architecture upgrades and refactoring. I have a small (<$1000/mo) budget for ads, do no outbound sales, and the vast majority of new signups are referrals from existing users, whether word-of-mouth or via blog posts, tweets, etc.
* W3Counter (https://www.w3counter.com) has ~78,000 users now with 99.5% of them on the free plan. It generates a few thousand a month in subscriptions and a few hundred a month in ad revenue via BuySellAds. I haven't invested any development time into it since a redesign in February, and had a grand total of 5 e-mails for support last month. I don't market the site at all. It's very much passive income -- keep the servers up and everyone's happy.
* I started investing my savings in the stock market when the recession began and everything was cheap. That's yielded a 35% return so far plus dividends. I put aside some money to gamble on individual stocks, but most of it is in Vanguard index funds (total stock market, total bond market, dividend growth fund). A portion of each month's savings go into that, buying and never selling.
-----
A lot of what's made Improvely & W3Counter work so well and be so low-maintenance were learned through things shared on HN, which I'm eternally thankful for. Here's some of what I found most important for SAAS:
* Onboarding is super critical. It's all about guiding new users to "activation" ASAP, which means finishing whatever they need to do to get value from the service. To me, that means the first thing they see after signup is a walkthrough that very clearly tells them what steps to take to get started with their new account, and a set of automatic e-mails to gently remind new users about steps that haven't finished yet. Screens are never empty even if there's nothing to show yet -- show demo data, or a message with next steps to make that screen work, always.
* Track metrics that matter, not vanity metrics. I have no idea how many page views any of my sites had last month, or what their bounce rates were. I do know how much MRR changed, what the churn rate was, and what direction customer LTV is going.
* Someone whose credit card was declined isn't a lost customer. Have a good dunning process -- my users get an e-mail after 1 days, 3 days later, 7 days after that, asking to update their card on file. It's almost two weeks after the initial billing failure by then, and usually whatever the cause (insufficient funds, waiting on a new card to come in the mail, etc) is resolved by then and the subscription isn't lost.
* Someone who cancels isn't gone forever. People have financial issues, get too busy to use the service, are in the midst of changing jobs or winding down a business, trying alternatives, or a million reasons other than not liking your service. Reach out in a few months with a discount and they might come back. A lot do.
* A few FAQs go a long way. So do a few sentences of explanation/help on the screen itself, or tooltips on jargon/acronyms some users might not be familiar with.
* Pricing matters a lot. Try different pricing schemes, you're probably charging too little. Optimally, your pricing tiers should be tied somehow to the value you create for users so that your revenue grows as your customers' businesses grow. Your customer LTV from customers you've already acquired goes up every month, while they still get more value from the product than they're paying -- everyone's happy and growing together.
* Don't outsource or compartmentalize support if you can help it. Answer e-mails yourself for as long as possible. The most consistent feedback I've gotten the past 2 years is how much people are surprised and delighted to get a same-day reply to their e-mail from someone that understands their technical question. If you go above and beyond with support, you'll win customers for life.
Recommended reading:
http://www.groovehq.com/blog
http://www.kalzumeus.com/greatest-hits/
> Someone who cancels isn't gone forever. [...] Reach out in a few months with a discount and they might come back. A lot do.
A lot of American companies could do with learning this lesson.
They focus on "customer retention" instead of "customer service." Which is to say they make it as difficult as humanly possible to quit, but as a direct consequence of that they make customers much less likely to ever return if they do successfully quit.
There are a lot of services I quit and re-join regularly (e.g. Pluralsight, Audible, Amazon AWS, World of Warcraft, etc). I rejoin without a second thought because I KNOW that if I want to cancel it is just a simple click away.
There are other companies (e.g. LogMeIn, XBox Live, all cell phone companies, etc) which I will only join if I absolutely have to as leaving is such a PITA. It always involves calling CS and having long pointless conversations about your reasons, why you won't reconsider, blah blah blah until you can finally leave.
My point is: That every step you add to customer exit is a step you also add to customer re-acquisition. MBAs could do with learning that.
A lot of American companies could do with learning this lesson.
They focus on "customer retention" instead of "customer service." Which is to say they make it as difficult as humanly possible to quit, but as a direct consequence of that they make customers much less likely to ever return if they do successfully quit.
There are a lot of services I quit and re-join regularly (e.g. Pluralsight, Audible, Amazon AWS, World of Warcraft, etc). I rejoin without a second thought because I KNOW that if I want to cancel it is just a simple click away.
There are other companies (e.g. LogMeIn, XBox Live, all cell phone companies, etc) which I will only join if I absolutely have to as leaving is such a PITA. It always involves calling CS and having long pointless conversations about your reasons, why you won't reconsider, blah blah blah until you can finally leave.
My point is: That every step you add to customer exit is a step you also add to customer re-acquisition. MBAs could do with learning that.
This is great Dan! I've printed out your comment and will refer back to this.
Has having the free plan for W3Counter been beneficial and would you have it if you started again? I was strongly advised against having a free plan for my site (https://touchingbase.io) as people said it kill me on support time and dealing with people that wouldn't pay anyways. But it seems you've had a different experience.
For the declined credit card issue check out http://churnbuster.io which is solving this exact problem and using the data they have to build a finely tuned algorithm that sometimes goes against what you think would be logical.
Has having the free plan for W3Counter been beneficial and would you have it if you started again? I was strongly advised against having a free plan for my site (https://touchingbase.io) as people said it kill me on support time and dealing with people that wouldn't pay anyways. But it seems you've had a different experience.
For the declined credit card issue check out http://churnbuster.io which is solving this exact problem and using the data they have to build a finely tuned algorithm that sometimes goes against what you think would be logical.
Congrats on your successes! Improvely seems like a service where you knew your target customer extremely well. What approach did you take to understand your customers' needs when starting out with it? Did you already know that area extremely well, did you use the lean methodology, or something else entirely?
I just built them to scratch my own itch. I didn't like any of the analytics tools out there, so I built something that I would pay for if it existed.
These are just two successes out of many projects that didn't go anywhere. In the past few years, I've also built a bookmark manager, an order fraud scoring service, a phone verification service that tied into it, a "smart" contact form that came with analytics about what the person mailing you has looked at on your site, a fulfillment app to make printing postage for orders at Shopify stores easier...
I guess that's another reason I invest a lot of time into ensuring everything I build is as low-maintenance as possible: so I have the time to try and run many different businesses. It's kind of like being a VC investor, except you also happen to be starting all the companies you're investing in. One big success makes up for all the failures.
These are just two successes out of many projects that didn't go anywhere. In the past few years, I've also built a bookmark manager, an order fraud scoring service, a phone verification service that tied into it, a "smart" contact form that came with analytics about what the person mailing you has looked at on your site, a fulfillment app to make printing postage for orders at Shopify stores easier...
I guess that's another reason I invest a lot of time into ensuring everything I build is as low-maintenance as possible: so I have the time to try and run many different businesses. It's kind of like being a VC investor, except you also happen to be starting all the companies you're investing in. One big success makes up for all the failures.
That's awesome, congratulations!
Do you mind me asking how did you get your first few customers? Ads, blog, cold emailing?
Thanks.
Do you mind me asking how did you get your first few customers? Ads, blog, cold emailing?
Thanks.
Thats great. Can you share what tech stack you used to build these? I am curious because they don't look like a one man effort. If you have built all of it on your own, can you share how long did it take ?
The backend is PHP, MySQL, Redis and a bit of node.js. They run on a couple bare-metal servers at SoftLayer. Bootstrap and Font Awesome are helpful for banging out the design pretty quickly.
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Thanks for sharing what you've learned. Many of the points seem insightful.
awesomeness
Currently I make around $500 a month from my passive projects and websites, all of this revenue is from either Google adsense or amazon affiliate sales. In their prime the monthly revenue was just over $1000, however I've basically done nothing on them for a year other than approving blog comments hence the downturn.
Desperately need to find something that I find interesting enough to Devote some real time and effort into.
Desperately need to find something that I find interesting enough to Devote some real time and effort into.
My wife has a great source of passive, recurring income: me.
From this, I can deduce that she's smarter than me.
From this, I can deduce that she's smarter than me.
Or perhaps she would challenge how "passive" this income source is to maintain ;)
I made a few programming tutorial videos for YT a while ago. Total time invested: ~30hours.
For the time the Videos habe Bern online (16 months) they have earned me $580
For the time the Videos habe Bern online (16 months) they have earned me $580
$19 an hour, you could probably improve this by shifting to something like Udemy and actually selling them.
Someone more qualified might have more information on how those video course websites work, I've always been interested and considered making videos and selling them, but was never sure about the return. Udemy in particular seems to have a significant amount of coupon codes making videos 1/10 of their cost.
Someone more qualified might have more information on how those video course websites work, I've always been interested and considered making videos and selling them, but was never sure about the return. Udemy in particular seems to have a significant amount of coupon codes making videos 1/10 of their cost.
My course does about $1,100 a month on Udemy. I'd recommend it. That said, I would make sure that I had a clear early marketing plan in place beforehand. You can make a pretty decent passive income once you get the ball rolling on there. But you're gonna have to roll it yourself at first.
My course: https://www.udemy.com/building-and-selling-a-niche-website-f....
My course: https://www.udemy.com/building-and-selling-a-niche-website-f....
$1 a day, made an addon for a popular video game and it's commission via curse :p
Interesting, what is the addon and how do you distribute it?
my site (http://graph-director.herokuapp.com) is relatively new, but it generates small amounts through amazon affiliate links
Is there any reason for using highcharts? it's license is costly and you have free alternatives for these simple graphs.
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In the spirit of previous years' threads:
https://news.ycombinator.com/item?id=7094402 https://news.ycombinator.com/item?id=6661536 https://news.ycombinator.com/item?id=4639271