Easy vs. probable or how to make money with software

It it hard to make $1000 a month?

There’s a question on Quora: Is it hard to build, market and maintain a web app that makes at least $1000 a month?

Most of the answers are happily saying "no, it’s not hard at all", usually justifying it with wishful thinking ("it’s not hard to get 50 people pay you $20 a month").

Those answers are misleading.

I don’t blame the respondents. They answered the question the way it was asked.

What you ask vs. what you want to know

The problem is that the person who asked the question really wanted to know how probable it is, not how hard. There’s a big difference.

A personal anecdote

Many years ago, in the early days of Palm PDAs I wrote an English dictionary for Palm OS. For more than 2 years I made several thousands dollars per months from it.

Was it hard? Not at all. It took me about 2 weeks to write the first version and there was nothing especially difficult about it - there are thousands of programmers that could have done it.

My website was simplistic, my marketing skills limited to uploading my app to an app store-like website (PalmGear) which handled selling the app.

Nothing I did was difficult. However, my success wasn’t very probable.

I wrote one of the first (if not the first) dictionaries. Things were different in 2001. Today everyone and their mother jumps on building iPhone or Android apps bandwagons but back then I had no competition from known dictionary publishers (publishers are not risk taking, future embracing organizations).

For a while I had the market to myself and that helped to establish my program as one of the most popular programs for Palm OS. Eventually competition arrived and it did have negative effect on my sales, but they had a really hard time catching up with me.

Lesson number 1: timing matters.

Getting timing right is not hard or easy, it’s simply not likely that you’ll get the timing right. If the right timing is obvious, it’ll be obvious for many people and, paradoxically, means it’s too late. If it’s not obvious, there’s a big probability that whatever you think the right timing is, you’re wrong.

The right timing is only obvious in retrospect.

In my case, I didn’t write my dictionary because I thought it’s the right time to do it if I wanted to make money. I was just excited about new technology (Palm Pilots), wanted to write some program for it and a dictionary seemed like a good choice.

Do it once vs. do it many times

Another way to look at it is repeatability.

The easy success of my app wasn’t lost on me. If I could replicate that success several times, I would get quite rich with little effort.

So I’ve made more apps for Palm OS. They were more complex than my dictionary. They took longer to write, but still weren’t hard to write.

I assume that my marketing, sales and other business skills were at least as good as before. And yet, the other apps were all failures.

My first success was easy but it wasn’t easily repeatable.

Many people who answered the Quora question did build successful websites making $1000 or more a month. Does that mean that their experience is good enough to declare that achieving what they did is easy?

No. Just like me, they all have only one or two successful products. If it’s easy, then why don’t they re-invest their capital in making more products? After all, if you have 100 products each making $1000 per month, you’ll make more than a million a year.

The answers are a good example of selection bias. Even if something has 1% probability of happening, if there are 100 people who tried, 1 of them will succeed. Given the popularity of Quora, it’s not hard to find lots of people who tried something with low probability of success and did it successfully. When they see someone asking if doing it was hard, they jump in saying that it wasn’t.

They are truthful and trying to be helpful and encouraging but we don’t get the complete picture because we don’t hear from much bigger number of people who tried and failed.

The successes might have been easy, but they were not likely.

Just ship it

Making software (be it a web site, a mobile app, a desktop app) that makes money is something with low probability of success. It’s not as bad as you think: making money in any self-directed business (as opposed to being employed) has low probability of success.

More importantly: you have the biggest influence on that probability.

The person who asked this question probably won’t be successful. The answer is unknowable and knowing it would not make a difference.

You’ll succeed or you’ll fail but you’ll not ever know it until you’ve tried. Spending any time calculating your chances actually decreases the probability because it takes away time and energy from things that matter.

The single most important thing when building money making software product is this: ship it.

My success might have been accidental, but it wouldn’t have happen if I didn’t write the code, the website, the documentation and made my program available for people to buy.

If the product fails, either improve it or make another one. The more times you try, the more likely you’re to succeed.

When you start getting sales, double down. The unassailable logic of software business is that it’s easier to make a successful product even more successful than to create another one that is just as successful.

Look at any software business. Even the biggest successes, like Microsoft or Google, have only few extremely profitable products and despite having the brightest developers, mountains of money, cross-promotional opportunities, they struggle to create more money making products.