Not sure about your situation, but earning six figures in SF just doesn’t cut it. The only problem is, it’s damn expensive living in SF. No shit, especially when it’s ultra competitive, people keep moving in from out of state, chasing the next get rich quick scheme. Rental prices keeps going up, restaurants have to jack up their prices as well.
The problem is in tech, if you’re not an engineer, founder or trust fund baby, you’re not gonna make jack shit. Salaries are pretty much capped and getting above a certain range becomes impossibly hard, not without a lot of luck. Getting to the executive level takes a lot of luck, skill, and patience. Most don’t even make the cut. As you get higher up the ladder, it gets even more tough as opportunities are less and less, especially in the specific vertical you’ve specialized in.
Equity is extremely low and you’ll only gain anything meaningful if the company 10x’s, actually turns a profit, and magically gets acquired by another tech company with extra stock and cash. Only then can you finally make a down payment on a house, and have the privilege of locking yourself into a 30 years mortgage.
Now, you probably think the ticket out of corporate slavery is building out and launching your own project.
How do you find ideas that can actually be profitable?
My favorite three sites to start searching for ideas are:
- Flippa.com – Look for existing site projects and see how much revenue they’re earning.
- IndieHackers.com – A community of people who make monthly income from small sites.
- CodeCanyon.net – A lot cheap sub $100 scripts that can inspire you, or you can pay a developer to flesh it out more the way you want it.
You don’t need to think of an innovative, “disruptive” idea. Think of how Craigslist spawned hundreds of $100+ million companies:
Also – engineers in SF are expensive.
You either need to be:
- Skillful at your job with a proven track record (hard to do when young and inexperienced)
- Have really good friends who believe in you (good luck – you have to be the best of the best, or at least more motivated than others)
- A programmer yourself
If you don’t have any of the 3 criteria above, then what next?
The answer is: Upwork
The only way to escape the 9 to 5 rat race, is taking the monthly savings you get, and lobbing it all into a project you believe in for development, that you want to build.
A lot of profitable monthly passive income generating projects don’t need to be some crazy idea. They just need to solve a need.
- Post a job to Upwork with your general idea. You don’t want others to steal your valuable idea.
- Increase your “reach” by inviting relevant freelancers to apply.
- When engineers reply, look through their feedback and ratings to see $ of volume done, and their rates.
- Keep the ones with high volume of transactions done, and high ratings (compared to the other people in the pool for the project you’re working on)
- Now message the ones that replied and ask for a detailed quote break down of each component of your idea.
- Compare the proposals from each engineers against each other, and negotiate down the expensive pieces with the corresponding contractor.
- Now select a contractor on a fixed budget, and break up payments into milestone payments which are released only when parts of the projects are completed.
- Ask for references, examples of past projects done, and have them explain how they did it.
- Make sure you allocate budget for front end, back end, QA/bug fixes of each component you have.
- Deploy your finished work on an appropriate web host.
Now you have your finished project, start marketing it. Get your first 100 beta users. Get feedback.
You may struggle for several months with high churn, but over time you will start to find your target audience. Your income base will grow, and your project will become an income producing asset (which may become the target for acquisition or which you can sell off to lock in a nice yearly multiplier on revenue or profit depending on the vertical you’re in).
If the project idea doesn’t work, invest your next months savings into another idea. Every month, just lob your savings into a new idea, until one finally works and takes off.
What can happen if you invest the money to build the project out
- You can show your project to real SF engineers, or a skilled marketer who can test their ideas on your project to see if they can gain users or not.
- You can show it to investors or pitch it to see if you can raise a seed round and build out more features/test out marketing strategies risk free.
- You can start working on it on your off hours, testing various marketing ideas you can read off the internet (or this blog).
What you gain if the project succeeds
- You will never have to work at a job again. No more boss, no more schedule. It’s all you.
- You can make passive monthly income or active monthly income depending on your project.
- You have the option to sell off your project for a lump sum that takes into account a multiplier on the yearly revenue based on historical revenue length (more years, higher multiplier up to 2-3 years), and the vertical you’re in (more hyped up verticals, higher the multiplier).
If you fail to get users, what benefits can still happen?
- You can always sell off the project and get 70-80% of the value if your project gets no users (check Flippa.com).
- You can license out the code, pay a developer to make it so you can license it at a monthly fee. Users can pay a small $200/year fee or so in order to deploy the code and try to market their own project.
- You can always become a project manager at a company with the beginning experience, or consultant for other people’s projects, or blog about your failing experience and teach others what to avoid.
This might be the best investment you can make.
Post your questions below, and I will do my best to answer them! Or contact me if you need consulting on your idea!