Most startups fail, but all founders succeed(in the long run!)
Building a startup is hard.
90% of them don’t find success, but the lessons that founders learn in the process of starting up are valuable.
These lessons often lead them to start other profitable businesses and do high-impact work.
And most of all, grow and learn at a rapid pace.
There are common patterns that keep coming back when we study the success of solo founders and Indie Hackers.
This playbook is a collection of these common patterns, it's not generic business advice.
By definition, the term “solo founder” means a single person starting a business. But this playbook can also be applied to small scrappy teams of 2 or 3 founders.
The playbook is divided into 5 steps:
- Start then Learn 🧑🏫
- Identify and Solve Problems 🔍
- Iterate and Pivot ↗️
- Share your Journey 📢
- Keep Going 💪
But before we jump into the steps, it's important to take stock of the constraints that solo founders face.
Also, the superpowers that come with those constraints👇
Constraints and Superpowers 🦸
- Limited capital - This is your biggest constraint as a solo founder.
- Venture Capital may not an option for a few reasons:
- No access to a VC network.
- Want to work for yourself, have the freedom to build what you want.
- Don’t have a concrete idea yet.
You will be mostly self-funded or bootstrapped.
- Limited capital means not enough resources to hire developers or run ads.
- Skillset - As a solo founder you will have 1 or 2 primary skills, and will have to learn or outsource other skills needed in a business.
- Developers need to learn Marketing.
- Marketers need to learn Development or No Code tools.
- Or both have to find contractors or co-founders with complementary skills.
But with these constraints, solo founders also enjoy a few superpowers:
- Ability to take fast decisions - Because you’re accountable to only yourself, you can take fast decisions and pivot when needed.
- Play the long game - You don’t have the pressure to grow fast. Once you have a profitable business model, you can stick around and grow with substance. Not go after growth at all costs.
- Find niches within niches - You can double down on small niches at the start. Because the business just needs to sustain you or a small team you can solve problems for a small market. You won’t face competition from larger players because such small markets don’t move the needle for them.
- And because you are not venture-funded, you don’t have the pressure of capturing an entire market. You don’t have to become a billion-dollar company. That’s a relief!
12 startups in 12 months | Constraint = Superpower
An artificial constraint that you can put on yourself is doing something like a “12 startups in 12 months” challenge.
Force yourself to build and ship a product in 30 days. And do it 12 times a year.
This constraint can turn into a superpower because it will help you build a habit of shipping, and it will also help you get eyeballs on your projects.
This challenge immensely helped people like Pieter Levels, Jon Yongfook, and Andrey Azimov. Their breakout startups were conceived during the 12 startups challenge.
Nathan Barry did a public challenge where he had to build a profitable web app in 6 months, back in 2012. Today that web app is ConvertKit and doing almost $30M ARR.
Now, let’s go to the first step of the playbook - Star then Learn.
Start then Learn
Step 1. Start then Learn 🧑🏫
This is the exact opposite of traditional business advice. But it’s far more effective.
- Your best ideas and learning will come after you start building something, it can be anything.
- It can be anything really, doesn’t have to be a groundbreaking product. It just has to be something that YOU build.
How do you get your 1st idea?
- Scratch your own itch - Note down your daily workflows, see what problems you face, and try to build solutions to those problems.
- Rebuild your favorite app - You love using an app, it may be very complicated, build a simpler version of it.
- Help people around you - Speak to 5 people around you, ask them about their daily workflow and the problems they face. Try to solve the one that’s most interesting to you.
- Help people online - Go to Reddit, Quora, Twitter, Facebook groups. People are sharing their troubles and challenges every day there. Figure out which problems look interesting to you and try to solve them.
Build the most barebones solution you can with your current capabilities.
Don’t worry about questions like “which tech stack should I choose?”
Listen to Arvid -
If you are a non-technical founder:
- Don’t start learning to code to solve this problem.
- Try No-Code tools and see if they can work.
- Or see if the problem can be solved with content - A “How-to” article or a video. Or a curated newsletter.
- You will find that many problems can be solved with good content. High-quality information is hard to find on the internet, with increasing noise, the value of curation is going up.
The goal of this step is not to build the final product, it’s just to get into the habit of building and dealing with interesting problems every day.
Once you do that, you can start to look towards solving real problems that people will pay money for.
Examples of Step 1:
- Makerpad started when Ben Tossell wanted to learn to use NoCode tools, so he could build all the product ideas he had.
- Product Hunt started because Ryan Hoover loved talking about new products. He started it as a simple newsletter
Identify and Solve Problems
Step 2. Identify and Solve Problems 🔍
The process of building will throw up problems that you could have never encountered otherwise.
- For example, if you’re building a mobile app, you may find that there aren’t any efficient ways to test mobile apps.
- Or if you’re building a newsletter, you will find that there are no good ways to promote and grow newsletters.
- These problems you face now will be closer to real business problems that other people face. Problems that they would pay money to be solved for them.
- They can be the seeds of a sustainable business.
- But before you jump into writing code, you need to figure out if users are willing to pay money to solve this problem.
- One way to find that out is to manually solve the problem for the user.
- Before using computing power, use human power. Do it as a freelancer.
If your idea is a software tool that lets bloggers turn their articles into newsletters and sends them out.
Then you can offer that service to bloggers as a freelancer, do it manually for them.
And see if people are willing to pay money for it or not. No need to code up a complicated tool that interfaces with multiple other tools in the blogger’s journey. If you can find 10 people willing to pay money for such a solution, then you have some validation, and can start thinking of a software solution.)
- Not all businesses have to be SaaS businesses. In fact, SaaS is one of the hardest business models to crack.
- You can start with a service or agency business, do large chunks of work manually, and automate only the repetitive parts.
- This also aligns with Nathan Barry’s framework - Ladders of Wealth Creation.
(If the service/agency business works, you can turn parts of it into a SaaS.)
- You can find people to reach out in online communities on Reddit or Facebook Groups, or even Twitter.
- Find where they hang out and start reaching out to them via DMs or comments.
- Once you start reaching out to people offering them help you will start to learn what solutions they are willing to pay money for.
- And what problems they are willing to live with.
You don’t necessarily have to avoid software, if you can set up a software solution quickly, then go for it.
The goal of this step is to get used to reaching out to people with solutions, asking them for money, and identifying real problems worth solving.
Do it manually, or with code, but learn to do it fast and often.
Once you have that, you can move to the next step: Iterate and Pivot.
Examples of Step 2:
- For a project, Andrey Azimov wanted to build a site and had a ton of data in Google Sheets, but no way to turn that data into a site. This problem eventually gave rise to his breakout startup SheetSite.
- Molly Wolchansky worked as a freelancer, then ran an agency, and then built a SaaS (The Agent Nest) solving the same problem - Marketing for Real Estate Agents. At every step, she had validation.
Iterate and Pivot
Step 3. Iterate and Pivot ↗️
Your first idea will not be your last idea. Even your 100th idea may not be your final idea that takes off as a business.
- A sustainable business has many moving parts, and to get everything right, you will have to keep iterating and even pivot on your ideas a few times.
- Once you have some initial validation on the problem that you want to solve, you can start building the actual product.
- But even before that, you have to start talking to users.
- Customer conversations are one of the key ways to build the right product.
- They will help you position your product in a crowded market, give you the right features to build, and even give you words you can use in your sales copy.
- You can't shy away from customer conversations, you must get better at them. To learn, you can read books like The Mom Test and Deploy Empathy.
- These books will give you the dos and don’ts of customer conversations, and even scripts for outreach and interviews.
- At this stage the idea is to keep building features, talking to customers about them, and improving the product based on those conversations.
- A good tactic at this stage is to start a small private chat group of your most loyal customers and gather feedback from them on a day-to-day basis.
These steps will most likely get you some initial revenue.
Congratulations, this was the hardest part.
2 things can happen now:
1. Customers don’t care about your product. 😕
They don’t use it anymore, they realize that it was just a nice-to-have solution, not a pain killer for them.
Now you can either iterate more, build new features if customer conversations are still helpful.
Or you might need to pivot to a different solution.
You can even change the product positioning to cater to a different kind of user.
Example: ConvertKit is an email marketing solution focused only on creators. This positioning helps it differentiate itself from other competing email marketing solutions like Mailchimp.
If you are building a CRM solution for dentists, maybe you can try to reposition it for chiropractors or gym owners.
Such pivots will give you new ideas for features to build and a fresh new market to tap into. And have new kinds of customer conversations.
But if you think even that is not likely to work, then maybe it’s best to go back to Step 2 and find a new problem to solve. 🔃
2. Customers love your product ❤️
Customers start talking about it in their circles, start sharing your product with their friends.
You can use this as social proof, and even start to market your product based on this validation.
Depending on the type of product and where you find customers you can invest in marketing via different channels:
- Google, FB, IG ads.
- Niche newsletters or social media influencers
- Reddit, Quora answers, and SEO content.
This is not a full-scale marketing effort.
The goal is to figure out your average customer acquisition cost.
(CAC = How much money does it take to get every new customer.)
And how does that amount stack up against the lifetime value of each customer?
(LTV = The total money the customer will spend on your product from the day they start to the day they leave your product)
These numbers will be useful in identifying which parts of the business you need to work on.
If the LTV is low, that means customers are churning, you need to improve the product before you do any more marketing.
Find ways to keep the customers you have before bringing in any new ones. Keep iterating.
If the CAC is high that means the offer isn’t appealing enough, you need to tune your marketing efforts - the channels, the copy, the targeting. Review every aspect of your marketing funnel.
If the CAC is low, and the LTV is high then look at their ratio.
Generally, you should aim for an LTV/CAC ratio of 3:1.
Anything lower would mean that you’re losing money. Because you also have to consider operating costs for each customer.
Operating costs would include server costs, tools you are paying for, and also your own salary!
But if LTV/CAC is greater than 3, then congratulations 🥳🎉
You’ve just created a money-making machine - Where you put in $1 and it spits out more than $1.
This is the definition of a sustainable business, some people would even call this product-market fit.
You can now start looking for ways to scale the business:
- Make a more intentional marketing effort.
- Redo the code, optimize it to handle more traffic.
- Maybe hire contractors with complementary skills.
- Or even try to find a co-founder.
Examples of Step 3:
- Hypefury and Tally Forms created private groups of their initial customers to get early feedback and improve on the product.
- For The Agent Nest, Molly Wolchansky ran FB and IG ads from the first day because she knew her target users hung out there the most and the ads could generate leads for cheap.
Build in Public
Step 4. Share your journey - Build In Public 📢
This is more a meta step that you can start right from the beginning.
But even if you don’t start then, you should start now because now you have lessons worth sharing.
You’ve been in the trenches, you know shit that someone starting out doesn’t know.
What you share can be valuable to someone just 2 steps behind you. So start sharing your lessons in public.
Either on Twitter or in a newsletter or through both.
Apart from this, you can also join founder communities on Slack or Discord.
You will get a more intimate view of what other solo founders struggle with, and how they deal with unique challenges every day.
The relationships you build like this will outlast your current business.
- Indie Hackers is a great open community to join for solo founders. The content and connections there would help you immensely in your journey.
- You can join the #BuildInPublic community on Twitter.
- You can join subreddits like r/startups and r/SaaS.
- You will find many startup slack communities on slofile.
- You can even join paid communities and co-working clubs like WeekendClub.
- If your target audience is other startup founders then you would have touched these communities in step 1 or 2 already.
Again, this step can be performed right from the start.
The audience, friends, acquaintances you make by sharing your journey openly are invaluable.
They would be around you even when you start your next business or pivot the current one to something else.
Examples of Step 4:
- AJ from Carrd added his Twitter account at the bottom of the page of every project he did. Over time he’s accrued a loyal audience on Twitter, that's where he launched his most successful product - Carrd.
- Andrey Azimov did the 12 startups challenge and had a single mailing list throughout, he would post product updates, personal challenges, and lessons. Over time he built a loyal audience that helped him grow and sell his most profitable project - Sheet2Site.
Keep Going (or not!)
Step 5. Keep Going (Or not!) 💪
This is the harsh truth of any business, you have to keep going.
If you haven’t found a product that works, then go back to step 2 and iterate on other interesting problems to solve.
But if you have found a sustainable business model, and it’s growing well, then you will still have to make strong efforts for a couple of reasons:
- Growth will plateau - Every marketing channel gets saturated eventually, and you have to search for new ones. (Andrew Chen calls this the law of shitty clickthroughs)
- Competitors will come up - As you find success, other people will emulate your business, either with more features or at a lesser price. So you have to keep making efforts to differentiate your product and maintain customer loyalty.
A few steps you can take at this stage to make life easier for yourself:
Hire help - outsource, automate, delegate anything that’s not your core strength.
Get VC Funding - By this point, it will be easier for you to get Venture Capital, the business is proven, and if with more money it can grow big, then VCs will love it.
Get Acquired - Merge yourself into a larger business, you will have a boss, but there will be less pressure compared to running the entire business yourself.
Sell the business - Use platforms like Microacquire to find potential buyers.
There are some people who like to build new stuff, and there are others who like to scale and operationalize businesses.
If you’re not the 2nd kind, it makes sense to sell the business and start afresh with a new idea.
Examples of Step 5:
- AJ got VC funding for Carrd 4 years after starting.
- Makerpad got acquired by Zapier.
- Andrey Azimov sold Sheet2Site when the startup needed scaling.
These are common patterns observed in most success stories of Solo founders and Indie Hackers.
Your journey might differ a bit from this playbook, but it can be a good framework to think about as you build a solo business.
If you're just starting out, step 1 is perhaps the most important. Stop waiting for the right idea to strike, start building right away, follow the playbook, and eventually, you will find success.
As I said at the top - Most startups fail, but all founders succeed!
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PS: No business plans were harmed during the making of this playbook!