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

Summary

In this video, the creator shares insights on building a successful app called Nexus Research.aai, an AI tool that aids in document reading and note-taking. Despite initial failures, the app now generates $400 passive monthly income. Key takeaways include the importance of marketing over engineering for early traction, targeting a specific audience like college students, and the strategy of avoiding premium tiers and subscriptions in favor of one-time purchases. The creator emphasizes the necessity of charging for your app and the benefits of organic marketing on social media platforms like TikTok and Instagram.

Takeaways

• 😀 The creator built an app called Nexus Research that generates $400 a month in passive income without any updates for several months.
• 🔧 In the past, the creator had built six or seven apps that failed to generate income, but learning from those experiences led to the success of Nexus Research.
• 🤔 Originality is considered overrated by the creator, who found success by copying existing ideas and focusing on a validated market.
• 🎯 Marketing is deemed more important than engineering in the early stages of an app for gaining initial traction and user base.
• 📚 The creator targeted college students with content tailored to go viral, leveraging social media platforms like TikTok, Instagram, and YouTube.
• 🚀 The creator emphasizes the importance of having a clear marketing strategy and understanding the target audience's pain points before building features.
• 💰 The creator advises against premium tiers, suggesting that they can hinder conversion rates, especially for solo app developers without venture capital.
• 💵 There is an encouragement to charge money for the app, as it's the primary way for solo developers to generate income and validate the app's worth.
• 🛒 The creator suggests avoiding subscription plans and optimizing for one-time purchases, as they found higher conversion rates with the latter.
• 📈 The creator's experience indicates that one-time purchases are preferred by users who are tired of managing multiple subscriptions.
• 📈 The creator's strategy involves identifying a target audience first and then building content and marketing around their interests and needs.

Q & A

What is the name of the app that generates $400 a month in passive income?

The app is called Nexus Research.ai.

What does Nexus Research.ai do?

Nexus Research.ai is an AI tool that helps users read documents and take notes faster. Users can upload a PDF document and chat with it to extract information, and there is also a dedicated note-taking section for quick note-taking and asking questions to the AI.

What was the speaker's profession during the development of the app?

The speaker is a software engineer at a big tech company.

How many apps did the speaker build before creating Nexus Research.ai?

The speaker built six or seven different apps before creating Nexus Research.ai.

What was the speaker's initial approach to building apps?

The initial approach was to build apps with original ideas, none of which made money or were successful.

What was the key change in strategy that led to the success of Nexus Research.ai?

The key change was copying ideas from successful AI reading and note-taking tools in the market and focusing on marketing.

Why did the speaker choose to target college students with Nexus Research.ai?

The speaker believed they could create content that would go viral among college students, which was their competitive advantage.

What are the two primary content series the speaker used for marketing Nexus Research.ai?

The two primary series were 'If College X was honest' and a series featuring the most ridiculous articles on the internet, integrating the product naturally into the content.

What is the speaker's opinion on the importance of marketing versus engineering in the early stages of an app?

The speaker believes that marketing is more important than engineering in the early stages, as it helps gain initial traction and users.

What advice does the speaker give regarding premium tiers in apps?

The speaker advises to avoid premium tiers at all costs, especially for solo app developers, as they can lead to lower conversion rates and financial strain.

Why does the speaker suggest charging money for an app?

The speaker suggests charging money to get a signal from customers if they are willing to pay for the app, which is crucial for a solo developer trying to build a side hustle.

What is the speaker's stance on subscription plans versus one-time purchases?

The speaker prefers one-time purchases over subscription plans, as they found almost double the conversion rate for one-time purchases in their experience.

What is the speaker's recommendation for app developers regarding revenue strategies?

The speaker recommends focusing on revenue rather than being obsessed with monthly recurring revenue (MRR) and suggests that one-time purchases can yield higher conversions.

Outlines

00:00

💼 Building a Profitable Side Project: Nexus Research App

The speaker, a software engineer, shares their experience of building an app called Nexus Research.aai that generates $400 of passive monthly income without requiring maintenance for several months. The app is an AI tool designed to help users read documents and take notes more efficiently by allowing them to chat with the document to extract information and having a dedicated note-taking section. The speaker emphasizes the importance of adopting existing successful ideas and focusing on marketing as key strategies for their app's success, particularly targeting college students with content designed to go viral on social media platforms like TikTok and Instagram.

05:00

🚀 Marketing and Monetization Strategies for App Success

In the second paragraph, the speaker discusses lessons learned from building their app. They advise against premium tiers, suggesting that they can hinder conversion rates, especially for solo developers without substantial financial backing. Instead, they recommend offering free trials to allow users to experience the full product before requiring payment. The speaker also encourages developers to charge for their apps to gauge customer willingness to pay and to avoid being afraid of monetization. They further suggest that optimizing for one-time purchases rather than subscription plans can lead to higher conversion rates, as they found in their own experiments. The speaker concludes by emphasizing the importance of identifying a target audience and a marketing strategy that leverages one's competitive advantages.

Keywords

💡Passive Income

Passive income refers to earnings derived from a source that requires little to no effort to maintain. In the context of the video, the speaker mentions an app that generates $400 a month without any recent intervention or work on their part, exemplifying the concept of passive income.

💡Software Engineer

A software engineer is a professional who applies engineering principles to design, develop, and maintain software. The speaker identifies themselves as a software engineer at a big tech company, which is their day job and also the foundation of their skillset for building apps.

💡App Development

App development is the process of creating applications for end users. The video's creator discusses their journey of building multiple apps over 2 and a half years, highlighting the challenges and learnings associated with the process.

💡Originality

Originality in the context of the video refers to the creation of something new and unique. The speaker argues that originality is overrated, as they found success by copying and adapting existing ideas from the market, particularly in the realm of AI tools.

💡Marketing

Marketing is the process of promoting and selling products or services. The speaker emphasizes the importance of marketing over engineering in the early stages of an app's life, as it is crucial for gaining initial traction and users.

💡Social Media

Social media refers to websites and applications that enable users to create and share content or participate in social networking. The video creator leveraged platforms like TikTok, Instagram, and YouTube for marketing their app, targeting college students to increase the app's visibility and virality.

💡Competitive Advantage

A competitive advantage is a characteristic or strategy that sets a business apart from its competitors. The speaker's ability to create content that resonates with college students and goes viral is presented as their competitive advantage in marketing their app.

💡Premium Tiers

Premium tiers refer to different levels of service or access that customers can purchase, often at varying price points. The speaker advises against premium tiers, as they found lower conversion rates and more difficulty in monetizing their app with this model.

💡Conversion Rate

Conversion rate is the percentage of users who take a desired action, such as making a purchase. The video discusses the importance of a high conversion rate for monetization and how different pricing strategies, like one-time purchases, can affect this metric.

💡Subscription Plans

Subscription plans are a type of pricing model where customers pay a recurring fee to access a product or service. The speaker shares their preference for one-time purchases over subscription plans, based on their findings that one-time purchases have a higher conversion rate and are more appealing to customers.

💡Monetization

Monetization is the process of generating revenue from a product or service. The video's creator discusses various strategies for monetizing an app, including avoiding premium tiers and focusing on one-time purchases to increase revenue.

Highlights

Creator built an app called Nexus Research that generates $400 a month in passive income.

The app has not been touched for about 3 months but still generates income.

The speaker is a software engineer by day and has been building apps for 2.5 years.

Initially, the speaker failed to make money from building six or seven different apps.

Nexus Research is an AI tool that helps users read documents and take notes faster.

The app allows users to upload a PDF and chat with the document to extract information.

There's a dedicated note-taking section integrated with AI for faster note writing.

Originality is overrated; the speaker copied successful ideas from the market.

The importance of marketing over engineering in the early stages of an app.

The speaker used social media platforms like TikTok, Instagram, and YouTube for marketing.

Targeting college kids with content designed to go viral was a strategic marketing move.

Two primary content series were used to market the app effectively.

The speaker emphasizes the importance of distribution and marketing for app success.

Avoiding premium tiers and instead offering free trials can improve conversion rates.

The speaker advises not to be afraid to charge money for an app.

Optimizing for one-time purchases over subscription plans can lead to higher conversion rates.

The speaker shares personal experiences and opinions on app monetization strategies.

The video concludes with lessons learned from building and monetizing apps.

Transcripts

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

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