5 Lessons I Learned Building A $400/month Micro-SaaS Side Hustle

I built an app that makes $400 a month of completely passive income I literally haven't touched it in probably 3 months now and in this video I'm going to be telling you everything that I learned from growing and building this app so that you can learn how to hopefully do the same for yourself for a little bit of context in my day job I'm a software engineer at a big tech company but I've always wanted to build my own apps and try to make some money from them I've been building apps for the past 2 and 1/2 years and for the first 2 years I built so many apps I think I built six or seven different apps and none of them made money and every single one of them failed but in the past few months I've built a couple more apps and I've had a different approach and a different strategy on how I built and marketed these apps and now I finally have my own app that makes $400 a month of completely passive income like truly it is so passive I haven't touched this app in probably like 6 months but I still get users people still pay for the app and I still get a couple hundred bucks put into my bank account every single month first of all what app did I build so the app that I built is called Nexus research. aai it is an AI tool that helps users read documents and take noes faster the way that it works is that a user can up upload a PDF document and then the user is then able to chat with that document to extract all the information that they want and then there's also a dedicated note taking section where the user can take notes on whatever they want and also quickly ask questions to the AI to help them write notes faster as well so that is the basic premise of what I built now let's go over into some of the learnings that I had from building this app from scratch and how to make it actually kind of successful and make some money so number one is the fact that originality is overrated for the first 2 years where I built apps and made like absolutely no money from doing it I think one of the biggest unlocks of me building Nexus research. Ai and actually making money from it is the fact that I shamelessly copied other people's ideas there are so many of these types of tools out there these AI writing these AI reading tools there's so many of them out there I was not the first to Market and I will proudly say that I was not the first person to build any of these tools but I think as somebody that's working a full-time job and if you're trying to pursue this as a side hustle you should actually be pursuing these ideas that have a validated use case that have a validated market and that's what I did I saw all of these AI reading AI note ticking tools and I figured you know what some of these people making tons of money off of these tools there's absolutely no reason why I can't do the same so I shamelessly looked at the market saw what was working and just did the same and yes the product is a little bit differentiated with the note-taking and reading built into one but what I did most differently is going to be the second point that I wanted to talk about is marketing in my opinion marketing is way more important than any engineering that you do in a product at least in the early stages of the app when you're really just trying to get that initial traction look I'm a software engineer I love building things building features is so fun but want to know what's not fun building features when you have absolutely no users because it makes you feel like you're getting worked in it makes you feel productive but you're not making any money from your app and you have no users using your app so what's the point of building out new features if no one's using it and that is where marketing comes into play and that is where I had a little bit of competitive Advantage because I know how to do social media on Tik Tok on Instagram and on YouTube as well so what I did differently was I figured out the type of content that I was going to make and the type of people that I wanted to Target and specifically for my tool I wanted to Target college kids because I knew that I can make content specifically catered toward towards college kids that could go viral with college kids and that was my Competitive Edge my angle that I went for with my marketing and in my product you can check out the Instagram and Tik Tok account here and here and you can see all the content that I built and as you can see all of my marketing content was specifically geared towards going viral amongst college kids I had two primary series that did that number one was this one Series where it was like if College X was honest so if Harvard was honest if Stanford was honest and I knew that this type of content would do well because what school Somebody went to is a huge part of their identity for so of course they would want to see what some random stranger on the Internet is going to say and roast about their school and then the other video series that I did that we talked more directly about the product was this one Series where I found the most ridiculous articles on the internet like I found this one article where it talked about what type of doctors cheat on their spouses the most crazy article who even has the time to write this type of stuff but the article was so crazy and the way I did this video series was by organically integrating my product of Nexus research. a into the marketing of it and the way that this content worked out would be I would share this article and then be like but because I am way too lazy to read the article myself I'm going to use this tool called Nexus research. a to help me read it faster there's a very organic and natural integration of my product showing what the product does in this type of content that was also geared to do pretty well on social media too so from this entire segment talking about marketing I want to say that distribution and marketing is so important from your product especially if you're an engineer which chances are if you're watching my channel you are an engineer or someone that's technical do not get lost in building endless features without marketing marketing is important distribution is so important and actually for me I've changed my thesis where I do not build a product unless I can figure out the distribution strategy first so I pick an audience which for nextus research was these college kids because I knew how to get into the mind of these college kids I knew what their pain points were and I knew how to make content around their lives to go viral I knew that that was my Competitive Edge so if you are trying to build your own app as well and grow it you need to figure out who your audience is and what your competitive advantages what your strategy is to Market it to these people whether that be on social media r or other groups out there in the world whatever that marketing strategy may be you need to figure out what your advantage is and what your strategy is to grow in that Target demographic the third lesson that I learned from building out this tool is the fact that I hate premium tiers avoid premium tiers at all cost now I know some of you might be like bro that is so dumb all the biggest companies in the world they have premium tiers and they're crushing it you're not wrong but let's also remember the fact that a lot of these companies that have these forever fremium trials they also have tons of venture-backed money or money in the bank to help fund their product and make up for any loss Revenue that these premium users are incurring but if you are somebody like me who's working a full-time job trying to build this app on the side forever premium plans are going to kill you I just found that whenever I had this forever premium tier no one would convert or the conversion rate would be so much lower so I would to remove the complete forever premium tier and instead move to something like a free trial or something give someone a free trial for a week or a couple of days depending on your product just so that they can experience what the full product is like and then once that free trial is over just block off the access and being like hey if you want to use this product you should pay for it because if you are a solo app developer you have to remember you are not a big company you are one person you do not have unlimited funds most likely at least then your number one objective in building an app that can make some money month over month is to charge money do not be afraid to charge money and that leads me to the fourth point that I want to talk about which once again is do not be afraid to charge money for your app trust me I get it money is such a sensitive topic there's so much psychology that goes into money and especially when you're like an early app developer you're like oh is my app good enough like should I charge money for it well the only way for you to find out is by charging customers so please put money out there don't be afraid to do it you have to get signal early on if someone is willing to pay for your app because once again if you are a solo app developer trying to build a side hustle does it really matter if your app can get tons of free users but you can't get a single one of them to convert to a paid user not really I know that there's a lot of different opinions about this but my two sense is you got to charge money charge for your product all right so the fifth point that I want to talk about is avoid subscription plans if you can and optimize for onetime purchases if possible once again I know this is kind of sacriligious in the software engineering space but trust me I run a couple of experiments on my app as well but I personally found at least with my apps that the conversion rate for a one-time purchase product versus a subscription product is almost double the conversion rate for example with my current product that I'm building which is called perfect interview. a I split tested this of a subscription product versus a one-time purchase and I believe the subcription product had like a .5% conversion rate whereas my onetime product offering with the same exact price had like a 1.2 1.3% conversion rate so more than double the conversion rate once again I'm just one data point I'm sure there's other data points point to refute but you're watching my video where you listen to my opinions and my experiences so that's just what I have learned I think nowadays people are just so exhausted with subscriptions and people really prefer the onetime purchases I know at least for me personally and anecdotally whenever I see a subscription product out there I'm always like oh my god really another subscription that I have to add month over month whereas if something is a onetime purchase I'm like okay I'm just going to purchase it it's fine I own it forever or I I know exactly what I get and what I don't get so that's just my two cents and I know within the SAS space and the tech space everybody is like oh my God what's your Mr bro what's your monthly recurring Revenue bro Mr or die it's like yeah you're not wrong but also onetime purchases are just so so good just leave the ego at the door do not be an MR obsessive person just look for revenue revenue is great too and I think you can get way higher conversions with a onetime purchase over a subscription at least in my experience all right so those are some of the lessons that I learned from building apps for 2 years completely failing and then finally within the past 6 months building an app that actually makes real money month over month hope you enjoyed the video if you did please feel forget to subscribe to the channel chel I'd really appreciate that trying to hit 100K subscribers this year please please help me once again thank you so much for watching and I'll see you in the next one

Channel: Your Average Tech Bro

Views: 74,285

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Id: QBajJCMxByw

Length: 8min 36sec (516 seconds)

Published: Tue Apr 30 2024