In the previous two essays, I covered two ways to make money as an software solopreneur:

1. Service-based and subcontractor to software agency

2. Service-based and main contractor to non-agency business

You should revisit them to get details on the pros and cons of each and recommendations on when to go for them and when not to.

Today, I will cover pros and cons for the 3rd way: software product-based business and how to get there.

Software Product-Based Business

For many solopreneurs, this is the the holy grail. However, this may not be easy. Being good at writing code is no guarantee you can build a software product-based business.

Make Something People Want isn't enough. You also need to find where these people, who desire the thing you make, are. And make them know you exist.

Logically, there should be two ways:

1. Find what people want then make it. (Lean Startup)

2. Make something then find people who want it. (Artist/Auteur)

Real life is messy and is seldom that linear.

You may start with making something first and then find people to want it. As you talk to people, you realize what they really want is something else. So it becomes a 2->1 situation.

Or you can do it in a hybrid way: you try to talk to people and try making stuff at the same time. It's easier to talk to people when you have something to show even if it's imperfect. This would be more like Agile.

The downside is this is cognitively more challenging and time-management wise, more difficult.

Longest To See Any Money

Of the 3 options (service-based sub con of agency, service-based main con for customer, and software product-based), this takes the longest to see any money. And even if you do see money, it also takes the longest to reach ramen-profitable level.

There's a reason the term "long slow saas ramp of death" is invented.

Least Vulnerable to Eggs in One Basket Risk

Of all the options, when this option is successful, this option is the least vulnerable to any single customer leaving.

In both service-based options, you may be stuck with one or a pillar customer that accounts for majority of your revenue. You have customer concentration risk. A product-based business theoretically does not have this risk as much.

Bear in mind, the key phrase is "when this is successful".

1000 customers pay 10 dollars vs 10 customers pay 1000 dollars

Then you face classic questions of which customer profile to go after and how much to charge.

My recommendation is whichever gets you to ramen profitability the soonest. If you already have a willing audience or you intimately familiar with a market full of people starving for a solution you can make, then just go for that one.

For example, @tdinh_me the person behind BlackMagic.so a twitter tool has a ready audience in twitter users. If you have something similar, just go for it.

The only barometer for any business is whether it makes money. So if you make money, who cares whether you conform to any theory?

Absent these subjective and concrete factors, and knowing freedom and independence are important lifestyle choices for a solopreneur, I recommend going after fewer customers with higher price points, i.e. choose the 10 customers pay 1000 dollars option.

You will feel happier and more fulfilled. And theoretically this option is faster to reach ramen profitablity than the high volume, low price point option.

Again, remember this is an abstract recommendation without knowing who and what you know or have access to. Always consider your personal social graph and reach first.

Remember the example of BlackMagic.so and @tdinh_me .

If You Find Yourself Reading Too Much And Theorizing, Get Outside Your Daily Routine More

If you find yourself reading a lot of startup internet and theorizing in your head non-stop, it's a strong sign that your personal social graph or reach is not enough yet.

Instead of reading more startup internet, go out and interact with more people outside your typical day-to-day routine. And also make more friends on the internet.

Real-life or internet? Do both.

You need more real-life experiences in order to build stuff real people want. More real-life experiences to know real-life problems people want solved.

Don't be afraid of first stepping down to the 2nd option of doing a service-based business. It may not be as scalable as a successful product-based business, but a successful service-based business can subsequently evolve to be product-based.

Or at the least provide the foundation to spin off a product.

I am currently running a service-based business with about 10k SGD monthly recurring revenue and using that as a base to fund my SaaS goal with GreenDeploy.io. And all this started when I whimsically decided to attend a childhood friend's birthday years ago.

Allow room in your life to have more serendipitous, random interactions with people. You never know what you are gonna get.