I sent out this tweet which seemed to resonate with a lot of people. After I build something that exceeds my basic needs, what’s next?
I’ve been thinking a lot about this, and I don’t have perfect clarity on it yet (part of the reason I’m writing about it). There’s a few distinct options available to me that I can start preparing for now.
Here’s the list of options:
- Keep operating this business as a solo entrepreneur.
- Hire people and grow + reinvest into the company.
- Prepare the business to be sold to an acquirer.
- Use the net profits to build another long-term focused business.
The reason these options are on the table, is because I don’t see my current business as a long-term solution for my own goals. It’s more of a temporary first-step in my entrepreneurial journey.
The application is built on-top of another platform. That in and of itself is fine, but the way in which I have integrated the application is both not official and technically against the community guidelines of the parent platform.
All of my customers are renegades. “Fight against the system” type of people. My kind of people.
There is a definite need for the problem my product solves, and my customers are eternally grateful for the time they recover everyday using the product.
There’s no question that it’s valuable, but what I am less than thrilled about is the integration.
At any moment in time, the parent platform can “pull the plug” and make my product is rendered unusable. I don’t actually think that will happen, but it could. I don’t own the platform, I’m just riding the wave.
In the future, I would like to run/own/operate a company that has it’s own platform in an existing market. Something that’s not necessarily boring, but something that is a solution to an existing problem.
With time, any business that successfully solves the problems of a niche can become very big and very successful. I know I am fairly innovative, and understand how to automate systems and solutions to a lot of different use-cases.
But enough about what I would like to do. Let’s talk about what I can do right now.
There are many great things about this option that I genuinely like, and they make it hard to turn down.
As it stands right now, this is the option I am operating under. I haven’t hired anyone. I haven’t really reinvested any money into the business. Just about everything (sans customer service) is automated.
I like this option because I am in full control. I can work when I want to, I can build the features I want to build, I can talk to customers how I want to treat them, and I run the whole show.
This option requires the least amount of responsibility on my part. My only responsibilities are to show up often enough to manage customer service, consistently make new features, and talk to customers about what they’d like to see down the road.
This option also keeps things pretty nimble. I know exactly where everything is, how it was built, why it was built, and how to improve the business.
Lastly (and probably most importantly), I am able to be with my kids while they are young, and I can help my wife out at any time. It’s a huge benefit to be able to do exactly what you want when you want.
But, it’s not all sunshine and rainbows. Here’s why the option is really the worst case scenario (for the business).
There’s no way I personally can grow the business faster than multiple people could. Which poses the question, does it even need to grow? Not necessarily, but ideally it would keep growing undeterred.
Being able to distribute the work load (and come up with new work) to other people would allow the business to begin operating at higher levels, making it reach more customers and solve more problems. It quite literally would be able to do more work every day, which is a direct influence on productivity.
The other downside to managing the app myself, is that I can’t easily just start another business and expand my own horizons. I would have to manage both businesses together, and it would require more work (not necessarily a lot of work, but more).
There are some moral points that I think are important as well. I want to help people. It’s a core principle in my life. By running the business all on my own, I am technically pushing out other people that would be able to contribute to the business and be direct beneficiaries of its success.
As it stands now, if I want to help people, I can’t give them a “job” or allow them to work for the company. I would only be able to spend my time and my money to help other people.
That’s great, and I do that a lot, but it requires external work. I have to plan out how I am going to bless people and how I am going to make an impact on other people.
By being able to hire people, and make them part of the vision, I am able to do philanthropic work by default. Every day I am able to help pay someone’s bills, and give them a life of flexibility.
At the end of the day, this is the most selfish option. It allows me to stay in my comfort zone, not do a lot of extra work, and not have to manage people.
Hire People + Grow
This option is probably the least attractive to me. Based on my points above (about the business being built unofficially on another platform), I don’t have the faith to hire people and grow a team under those terms.
Technically I can afford to hire people. Technically there is work that I could hire for. But, do I hire people knowing one day the carpet can get ripped out from underneath?
I think these are common fears for a first-time entrepreneur. There are all of these “what if?” scenarios that make it hard to take action on the vision you have for yourself.
A core fear for me is incompetence. I don’t want to be at the helm of the ship if it tanks. I want to appear as if I am always right, or at least always trending in the right direction.
But, if you know me, you would know that I don’t like fear. Operating out of fear is almost always the worst decision you can make. In this case, operating in faith that the company will continue to thrive is the only way to move forward and make progress.
The good things about hiring people and growing the company, is that there’s a chance of succeeding and ultimately generating a lot of money. Money that not only I can use for my future, but money that my employees could also use for their futures.
Hiring people is also good because I can offload tasks that I don’t want to spend time doing (or at least the tasks that I don’t want to do all the time). I think running your own customer service is valuable, because it gives you a better lens into how your customers are thinking, and you become more aware of the problems they are facing.
Being able to hire someone to build out new features in the code, or to do content marketing, or to do advertising, or customer success, would be really cool. I could definitely see that making a large impact on the business, and it would definitely grow over time.
The downside is I lose my precious flexibility. Now I have to show up to meetings. Now I have to manage people. Now I have to write out the vision and plan for other people. All of these things I could do on my own before, and now I would need to be held accountable.
But, accountability is ultimately healthy. It would prevent me from doing things that are not in the best interest of those around me, and it would force me to prepare for worst-case scenarios. Now that I would be responsible for the livelihood of others, I would make different decisions.
I would be forced to be prepared just about every day to work. I would have slightly less time to spend with my wife and kids. I would actually have to plan things (which I hate). Maybe I would hire a secretary first to manage my time.
So, this option once again begs the question, does it even need to grow? And the answer to that is probably not, but it certainly could.
Sell The Business
This option seems viable to me (and the most exciting!), but it’s also something that’s not directly in my control. I can’t necessarily force someone to buy my business. And with significant effort there’s no guarantee that anyone would actually buy the business.
That being said, were I able to sell the business, it would be a significant pay-day for me and my family. SaaS acquisitions can run from 5x to 10x annual revenues. This would put me squarely in the low-seven-figures range.
Since the business is more than 99% profit, there’s a lot of value in that. It can continue running if revenues dip, and it can scale to be very big without the cost of running the business growing too much.
There’s also very little maintenance and upkeep. Just about everything is automated. It would be a great product to acquire.
There’s very little downside to this option, the deterrent is that it’s not something I can just do. It requires interest from another party, and there’s no guarantee that would ever happen.
The only other downside I can think of is that I would still need to come up with another business or means of income. Low seven figures is nice, but it’s not “ride off into the sunset” money. It would be great for now, but I would still need to drum up a long-term solution.
However, that money would easily buy me the time to figure out that long term solution. It only took me two years to get to where I am now with my current business. I can’t think it would take much longer to start something else (especially since I’m not employed full-time and working on the business on the side).
I would need to do quite a bit of work to sell the business. I’m not 100% sure what it would entail, but I’m sure I would need to dress up the code quite a bit, dot my i’s and cross my t’s with any business related contracts and such, and have to do lots of financial reporting.
That’s usually quite a lot of work, and can take months. Obviously it would be worth it financially, but it would definitely be a season of life that I would be happy was over. Also, I would probably give up the reigns of the business. I doubt I would continue to operate and be in control of anything with the business.
I would most definitely get bored of not working, so I would probably write a lot more, hike a lot more, and teach my kids. It would be a totally different life for sure.
Build Another Business
This is probably the thing I will end up doing, though it’s the least appealing. It’s the least appealing because I would have to be working on two different products at the same time. Not only that, but I would be learning a new niche and dealing with new customers.
It would be like almost starting from square one, except for the small amount of experience I have from running my first business.
By taking this route, I can still maintain the flexibility I want in my schedule. I’ll probably just end up working during weird hours so I can still do the things I want to do with my family. I did this for a few years already, what’s a few more?
I would love to build a product that isn’t dependent on another platform. Obviously, the product is within a market and the market drives demand, but I can be a standalone product that can’t be directly influenced by a larger platform.
While I think that “integration” apps are the best way for an Indiehacker to get into entrepreneurship (there’s already a market and you can get in front of customers right away), I think a standalone platform is a better long-term solution that makes you more resilient to market changes.
Being your own platform allows you full control over your future. This is good and bad. It’s good because you can control your own future and drive your own success. It’s bad because you have to start from scratch. You don’t get the added benefit of piggybacking off of a larger platform’s audience.
There are so many different niches and markets out there, and it’s not hard to simply enter an existing market with a different product. Most of the work is in marketing and distribution, not in making the app itself.
The only disadvantage of this option is the risk of not building something that equals the level of success that I already have. What if I build something that’s not as good? Then I would be stuck with a not-so-good business, and another business that I’ve been neglecting to build the not-so-good business.
Nevertheless, building another business on the side is something I can do right now. I don’t need anyone else’s permission. I can just get started. Sometimes that’s the best thing to do. Just get started.
I would feel more comfortable hiring people to work on a business that owns it’s own platform. Something about it seems more legitimate, and less like an “add-on”. The success that comes from it would be more sticky, and less susceptible to churn (hopefully).
Speaking of that, I would want to build a product that has inherent “stickiness”. Something that once you start using it, it’s hard to switch away.
I think https://transistor.fm is a great example of this. Once you start with a podcast hosting platform, it’s almost guaranteed that you’re going to stick with them to the end. If you churned, you would be discontinuing the podcast, probably not moving to another host.
Another good example is https://notion.so. I use notion extensively for notes, task management, and writing (I’m writing this right now in Notion). The more I use Notion, and the more information I put into it, the more valuable it becomes to me. Soon it becomes something that is indispensable, and holds some of your most valuable assets. You can feel safe knowing your data is always going to be at your fingertips.
Rather than just being a “pay to have access” application, it’s something that hosts your data, drives growth for your business, and gets more valuable the more you use it.
An app like my current business is valuable only when you’re using it. If you stop using it, it’s not valuable to you anymore. There are competing products that have different price points, so it’s ripe for disruption. It would be much more valuable if it had some sort of value to the user when they’re not using it (like the platform it integrates with).
So yeah, I have some opinions on building platforms versus building integrations. I want to build something that has more value when it’s been used for a long time.
I don’t know exactly what I am going to do, and I’m going to MicroConf this year hopefully to get clarity on my vision. There are a lot of people there who have been in my shoes and can shed advice on where to head next in my journey.
Regardless, I won’t be sitting idle. I will be continuing to grow, to succeed, and to write as the next months and years go on.
I’m excited about the future, and all of these options are good problems to have.
Thanks for reading!