5 Lessons I Learned Building A $400/month Micro-SaaS Side Hustle
Summary
TLDRIn 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
💼 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.
🚀 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.
Mindmap
Keywords
💡Passive Income
💡Software Engineer
💡App Development
💡Originality
💡Marketing
💡Social Media
💡Competitive Advantage
💡Premium Tiers
💡Conversion Rate
💡Subscription Plans
💡Monetization
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
one
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