The Full-Time Gap
Posted By Paul Kafasis on September 13th, 2006
A few days back, I was having a discussion with a few developers about the path to becoming an independent software vendor (ISV). Ultimately, there’s a major difference between doing software development as a hobby and working for an ISV as your full-time job. Quentin smartly dubbed this the Full-Time Gap.
The seminal blog post (if such a thing can exist) on bridging the Full-Time Gap is Gus Mueller’s “1068 days”, which I discovered we never linked to (and shame on us). If you haven’t read it, the time is now, whether you’re a developer or just a user.
In brief, Gus began Flying Meat as a side-project while at his full-time job. After almost three years of sales growth and saving money, he was finally ready to quit his job and work for himself. Gus’ path to independence is a great lesson for others, but it’s certainly not the only way to become an full-time software developer. After reading Gus’ post, I decided it might be helpful to post our own experience with crossing the gap. I also talked Daniel Jalkut, of Red Sweater Software, into chronicling his own journey.
Before starting Rogue Amoeba Alex, Quentin, and I worked together in a professional capacity at several companies, on a string of MP3 players. In fact, the genesis for Audio Hijack was in a little-known plugin for MacAmp and MacAmp Lite X. When we couldn’t get approval from our previous corporate overlords to release Audio Hijack , we left to form a new company – Rogue Amoeba.
Alright, Professional – Absolutely No Ties Though!
From the beginning, we attempted to work very professionally (as professional as you can be with a name like “Rogue Amoeba”, anyhow) on Audio Hijack. For us that meant having a complete website, comprehensive documentation, and fast, responsive support. With three founders, we were able to divide work and take care of many tasks. For us, Rogue Amoeba was never a hobby or a side project. Instead, from day one, we built it as a full-fledged company. We worked on Rogue Amoeba seven days a week, answering support rapidly and updating the software often.
Lesson: If you want to be a professional, act like one.
However, while we were working on Rogue Amoeba as much as 50 hours a week, we weren’t yet “independent”. Alex was still working a full-time job, while Quentin and I were studying full-time at the University of Maryland and Tufts University, respectively. With three people, a bare minimum of $75,000 in profit was needed yearly in order to be able to consider working solely for Rogue Amoeba, and Audio Hijack wasn’t there.
A hobbyist product, perhaps updated infrequently or poorly supported, might make as little as a few hundred dollars a year. A few thousand dollars in a year is a nice take, which is great for beer money. Many developers get here and stop, and that’s just fine – not every developer needs to be an ISV.
Lesson: Acting professional doesn’t make you one.
However, a business needs to earn enough to support itself. At $16 (that’s 24) a pop, Audio Hijack would need to sell about 4700 copies a year to hit that $75,000 “floor”. That’s approximately 13 copies a day, every day, 7 days a week, 365 days a year – no small feat. In addition to increasing sales, we really needed to earn more profit per sale.
Lesson: Pricing is important, and under-pricing could sink you before you get started1.
At the end of 2002, Rogue Amoeba had released 3 updates to Audio Hijack and seen revenues grow, but we didn’t have a reliable level of sales. Our story could have largely ended there, with Audio Hijack being updated a few times, never gaining much in the way of fame. But as you know (or can safely assume), that’s not what happened.
We Think We Can, We Think We Can…
For the record books, Audio Hijack Pro started life as version 2 of Audio Hijack. While we were developing it, we realized we’d added and changed so much that we had a whole new product on our hands. Ultimately, this was released as Audio Hijack Pro, for $32 (that’s right, 25). This is really what allowed Rogue Amoeba to take off.
The day Audio Hijack Pro (03-03-03, forever imprinted on our brains) was released, sales rose 1400% over the previous day. Even without dollar figures that should sound impressive and indeed it was a big day for us. We’d never seen anything like it. Sales came down of course, but in the second five months of Rogue Amoeba we averaged almost three times the average sales per day of the first five months.
Lesson: “Instant success” is never instant – keep working.
After Audio Hijack Pro, we were making enough to consider going full time – heady stuff! However, this wasn’t a no-brainer by any means. There was still plenty of risk – would sales continue? Could we really handle this? What about school?
Rogue Amoeba Bridges The Gap
Ultimately, the answers to the above proved to be “Yes”, “Yes”, and “What about it?”. Alex left his job, and Quentin left school following the release of Audio Hijack Pro. Perhaps foolishly, I decided to work to finish school a year early2. We’ve been working full-time and solely for Rogue Amoeba for 2-3 years now, and it’s been fantastic.
I think the most important part of our particular journey was starting out from day one acting professionally. We weren’t big when we started, but we continued to work and develop our software until we got big. When we reached that point, one by one we moved across the bridge to full-time.
Many Paths To Skin A Cat
I’d imagine starting a company yourself while working full-time would be quite difficult, as a lack of motivation and time to work are definitely going to be obstacles. Scarier still is the idea of quitting a full-time job and living off savings until sales ramp up, as the brave folks at Potion Factory have done.
For Rogue Amoeba, college provided an incubator that was invaluable. While we were getting started, Alex had the security of another job while Quentin and I had the safety net college provided. That luxury was something we used to our strong advantage, taking a risk on an unproven concept and ultimately joining the ranks of many great Mac ISVs.
There are many ways to amortize risk, and I’m eager to hear about the experiences of others. If you’re working full-time as an ISV, post about your experience! With any luck, our tale and those of others like Gus and Daniel will encourage another generation of Mac developers. There are lots of ways across the Full-Time Gap. The most important thing is to decide that you want to cross it, and then get started building your bridge.
1 Pricing requires its own article, or possibly an entire book. The simple conclusion we’ve reached is that anything under $20 is probably too cheap for a business.
2 I can’t say I really recommend this, as working full-time and studying full-time is likely to result in a loss of sleep and a decline in grades.