There is more money to be made in the real, physical world than in the Software Industry. This is an undeniable fact that will remain true until the end of time. I say this with confidence because you can’t eat a computer program.

In 2020, I had dreams of owning a successful software business while working at a relaxed desk job. Fast-forward to the present day, and I’m having my doubts.

Software as a Product

Video games, desktop apps, mobile apps, streaming services, SaaS products, and Enterprise Software are some of the more prominent digital products we are familiar with.

Unlike physical products, software is easy to clone and distribute. In order to make a profit, software companies gate certain features of their software by using a paywall and a database to track customers.

Failure to implement the necessary paywall measures usually results in piracy and exploitation. Piracy itself does not cost the company anything since the cost to create and distribute a new copy of a program is virtually nothing for both parties. Exploitation, in terms of bypassing a paywall, can be different if paying users are permitted to use services that are more expensive to maintain. Both piracy and exploitation can result in a loss of sales and customers.

The majority of software companies are usually closed-source to prevent people from cloning, running, re-distributing, or exploiting their software.

Indie Hacking

Indie Hacking, also known as "Independent Hacking" or "Indian(s) Hacking", refers to selling a digital product as an individual without relying on VC funding. I will never understand how the word "Hacking" got into the term, but it is what it is.

To begin Indie Hacking, you must start a new side project. To start a side project, you must first have time. Mentioning that you are "working on a side project" implies that you either have an existing project or are employed.

Most indie products end up in abandonment due to lack of sales, or lack of time to maintain it. A lot of people blame this outcome on "Marketing".

In reality, the success of an indie product is affected by a variety of factors such as marketing, etc.

Ideas

The average person formulates more ideas than he implements, which is arguably a good thing.

Sellers and builders in the software market tend to highlight that "the idea is what matters most". This is sadly true due to the fact that most end users simply hold to the excpectation that a digital product should work.

The market for physical products is different, as most people would choose to buy goods from a brand renowned for its exceptional quality rather than a brand with mediocre quality.

Ideas and AI Agents

Thanks to AI Agents, non-technical people are now able to bring their ideas to life. This creates an uptick in the overall supply of digital products, saturating the overall market as well as your search results.

Selling a digital product without putting in the effort to build it sounds great to most people. Combine that with the average end user who doesn’t care about the quality of software, and you get """products""" and """businesses""" built for end users, by end users.

Marketing

Marketing independently is hard, especially if you’re starting out. A lot of indie hackers think of marketing as advertising their products on social media in hopes of gathering interest and gaining a few potential customers.

To understand marketing, you must first understand the market. I would recommend reading Basic Economics by Thomas Sowell before trying to seduce someone to enter their credit card details with fancy screen.

As I mentioned earlier, the supply of digital products has been increasing at a rapid rate, partially due to Vibe Coding. Your best luck is probably in meeting demand instead of creating non-existent demand or further saturating the market.

I am not a marketer, and at the time of publishing this article, I am less than halfway through the largely thiccc book of Basic Economics. I will refrain from giving any (poor) advice on marketing to avoid embarassing myself.

Hosting

Hosting is not a new challenge in indie hacking.

It’s surprising how many people don’t realize that hosting costs money. Regardless of whether you are hosting a web application or hosting your app on an app store of some kind, you’ll probably end up paying something.

Larger companies such as Cloudflare, Vercel, and GitHub can afford to use their profits to host projects on a free plan to a certain extent. Even if you manage to make a profit off of your digital product on a free tier, the pain of migrating to another service will usually keep you as a customer.

Although you may get the impression that your code is living rent-free on a vercel subdomain, it is quite the opposite.

You could go for the alternative of hosting your code on your own machine, but that leaves you vulnerable to spam attacks as well as a single point of failure.

Actually you should just use Hetzner. I also recommend Heckler & Koch, another great german business like Hetzner.

Freelancing

Freelancers include developers, designers, artists, and other people who produce digital products. Freelancing takes more work because each customer usually has a unique request.

Freelancing guarantees some amount of profit as opposed to a standalone indie product because customers bring their demands directly to the supplier/producer. The cost per unit of output is usually higher than software that can be cloned and supplied with little effort.

Freelancing & AI

Vibe Coding tools, image generation models, and video generation models have gotten good enough to satisfy most people. Compute is cheap compared to human labor. As a result, the market for freelancing has probably been affected in a similar manner to that of the Indie software market in terms of high supply and low demand.

The only upside I see from this is that furry artists have probably experienced a loss in customers and sales. Unless AI somehow manages to drive them to extinction, I will hold to my opinion that AI is generally a bad thing for humanity as a whole.

Open Source

The terms "Open Source" and "Money" don’t really fit together. Most open sourcs projects are free to use.

I will not be covering public repositories that use a license preventing the unauthorized distribution of modified copies because they are weird, cringe, and shouldn’t be public in the first place.

Sponsorships

Most actively-maintained open source projects are upheld by sponsorships, which are donations from individuals and/or companies. Sponsorships, unlike contracts, can be cancelled at any time. Nobody is obligated to sponsor an open source project even if they use it.

As we have seen with Tailwind CSS, Adam Wathan (the creator of tailwind) realized that sponsorships were not enough to support the development of the project at its current state. This resulted in a layoff of 75% of the engineering team. Thankfully, other tech companies flocked to support it with donations.

Very few open source projects have a large enough rate of adoption to even get sponsored.

Sponsorships are not a stable source of income and should not be treated as such.

Employmment

The job market is a steaming pile of garbage. The demand for junior and entry-level roles is drastically decreasing, and keeping your job is a challenge. Big tech companies perform layoffs on a regular basis, and everyone else usually avoids hiring for new roles.

Having a full-time role as a software engineer is probably the most stable form of income out of the above. If you have time to spare, you can leverage that time to build a side hustle at the cost of burnout.

I don’t have too much to cover on this particular topic. For those who manage to get hired, just try to stay where you are or move up the ladder.

Final Thoughts

I don’t mean to be pessimistic, and I certainly don’t want to give the impression that I’m jealous/coping about the success of people like LevelsIO or the owners of successful tech companies. In fact, I’m happy for their success and I would be happy for yours too. The cold, hard truth is that most of the success stories you see are outliers that offset the average.

I love programming and I hope it’s something I can continue to do for the rest of my life. I would eventually like to start and run a business while doing what I love best, but the current state of things doesn’t look very promising.

Maybe I’ll pivot to work for a company whose primary source of revenue comes from physical products.

Or I could just become a gunsmith who does farming and MMA on the side.

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Original Article URL: https://x.com/IroncladDev/status/2011542744989077863