Difference between a project & a business
The difference between a project and a business is that the former does not generate any revenue whereas the latter does.
The purpose of a business is to generate revenue. That's it. A business will cease to exist if it is unable to generate cash. So the core problem every business (and business owner) is trying to solve is: how to optimize for maximum revenue. For technical folks like me, here's the equation you're trying to solve for:
Revenue = Traffic × Conversion Rate of Product × Price of Product
Your objective is simple: maximize revenue. It's really that simple. But often indie hackers who are just starting out, or those that have tried shipping projects without financial success will fail to explictly state these 3 variables as their primary objective. In simple terms, how many weeks have been wasted away working on features that don't contribute to any of these three variables?
I'm not immune to this either. As I am writing this post, I think back to all the weeks and months wasted away on things that didn't fit into any of these categories. Selecting the right colors, choosing the pixel perfect icons, shifting the backend from Apache to Nginx... The list is painfully endless. In my two years of working on Deep Meditate, I can attribute just 10% of the overall work to the current MRR numbers. Most of what I did was useless or pretend work as Alex puts it.
If it doesn't contribute directly to traffic, conversion rate, or pricing, then don't do it.
Corollary: If it contributes to traffic, conversion rate, or pricing, then do it.
Stop working on Product
If you look at the equation, you'll see that product is not mentioned anywhere. This is by design because a product, by itself, is not a goal. The goal is revenue. Remember this.
Unlearn the idea that product is as important as marketing. It is not. After version 1, any time spent on the product will only impact variable #2 of the equation: conversion rate. So if you're working on the product, then make sure it is able to pass this test:
Out of all the things I can do to boost the conversion rate, is this feature in the list, and if so, is it at the top of the priority list of things that can have max impact on the conversion rate?
Only when this is true, is "working on product" justified.
There is some nuance here that must be respected, and so a little disclaimer:
- At the end of the day every business needs to have something to sell, and
- The quality of the thing the business sells will have some affect on future traffic (referrals, word of mouth...) as well as price (higher quality might command a higher price)
Having something to sell, and making sure it is something people are willing to pay for is a requirement. However, once you start looking at the product through the lens of the 3 variables above, it's easier not to fall into the trap of doing pretend work on something that isn't valuable for the business.
Building a referral system into the product or improving the page load time of your blog will still be considered "working on product" but that's okay because the overall purpose of these is well aligned with the goal of generating revenue. What's not okay to "working on product"? Redesigning the homepage, adding features, optimizing uptime, reducing server costs, changing from Apache to Nginx...
Time is money. Your endeavor will fail if you are unable to generate revenue. The longer you wait to generate cash, the more likely it is that you will feel burned out and demotivated. It's that simple. As indie-hackers we often spend wayyyy too much time on product. We build something and think project = business. That's not the case. If you are serious about building a business, then take a step back, re-evaluate what needs to be done to generate cash (see variables above), and go do that. Don't just "work on product."
Start marketing
You want to convert your project into a business? Know when to stop refractoring and adding to your product and get smart about what really needs to be done. Focus on conversion rate and traffic. Write that blog post. Build the customer generation funnel. Brainstorm and experiment with ideas that might impact the 3 variables listed above. That's it.
Why don't indie hackers do any kind of marketing? It's usually unfamiliar territory. You know that sending that DM to 10 potential customers on Twitter is a great way to make cash immediately, but you are afraid. You're used to writing code, and so you procrastinate. It's okay. I've been there. Just know that building a business requires more marketing than product building. Switch the mindset to: how can I generate any cash from what I've built so far. Anything is better than nothing. Start there, and think about solving this problem. You have the variables, now it's just a game of coming up with ways to maximize the left hand side.
