I started a passive income side project while I was an employee in 2011. It took 6 weeks from inception to launch and was profitable from month 1, making something between $500-$2000/mo for the first 18 months, and then sales came to a halt because of competition. I recently decided to leave my company to restore my product’s profitability and work on new products. A couple of months later and I am now happily profitable again, but still trying to increase revenue to match my salary.
Here are a few good things that came out of staying at my job for that long:
- Having up to 2 hours on workdays and ~6-8 hours on weekends to work on your project, you learn to become very resourceful with your time. You learn to prioritize and eliminate unimportant tasks, say no to clients with feature requests and bespoke work, fail to deliver on self-imposed deadlines but also realize that missing a deadline is not all that important after all. Use all this to your advantage in goal setting, failing, reflecting, learning, adjusting and recovering.
- If you get excited about an idea or new product, you can’t just jumpstart it, crash and burn. Making time for it is hard. Many risky ideas never started because of this time limitation. As a side effect, thinking about it goes on for longer, researching the competition goes on for longer, feeling the market demand becomes a bit more accurate, the unhealthy initial enthusiasm goes away, and at the end of 2-3 weeks you’re like, so I now know a few more things about this, is it worth starting it at all? And in many cases its not worth it. If I just started working on something, I would have probably not have done my initial research on it and kept going without challenging my assumptions. My new rule is that if you estimate 100 hours of work for a project, spent about one fifth of that time researching it before you write a single line of code.
- You generally give yourself more time to read the things you can’t find in books. Websites like startupsanonymous.com contain real life experiences that you can learn from. If you just take your time to learn everything from other people while you are surrounded by the safety net of a monthly income from a job, then you reduce the risk of failing when you go solo. You avoid wasting your time on projects that cannot be monetized, by reading the warnings over and over and over and over until they burn in your brain.
- Your savings build up. If I make no money from my products after I jump ship, it doesn’t stress me out at all because I now have enough savings to keep me going for a couple of years before even considering to get another job. But seeing that within a couple of months I’m profitable again and revenue is increasing, I’m kind of extending the time I gave to myself to build up my passive income.
- You learn the key things about running a business just like a full time founder, i.e. customer support, accounting etc, but your limited time also stresses you out more which may mean your time management needs improvement.
As I’m focusing on passive income projects only, I’m picky with what I choose to do. I take on things I can execute on my own, without a team, without funding, without an office. I wake up and work at home during regular work hours, doing my best not to procrastinate too much. I take evenings and weekends off, and holidays are up to me. I do not have a business card, my company does not have a phone number and I can only be reached from the website’s contact form or with olark chat.