Ask HN: Tips for Solopreneur?

I looked around and found one or two articles that essentially said "If one customer is more than x percentage of your revenue, time to diversify. Start actively drumming up new business."

If you are so small that you can't actively look to take on more customers because they take up all your time and you don't want to gamble on hiring more help when you don't really need it, you have a problem.

This seems to be partly a self created issue. Small businesses seem to think "We're friends!"

No, you aren't and big businesses know that having dealt with enough assholes themselves already.

No one can make you work only for them but the reality is if you want to stay a one-man operation and not hire more people and this one customer is 80 percent of your revenue, the tendency is to feel like "This works!" -- until it suddenly doesn't and they have you over a barrel.

> "what happens if you get hit by a bus?"

This is actually a weasel sentence for "you are too poor" and it's kind of patronising. What do they expect to happen if solo entrepreneur get hit by a bus? That he or she has like a dead man switch that will send over all the business secrets, IP, passwords etc to a trusted person to ensure continuity?

In reality the rich look for business run by someone with generational wealth or someone who already made it and they don't trust the poor. There is an exception if they want to make a token investment, like helping the poor or disadvantaged will get them a badge in their social circle or they need it for PR.

People run their business on their own mostly because they don't have money to hire a team that will "survive" owner being hit by a bus.

So if a potential investor asks that question, it's better to politely turn them down. They are not genuine.

(I attended many seminars for angel investors, VC funds etc. and that's my take away)

Congrats on jumping into this adventure! Here are my thoughts on your concerns:

1. If you communicate that you're in the early stages of building an exciting new business and wanting to get feedback from early-access customers, there should be businesses that are OK with you being solo. They will adapt to that risk, and you won't be able to sell to everyone, but it shouldn't exclude you from everyone either. You might just not be talking to the right customers yet.

2. For milestones (and fundraising) you should think about your goals - what are you trying to get out of this? Do you want to build and scale a big team, serve giant amounts of customers, etc. Or do you just want to augment or replace your income? Or something in-between? You can think about this from different angles: team size, revenue, geographic scope, your personal exit or income, etc.

Here are a couple of examples from my journey in case they're helpful:

In my prior business (https://www.bigleaf.net) my first milestone was to get a working product. I didn't feel as though just talking about it would be convincing enough (and it wasn't), but once I could demo an MVP then it really wow'd customers. Along the way I added a milestone to get a technical co-founder since I got burnt out doing it myself. Those 2 major steps took just over a year. The next milestone was getting our first revenue (took just a month or so after the MVP), then milestones just kept being added from there logically based on the strategic path we chose to be on at that moment.

In my current business (https://www.companycraft.ai) I had a mix of some early milestones. I wanted to talk to potential customers (entrepreneurs) to ensure the problems I wanted to solve matched up with pain they had, and I also wanted to build an MVP ASAP. I completed those in about 3 months, with many other smaller steps and goals along the way. My current milestone is to do a full "v1" public launch in November.

So you just set some milestones that are logical based on where you are and where you want to be in the coming months and years, then hold yourself accountable to them (or ideally be connected with a peer or mentor who can be an accountability partner of sorts).

3. On location, I go back to your team goals. If you're going to stay solo then no, location shouldn't matter. If you want to build a fully remote team then it shouldn't matter much (though being near-ish to a decent airport would be valuable for visiting the team and customers). If you want any local team members then you should think about where you'll gather and what the talent pool is like in your area.

4. It sounds like you're already on a good track here - talking to people who have the pain you're solving and gathering their emails. If that has you on the right track I'd just keep doing that. However you mentioned below that you're selling this B2B...so in that case you may want to consider if you're actually talking to the buyer of your product. Are the people you've met the people who would approve the purchase of your solution? If not, try to connect with those people. Identifying a list of them on LinkedIn and cold reaching out could be one method.

5. Fundraising goes back to your goals as an entrepreneur :) If you want to grow this to IPO or a really big exit, have a team of hundreds, and build a market-changing or world-impacting offering, then you probably need to raise outside funds at some point. However, if your desired scale is smaller and/or you see a path to profitability without fundraising then you get to keep control of your destiny, which is great. If you can afford it and you don't sense the market is going to run away without you, I'd advise continue building, talking to customers, and close your first deals; don't rush into raising money. If/when you know that you can't succeed at your goals without raising money, then dive into that path.

Landing big contracts as a small company - it's not all bad. They can bring in a lot of revenue, for not that much sales effort. And if you have good processes down, they can also be much easier to deliver on. At least in the US, contract law can be very fair, financing options to facilitate large contracts are plentiful, and most large businesses act in good faith.

So it isn't so much landing a big contract is bad, but landing a big contract that you can't deliver on is very bad. Determining what you can and can't do, how much you need to invest into your internal processes and capabilities - that is the challenge of running a business.

Usually, in successful businesses I have worked at (or business units), I see a split. Ideally it would be 50-50 large contracts to small accounts, but usually realistically is is more like 60-40. Probably depends on the industry too.

Yeah, if you've got 80% of your revenue coming from one customer, that's not great. But it all depends on how you work with your customers. In my business, things are pretty hands-off, and we have calls only a couple times a year, largely to talk about promoting our work together (our tech is a customer-facing differentiator for them, so we give joint talks at conferences and such).

I don't think there's some magic percentage, over which you need to diversify. You should always be looking to get other customers, and if you have one big one then it should be easier to get other big/medium-sized ones.