Side Projects Are Not Startups

Side projects are often the real start of startups. Yet the keys to succeed with startups don’t apply to side projects. How can that be?

Paul Graham once wrote that you need three things to create a successful startup: to start with good people, to make something customers actually want, and to spend as little money as possible. For side projects, all three are wrong.

You don’t have to start with good people. You can make plenty of progress on your own while it’s “on the side”, and then do the hard “find a cofounder”-thing later, when you have progress or need it.

And you don’t have to make something customers want. Your project is “on the side”, and that means you have another main thing. It’s normally something at least you yourself want, though. But you don’t need to make money on this project. It can be a pure passion project.

And this is a pretty unique feature of the side project state, it’s one of few places you can let your passion guide your way and you can pick the next thing on the to-do list that you most feel like solving this evening.

And actually, especially for young side project warriors, I’d rather them follow their passion and finish their project rather than taking detours into “must do this” or “best practice that”.

Like a startup, the biggest threat to your project isn’t competitors, it's your motivation. Most projects die because you stop nerding on it. For both startups and side projects, your most important job as a founder is to be motivated around the thing. That means that if you’re demotivated, it might make sense to do something fun next. Do it for your project.

So don’t let a TAM-calculation or a well meaning tip of checking out the "disciplined entrepreneurship”-book stop you from getting a stupid product live into the world. The lessons you learn from wasting that much time making something people don’t want will probably teach you more than reading about it anyways. And having finished it builds your resumé too! Don't be the mother of a thousand unfinished sides.

But it must be smart to spend as little money as possible? No! Again, this isn't relevant until you upgrade from side to main project. Your main thing covers your costs today. So feel free to splurge and let your day job cover a hotel room for a weekend with friends just to get some change of scenery while nerding on your project.

Paul also wrote that it’s people aged between 23 and 38 that should start startups. I’m not sure about the lower number, but I disagree with the higher one. He argues that people older than 38 lack the physical stamina, and that startups are a big risk financially. I think that if you use your experience to do the smart to-dos in the project, then you don’t need to sit until 02 every night to build a business you can live off.

What I actually do fear though, is that older people realize that work shouldn’t take center stage in life. That other things matter more, like happiness. This can make them work less hard. Naval Ravikant says nothing you do on this earth matters, because we will die and be forgotten. I agree. So the only thing that makes sense is to enjoy the time we have. To me, that means spending a lot of time with the important relationships in your life. But fortunately, using your potential also makes you happy, so working towards something ambitious in balance is the way to go.

The risk for older people that Paul talks about is also manageable. A 24 year old might need net 500 USD a month because she can live with her parents, whereas a 37 year old father of two (4 and 9), like me, needs a year of runway at around net 5000 USD a month. Not because I spend a lot, but because we bought an expensive house due to an increasing salary over many years, so my fixed costs are around 4500 USD, and I can’t ask my wife to move just because I want to do startups. Also, whenever the runway has three months left, I just start applying to jobs I don’t want. Easy!

This all means that side projects start out in a very different way than startups. And that you must morph from the side project phase where none of this matters, to the startup-phase where it suddenly all matters. To grow into a startup you need good people, to make something people want and to not spend a lot of money. Hopefully you’ve spent your side phase well by sharing your thoughts and creating relationships so that you now have “cofounder ready”-relationships with good people in the bank (Relentlessly did this for me). Spending little is the easiest part. Making something people want can include getting paid from the right players within your project (ads, members, users, b2b). So finding this viable business model for your passion project might be the real challenge. We still struggle at Relentlessly. YC’s motto is “make something people want”, and they say it’s where most startups fail. This failure for startups is actually not related to startups, it's an inherited feature of their side project days.