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Hackernoon logoThe Long Road to Passive Income Part 1: Getting to $100 in Monthly Revenue by@czue

The Long Road to Passive Income Part 1: Getting to $100 in Monthly Revenue

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@czueCory Zue

I make monetized side projects and sometimes write about it.

How Iโ€™ve taken my SaaS app from $1 to $100/month in threeย months.

โ€œThe journey of a thousand miles begins with a single step. โ€œโ€Šโ€”โ€ŠLaoย Tzu

Two months ago Place Card Me, my little place card making website and SaaS-building testbed made its very first dollar.

Two months later, towards the end of October, it passed another major milestone: $100. With a few more sales it will pay back every dollar Iโ€™ve put into it so far!

Moreover, if you ignore the Y-axis, the revenue growth looks great so far:

Iโ€™m now convinced that barring any surprising unforeseen changes (like Google deciding to kill my search rankings or a new heavyweight competitor jumping in) it will be feasibleโ€Šโ€”โ€Šif not easyโ€Šโ€”โ€Šfor the site to become a steady source of passive income, maybe one or two hundred dollars a month.

Pretty great, right?

Honestly, I am stoked. There were many times where I thought I was going to fail to earn a single dollar in six months. That would have beenโ€Šโ€”โ€Šamong other thingsโ€Šโ€”โ€Šsuper embarrassing for me.

At $100/month, I can cover all my hosting costs, many of my lunches, and maybe even the occasional night on the town!

The rest of this post describesโ€Šโ€”โ€Šin possibly more detail than necessaryโ€Šโ€”โ€Šexactly how that happened. And while a lot of what follows is specific to my own product, I hope the lessons and thinking can help guide and inspire others to continue to grow their SaaS businesses.

From $1 to $100/month

So it took me 5 months and 200+ hours to earn my first dollar. By comparison getting to $100/month was a cakewalk.

These were the major contributing factorsโ€Šโ€”โ€Šin approximate order of importance:

  1. My organic reach and top-of-the-funnel continued to grow.
  2. I picked up a new distribution channel.
  3. I started charging more.

Thatโ€™s it!

Iโ€™ll talk more a about each of these below.

The Compounding Effects of Reproducible Organicย Reach

Many months agoโ€Šโ€”โ€Šwhen I was first trying to figure out how to market my siteโ€Šโ€”โ€ŠI read Traction.

The book outlines 19 different channels you can use to get traction for a product, and provides a methodologyโ€Šโ€”โ€Šcalled โ€œbullseyeโ€โ€Šโ€”โ€Šfor picking which ones to focus on. I found it to be super helpful in coming up with my overall traction strategy and Iโ€™d highly recommend it to anyone that isnโ€™t sure where to start with marketing and selling their product.

The spreadsheet I used to evaluate the 19 different traction channels I couldย use

When I did the โ€œbullseyeโ€ exercise I selected SEO as as the number one channel to pursue. As a result, I set about learning SEO and adapting a strategy that worked pretty well. Through the techniques described in that article, I was able to slowly target certain keywords and phrases until my site started climbing the rankings in search. And as this happened, I started getting more and more organic traffic until eventually making that first joyous sale.

However whatโ€™s important to realize is that that sale wasnโ€™t a miraculous single-event. It was the eventual conclusion of very simple game of probabilities.

One of out every N visitors to my site will eventually make a purchase. So if that first sale came after N visits, then the next sale should come after approximately 2N, and so forth. Therefore, if the rate of visits went up (which it did) then the rate of sales should also go up (which it also did). Itโ€™s just math!

So far, I believe that the biggest factor in my appโ€™s increase in revenue over the last two months is simply that itโ€™s getting way more traffic. More traffic = more sales, plain and simple.

Traffic to Place Card Me over time. The โ€œhome aloneโ€ face is when the first sale happened. (Chart courtesy of Tractionbeat)

As an aside, I now have enough data to know what my sales rate is and enough traffic to run A/B tests to try and move itโ€Šโ€”โ€Šbut thatโ€™s a subject for another timeโ€ฆ

New Distribution Channels

The second increase in revenue came from a completely new distribution channel. That channel was Etsy.

Etsy is where millions of people go to buy and sell creative productsโ€Šโ€”โ€Šespecially forย weddings

Early on in my research of the wedding industry I learned that Etsy was an absolute behemoth in the space. In fact, a significant proportion of brides (and grooms) will search only on Etsy when theyโ€™re looking for things for their wedding.

Realizing this made me want to figure out how to get in on some of that Etsy action. The simple way to do thisโ€Šโ€”โ€Šwhich youโ€™ve probably guessedโ€Šโ€”โ€Šwas to create a shop on Etsy and sell my place card templates there. This did require building out some tech to support a workflow centered around someone purchasing something on Etsy, but turned out to not be too complicated.

Those orange slices in the chart at the topโ€Šโ€”โ€Šthose are my Etsy sales. In September they were actually higher than my organic sales, though in October I toppled them with organic.

Unfortunately, I donโ€™t quite know how to improve my organic reach on Etsy so the numbers seem to stay much flatter over timeโ€Šโ€”โ€Šat least so far. If anyone figures out how to exponentially grow a shopโ€™s Etsy reach, I suspect they could make a lot of money!

Also please let me know if you know how to do this.ย :)

Pricing Changes

The last thing I did to increase revenue was raise prices.

The way Place Card Me works is that you can use it for free, but certain templates on the site cost money. When I was deep in the trough of sorrowโ€Šโ€”โ€Šwondering whether I would ever make a single saleโ€Šโ€”โ€ŠI dropped the price of all templates to just $1. After several back-to-back weeks of regular sales I decided to start bringing them back up.

Specifically I did three things:

  1. I eliminated all free designs except the โ€œblankโ€ one.
  2. I raised prices on most designs from $1 to $1.95.
  3. I started charging people who uploaded their own designs.

The combination of these changes actually increased sales rates. I believe that was mostly a result of removing the free designsโ€Šโ€”โ€Šwhich I suspect created a psychological effect of making people think that they โ€œshouldโ€ have to pay for a design, and were therefore more willing to do so.

We developers are often very hesitant to raise prices. This gentleman provides some helpfulย advice.

One last funny anecdote: charging for custom uploads was actually an accident.

When I introduced the change that made all designs paid, I changed the default behavior of the site in a way that inadvertently caused the upload workflow to also cost money. The way I found out I had changed it was getting notified that someone had paid for a custom design! Of courseโ€Šโ€”โ€Šonce that happenedโ€Šโ€”โ€ŠI decided to keep the change in place. Custom design sales are now the most popular single template/option on the site.

Whatโ€™s Next?

Iโ€™m quite happy to be at $100/month in revenue at the moment, but itโ€™s still a long ways away from anything that might meaningfully get me on a road to passive income.

In the next installment of this series, Iโ€™ll talk about how I plan to try and grow that number by at least 10x to $1000/month. It should be fun! If youโ€™d like to follow along you can subscribe below.

Edit: Part 2 is now out! You can find it here. You can still subscribe if you want though.ย :)

Originally published at www.coryzue.com.

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