I was reading an interview where a developer said:
Software businesses are incredible in the way they can deliver passive income once you get them rolling, and especially a subscription app. If you build something that people care enough about to subscribe to and it has reasonably good retention, you don’t have to be working on it day in, day out for it to continue to be profitable.
It looks normal to me, as I’ve been trying to build a “passive income” business for ..more than a decade, but it’s quite uncommon in what I call the offline world.
As a developer you can do something that will create “perpetual” income without you doing anything.
You don’t need to be an entrepreneurial kind of person to do that. If you work for someone, you are basically employed to do that.
You build systems that will provide value to a company over time.
For how long, it depends. Imagine being the person that created Craigslist.
Once built, the system hasn’t changed a lot over time. Or imagine building the first version of Google. I mean, it surely has changed over the years, but the original idea is still there. There’s a box, someone types, they give you results.
They could easily say “ok let’s stop working on this” and it would work in the same way for the next 10, 20, 100 years, until something better shows up.
That’s where the non-passive kicks in, of course. In order to stay relevant, you have to keep working on the thing you create.
Imagine building a mobile or web app in 2009, today it would look ..ancient. The best apps keep reinventing themselves, keep getting better.
What’s passive is that you can count on it for future revenue.
You have built a system so that people will keep coming back.
You have built a user base of people subscribed to your app, that keep paying for it because they find it so useful they want it.
You have built a valuable product and it basically sells itself.
What makes it unique is that you can do it by yourself.
Sure in the offline world you can create a shop or any kind of service company, then hire people to run it, and it’s “passive”. Except you need a lot of capital to start, and then your job becomes managing those people you hired. Or you hire someone to manage those people, but is there a lot for you in the end?
With the healthy margins that we know software products have, it’s much simpler.
It’s not even just for developers, of course. Developers have an additional way which is creating a mobile app, a desktop app, or a web app.
But in general anyone can create a digital product and have passive income from it. Ebooks and courses are two ways. You create them once, and sell them forever, or until they are outdated.
Passive revenue to me is the dream.
Not because I am lazy.
I am definitely lazy, of course.
But once I create something, ideally I want it to “live on its own” and I want to create something new.
Even if it does not work like this.
Maybe if you release something quietly and it’s a flop and no one cares.
But if something takes off, it’s hardly passive.
To start with, there’s support. People have problems, they want answers, you need to care.
If you think my courses are “passive income” in the sense that I don’t have to do anything to run them, you’d change idea after spending a day with me.
It goes from low activity periods to high activity periods, but I wouldn’t want to do anything else.
Teaching programming is a dream. Not only I get to talk about what I am passionate about, I also get to help other people realize their dream of making a living programming computers and get a nice job.
But it’s still passive income in that one more person joining the course does not change a lot. I don’t have to 2x my efforts. Sure, 20 people instead of 10 is 2x my support emails, but that’s it.
I could also hire someone for handling support but I like staying in touch with my students.
Maybe one day, who knows? Hire one person doing support. Hire one person improving the curriculum.
That’s when it’d be 100% passive.