A few days ago, a friend introduced me to someone. This person had been working in startups as a founding CTO for years, but after a few projects that didn’t go as good as expected, he ended up being burned out and leaving. Now he’s deciding what to do next, and the idea of keeping on building startup-like projects –only with an indie hacker approach this time– is what’s tempting him the most.
His story is not uncommon.
In fact, I’d say his story is the most common there is. I myself identify with it. Many solo makers I know share the same backstory. We all started out by founding a traditional startup, with dreams of making something really big with potential to change the world. You go through accelerators, pitching contests, financing rounds… and when nothing works and you’re sick and tired of that world, you go straight into indie hacking, because making software products is probably the thing you’ve become best at – and because indie hacking allows you to keep doing what you’re good at, without the bad things of Venture Capital (VC) backed startups.
“What’s an indie hacker?”, you may ask. Well, indie just means “independent”: it’s you, and only you against the world. In other words: a one-man band company. Practically, this just means owning the 100% of your business, and therefore not having investors or VCs involved. You bootstrap your way forward by reinvesting your profits. Indie, in this post at least, refers to the antagonized approach of going down the traditional startup path of raising money from venture capital funds right from the start.
Going indie is almost as if you realize you don’t need anyone’s permission or financial support to just start hacking on projects and building cool stuff. Almost as if the illusion of venture capital vanishes right in front of your eyes, and you figure out you can just do the thing yourself.
After all, we all thought at some point, we can just start out indie to validate the idea – and we can always choose to go down the VC path later on, if we feel like doing so.
All the good stuff of the startup world, minus the bullshit. But is it really that way?
Before we move on: I'm writing a book on indie hacking and making digital products. Go check it out, you can pre-order it now!
The big 7 differences
Building a bootstrapped indie startup is something fundamentally different from building a VC-backed startup. Whether one approach can naturally follow the other is a question I’ll leave for the end, but I want to first explore the main differences I’ve found between indie and traditional. Here’s 7 things indie startups do that traditional startups don’t do as much:
1) Profit is king
In indie startups profit is the only thing that matters: all the rest is irrelevant.
Something you often see in traditional startups is founders showing off vanity metrics. “We have 1 million monthly active users”, “we’re now 20 employees” or “last month we processed 70 million transactions through our platform”.
The illusion breaks as soon as you ask this one question: “but, are you profitable?”.
The answer, more often than not, is surprisingly “no”. What all those fancy metrics really mean is something like: “we’re really efficient at burning VC money to fuel our artificial growth”, not necessarily “we can create sustainable businesses” nor “we’re really good at building something people want and selling it at a profit”.
VCs would argue those are all problems that can be fixed later on (as in: it’s known how to turn a business into profitable given that they have enough users) and that there’s no example of a large enough startup with a sufficient number of users that has not been successful. Their main point is that a viable business model can always be found, provided the startup operates at the right scale. Indies, on the other hand, would argue that if this is really that straightforward of a process, why not just do it right off the bat to make sure we’re not delusional, and to and avoid wasting years of our lives on a single assumption.
At the end of the day, however, it’s all just about money and not arguments. Traditional startups can afford to be non profitable for large periods of time, because they’re living off others’ money. Indies just can’t.
2) Speed is queen
VC startups can afford to spend months inside their caves coming up with “the perfect” idea and building version one of the product. That’s not the case with indies.
What often happens when you’re bootstrapping is that you start off your indie adventure with some amount of months worth of savings in the bank. If you have, say, a 12 month runway to come up with something profitable, and you burn through half of that with your first product (a product that’s probably gonna be a flop anyways) – you end up in a really bad position. When your own money is on the line, you need to optimize for speed.
3) B2B instead of B2C
Here’s the rationale: you’re burning savings, so you need money as quick as possible, right? And who usually has money? That’s right, businesses.
A $100/mo subscription is just not gonna fly for your average consumer. Netflix subscriptions go for something like $10/mo, and people often share them with friends, so it becomes more like a $3-5/mo deal. That’s my reference point for what a B2C business often looks like.
At a $3/mo/user price point, it’s very, very difficult to build an indie business. You need way too many users to reach profitability, and capturing each individual user is costly – a cost you can’t afford, because you’re bootstrapping.
Think about this: at $50/mo, you only need 200 customers to reach the $10k/mo milestone. But you’d need 10x more customers (that is: 2,000 customers) to reach that same level of revenue at $5/mo. And the last thing you want when you’re indie is to make things 10x more complicated than they need to be.
Here’s a mental exercise to help you understand the difference of the scale: you can fit 200 people in an average college classroom, but you’d need a medium-to-large night club, a concert venue the size of the Glasgow Royal Concert Hall, or the largest of Broadway theatres just to fit 2,000 people. It’s 10x easier to fill up a classroom than a whole Broadway theater – that’s the difference in scale you’d need to overcome by going indie into B2C.
B2C models tend to be subsidized by venture capital funds, and only work (if any) once you’ve reached a tremendous scale. I’d argue scales like that are not reachable by indie makers in the vast majority of cases, because it takes burning literal millions of dollars in ads to get there.
Consumer markets are not easy. Businesses, on the other hand, handle budgets differently. Purchases are often seen as investments (as in: by purchasing this, I’m able to do X thing that will increase my revenue by more than the cost of the purchase), or as cost reducers (as in: the alternative of purchasing this is building it myself, which is 1000x more costly than the monthly subscription).
Think of “businesses” as a loosely defined term. They don’t need to be brick-and-mortar shops. “Anyone that’s selling something” fits my definition. It might be freelancers, course sellers, one-man bands, small businesses, creatives, agencies, etc. It’s often not the case that you’re selling to extra large companies, enterprise-like, because they have a whole different set of requisites and are a beast of their own, in my opinion.
What’s the right price point for an indie business, then? I have no clue, and I’m not an expert in pricing myself, so take this with a grain of salt. But a pattern I’ve observed is businesses with an average ticket in the $30-$60/mo/user range tend to be healthy and survive over time, whereas the rest tend to struggle and eventually close down.
This is interesting, because it forces you to do price-first entrepreneurship. Instead of thinking: “I’ve built this thing, how much should I price it?”, you start thinking: “what can I build that’s so valuable it sells for $100/mo?”.
4) Simpler products
Indies tend to prefer less complex products. Since indie businesses are usually a one-man band, you tend to create niche things of lower complexity that allow one single person to handle everything.
This tends to be true across all the areas of the business: lighter operations, low customer support, low tech mainteinance, low-to-none management work, etc.
There’s an obvious drawback to this: you might risk not creating anything relevant. Impactful, world-class products often hide tons of complexity under a facade of simplicity, and by avoiding complexity altogether you’re limiting the potential of the ideas you end up building. It might just not be feasible à la indie otherwise.
5) Multiple bets
There’s an idea that’s been gaining popularity lately in the indie hacker space. It’s the idea that, as indie makers, we should all aim to “build a portfolio of small bets”. I believe it was popularized a couple of years ago by Daniel Vassallo (@dvasallo) on Twitter.
As most ideas, this idea has been around for a long time: there’s nothing new under the sun. I remember thinking about it circa 2016, when I was still building a traditional startup. My reasoning went something like: I’m essentially like an investor, only that I have time, and not money, to invest. My unfair advantage is that I can create products worth thousands of dollars in tech development for essentially free (more precisely, in exchange for time and living expenses). Given that most tech ventures fail, I should, as a good “time investor”, diversify my risk by investing in a wide variety of ideas, and have a portfolio of products that might work, to maximize my chances of getting a disproportionate return. I just happen to be both the entrepreneur and the investor.
I still philosophically agree with this line of reasoning. When it comes to the actual implementation, though, there’s a few nuances I’m now aware of.
This approach maximizes your luck surface area, but in return leads to scattered efforts.
There’s a flaw in the “single-person investor and entrepreneur” reasoning, and that’s that if you happen to be both roles at the same time, you can’t delegate anything ever. When a traditional investor makes an investment, the entrepreneur takes the full responsibility over the project and then the investor is free to keep researching the market for good investment opportunities. But if the investor is busy trying to make the venture work, he is not going to be able to scout the market effectively. In the same manner, the investor would never make the startup work if the majority of his time was spent doing what he does best: building a good dealflow. The end result is that neither investor nor entrepreneur end up doing their jobs the best they could.
This is a numbers game, though, and you often win just by buying more lottery tickets.
Juggling multiple projects at the same time often leads to scattered efforts, but in return you get to buy more tickets. It’s a difficult balance to make.
Here’s another interesting nuance: one popular pitfall that first-time indie makers fall into is thinking their first product is going to be a success, and getting too emotional and attached to it. Making multiple products helps understand ideas as what they are: mere ideas – and helps detaching emotionally from them. Single-bet founders often fail to recognize when an idea has no future and needs to be killed to move on to the next one, often to the point of prolonging everyone’s agony by artificially keeping alive an idea that’s not going anywhere. These are all things that can be fixed by understanding your first idea is probably flawed, and that not all eggs need to be put in one single basket.
6) The impact VS freedom tradeoff
A direct consequence of all of the above is that your impact in the world can be reduced by going the indie route.
You get maximum freedom, but at the cost of minimizing your potential impact.
You may get a calendar free of calls and meetings, but in return your products are not likely to affect the world in the same way Netflix or Instagram have had.
There’s a tradeoff here, and I’m still trying to figure it out.
One thing I constantly think about, though, is that even though I’ve already built and crashed one traditional startup, and even though I left that world more burned out than anything else, I’d still feel excited about building another one if the right team and idea come along. The need for impact has not gone away.
7) Bias towards lifestyle businesses
Another consequence of the previous points is that the indie approach tends to yield lifestyle businesses, rather than big, mission-driven businesses. As long as the founder can live off the business, it’s considered a success for the most part. It’s often not lack of ambition, but rather all the aforementioned constraints: time, money, team, low complexity, niche ideas, scattered efforts, etc.
Indies tend to produce small businesses, but let’s make sure we’re all on the same page when we talk about what “small businesses” means. These indie businesses can sell for more than $100k and even up to several millions. A few hundred thousands in the bank is a life-chainging amount of money for most people. We might not be producing your typical billion-dollar unicorns over here, but that doesn’t mean large amounts of money are not involved in many cases.
These are the main fundamental differences I’ve personally found between bootstrapped and venture capital backed startups. What follows is a series of thoughts I think are interesting to reflect upon, especially for aspiring indie hackers – as well as some caveats I’ve gathered from my experience in the scene.
Why go into indie hacking, then?
To define success, let’s first define a goal.
What are you trying to get out of starting an “indie maker career”? If I were starting out, I would make sure I’m doing it for the right reasons, because things are often not what they look like. The most popular reasons people often bring up are:
- Make millions and/or achieve financial freedom: indie hacking is not the best nor quickest way to become rich. The odds that you’re gonna make not just millions, but any significant amount of money are extremely slim. The handful of successful makers you’ve seen on Twitter are not representative of the results the average maker achieves. They’re not lying, they’re just the top 0.001% in their field. There are safer ways of making bank, such as working a high-paying job.
- Become the next Elon Musk: indie hacking is probably not the best way to become the next Elon Musk, either. As discussed, the potential impact of indie hackers is very constrained by definition, as well as their access to the resources one would need to become something like Elon.
- Live without worries: also not the case with indie hacking. Owning a business is a lot of stress. You never get to turn your computer off, you work weekends and holidays, you’re just on a state of permanent alert 24/7. Passive income does not exist, we’ll describe why later. Again, I think the best option if you want to live a life without streess, anxiety and worries is just getting a stable job that doesn’t require much of you. I’ve considered it in the past, and I’ll consider it in the future. You just don’t get into this and come out on the other end without anxiety. You’re always worrying what your next month’s revenue is gonna be. A project that’s generating revenue today may stop selling altogether the following month. And it’s very difficult to keep the “well, at least I’m my own boss” mindset when there’s not enough money coming in to your bank account.
- Freedom: this one is true, but it comes at the cost of impact, as we’ve discussed. I’m fairly free from any obligtation: had nothing on my calendar this week except for the call with the person that inspired this post. On top of that, I can just go anywhere at any moment: I’m now on a tropical island, but I’ll be packing and leaving for Bangkok in two weeks, then I’ll be visiting my family and friends in Spain, then I’ll travel to Portugal with other indie makers, etc. Freedom while indie making is close to absolute, so if you’re exclusively looking for freedom, this is a good path to get it – provided you can make enough money, of course, which as discussed is extremely unlikely to happen.
- Creative expression: I personally see indie hacking as a way of expressing myself creatively. It’s mainly a creative endeavor for me, the fact that it’s related to business and tech is purely contingent. If I had more talent at painting I’d be painting instead, if I had more talent at singing I’d be a singer instead. I just have ideas I feel the urge to make real, and code and startups happen to be the way to make them happen. I’ve seen a certain amount of people fitting into this pattern, which makes me think indie hackers are closer to artists than to businessmen.
- Quickly validate a business idea: some people see indie hacking as just a stage, as something temporary, as a transitory opportunity to get immersed in an internet culture that promotes quick action and getting things done. It’s just means to an end, the end being building a business that’s not indie (i.e.: going into venture capital later). This may or may not be a valid reason to get into indie hacking, and we’ll discuss it in depth at the end of the post.
In summary: get into indie hacking if you’re looking for freedom and creative expression, but be aware it comes at the cost of other valuable things, like impact. If you’re looking for something else that’s not freedom or creativity, I’d recommend you go other paths.
The lie of passive income
Some go into indie hacking thinking you can just build a software, come up with a marketing funnel that predictably drives traffic to the software and put the whole thing on autopilot so it generates money while you sleep.
I think this is just a straight up lie.
The default state of any software is rotting to death, not being alive. You need to put in very conscious work just to keep things afloat. You need to keep up with tech changes, shifts in the market, security updates and overall maintenance. Things are guaranteed to break, and customers will complain. Support will take up a good chunk of your time. Also competitors: something new might come along and you’ll need to put in work just to stay afloat.
Passive income doesn’t exist. Everything requires work. If someone is telling you otherwise, they’ve either never built a software business or they’re trying to sell you a course.
Does my success rate increase if I make an indie startup instead of a traditional startup?
I’d say the overall success rate is about the same as traditional startups, because there’s nothing fundamentally different about bootstrapped businesses that makes me think otherwise.
One thing we could argue is the success rate might be even worse in indie startups. There are less entry barriers, so there’s more people trying, which will inevitably turn into more people failing, which might drive the success rate down.
What you do get is more tries.
By avoiding to put all your eggs in the same basket, you’re optimizing for a chance to get disproportionate returns.
But still, most people fail. And by most, I mean more than 90% probably fail. Here’s how I intuitevely think about it:
- Most people stay at the idea stage and never really ship anything that’s production ready. This probably eliminates half of all people that try.
- Then, the most common error by far is spending too much time on building the first app (I’ve even seen people spending years without launching!). What happens then is you launch it, you face the reality that nobody wants what you’ve built, you realize you’ve burned through most of your savings in the process, and you end up running back to a corporate job – to never going back to indie hacking again. This probably accounts for 80% of the remaining candidates. I’d say most indie hackers only survive their first product launch, which is likely to be a flop.
- Of the remaining 20% that manage to either launch several times or get some initial traction: most die in the process. Only a few achieve a profitable business that can pay for their bills. I don’t have numbers, but maybe those in the overall top 5%?
- Of them, the subsequent levels of success just follow a power law. The majority of the money is made by a tiny fraction in the top percentiles, and the rest of the money is distributed along the long tail.
This whole reasoning is no different to that of other fields, like the success of Twitch streamers, of OnlyFans creators, of book sellers or of musicians on Spotify. Most fail, some don’t (immediately), and only a tiny fraction produces most of what’s consumed. Talent and luck are unequally distributed, and these types of distributions are common across almost every field.
The risk of coming across as not serious
One disadvantage of going indie is you and your products may be perceived as unsettled and volatile, especially if you’re taking the “multiple small bets” approach and are launching project after project.
One thing VC-backed startups do well is they go all-in with one idea. It may not work out in the end, but at least you know they’re going to keep doing it until the money runs out. And if they secure further rounds, or even better: if they reach profitability, it’s likely they’re going to be stable and fairly reliable.
Compare that to what an indie hacker might do: launch a half-complete project, see it doesn’t get much traction, get bored of it, stop improving it and stop supporting customers.
It’s only understandable some people are cautious about products by indie makers.
Indie takes time
Another of the drawbacks of building startups the indie way is that you don’t get to push the pedal to the metal in terms of marketing. When a good opportunity in the market comes along, you just don’t have the budget to spend dozens of thousands of dollars in ads to take advantage of the opportunity and accelerate your growth. Going indie means missing on the opportunity to compete on that sort of things.
It also means going slow but steady on a regular basis.
I’ve known a fair deal of indie makers in the past few years, and I have yet to know someone who unexpectedly woke up to a bank account full of money starting from absolute zero.
Overnight success might happen, but it probably doesn’t look like what you think it looks like. It usually means going viral with something that doesn’t bring in much revenue, something that you later need to capitalize on.
Scaling revenue takes time and effort.
From time to time I see the occasional story on Twitter of someone that started out as an indie maker just a few weeks ago and is already bringing in dozens of thousands of dollars in revenue. I’d advice to be skeptic of such stories, not only because they do not represent the most likely scenario and set the wrong expectations for newcomers, but because they often present one or more of these elements:
- Revenue is mentioned, but not costs (I can spend $100 to make $90 and lose $10 in the process, and I’d still probably could make millions, but that revenue number doesn’t incorporate the fact that I sold at a loss and that I’m now in negative numbers)
- A big part of the mentioned revenue might come from sources other than the indie product itself, such as infoproducts (selling courses, books, etc.), sponsorships, or consulting/contracting.
- Money is often involved, to fuel the fast growth: either the founder’s personal money, friend’s money or VC money.
- Founder is monetizing a pre-existing network or audience that has been built way before the indie product was born.
- Revenue comes from a single or handful of enterprise customers the founder already had closed deals with.
- Revenue is not recurring, but gives the impression that’s recurring (a massive one-week sale does not mean increased MRR, which is often more valuable)
To be clear: I think there’s nothing wrong with using external money, monetizing pre-existing audiences, etc. I just like things to be straight up and clear so the right expectations are set.
The indie way takes time, often years, to see spectacular growth. While you should be seeing some growth right from the start, most of that growth is generally linear. You’re also optimizing for disproportional returns, so you might see nonlinear growth in some cases – I’m not saying it’s impossible. But from what I’ve seen, that’s something that’s out of your control for the most part. As in: you happened to be early in a market that grew exponentially by pure chance (say, NFTs and crypto), and your business just grew with the market – without you really having the control of that growth.
Speed is your only competitive advantage
Something the best indie makers I know do better than anyone else is be quick as f**k.
Quick on reacting to market trends.
Quick on answering user messages.
Quick on making any kind of decision.
Quick on implementing new feature ideas.
Quick on talking with customers to obtain new feedback.
But, above all: quick on building new products.
And by that I mean shipping a whole new product (from idea to launch) in weeks, not months.
You can’t afford spending weeks on customer research and idea validation as an indie maker. You can maybe spend one or two days studying the market, talking with one or two users and understanding the problem – but you’re better off just hacking together a rough prototype and launching next week than trying to follow glorified startup processes.
You become an expert by operating your business and by interacting with your customers, not by overanalyzing the market before building anything of value.
The indie script usually goes something like:
- Come up with an intuition of a problem and a solution
- Do a quick overnight analysis to understand 80% of the problem and the market
- Discover where the community hangs out at, and maybe talk to one or two members
(these three steps should take just a few days)
- Ship something ultra quick in the 2-3 days following that. I should be rough but interactive
- Go talk to users, see if they see any value in it
- Repeat 4-5 until you can charge money for it
The whole process should take a couple weeks total, and it’s better if steps 4-5 are a continuum rather than a “updates in batches” approach. People often do this by building in public: #buildinpublic on Twitter, or just by going in front of where the target audience hangs out at and start sharing daily updates with them, like “today I added this to the project, what do you think?”. People tend to be very forgiving of projects that clearly are in the prototype stage.
The only goal here is launching as soon as possible (tomorrow better than next week) to see if there’s a real market for the idea, or if no one gives a damn. If there is not, you’ve saved yourself months of your time. If there is, you can always refine your product later. That’s something useful to understand: you don’t need to launch with a full version. Instead, you can launch a useful but unfinished version, and you can always keep improving the project after launch if people use it.
I’d say one month from idea to launch should be the maximum you should aim at. One or two weeks is better.
Corollary: if you’re technical, quick means stop being an engineer
If you’re technical (i.e.: you write code), you’re required to stop thinking so much like an engineer and start thinking like a business guy instead. I know this is remarkably difficult for technical people. It is for me. But not doing it is the easiest path to failure.
Some things you need to change include:
- Forget about Kubernetes
- Forget about scalable infrastructure, lambdas and the like
- Forget about CI/CD
- Forget about perfect interfaces
- Forget about tests
- Forget about documentation
- Forget about best practices
The only goal is hitting that “deploy” button as often as possible, and as early as possible. Anything that stops you from hitting “deploy” every few hours needs to go away.
There’s literally no time for unnecessary technical complexity.
A WordPress page in a basic hosted FTP with some custom PHP classes beats a perfectly orchestrated and distributed Go app, because the former can be built and deployed in hours – the latter can’t.
You can’t make something in 2 weeks if you try to make it technically perfect. It just won’t happen.
And you, smarty-pants, you that’s reading this thinking: “oh, I’m smarter than this guy, I can just do it faster, or I can just trade another week of my time in return for all these shiny technical things”, to you I say: that’s just not the way this works. The complexity you’re adding doesn’t scale linearly, but exponentially – and before you notice you’ll be spending extra weeks, and not days, on making everything work. You’ll be burning time making all your tests pass and making all your moving pieces fit together instead of having shipped a product and having people pay for it. Trust me, I’ve made this mistake several times.
The way I’m describing is difficult enough and already has enough technical challenges. There’s no need to overcomplicate it.
You’re trying to figure out WHAT to build, not how to build it perfectly. Your first codebase should almost be a throwaway codebase. This is not engineering, it’s indie hacking: your job is to build the RIGHT thing, not to build things right. Once you have figured things out and you’re making good money, you’re allowed to spend all the time you want doing proper engineering.
How to determine if a product is successful?
There’s no right answer. I wish there was.
Some products take off immediately, some take off after a while.
The possibility space is way too complex, so any answer will oversimplify reality, but here’s some rough mental model I often find myself using:
A “launch” event (commonly: posting on PH, HN, Reddit, and the like) generally brings in the first 1k web visitors to your site. One thousand people is a statistically significant amount of people: if you can’t make one or two sales out of that, there’s probably something fundamentally wrong about your product.
The most probable outcome, though, is that the product ends up being in lukewarm territory. Not dying, but also not wildly successful. Maybe it’s generating enough money that you don’t want to kill it, but not enough revenue to be considered successful. That’s a tough spot, because it keeps consuming some of your time and resources that you could be using on building higher value products.
When to abandon a product?
The quick answer is: when it’s preventing you from doing anything better.
One good compromise if you’re thinking about sunsetting something might be to post it on MicroAcquire first, and see if there’s someone willing to buy it.
Another good intermediate solution if selling is not an option is to automate as many things as you possibly can to put the product on auto-pilot.
Products on auto-pilot keep being usable without your intervention. Maybe their functionality is reduced to the bare minimum to reduce customer support, but at least they’re live. Live products tend to add value:
- They’re discovereable by Google, and may come up in search results
- They add to your total count of pageviews, and all pageviews are valuable
- You can do cross-selling by promoting “good” products in “auto-pilot” products
- Live products also help build a brand
I’m of the opinion that killing products, just for the sake of killing them, substracts more value than it adds. There are things one can try to turn bad performing products into something of value.
Should I follow any methodology? (Lean Startup, Business Canvas Model, etc.)
I say no.
I believe that’s all startup porn.
Founders love reading startup porn. Founders can spend hours reading stories about how other founders became successful, and/or how they devised a perfect method to reach the top. But at the end of the day, it only adds marginal value.
No one became rich by pasting post-its on a canvas model. People become rich by building products people love, and selling them. So just ignore the startup porn and go straight into building the thing.
I’d argue reading books and following methodologies is just productive procrastination. Your brain is just trading a task that’s really hard to do (building a product) for a task that’s slightly less hard to do, so it gets the dopamine kick it’s looking for.
Don’t fall into that trap.
Should I measure metrics as an indie hacker?
As long as it doesn’t take away your focus from building and selling.
Try to capture basic usage data early on, because unsaved data can’t be recovered and because it’s remarkably easy to start capturing basic data these days. It takes minutes. Just drop the GA, or the Amplitude, or whatever service’s snippet you’re using, and start gathering the default data. Don’t stress over it too much: you can just analyze it later.
A trend I saw in VC-backed startups is they try to measure everything. They tend to overmeasure, in fact. I suspect this is because VCs and accelerators have a specific set of interests, and demand such metrics from the entrepreneurs. Which is something that might lead to the entrepreneur losing too much time on something that doesn’t add much value in early stages. What sometimes happens is they’re trying to obtain conclusive results from just a handful of users, the few ones you have in early stages, and this tends to yield noise more than anything else.
The trend I’m seeing in indie startups is intuition over analysis. Most indies don’t know their metrics and numbers at the top of their head, as it’s commonly required in VC world. They run their businesses more intuitively. Don’t get me wrong: some do measure their metrics very well and have amazing spreadsheets and all that, but I’d say it’s more common to just focus on 1-2 key metrics (revenue being one of them), and leave the rest to intuition – especially in early stages.
Are people using your product? Then they’ll probably be talking about it publicly. Are you not seeing much people talking about your product lately? Then something is wrong. This, in my experience, is more what the indie way looks like, rather than making retention cohorts analyses and all that jazz.
Having a job while indie hacking
Having a job while indie hacking is common, and often necessary to make ends meet in the beginning. It may not be a traditional 9-5 job, it might just be freelancing gigs from time to time: contracting, consulting, teaching, etc.
The line is often fuzzy. It’s not like “I left my job this one day and the very next day started indie hacking full time”. Everything is blended together, work and hacking on the side, until you can do more of the later and less of the former.
There’s also an interesting nuance to note here: when you have total freedom over your time, you can decide to briefly use your time on sporadic interesting opportunities that come along. For example, a few months ago some friends reached out with an interesting proposal for a well time-bound project in an field I was looking to get into: web3. It made sense at the time, so I put what I was doing on hold for a few weeks to take on that project, and resumed normal operations once it was finished.
Freedom makes things look more fuzzy, and less written in stone.
Hiring as an indie business
I’ve personally seen few hires in the scene.
I think there are three main reasons that explain why that is the case:
- Not enough money. Since indie businesses are often lifestyle businesses designed to only support their founder, there’s often not enough excess revenue to finance a hire.
- Not enough stable workload. The way in which I use my time varies wildly from week to week. Some weeks are 99% development, some are 80% marketing, some are mainly customer support and planning, etc. I’ve seen this holds true for many indie makers. I suspect often times there’s just not enough stable work of one single kind to justify a full-time hire. This is often solved by hiring part-time, or just by sporadically hiring freelancers for very concrete tasks. I myself have hired a couple of freelancers for marketing taks, but it’s more anecdotal than anything else. People often hire logo designers, customer support agents, video editors, etc.
- Not enough interest to manage. Most indies love hacking, and hate managing. Hiring means turning the whole indie thing into a traditional business, and then the fun is mostly gone. Indies want to keep on building. They don’t want to become a full time manager instead of a full time hacker.
Can indie businesses become VC-backed businesses?
I started this post proposing the idea that indie hacking can be the starting point of VC-backed businesses. The rationale is that you start out indie in order to quickly validate if your idea makes sense and if there’s a market for it – and once you have the important parts figured out, you start pouring VC money into the idea to make it grow like crazy.
Is this a valid reasoning?
I think so. But there are nuances.
I’ve personally never seen a successful indie maker go into VC world. There might be, I just don’t know of them.
My hypothesis is that while going from indie to VC is theoretically possible, it goes against fundamental values indies have. It has nothing to do with “hating venture capital”, as sometimes one can read on Twitter. It has more to do with the very reason one gets into indie hacking in the first place. As we’ve covered, total freedom and creative flexibility are almost the only reasons to choose this “career path”, and you don’t get neither of these in a VC-backed startup.
Plus, indie startups are often more efficient than big, money-burning startups: maximum profit margins with minimal business complexity.
Some people, however, don’t care about any of this. They just see indie hacking as a means to an end – the end being building a VC-scale business. But I still think there are reasons why this ends up not happening in practice.
If your indie business is going well enough, it may become your golden handcuffs. You’re making enough to live off of, and you enjoy freedom and lack of creative restraints. Once you have that, why would you add complexity to the equation?
Or, if impact is still something you’re going after and you’re making loads of money, you might try to scale up your business yourself, using your own revenue to finance growth, having full control of the process. That way you might achieve mass market scale, without taking on the risk of crashing the whole business into a wall.
That’s a tough decision to make, though, because the revenue you’re burning in growth is money that’s intrinsically yours, meaning: it’s money that’s not adding to your net worth, money that you’re not investing in assets with a more predictable return. It’s easy to spend others’ money, it gets tough when it’s yours.
It’s a totally different landscape to that of running a VC-backed startup. In VC startups you don’t directly own the revenue, because you don’t have full ownership over the company. You own equity, and equity is often worthless. You may get a big valuation, and that makes you a paper millionaire, but that’s often worthless as well.
In indie startups, if you’re making millions in revenue, that’s real millions in the bank, millions of your net worth. It’s not a writing on a random piece of paper stating that some other pieces of paper you own may be worth millions if you happen to hold them for long enough and only then find a suitable buyer for them.
This is why it’s difficult for indie makers, in my opinion, both to bring external capital to scale the business and to think of the revenue they generate as VC money to use it all towards growth.
We could argue that if you wanted to have a VC-backed business you should have done things fundamentally different from the beginning, starting with having willingness to sell most of your equity, having willingness to give up on freedom and start reporting to your investors, and having an overall adherence to a different set of core values.
But the reality is there’s not much difference between what an indie maker does and what a VC startup does, practically. We’re all just trying to build something people want – the scale is just different. We all start the same, no matter how many millions in the bank, and it’s only once we hit some sort of product market fit that our paths start diverging to scale the business differently. The fact that both approaches need to reach the same intermediate point in the first place doesn’t ever go away.
So yes, I’d say it’s feasible to go from indie into VC, provided you’re willing to give up the core freedom and equity ownership values the indie scene is built upon.
I think I personally wouldn’t do it without a cofounder or two to help me with deal with the extra complexity. I don’t find it particularly attractive to make decks, pitch to VCs, close rounds, manage the required personal relations, etc.
I’ve received investment offers in the past, and I’ve politely turned them down for this reason. It’s not “free money”: it comes with deep consequences. I would have gone straight into traditional startups and avoided the indie scene altogether if I wanted those consequences so badly. As I said, I don’t disregard the VC option in the future, though. But if I do it, it’d probably be a very conscious decision, a process initated by me, and not a kneejerk reaction to someone offering me money out of nowhere.
At the end of the day, though, a good product is a good product. If something is good it will work in the market, no matter how much money you have in the bank, or how much money you raised.
P.S.: Follow me on Twitter to stay in the loop. I'm writing a book called Bold Hackers on making successful digital products as an indie hacker. Read other stories I've written. Subscribe below to get an alert when I publish a new post: