Profitable Side Projects: A Website For < $200

I hate “business opportunity” pitches. I hear plenty of them and they never work as promised. The Internet is full of this garbage, selling $99.99 e-books with the secret of infinite wealth. At the same time, I  believe the world would be a better place if more people tried to turn their side project into a profitable business.

This guide walks you through how to turn a side project into a profitable small business. I did this myself for under $200, in my spare time, and was profitable within six months of launch. I’ll start by sharing what we learned.

(Spoilers: There’s no e-book. You (likely) won’t get massively rich. It will be a great investment.)

Why Do A Side Project? (Developer’s Take)

The mere act of doing this is a good experience for a software developer. A good side project forces you to:

  • Complete the dang thing (blushes)
  • Maintain the code
  • Listen to the users

Doing a side project dramatically accelerated my growth as a developer. Let’s start with the whole accountability concept. Corporate jobs are great at spreading responsibility around. The side project is all you. This helps you find and fix behaviors that are holding you back as a good developer.

The first two items are fundamental to making good software. You need to be able to ship a project. After you ship, you must update and maintain the code. Running a side project for a few years shows you where the cruft in your code is hiding. Every major area of our site has been rebuilt at least three or four times. My coding habits improved each time. Incidentally, shipping the project demonstrates (for employers) that you can manage every element of the stack if required. More on that later….

The third quality (listen to users) is the first step towards learning how to create great software. Most developers learn the power of being a creator. If you build it, they will admire it. But will they use it? Especially if you’re not looking? That’s the tricky part. Google analytics (free tracking service) can provide you with insight on what features users respond to, in very measurable terms. You’ll learn that most users ignore most features (sniff, it’s true…). You will also learn that users ignore directions (the horror!). Or say one thing and do another. Once you understand this, you are free to focus on ‘things which really matter”. And that is the first step to creating great software.

Business and Career Perspective

Operating your own side business is also a great way to help your personal growth. A couple of things I’ve gathered from my own (very successful) side project:

  • Better understanding of how business, marketing, and communications works
  • Demonstrate skills for future employers
  • Getting closer to your purpose in life

Unlike most corporate jobs, a good side project will give you exposure to every part of operating a business. The ideal project is self-managed; we’ll talk about how to automate as much of this activity as possible. You’ll learn marketing and product strategy skills that you can apply elsewhere. From a technical perspective, you have an opportunity to play with every element of the stack.

This can also help you learn skills that aren’t a fit with your day job. This was a huge win for me. I was a software developer who wanted to shift from admin systems to online games. This wasn’t an option at my day job. We didn’t do gaming. Management wasn’t interested in the web. When jobs were posted at other companies, my resume was ignored due to lack of experience. Four years later, I’m getting recruited for these positions. Without having giving up my regular job or taking a pay cut in the process.

Which brings me to my last point: your purpose in life. The fact you want to build this on your own time is a sign. I’m certain my purpose in life was not to build administrative systems. Or worse, clean up poorly designed systems. Even if you’re not completely correct on the first try (I wasn’t), this is a step in the right direction.

Goal Setting

We broke this guide up into parts. There is psychology behind it. The biggest enemy of side projects is distraction. My entire approach tries to block this. In the short run, these are your priorities:

  • Launch a simple prototype quickly
  • Share Your Prototype with an audience of potential users

The goal here is to build something before you lose interest. Watching your users on Google analytics is addictive. It feels good to see people use something you built. That pulls you back into the project.

Once you have users, your next goal is to earn a little income. We did research on survival rates for small website projects. As a result, we recommend the following as a early goal:

  • Build revenue to $500 / month (on auto-pilot)

Wot! You say…. Not millions? Charlatan! Fraud! Impostor! Where is Easy Street?

Here is the logic behind this goal. First, it is attainable. Some effort and creativity is required, but you can execute this without investing much cash. Second, our statistics indicate this is “enough” (based on our analysis) to help most people to stick with the project over time. This reduces your odds of burning out and quitting.

Incidentally, reaching this level is still a big win for many people. A website that earns $500/month will deliver $6,000 per year to the owner. If you tried to sell it, it would be worth between $10,000 and $15,000. However, you many want to hang onto your project. At $500 per month, the website is generating a cash income equivalent to a $300,000 portfolio of S&P 500 stocks. This is based on the current dividend rate of 2%.

Ignoring, of course, the fact that it is a lot more fun to talk about your crazy pet blog at cocktail parties….

Putting Things Into Action

Phase 1 – Build and Share Prototype

Phase 2 – Getting to $500

Phase 3 – Grand Strategery (Path to Global Domination)

  • Web Analytics – Advanced
  • Content Strategy – Advanced
  • The Meaning of Life

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