Passive income is a holy grail for most of the developers, programmers, makers, digital nomads, and pretty much everyone else. You can often hear, that substantial passive income is an end game, a goal that you should chase.
Now, the issue is that it’s hard to get there! Especially online.
I knew a lot of people that got some passive income online (sometimes enough to live off it), but they were unable to replicate it or scale it. That’s the issue (?) with this model – it reveals businesses that exist thanks to luck and coincidence rather than planning and understanding. After all, if you cannot repeat your success, do you know how, and more importantly, why did you succeed?
I have decided to start a journey. No, not another 12 startups in 12 months (with over dozen of makers trying to complete it and only one person finishing it (correct me if I am wrong) is more of an exercise). I am thinking about the challenge where the main goal is quality, not quantity. While “12 startups in 12 months” is excellent to train deliverability, I prefer to aim for a fixed result based goal.
Phassive is a project, journey, where I will build numerous startups, that collectively will earn $10K/month of passive income. The whole process will be thoroughly documented and presented in an easy to digest form. Revenue and all insider information will be shared openly.
I will keep building solutions to my own problems. Tools that I will be using myself, and need them to exist (but I could not find an app that will be good enough substitution).
I have a good foundation for going ahead with this challenge. I own a slowly growing, reliable startup that provides me with some steady income.
I can invest 20-25 hours a week into Phassive, which is more than enough to ship startups quite often. I plan to release 3-5 startups by the end of the year.
I have extensive programming experience, even larger marketing and business experience, so the journey shouldn’t be impossible.
During the last 12 years of professional work, I have launched over 40 businesses and projects, consulted and worked with numerous global companies, and helped well over two thousand customers.
I am in a place in life where I am ready to take on a serious challenge that holds you accountable.
I know that some might say – aiming for revenue is greedy and bad. For me, it is a sure way to stay accountable. Launching XX startups that make no income is excellent as a hobby/learning/side project/finding a niche. But a valid metric of success for most startups is revenue and growth. Thus I choose it as my project’s goal.
I am fascinated by income reports for a decade. Seeing actual results helped me tremendously in my work life. Honest revenue numbers allow you to take a peek into the industry or market without losing anything besides a few minutes of your time.
Learning on their mistakes, seeing the decisions they made, and monetary penalty or reward that comes with it allows you to learn much faster.
I am a vocal supporter of karma in business – if you only take, you will most likely end up badly. As a part of my way to give back, I have decided to expose what I know and show how to build a project that is passive income focused. It is a way to return something back for all the knowledge and inspiration that I’ve got from reading open journals available on the web.
The core of Phassive will be this blog and Product Hunt (thus the idea for name Phassive). Product Hunt is a platform that anyone can use; it’s free, open, and at the center of makers world. The perfect starting point for a startup to skyrocket its growth. My methods will be possible to reproduce thanks to the availability of solutions that you can use:
-my own time
-resources found on the World Wide Web
Short term strategy for marketing will be Product Hunt. A way to jumpstart each project. Long term strategy will be using the blog to keep the streams of visitors to each startup.
For researching startup ideas, I will build what I need. Tools that I know that can be attractive to the broad public, but also tools that do not exist yet. Or even if they exist, they are broken or problematic in some way.
Also, by building tools I need, I will force myself to maintain them, add features, and keep them relevant.
The issue with numerous challenges and MVP’s is that they disappear as fast as they appear. In my opinion, the model of extreme MVP (or more precisely – MRP – Minimum Releasable Products) is hurting the overall market since the users lose trust in the startups as a whole. I know many people (myself including) that would like to use a new cool tool but the idea of it to disappear overnight makes investing your own time harder to justify.
Phassive is a challenge that has many different goals. Obtaining passive income is the main one, but also teaching potential makers, and proving that startups that do worse don’t need to fade away. Each of my startups will have at least 1 active users (me), so it will be worth to keep it.
Why the $10K/month goal? Well, it’s a round number. It’s large enough to live comfortably in any place in the world. It is large enough to make it “chasable.” The thing is that with different amounts of money for a goal, the whole strategy changes a lot. You will have different approach for $1K goal, for $10K goal, and $30K goal. I picked $10K as it has the sanest, easiest to replicate, safest, and most rewarding process. Also, I decided not to create limits/timeframes and startup numbers. I will keep building and growing until reaching $10K of revenue three months in a row. If it will take 5 or 15 startups. If it will take 6 months or 2 years.
My plan is much more optimistic than doing it within 15 startups and 2 years. I hope to reach the goal within a year and less than 10 startups. I need to account for unaccounted to happen though, thus not setting in stone timeframes and startup numbers (so quite the opposite to the 12 startups in 12 months).
To be crystal clear – I have never created a business that was meant to be passive, never done a challenge like that, and this is my first real blog. So the whole journey is a learning process for me as well!
Passive Income Definition And “MUP”
Each startup created will be MUP (Minimum Usable Product). So entirely usable, fully functional SAAS (software as a service) or a website. No half measures.
As of passive income – there are numerous definitions out there, so we need to pick one.
For me, the business is earning passive income when:
-it will function normally when a maximum 4 hours a week or 1 full day in a month is spent on maintaining it.
-it will fully work without issues and serious revenue fluctuations even if the owner disappears for 2-3 months completely.
-it is sustainable – the chances that it will disappear overnight are marginal.
It seems that all those rules go in par with Wikipedia Wiki:
“Passive income is income resulting from cash flow received on a regular basis, requiring minimal to no effort by the recipient to maintain it.”
To follow this set of rules, I will be forced to build easy to maintain, ergonomic solutions. They will need to avoid overcomplication and massive builds. Something that will train me in shipping small, sharp products. I look forward to it since I am usually caught by large-scale and advanced projects.
Phassive – Passive Income Project
I have been observing Ryan Hoovers Product Hunt from a distance since its early days. It was rather quickly apparent that it would outrun BetaList as “the” place to show your creations to the world. A place where stars and unicorns will be born.
With Product Hunt, I have managed to discover hundreds of awesome startups and indirectly make friends and business deals.
Building and quickly validating a product is as easy as writing some text, coming up with images and clicking a few buttons. Only thanks to this simplicity Phassive can be completed by not only following MUP idea but also by streamlining and perfecting marketing process. With keeping marketing mainly to the Product Hunt, Phassive with the help of IndieHackers, Reddit, and social media, marketing will take hours instead of weeks per startup. Utilizing the most optimized channels allows to keep everything lean and release resources to be spent on building and growing.
From all ideas for the first startup that I came up in the last few days, I think I decided on a winner. But first – how I came up with the ideas?
Simple – I followed processes I perform each day. From waking up to going asleep. I have observed what takes most of my time or makes my life non-optimized.
I have observed what would make a difference in my workload. The idea is not to look for another Facebook or Slack. The idea is to look for something small, seriously helpful, and with excellent growth potential.
It is essential to not focus on if your friends will use it. Surely over 90% of the time, your friends are not your target audience. One of the worst ways to look for initial validation is to ask your friends and family. This is not universal, but most of the time they will be positive about it so that they won’t hurt your feelings. It is much more unlikely that friends and family will tell you that your idea sucks. They will be biased (one way or another) and will not bring the answers you need.
We tend to get overhyped all the time about ideas. Before we know we imagine crazy growth, first one thousand or one million users. Our closest circles can magnify this feeling.
To come up with really good ideas, we need to look from another perspective. The perspective of potential, neutral users. The good idea is to start with an elevator pitch – a part where most fail.
Elevator pitch is a role play where you imagine that you get into the elevator with this billionaire investor with ridiculous money on his hands ready to invest right now. Your job is to explain to him, sell your product, and build interest. Usually, the elevator pitch should be 30-40 seconds long. I prefer a more optimized version that takes 2 sentences.
Within them, answer to those questions:
-what do you do.
-what is your unique value and/or market.
An example of this would be:
I am building a stock market tracking app that is easy to use for beginners, free, and allows you to track and learn from trades of large players.
By offering open, beginner-friendly platform with automatically adjusting goals and lessons, we can aim at a wider market than any other player.
This is just an example of course. You should always take your idea and try to turn it into an elevator pitch like that. If you cannot summarize your business within 2-3 sentences, you are overcomplicating problem, or worse, you don’t understand what you are doing yourself.
So what is the app I will be working for the next week? I am releasing a Task/Todo app. While there are hundreds of task/todo apps, there is none, that can fulfill my own, basic needs. This forces me to use a piece of paper and a pen to organize my days, which is quite irritating and time-consuming. I have created a model for task system on a paper, tested it for two weeks, and I can confirm that it works great.
I use Google Keep myself (and I will keep using it), but I could not find an online solution that will complete it. I tried everything from Evernote, through Wunderlist, to Ike.
Since I cannot find a solution to my needs, I will build one, and I think there will be many people interested in it. I need to digitalize my own solution.
As of revenue stream – I will try to sell subscriptions for extended features version for small annual and lifetime fee.
I am hoping to get over two thousand initial users from Product Hunt and first-week promotion. I also wish to generate around $600-700 of revenue through the launch (launch = first week of releasing it). This would require about 60 paid members (3% free to paid), which I think is ambitious for the first Phassive launch, but not impossible. In the long term, I would expect to grow by 10-20% a month and keep $500-1000 in revenue. I imagine this project will be self-propelling – existing users will be slowly spreading the word creating a marketing/revenue snowball effect. My highly optimistic goal is to keep getting 300 premium members a month ($3-4K of revenue a month). But since I am more of a centrist than optimist/pessimist, I always plan business with a pinch of healthy pessimism. As said before, over-optimism is unhealthy, the same with extensive pessimism. Aim for centrism and add a squeeze of cynicism to stay cool.
Getting 60 premium members is my main goal. But then again – even if I am the only premium user of the app, I will be still happy about it, since it will fix my issue and save me some time!
Keep an eye on a new Task Management app on the Product Hunt within the next two weeks!
Thank you for checking my passive income blog and keep an eye on this space. I will add new articles documenting the process every 1-2 weeks.