I'm a really big fan of Brennan, Patrick, and Amy. But there's a pattern here that makes me very nervous:
* Huge success with consulting and it seems quite reliable
* Huge success on information products, which are sold exclusively to developers/freelancers
* Impressive, but somewhat less success on actual apps (often sold to developers/freelancers)
So the disturbing part is products seem really fricking hard, unless you include information products in which case they are gold. I've been following (and rooting for) some of these people for a while and even after years it's a bit depressing that they couldn't make a decent salary off their best web applications. And what's worse is it feels like the only people we hear about finding success are those that are selling to us.
Their business model isn't creating software - it's selling "get rich fast schemes" and other information for high margins. You are the target of their sales channel. You can just see it in the financial Brennan posts: 12% comes from selling software, 88% comes from selling to you -- and he earned most from selling a $1199! course on how to build your own multi-million dollar consultancy. It should ring bells as it's a very common theme in most other markets (where you have a lot of people selling "how to get rich quick" - - and the only people that get rich by these schemes are the people that are selling them).
My company is making money with Brennan's Consultancy Class and it paid for itself literally within a week. Brennan's advice has significantly impacted my company's revenue in 2012, and will continue to do so in 2013.
I am sure there will be people that make money on the advice that's given. And I am sure most of the advice is valid. The question is: is it really worth $1000? Maybe you could have saved that $1000 and done these optimizations yourself (they seem pretty straightforward and you can find thousands of articles about retainer fees and fixed bids if you just search Google). I.e. maybe he is not selling anything extraordinary or "secret", it's just common sense packaged at a ridiculous price?
Here's some simple math for you. It would have taken my business partner (he took the course, not me) more than 10 hours to find all of the advice Brennan shared. He can bill out 10 hours to a client for $1000. Therefore is it worth it to pay someone to gather all this advice and package it in a way that allows him to apply it? Absolutely.
It took me a long time to realize many businesses are looking to exchange money for time. They have more money than they do time. It's a hard notion to understand when you don't have more money than time. I suspect you can't truly know it until you reach the point of being able to make that decision yourself.
If people think they will get $1000 of value out of it then they will buy it. If you don't think you can get that value then there is no reason you should buy.
A colleague of mine was a finance major and said in one of his higher level finance classes on the first day the professor asked, "Who wants to make a million dollars?". Of course, everyone raised their hands and he responded, "ok, go write a book."
Which is 100% the opposite of what most of us get told in most areas, at least in tech, because book writing will net most people only a few thousand bucks, and often takes several months.
But self-publishing? Owning everything? There seems to be more upside potential there (and yes, it's harder up front, because you have to market yourself too).
I find it funny that you call out these products. These are products that actually create value for their customers and they make their creators a decent amount of money. Yet you call them "get rich quick schemes". If anything this site (HN) is all about get rich quick schemes. How many startups actually make it to a point where they sell and make their owners very rich? Very, very, very few. It's almost like winning the lottery. Yet HN is always full of the "next social app" that's "valued" (in fake money of course) at a billion dollars that does nothing special. If anything, startups are the real "get rich quick" schemes, but HN eats them up.
That's a pretty serious accusation. Do you have any evidence to back that up?
If you actually ready any of the things we wrote, I think you're going to find it really hard to find any suggestion that "getting rich" is easy, fast, or common.
A kinder - but not, I think, less accurate - phrase might be, "selling pickaxes to gold miners".
To my eyes, this "accusation" is more like stating the plain facts of the matter. There's often more reliable money in selling people advice or tools, that they use to do something, than there is in actually doing that thing. When people are trying to sell you advice, or tools, or what have you, it's worth bearing in mind that their interests are not automatically aligned with yours.
This is general-purpose advice, given apropos of very little.
I can't figure out how you think that's "kinder" instead of "a compliment." What's so noble about gold mining, exactly? Or with a long-term impact?
If I help 10 students build $100k/yr+ businesses, that's a $1 m/year impact I've made… which will continue to improve their lives, have an impact on their families and their communities and naturally themselves, and anyone they tutor, too. And the first of my students are reaching that goalpost, 2-3 years later.
Freckle, too, is designed to help my customers earn more & build a better business. And I have over a thousand paying customers there.
How's that less valuable or less honorable than creating some kind of social startup I hope to sell for a couple million dollars? (Or investing in somebody who does?)
There aren't a lot of gold miners who have created lasting wealth, or lasting impact.
While I disagree with a lot of the negative sentiment found in the other threads, I find myself agreeing with you.
I don't know why, but there's something rather uncomfortable about people selling books/courses telling you "how to make more money doing X" and then 6 months later writing a blog post saying "how I made $Y selling a book/course on how to make more money doing X".
I tend to agree, and it's not because of the info products themselves, but because it appears to be so calculated. Nobody wants to see themselves as the target of a sales funnel.
It's also slightly contradictory with the hacker culture, where unlike say 'make money online bloggers,' hackers tend to share for free. That isn't to say that selling information is wrong or harmful, it's just different than it used to be.
Seems like the strategy is 1) do some standard business that makes a standard amount of money, 2) convince people you can make money, being "transparent" by offering a bunch of upward-trending income graphs, 3) write a book about how you did step 1, 4) rinse and repeat.
To me it'd be most interesting to learn about step 2, or "how to build a community willing to pay you to follow in your footsteps". I've tried it before but couldn't find the right balance between helpful and sales-y.
I think in my case it's more of a "I tried the consulting thing for 6+ years, I learned a lot, I'm ready to move on — but there's a lot of valuable info I've captured over the years that could be very valuable to others."
Don't get me wrong, I think there is a ton of valuable information in the path of transitioning from: salaried engineer -> freelancer/consultant -> standalone product sales, and I'm glad you (and others) have shared your experiences.
I also think these ebooks/courses people are producing probably contain tons of useful information to the folks that buy them.
There's just something that makes me feel weird about the way these information products are being bandied about to the audience on HN.
This has been done for many many years in many different industries. Notable are people who give seminars on how to make money in real estate. The truth is making money in real estate is much harder then getting a bunch of noobies into a room at the Holiday Inn and selling them information on how to make money in real estate. Not to say though that one of two people who you enlighten in those seminars might make out ok and the rest might have felt they received a days worth of knowledge and entertainment.
I'm in a position where I've been getting (unsolicited) consulting work helping people buy domain names (startups). I enjoy doing it even though the pay makes no sense (for the hours spent) compared to what I can make with what I know doing the same thing on my own account.
That said there is value in these offerings (just like there is value in a "franchise" system that you pay for that tells you what you need to know to open a yogurt store). It took years by the traditional method to learn what I have learned over the years. It would have been much easier if there were books ebooks or otherwise that you could have triangulated the information needed from.
I think one place where a franchise differs is that you are buying the brand as well. People are more likely to go into a Subway than a Ma and Pa sandwich shop. People are no more likely to buy real estate (or web apps) from you because you read book X or went to seminar Y.
While there are many franchises that fall into that category (have a network effect) there are actually many more where the brand means absolutely nothing and it is totally knowledge that you are getting.
But Brennan is selling a class teaching what he used to do -- consulting -- not what he's currently doing. And he had a $1m/yr consulting biz without any products at all. I understand your feelings, but the facts don't match them.
The perfect scam is the self-fulfilling prophecy [1]: Write a book titled "How to make millions writing ebooks." Suppose it goes on to make millions. Done.
Now suppose a guy named Jack flew to the moon. He writes a book "How I flew to the moon." It makes millions. He blogs about "How I made millions selling a book about how I flew to the moon."
See the difference?
[1] Especially pernicious in stock market pump-and-dumps.
> "how to make more money doing X" and then 6 months later writing a blog post saying "how I made $Y selling a book/course on how to make more money doing X".
Which is not what Brennan is doing or has done, as the previous commenter so clearly explained out.
No, I didn't imply that at all. My other comment[1] suggests that I think the opposite.
> Which is not what Brennan is doing or has done, as the previous commenter so clearly explained out.
If we fill in the blanks in that line: he wrote a book telling you "how to make more money freelancing" and then a few months later wrote a blog post saying "I made $33,024 selling a book on how to make more money freelancing". It seems to me that he did exactly what I stated.
I really have to echo this sentiment. Let me preface this by saying I have the utmost respect for all of these people. They're doing exactly what I want to do (SaaS products), and I follow each of their stories closely.
However, it can be disheartening when I see Product X owner posting "I made 6 figures this year!", only to open the post and see 10% of their income is from Product X, and the other 90% is selling information to people on how to create their own product X (often accompanied by doing consulting gigs for other people). I know the info products are high quality, but it still feels a little 'spammy'.
One of the reasons I'm getting into SaaS and not employment/consulting is because I want to work on my own schedule, on my own products, while traveling the world, without having to answer to anybody else, while still making more money than I could working as a developer in the Valley.
Regardless of this, I still fully believe it can be done. As a quick back-of-the-envelope calculation, if Planscope's growth stays on the exact same linear growth path for 2013, it will make over $110k for the year. But I predict it will make a whole lot more than that as Brennan increases marketing and develops reliable customer acquisition channels resulting in exponential growth.
Yeah, it's definitely disheartening that success takes time and the willingness to do different things to make it work. Really disappointing how life isn't like a movie.
Also, hate to disappoint you again, but when it comes to a paying product, "exponential growth" is a unicorn. Just cuz Github can make it work doesn't mean anyone else can.
"it's a bit depressing that they couldn't make a decent salary off their best web applications."
As someone who comes from the traditional old school world where you had to do traditional marketing to gain business (pre-internet and obviously pre-social media) one theme I see (which I highlighted in a comment on patio11's post yesterday) is the lack of traditional marketing to move the product.
Specifically I'm wondering what type of outreach Brennan or Patrick have done to gain business? Patrick was thinking about flying to industry conferences which was a step in the right direction although I thought the payback for such a low revenue product wouldn't make it worthwhile and I suggested a few traditional ways to test out (that had worked for me in the past).
One thing that I see happening is people thinking that the way to build a business is strictly by WOM online by low or no cost methods while there are a host of things out there that work and have worked for years (that people aren't using to push their apps). They cost money for sure but after you are established and have some cash flow the are possible.
This year I'm going to heavily invest in experimenting with paid advertising.
Surprisingly, about a quarter of my growth comes in organically. People find me through a blog post, research the product, and then buy. Can't beat that :-)
"People find me through a blog post, research the product"
.001% of your market (arbitrary to prove a point) reads blog posts. So you have to get to the others who are a virgin market (with no competition by the way) for the same product.
Off the top I'm thinking airports or places where consultants spend time or publications which consultants read where you could write some articles and get mention that way. (As a start anyway). Card packs are good (if they are offered and I don't know they are in that biz.) Maybe even advertise in the inflight magazine (for ads that is) which I did at one time. Back in the 90's I did ads in The Economist, the WSJ (marketplace) and Business Week. (Not saying they are good today I don't know but they did work then I picked up customers who are still with me today..)
Feel free to email me and bounce any ideas/costs and I will give you my opinion.
One last thing. You need a .com name if you are advertising to the traditional world. They are thrown a loop by anything that isn't .com . You can still use .io just get another one under .com.
You might also want to put up consultant specific sites for planscope that cater to specific industries (more targeted) "engineering consultant" "city planning consultant" (with templating) it will go a long way toward getting you businesses in specific areas and making you the go to resource.
I don't think you understand the market he is focused on. Everything you said is counter to that market. You pull .001% out your ass and I'm willing to bet a large portion of this market is reading blog posts. Also, in my opinion of course, your advertising advice is stuck in the 90's and not the way to go. Business Week, WSJ, Economist? I think Brennan is trying to reach freelance consultants not IBM consultants (or whoever reads those publications). Bang for buck you are going to lose BIG advertising on those type of pubs/sites. The fact that you need a .com is complete bullshit, again points to you not understanding the market.
It sounds like you've had experience and success but not necessarily with this market or maybe you are still stuck in the 1990's.
Sponsorships are really low impact, because they're a distraction to the thing people showed up for (the podcast, the event) and your CTA is by necessity very weak. I am anti-interruption marketing, and not just because it doesn't work.
Planscope's revenue is fairly small right now, but trust me when I say Freckle could give Amy and Thomas a very comfortable life if that's all they were working on.
Subscription products can take a while to build up in monthly recurring revenue. Product's like Freckle have been around for 4+ years.
RE: Selling to developers/designers
I'm a developer, so it'd naturally be a lot easier for me to make a product for my peers than it would for, say, construction managers.
There are a lot of people doing very well selling information products to non-developers.
RE: Consulting is reliable
It is. I could have made a lot more money this year had I focused on just that, but the long term equity isn't comparable. I'm fairly certain I could maintain a comparable growth rate with Planscope if I were to do absolutely nothing with it right now. Given enough time, the work I put into it this year will pay off.
You bring up a good point with: "Impressive, but somewhat less success on actual apps". For the longest time, I thought the path to success was:
* Launch an app
* Quit my day job the next day
* Live life on the fast lane forever more.
This is simply not true of apps. From what I'm seeing in those who have shared their revenue openly (Brennan, Patrick, Amy, Nathan), it takes about 2 years (+/- 1 year) to get to the place where an app is providing a living income.
Software is a long game. I've only been able to have the attention span of 3-6 months. So I lost that game. Here's to 2013 and changing my attention span! :D
note that of course their SaaS apps are directed at a small market of developers. and developers are in the pre-chasm area of early adopters. we are cheap bastards and many of us won't buy things. we get so much open source for free. we like to just play with new things and we switch easily. a hideous market, we are.
and then again mass market sales apps require significant marketing campaigns to get the plane in the air.
The truth of the matter is that the "switching easily" mentality makes us a very easy market to break into. I say this as someone who always looks for open source first (not because it's cheaper), but is more than willing to pay (or get work to pay for) tools that are really worth something. It's like the cost/benefit analysis of good furniture and good hardware: it just doesn't make any sense to skimp on anything that will give a significant boost in productivity, as long as it's not outrageously expensive and you don't waste time learning it. Hence, the easy switchers.
Definitely, early adopters are your friends. They experiment. They validate the idea. They feedback rather than complain. And they may keep you in business for a while. And going mass market isn't everything. The nature of the fickle early adopter crowd just needs to be known and appreciated.
What makes you think our apps are aimed at developers? You don't have any data on our customers to say things that we have problems making sales, or that people "play with us" and switch easily.
It's my impression, and no I don't have data, and I appreciate the data that you share. I'm doing a startup in a related area, so I am trying to figure out who is there and who is responding. I'm trying not to play to a small crowd by design.
It's my impression that it's freelancers, small businesses, people that are Internet savvy "creatives". Certainly that has been your initial crowd, right ?
> that we have problems making sales, or that people play with us and switch easily
Wot ? Yo, chill. I am describing the market segment of early adopters. It's a classic description of the pre chasm phase, a term I am sure you are well aware of. I guess you assume everybody in the thread is jumping on you ? My comment was noting that you have had success in a limited, not mass market. Good job. It's not fucking guitar hero, okay ? 6 year old girls don't scream out your product name, get a grip.
>I am describing the market segment of early adopters.
Right, with the assumption that A) developers are my audience and B) developers behave like early adopters. Now you fan out your description from "developers" to "creatives."
Do creatives behave like early adopters? Is there evidence for that?
> 6 year old girls don't scream out your product name, get a grip.
I think you're misinterpreting my tone, because I'm just pointing out that your comment was full of ungrounded conjecture. It doesn't bother me personally, since I have over 400,000 reasons not to worry what somebody on the internet says about Freckle as a business.
What does bug me is the unquestioning perpetuation of the myth that developers don't pay for things, which is a truthy "fact" that scares people away from serving a varied, diverse, and incredibly valuable market who needs things.
> Now you fan out your description from "developers" to "creatives."
Same boat as far as I'm concerned. I made an inexact description of the market segment in my initial comment, but I'm talking about the same herd of people.
"freelancers, consultants & and small teams" - your website
They aren't Postmen or Choir directors. They are not 6 year old girls.
> Do creatives behave like early adopters? Is there evidence for that?
Sure, I think they do. They seem like people who watch for new things and try them out. They aren't usually late to the party.
> I think you're misinterpreting my tone, because I'm just pointing out that your comment was full of ungrounded conjecture. It doesn't bother me personally, since I have over 400,000 reasons not to worry what somebody on the internet says about Freckle as a business.
Well your tone seems to suggest that you think I was criticizing something.
Once again - the description of early adopter markets has NOTHING to do with you or your business. Its a description of the general nature of that market segment and noting how you have SUCCEEDED in that area.
"400,00 reasons" seems to be a reference to your stated yearly income.
I see no reason for you to take anything I have said whatsoever as adversarial or critical. My analysis of the market segment was quite the opposite. You have the wrong end of the horse. If you make that money in a limited market then you are doing quite well and that makes me happy because I nearly walked away from that market thinking it was too limited.
You are making all kinds of pronouncements based on your opinion, which isn't based on data. Imagine if people who read it are discouraged from taking action because they think you are working based on facts or experience, instead of speculation.
FTR, based on the experience that my friends & I have running businesses which target "creatives" and yes "developers," your pronouncements don't reflect reality.
There are many who peddle stuff which is not their primary source of wealth. Suze Orman became wealthy not by saving for 401k and 'paying herself first' as she preaches. She became wealthy by selling her books, shows and other stuff.
Many an entrepreneur, when their products failed to get the traction they expected became:
- social media consultants
- lean canvas experts
- marketing experts for startups
I would like to hear from them how they are different from the late night infomercials who teach you to become rich from real estate and government grants.
Amy is making a fantastic salary off of Freckle, Patrick is doing great from his software, and Brennan is doing $6k/month from Planscope less than a year after launch (and growing like crazy!). I think they are all killing it with software.
Freckle's earning the better part of $400k/yr… not sure how that's "somewhat less." Did 30x500 bring in the same money as Freckle in 2012? Yeah, but that's after a lot of neglect of Freckle… which we're rectifying.[1]
Infoproducts are no less hard than software products, by the by… not if you put in the effort to make good ones. They're faster, yes, but not easier. It's not merely "sitting down and writing words" any more than creating good software is merely "sitting down and typing code."
Also, developers are not my audience (for Freckle). I doubt there are very many of "us" (Hacker News types) who use Freckle.
[1] (And the neglect of Freckle was due to focus on Charm, not my infoproduct biz. Which, on the balance, was a mistake, but boy did I learn from it!)
EDIT:
> And what's worse is it feels like the only people we hear about finding success are those that are selling to us.
That's because you don't venture out of your comfort zone. Naturally, the people you hang out with are the people you'll hear from. I, otoh, belong a lot of different, even weird communities, and I know people making a fantastic living off Wordpress plugins, design themes, social media how-to videos, healthy & super simple cooking classes, etc. I recently met a lady who grosses 7 figures a year on dog agility training products. (She's a respected industry expert; we're not talking Teach Your Parrot to Talk here.)
Get out of your comfort zone / fishbowl and it won't be so "weird."
I just wanted to say, I appreciate the response and I wasn't trying to be accusatory here. I guess what frustrates me is, personally speaking, I don't want to sell info products. And like many other people, I don't want to consult either. So I start to get dejected when it seems like those are the only real routes to success. Freckle definitely doesn't fit the pattern I was seeing (I vaguely knew it was doing well, but that's amazing).
This is a weird complaint. You're getting depressed because the things that the world wants and rewards with value are things you don't want to do? Aren't you saying that you don't want to do what other people value, but (implicitly) you still want to enjoy the results of doing valuable work?
A good point, and I have struggled with this idea alot. But, I don't think you can simply look at "what the world wants" as the final word. I think you have to temper that with what might be good for the world. My guess would be that the person with the complaint is really expressing their feeling that information products aren't doing something good for people. I haven't consumed any, so I can't say.
You don't have to do infoproducts. Who's telling you that you do? Not sure where you're getting this idea from. Because Brennan's current income is mostly from his book & courses? Because he used that money to free himself that much faster? But he never said it was the only way.
I got to leave consulting twice as fast because I decided that teaching was a much better way to spend my time. And it was. Teaching pays dividends that you can't imagine, beyond the simple revenue.
As for Freckle, $400k/yr is amazing? Not hardly. If we hadn't made the mistakes we have made, I bet it'd be a $1 m/yr biz already. All my semi-major competitors must be making at least 5x-10x that per year (at least!). I've met some of them at confs; the Harvest guys I met a couple years before I ever did anything with Freckle, and I suspect they were making more then than we did now.
There are tons of popular, quiet SaaS successes, all around you. (Also people selling UI kits, themes, plugins, resource kits, and dev libraries. I have a friend making $10-15k/mo on an iOS component, last I heard. Not to mention live workshops, which are both impactful and very profitable.)
I have a lot of friends who don't write, who don't usually speak, etc., who write about business in general but don't share numbers… who run successful SaaS businesses in the $300k-3 million/year range.
Here's the thing: those friends don't share like I do -- because they don't have "preach the good news" as a personal mission (as I do, as Brennan, Patrick, etc. do) -- and so you assume they're not there. Your whole argument is predicated on the 10% of the "big picture" that somebody has come to you and handed to you, pre-chewed and spelled out.
I mean this kindly so please take it in the manner it's intended: I see this kind of attitude a lot. "But I don't WANT to do xyz [which nobody ever said I had to do, but about which they merely said 'here's what I do']. SOMETHING IS FISHY/unfair/sketchy/dishonest/a rip-off." Assuming nobody is saying "You have to do it this way," this is a kind of ego-freak-out that your subconscious designed to give you an excuse to maintain your status quo. The ego is a slippery, slippery creature.
There have been lots of negative comments on 'year in review' or 'launch result' posts like this (see [1], [2] and [3]). However there are a few reasons why I believe HN should respect these as valid, interesting and "On Topic" : 'Anything that good hackers would find interesting'.
- Of Interest. It's hard to disagree that posts like this are of interest to hackers and HN readers. The four posts mentioned (linked, [1], [2] and [3]) are scientific and analytical. They go in to detail about how four technically/graphically minded gentlemen have failed or succeeded in their various startups and ideas. They offer an honest appraisal of their own decisions.
- Honesty not Arrogance. Many self-absorbed posts are arrogant in their success stories. I see each of these as being honest and humble. This is certainly subjective but I believe them to be modest in their writings.
- Education. HN can certainly learn from all three of these posts. I think patio11 put it well when he said: "I would hope that the six-thousand odd words of narrative in the post and copious linked material contains non-obvious useful tidbits such as "You can increase the sales of a mature, six-year old software company by over 60% solely by A/B testing while keeping all other factors constant."
- Democratic(ish) Voting. Let's not forget that HN is largely driven by its readers.
- Inspirational. I know that many people have taken great inspiration from these posts, particularly those wishing to move in to their own products or to write eBooks. One of those is http://brianfran.co/wroteabook/ who dedicated his book to Sacha Greif (sgdesign). If HN serves as an inspiration resource to encourage creativity and success, isn't that enough.
Whilst not all agree, I would like to say A Very Well Done bdunn, patio11, sgdesign and nathanbarry and thank you for being honest, humble, educational and inspirational.
The negative reaction is more to do with the old community being invaded by these new types of posts - a lot of which focus on money (how I made $x in y days doing z), some sort of secret to being wealthy (top x tips on quitting your job and making your first million) or some sort of life shortcut.
There are many sub communities within the broader startups and entrepreneurial fields, but what HN used to be was a group of people who were hackers first with interests in stories about other startups, new technology, implementing technology etc.
There is an entire other subculture around working from home, the 4 hour work week, SEO, affiliate marketing, how to ship product online, how to write an ebook that can sell for $40 in 24 hours, the micro-ISV space etc.
That later group, who would prefer to talk about how they sold $50k worth of software or ebooks, is much larger than the group of hacker entrepreneurs who would much rather read about the latest Javascript library, security exploit or scientific breakthrough.
Business of Software, the forum that Joel Spolsky ran for micro-ISV's shut down and it seems everybody came flooding over to HN (or were coming over steadily over the past few years). This means more of that type of content.
There can't be more than a few thousand technical (or want to be technical) entrepreneurs, while the group who are interested in breaking away from their career and becoming an ebook affiliate likely numbers in the millions.
A lot of those negative comments are, I feel, from frustrated hacker entrepreneurs who know you can make $100k a year online and who don't want to hear that story again. I didn't click on any of those links when I saw the headlines (no offense to the authors, but it just doesn't interest me) and the only reason I clicked on this thread is because I couldn't believe that another thread that mentions an amount of money in the title had again made it to the top of HN.
I have gone from clicking on 60-80% of HN headlines to now hitting 10%, on a good day. I bet that if I did click on one of those headlines, that I too would have left a smart-ass cynical comment as well, but i'm passed that stage of protesting submissions that I feel don't belong here and now just move on (except this thread).
edit: I realize that I made some sweeping generalizations, I don't mean that people interested in SEO aren't hacker entrepreneurs, I just needed a way to define what are different groups of people in the audience here.
You think the HN community has a problem with these posts because it's filled with people who can already execute on the "million dollar consultancy" or "make 100k online" business models? That the backlash is coming from the "thousands" of "hacker entrepreneurs" resenting the "millions" of "microISV" people taking over the site?
Give me a break. The backlash is from people who are so intensely jealous that they find the idea of making any money outside a job unseemly and would get back to bitching about how evil Valley VC is.
"The backlash is from people who are so intensely jealous"
Behaviorally, I'm wondering if some of the jealousy is coming from the "aw shucks" tone of these posts.
After all, in high school, nobody was ever jealous of the cliche kid with horn rimmed glasses that studied all the time, never partied, went to medical school (or became a rocket scientist) and ended up making lots of money (and actually married a beautiful nurse). He worked hard he deserved his success. (Or the athlete who made it into the pros or pick your own example). I think it's human nature for people to see someone who appears to be naive/lucky and things just worked out.
A relative of mind recently commented that his college roommate "who had a lower GPA than I did" made it big on wall street and was living the life with a beach house and all the trimmings (while the relative was working for a bank doing just "ok"). It was clear he was jealous and that he felt he was smarter and had worked harder than this individual.
This is the same mentality that suggests that 37signals is supercar-successful because they lucked out and got a popular blog. As if blogs were harvested from comet shrapnel instead of simply being the result of posting regularly about your work.
There is nothing Patrick is doing that most people on HN couldn't do. That is, in fact, his whole damn story; it is literally his thesis. "I spent 5 hours a week building 'hello world' and hooking it up to a random number generator and then refining ways to sell it to teachers; here's what happened". LUCKY DUCKY! cries HN.
"There is nothing Patrick is doing that most people on HN couldn't do"
Sure if they applied themselves and put the effort in. Big "if" there though.
In any case I don't think Patrick falls into the "aw shucks" category at all. The post he did was long and detailed and I don't remember much (just rescanned quickly maybe I missed) about how he did it all and managed to still travel and have fun (he might have but I didn't see that). The sheer amount of detail in that post is great. I don't even have time to read it fully I can only imagine the effort that went into writing and editing.
There is also this sentence at the end:
"I think that, aspirationally, career/job/business/etc was never supposed to be my #1 priority, but be that as it may it sucked up a disproportionate amount of my twenties."
So Patrick did what he had to do to make it happen, this is no "boating accident" (it's a shark) and his success is the result of hard work. Not everyone has what it takes to do that. (I'm reminded of the Karate tournament that I was in when I was younger where I was absolutely blown away by opponent who clearly had put way more effort into preparing than I did.)
I'm not sure all, or even that most, HN'ers could achieve that because while they may be smart and they may read and learn everything they can they might not actually be good at applying that information, taking chances, having other things in their life suffer etc. or just plugging away.
Author here. Trust me — I completely understand where you're coming from. With Planscope (my SaaS product) I'm getting to engineer a really rewarding product with Backbone.js and Ruby.
However, because I'm bootstrapped, things like SEO and marketing are pretty important if I want to be able to keep making my house payments, so they interest me.
I think marketing and engineering are completely complimentary. You can't have one without the other in this space. I need to know how to make money selling software or whatever else if I want to keep going, but I also am curious about the latest JS lib or whatever else to help build a sellable product.
My goal with this and other posts has been to always show "hackers" that building software and running a business aren't mutually exclusive. Stories and inspiration from others helped me get to where I am today; and I hope that my story can help others. That's all :-)
Do you find that balancing the business, marketing, and writing side of things comes naturally or is it something you have to force a bit? I can do it, but it seems like a grind versus learning new and rewarding software techniques.
....but what HN used to be was a group of people who were hackers first with interests in stories about other startups, new technology, implementing technology etc.
Stories about other startup you listed. So what's wrong with stories of how this startups made money. You mentioned implementing new technology. But any technology or opensource software not actively used in money making ventures starts to lag and eventually dies.
Hacking books (especially tech books) or hacking code? What's the difference? Both are just as technical.
I will agree, the post could have been titled better. What's relevant here is not the money but the OP's change of attitude from live to work to work to live.
That's something I hardly ever see on HN. And it belongs here on HN.
"Let's not forget that HN is largely driven by its readers."
I would add that HN is also driven by the admins. The admins can decide what gets on the front page and what stays there. They are the gatekeeper to being able to gain votes to stay on that page (unless an admin decides to remove something?).
All those negative commenters can shove it up their ass. This is one of the few really interesting posts in the last few _months_ on HN. If they can't see the connection between business and "hacking" (whatever the fuck that might be in their minds), they won't get very far in this industry. Either you figure out your personal business/life model (one and the same almost in the US), or you crash and burnout.
Good story for a year of transition, good for you.
But not everybody can be a author or a trainer/instructor. but what I feel is, it is more like celebrities making more money by endorsement. Every president who leaves office can get a multi million dollar book deal not the other way round.
I converted my niche consultancy into an outsourced product development company, after 6 1/2 years I employ over 150 people, and still believe there is lot of scope for growth in my line of business.
If I were you I would spend more time with the product, if needed would create variants or complimentary products.
if your company or the product is the brand your business is scalable, but if it is "YOU" then potentially it is a bottleneck.
To counter some of the negative sentiment around "selling to developers" I'd like to share a bit of what Brennan's advice has done for my consultancy business. One of my partners took Brennan's Consultancy Masterclass and here are some of the outcomes:
* Took two of our "do work once a year" clients into a monthly retainer relationships which will bring in an additional $20,000+ revenue annually.
* Changed our estimating process to value-based, fixed bids. Projects previously estimated at $5,000ish are now closer to $8,000ish, and prospect clients are biting just as hard... harder actually.
* Hard data: two new clients are in the door grossing an additional $6,200 above what we originally would have grossed... and are both interested in ongoing retainers :)
Brennan knows his stuff. His advice has moved the needle on my business. And we've only implemented a fraction of that advice.
Those are some good numbers! It's key to have an open mind about learning new things to help improve your business or anything else for that matter.
I think what happens to most people following advice from others is that they are not "dumb enough" to go with it. They just look for reasons on why tactics can't work instead of really giving them a shot.
Such a great story. Glad to see you making these changes. My favorite part of the article is your income graph (though it needs a legend). Two things are completely fascinating to me about your story:
- The consistent, predictable growth of Planscope month over month. Even when you have roller coaster revenue from other projects, Planscope provides a solid base.
- How you are using multiple products to feed off of each other. Selling the book to Planscope customers, then using the book as a gateway drug to get more Planscope customers and finally selling the class. Very well done.
When discussing this recent HN phenomenon, consider this:
Seniors in high school often have to be very conscientious when posting their college acceptances. In the age of Facebook, Twitter, and Tumblr, students have developed a tacit moral code. That is, anyone who posts "I got into Princeton!" comes off as inconsiderate and oblivious to other peoples' rejections. That is not to say that they are those things; just that they appear that way.
Fortunately, I've seen a promising trend where students will refrain from posting these self-lauding statuses. If anything, they'll wait it out before announcing their college decision.
With HN, the situation is more difficult. Entrepreneurs are constantly failing. The holidays are an especially difficult time for many of us, as we reflect on the previous year and everything that went wrong.
HN needs to develop some sort of a moral code. Many of us are incredibly sensitive to subject matters like these. I'm not suggesting that people refrain entirely from posting their 'year in review.' Rather, I suggest people deeply consider the others on HN before they go ahead posting their earnings to the penny or submitting their own blog posts to HN, boasting their million dollars.
Evidently, it comes off as rude to many users. Rather than complaining that people are so intensely jealous, maybe we should find a way to convey the same messages without evoking such jealousy. Believe it or not, it is possible.
When someone says Million Dollar Consultancy I'm guessing that means over 1 Million Gross? If that is the case I'd be more interested in how profitable the consultancy was. 10 employees alone could eat up most of $1 million.
Good point - your answer is what I was looking for. I was wondering how on earth he could have little in the way of savings when earning a million a year. This might be how.
I recently got the book Million Dollar Consulting and it takes a somewhat different approach to it, starting with "charge weekly for business value delivered, not by the hour." Weiss puts a strong emphasis on having plenty of free time, and is skeptical of hiring employees at all.
Probably doesn't work for all types of consultancy though.
I read the book more than a decade ago, and need to reread it, because I don't think I was ready for most of it back then. Also, the examples all seemed to focus on copywriting projects, and I couldn't really make the leap to software project billing.
I heartily agree with the idea of charging based on value provided, but I think it's harder for many providing software services to know, often because the people you're talking to don't really know - you may have to go a few levels up to get someone who sees the bigger value picture. In my experience, people will just skip over you to find someone more malleable to do the work, and until you get a name for yourself, and/or have people seeking you out based on reputation and past projects, you won't be in a position to do true 'value-based' consulting. It's certainly valuable, but it's also something I don't think many people can start off doing on day one.
Basically, charge for the value you provide, not for your time. There's a lot of other interesting tips & strategies in there, but that was my main takeaway.
The author does a great job of telling you the types of questions to ask to set the stage for value based billing (how will you measure success) but also how to write proposals. I highly recommend this book if you are wasting your life on hourly billing.
Thanks for the input. I'm definitely not charging by the hour but I feel I could learn a lot more from the book so I'm definitely going to get to it soon. Did you derive more success from it as a result?
Honestly, it's hard to say because I have had more success lately but it could be attributed to many things. I would say it has played a role in that but wasn't the single contributing factor. Either way, it is definitely one of the more useful business books I've read and I have recommended it and gifted it to several people.
As many others have stated, I appreciate the honesty and am inspired by the success. My question is how much of these revenues from products (info and SAAS) are paid out to affiliates? I would guess the numbers are significant.
It was closer to 2 million, but it could have been much higher. It helps to also be in a lower cost of living area, and included in that count were support people.
Thanks for clarifying. With 2M, and if support folks were included, you were getting nice output, actually.
What turned me off consulting eventually (even though the money was good), was the concept of wasting my life bringing other people's ideas to fruition, while neglecting my own. From the moment I realized that, it became an easy decision for me.
Thank you for writing such an honest post. Your courage is great and your view of work to live rather than live to work which has obviously changed quickly is inspiring. I too had this revelation a couple of years ago, but have always thought it too risky. Which is funny. Riskier than a 4 person startup at 1/3 of my rate? Hardly.
I wish you the best for this upcoming new year and look forward to reading more about personal achievements.
* Huge success with consulting and it seems quite reliable
* Huge success on information products, which are sold exclusively to developers/freelancers
* Impressive, but somewhat less success on actual apps (often sold to developers/freelancers)
So the disturbing part is products seem really fricking hard, unless you include information products in which case they are gold. I've been following (and rooting for) some of these people for a while and even after years it's a bit depressing that they couldn't make a decent salary off their best web applications. And what's worse is it feels like the only people we hear about finding success are those that are selling to us.