Lessons Learned Growing our Side Project to $20,000 in Revenue

The idea was simple. We thought that the web was missing an alternative to bloated and dry CRM incumbents. The web needed a CRM product that did its job, then got out of the way.

With that, Stride was born.

Since launch in mid-2012, we've generated $20,000 in subscription revenue. In the grand scheme of things, that number obviously isn't life-changing. However, it's not insignificant. This isn't my first side project, nor will it be my last. I've written plenty about side projects, from the struggles to the immense value of starting your own. This post is different.

There are many similarities between full-time startups and side projects, but there are also some stark differences. Here, I'm focusing on the latter. My hope is that with this information, you not only gain the confidence to start a side project of your own but also avoid some of the things that not only tripped us up, but kept us alive.

Optimize For Revenue

Money is weird, isn't it? A necessary evil. For a side project, it's your lifeline. There's nothing that will kill the passion for a side project faster than paying for hosting and servers out of pocket. You're already investing the majority of your free time to pursue the idea, often without any pay, so forking out money each month to keep it alive is like salt on the wound. For us, we started with a simple revenue model. At launch, we stamped a $7/month price tag on it to cover costs and validate whether the product was something people would be willing to pay for. Once we had that validation, we evolved the product and the revenue model to where it is today. Charging up-front removed the out of pocket problem from day one.

We did make the mistake of going freemium, however. We shoved a lot of people in the top of the funnel by making the service free at the lowest level, but had a hard time converting them to paid. Only recently did we make the switch to free trial. Once you have a solid product, don't be afraid to kill the free plan -- we waited too long to do this.

Equity Is An Asset

When I watch first-time entrepreneurs, they almost always try to hold onto as much equity as possible. It's their ticket to getting rich, right? Unlikely. The thing about equity, however, is that owning 100% of a company that's worth nothing is still worth nothing. By the very nature of side projects, time is your most limited resource. Not equity. Use it as your asset to find amazing people that share your vision and fill missing skill gaps. Our core team initially consisted of an engineer, designer, and myself. Since then, we've added another engineer and marketer to help expedite growth and increase sustainability. They are both equity and revenue partners in the business, as they should be.

Lose the Excuses

Your side project can never become an excuse for security flaws or delayed support times. Your customers don't care that it's a side project. They're paying for a quality product and responsive support. If you're not prepared to offer that, don't accept their money. The same goes for product reliability and marketing. Don't lose sight of quality by falling into the habit of side project excuses.

Set Goals and Communicate Them

The hardest problem you'll run into with a side project is team motivation. Building a successful side project is a grind. You have to constantly sacrifice. We've spent countless weekends and evenings building Stride into what it is today, and that commitment only grows over time. For a side project to be successful, you need to see the light at the end of the tunnel or at least share a vision of what the end of the tunnel may look like. As frequently as possible, I try to set goals for our team. Little wins. Things that help us stay motivated, and more importantly, keep us focused. The goals will vary, but at the core, they need to address the pain points of your team. If it's money (not generating enough revenue to compensate the team appropriately), set a monetary goal. If it's sanity (the team member is having a hard time balancing life/work), set a lifestyle goal. Shared goals are the thing that will keep a side project alive.

Investment to Impact

"Does the investment outweigh the impact?" This is the question I find myself uttering under my breath when I work on Stride. When you work on a side project, there's always more to do. I mean, look at the fundamental concept. You're essentially trying create something that fails greater than 90% of the time (a startup), in half the time. It's not a enviable challenge, but it's an exciting one. With everything you do, you need to maximize the impact and minimize the investment. From product to marketing decisions, this ratio is at the core.

Talk to People Smarter Than You

There are dozens of brilliant software founders, many of which come without the arrogance of venture-backed consumer apps. Talk to them. I've relied heavily on folks like Ruben Gamez and Neil Patel, folks that've been there before. Just as an artist becomes unenthused after months of relentless work on a piece of their own, as will you when it comes to your product. You need people that can lend a fresh set of eyes on your product. If you're having a hard time finding people, feel free to use me.

Steady Growth Is Good

After I read Paul Graham's essay on growth, I became a bit worried. I looked at how he was evaluating growth and thought, "Oh shit. We're nowhere near that." There's a key subtlety, however. Those statistics are for venture-backed startups, startups where the founders are working full-time. For a side project, growth is never going to resemble a hockey stick. It's going to be slow and smooth. Growth is your goal, at any pace. As long as you're trending upward, you've got reason to celebrate. The slower the growth, the slower the decline.

Don't Be Afraid to Pick a Crowded Market

I've written a bit about crowded markets before, but the point is especially true with a side project. It's very difficult to create a market when you're spending 90-hours a week trying to do so. It's impossible when you're spending 20-hours a week. Look for crowded markets that are missing something. Often times, that's a simplistic alternative to the products that have grown in features and complexity as the market matured. It certainly was in our case.

Embrace the Struggle

Side projects are so unbelievably difficult. Know that before you start, and embrace the struggle. There will be naysayers and people that don't understand why you're always working. Know that a side project is the ultimate investment in yourself, a quest for knowledge and betterment of your future self. Side projects will expand your area of knowledge faster than a day job ever could. Harness the process, not the outcome.

Hi, I'm Andrew, an entrepreneur that loves the process of building companies. Currently, I work at betaworks in New York City.

This is where I share my journey and lessons learned, feel free to follow along. Read more →

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