Tricks to Monetize your Side Projects

I was recently commenting on an excellent Show HN for a product called Duet and it was the most karma I have ever received on Hacker News (17 votes in 4 hours), and another respondent said I should write it up as a blog post. So here it is.

This advice can be extrapolated, but it is primarily focused on Duet.

Testing

First and foremost, always, always, always, split test EVERYTHING. You don’t have to get all fancy using systems like Optimizely or anything. Just know your conversions.

At my last job with Humankind/HKSEO I had actually written a split testing engine for ASP.Net MVC so we could try out different landing pages. All it did was chose a different View randomly for new users, then cookie’d the visitor to that page. That cookie would then be reported back on the payment record. That is how we tied visits & views to a specific page (via google analytics) and the conversions.

Even this amount of testing and coding isn’t required though, you could always know the date and time you pushed a new version of the page and track visits/conversions from then until you replaced it with the next test.

On-boarding

Without a doubt, you should be on-boarding your new customers/users, especially if you offer a free demo. You need to CONSTANTLY be in front of them, it is the only way to get them to install, use and then eventually buy your product. If there is anything that requires work after a purchase, you need to insure they are set up for success.

Here is an example sequence of emails that took our free trial users from $0 to $80 CLTV on a $15 product.

  • Immediately: Thank you for signing up for {Product Name}. – A very impersonal “transactional” email
  • 1 Hour: It’s Jeremy from {ProductName} – A very personal email introducing myself and walking them through the benefits of the product
  • Day 2 (if they haven’t used the product): Have you had a chance to use {ProductName}? – Body of the email went over a few benefits left out of the second email and gave my “personal” contact information that lead to a special bucket in our helpdesk software (Groove).
  • Day 6: How is it going? – Personal “shoot the shit” style email trying to get engagement.
  • Day 10 (if they hadn’t converted but were using the software and were reading the email): Just for you a 50% deal for the PRO plan of {ProductName}– Just a coupon

Knowing the PRO plan is out of reach for most, the 50% coupon allowed them to signup for PRO for 1 month, get the benefits, use the product, then downgrade to the basic plan which was similar, just a few limitations on number of integrations and account size.

But by on-boarding our free users I was able to convert 18% of free customers to paying customers. Which was a HUGE increase from the 6% of just the first transaction email.

Price Anchoring

Use a giant unreasonable number for the unlimited plan with:

  • 1 month of phone support
  • 12 month same business day email support
  • install it for them
  • Fee free ACH / Credit Card processing through you
  • etc.

A HUGE list of features to go along with the HUGE $574 price tag.

From that giant steel anchor, everything else on your ship will seem absolutely weightless.

Then drastically back off of that pricing for the other product tiers.

  • 10-25 team ($249)
  • 5-10 ($199)
  • 2-5 ($149)
  • solo ($99) plans.

You need to also reduce the features, support windows, contact method as you drop the price, not just the number of users.

Also drop the slider and use a comparison chart. And you should always have a “best value” or “most popular” call out on the pricing chart. The exact wording needs to be split tested, of course ;).

Additional Income Streams

There are infinite ways that you can continue making money on the “back-end” of the offer. Here is a handful that might work best for you.

Payment Processing

Include your own payment processor by default (I would use Stripe, personally). If you have 500 customers invoicing an average $1000, your processing fee will drop. Also, always default your processing to ACH as the fees are even lower (current Stripe fee is 0.8% maxed at $5 and a $0.25 fee to transfer the funds from your Stripe account to the customer’s bank). Bill the customer back at 2% and $0.30 and you are making a little bit on each transaction.

Annual Licensing

Don’t give updates away unless it is a bug fix. Also, QA the SHIT out of your product so less bugs make it into the stable track. And make sure you are always improving your product. If your product becomes stagnate then your customers will never have a reason to re-up their contract.

Cloud Hosted (SaaS)

Take the annual price divided by 12 and add a premium to it (10-25% or so). Also push updates to this channel regularly. Make sure to have a few extra premium add-ons as well, like:

  • Custom Domain Name (like the self hosted has) +$5/mo
  • Snail mail invoices (use something like Lob +$1.50/invoice
3rd Party Integrations

Create plug-ins for Slack, Salesforce, WordPress, etc., and charge $25-49 for them.

Conclusion

While I know this is probably only a side project, there is no reason you couldn’t turn this into a viable small startup with an additional 1-2 developers who also spend time answering phones and emails.

Questions or Comments

You can comment on this post over at Hacker News or you can email me at [email protected].

3 thoughts on “Tricks to Monetize your Side Projects”

  1. Has your advice changed over time, Jeremy? I can’t see a free trial that requires email or a high price anchor on your website at the moment.

    1. Hey Daniel, thanks for the question. My over arching advice hasn’t changed. That said, my personal blog isn’t my side project (I do have one, but it is still in the napkin phase as I work with a few people to better define it). I put less than 2 hours a month of thought into it, and I feel if I were to monetize it either through training courses or other types of paid content, I would want to invest a lot more time into it. I have a blog post in my drafts about my first product launch from a side project and my first real product launch I was paid to create. So if you stay tuned it should be out over this weekend. I am in the process of moving, though, so don’t hold me to that.

Leave a Reply