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Indie Makers and Risk Aversion

Indie Makers and Risk Aversion

I consider most successful entrepreneurs to be risk-averse. They make decisions that may seem to be the riskiest, but in fact, every move is calculated. This becomes clear, for example, in a letter that Jeff Bezos wrote to his shareholders.

I’m going to make the case that being an indie maker is the best way to minimize the risk of running a startup.

You see, 70% of VC-backed startups fail — usually around 20 months after first raising money with an average of $1.3M in total funding raised.

Top reasons for failure include:

🤷‍♀️ 1. No market
💰 2. Ran out of $
🤬 3. Wrong team

Today you can be an indie maker, and build a product without a team and without money. That leaves only “no market” as a failure factor.

The great part is that if there is no market and you do fail, you can always land a new job by showing projects you’ve built and skills you developed while building your projects.

One difference that I see running my software business (angage.net, scrapebook.net, fastcart.app, etc) compared to my service business (geex.co, jazz.services, etc) is that on the service business you have fewer customers who typically pay you more on retainer. That means that when you lose a customer you lose a good % of your MRR.

The software business, especially if it is low-ticket, is safer because you typically have more customers and it’s very unlikely that all the customers will churn at the same time. Also, when they do churn you lose a small amount of money and you have more time to adjust your marketing efforts accordingly.

Best,

Firma