How to become a Solo Entrepreneur

3 years ago I was laid off from my current job. Instead of despairing I started my own company. After a failed attempt at trying to build a "real" company with VC funding and employees, I started my own solo entrepreneur company. Today, after having been running the company for 18 months I want to share my experiences for others to learn.

Basic rules for Solo Entrepreneurs

First of all, you never regret what you tried to do but failed at. Once you truly believe this, the fear of starting on your own is reduced. According to a study conducted many years ago, most top 100 Nasdaq CEOs would rather hire a college dropout who had failed with a startup than an A student who had never failed at anything and chose the safe path. This implies that even if you fail, you can always go back to a "boring corporate job", which should make you more courageous towards trying.

Secondly, as a solo entrepreneur you've got literally zero overhead. In most companies salary expenses are dwarfing the resources most of us have at our disposal. When you're a solo entrepreneur, all you need is money to pay for rent and food. Once you've reached the point where you can pay your expenses, all you need to do is to figure out what you did right for then to do more of that and less of the wrong things.

Third of all, as a solo entrepreneur you can do things differently. A traditional company with dozens of employees needs processes and structural overhead that a solo entrepreneur company simply doesn't need. One example of this is how I save code chages straigth to production. For a traditional company this would be considered madness, but for a solo entrepreneur company it's quite common and poses little additional risk, while making you capable of moving at a speed most others can't even comprehense.

Fourth, you don't need to quit your day job to become a solo entrepreneur. If you've got something paying the bills, and you've got the energy to work on your company in after hours - Then do it. Your day job pays the bills, while you bootstrap your company in the weekends building your products. Being a solo entrepreneur isn't a binary choice, it's something you can do in addition to all the other stuff you're doing.

Find a niche

The first thing you'll have to do is to find a niche. Most others would tell you to perform market research at this point, to evaluate the total market size. This is because most others are trying to build billion dollar companies, so the total size of the market becomes a really big deal. As a solo entrepreneur you can chose a market with a total size of $120,000 annually, and still thrive assuming you can deliver something where your expenses are around 10% of your revenue.

This is because you're not looking to build a billion dollar company, you're looking for a way to generate salary - And $10,000 of monthly revenue, with 10% going to expenses, is a quite comfortable salary for most of us.

In a $120,000 annual market, competition is virtually non-existent, because nobody cares about the market, so it's an "underserved market". Want to build AI chatbots for your local plant nurseries? Well, if there are 50 plant nurseries in your town, all you need is to make all of them become willing to pay you $200 per month, and you've got $10,000 in MRR. And nobody is ever going to care about trying to even compete with you, because the market is simply too small for anyone but solo entrepreneurs to care about.

Experiment with Products

When I create spaghetti I cook it for some minutes, then I throw it at the fridge. If it sticks, the spaghetti is "Al Dente" and done. I experiment with products the same way. I create an MVP and throw it out in the market to see the reaction. If the reaction is good, I spend more time refining the product and I start marketing it more aggressively.

A great example of this is our AI Expert System, and specifically its ability to white label the system. It was created because of one of my clients wanting to start his own AI SaaS company, but I got several additional clients on it before it was even finished. Obviously I found a product that others needed and wanted to pay for. So today I spend a lot of time refining it and making it better.

Throw out your babies

Your first idea might not be what brings you success. If you try something and it doesn't bring you revenue after a couple of months, then move on to something else. I started my company with website AI chatbots. This market became over saturated quite rapidly, and turned into a "bloody ocean with sharks." So I just moved onwards. We're still delivering AI chatbots for support, and I believe we've got a super high quality product, but most clients contacting us today wants their own AI SaaS company - So I changed.

This is another advantage you've got over larger companies, since to change the trajectory for a large company might require years of planning and execution. But for a solo entrepreneur it's 30 minutes to rewrite your landing page, and a couple of weeks to develop a new product, and you've pivoted your company 180 degrees.

Just say no

When you're starting to accumulate some success others will contact you and offer you outsourcing services or apply for a job with you. At this point it's crucial you don't lose track of your goal, which was to build a sustainable company capable of sustaining you, and only you. Sure, you might want to hire the occasional Fiverr consultant for 50 bucks here and there, doing things you can't do - But when you start hiring people full time, you're accumulating costs and your company will become more rigid and less capable of change.

At this point do not fall for the corporate bs. Just say no, and explain that you're a solo entrepreneur company, and that you're simply not interested. The alternative is salary expenses, management overhead, maybe getting an office, and all sorts of trouble you don't really need in your life. Because in the end, what you're looking for is a better life, not being coerced into managing "a bajillion" things on a daily basis.

Conclusion

It's easy to see only the disadvantages with a solo entrepreneur company, because we're conditioned to see large companies as "better" and more "serious." However, once you start asking yourself what are my advantages, you realise that the very same thing you perceived as disadvantages actually are advantages.

I make a big deal out of that I'm a solo entrepreneur. It's literally the first thing I tell people in sales meetings. This makes my clients realise they're getting the attention of the man, the guy who created the platform, and that they couldn't possibly have been treated better. This also makes my clients more loyal since they know their relationship with me is crucial for my ability to pay my bills. I had a client the other day cancelling an enterprise subscription, I won't tell you who it was, but let me show you the email he wrote to me.

Hi Thomas,
I hope everything is fine with you.
I'm really sorry, but I have to cancel the enterprise subscription with your tool effective this month. Can you please make sure that Stripe doesn't book another amount in the coming week or when the next invoice would normally be ready?
Just to explain, I'm really happy with everything we did together and what you achieved for us. However, I received an offer for access to a system that provides the best and most comprehensive reporting tool I have ever seen. This tool has access to an internet archive and includes all the data I would typically pull from the web already in its database. It takes just two days with a fully automated workflow to generate a perfect report for a person or a company.
Given this, we will be using this new tool, and I won't need to do the kind of extensive searches and website scraping we did together in the future, at least for the foreseeable future, which could be a few months. I will also remove the knowledge bases for my typing mind API and look for a different version since that is part of this enterprise module. When we cancel, you can delete everything.
Thank you very much for everything you did and what we achieved together. It was a good project, but with the changes in our workflow, I can't justify paying for a system we won't be using, which I'm sure you understand.
Please cancel the subscription and send me a short confirmation once it's done. I hope to stay in contact with you in the future. Thanks again, and bye for now.

You know you're doing something great when people cancelling your subscriptions spends an entire email telling you how great you were, and what great services you provided, and what an amazing product you've got. Some people will cancel your product and stop being a customer, it's just the way the world works. Others will reject you in sales meetings and tell you they're not interested. Don't take it personal, it happens, it's a part of daily life. Move on to the next client, and deliver that one thing you and only you can deliver - Which is as follows ...