🗞 What's New: Getting validation and building runway

You need 2 things before going full-time on your project:

• Validation and runway are essential when considering going all-in. The calculator below can help you determine how much you may need to quit your day job!
• Do you work on the weekends? Founders weigh in below on unplugging on their days off.
• Founder Ben Leonard grew his e-commerce fitness business to $6,000,000 in annual revenue, then sold for $2,000,000+. Here's why he doesn't believe in setting million dollar goals, and why he's never in a rush to launch.

Want to share something with over 100,000 indie hackers? Submit a section for us to include in a future newsletter. —Channing

🏁 Getting Validation and Building Runway

by James Fleischmann

If you're going all-in on your project, you need two things before taking the leap:

1. Validation.
2. Runway.

Read on for more!

Getting validation

The only reliable form of validation is money in your bank account. Everything else (market research, user feedback, etc.) is just an indicator that you're headed in the right direction.

I wrote a comprehensive post on the topic of validation a while back, so I won't rehash it here. Check it out if you'd like to learn more about effective validation methods and tools.

In this post, I want to focus more on the second must-have: Runway.

Calculating runway

The equation:

If you're leaving the land of the gainfully employed and heading out on your own, you're going to need some money in the bank. The question is, how much?

Calculating runway is a little different for indie hackers than it is for other business owners. Here's the equation I'd suggest using:

For example, if you've got $20K, your personal expenses are $3K per month, your business expenses are $1K per month, your MRR is $1K, and freelancing brings in $1K, then you've got 10 months of runway. 10=20K/(4K-2K). Simple enough.

It's slightly more complicated for indie hackers because we have to include our personal expenses, our MRR, and any other income we might have. Other income might include other products, freelancing, your spouse's income, etc., but it should not include your current job.

Check out what you've got in your bank account. Take a look at what you spend every month on personal bills, expenses, etc. I'd recommend looking at the withdrawals from the last three months, and taking the most expensive month.

If you plan to try reducing your monthly spend, don't wait until you quit your job. Try it for a few months so that you have a realistic idea of how much you'll spend; most folks overestimate how much they can reduce costs. If you're trying to set aside money for something else, like a house or investments, add the monthly amount to your expenses so it's accounted for in the runway.

Now, do the same for your business expenses. Add some cushion to both calculations, just to be safe.

Then, subtract your MRR and other income from the expenses. Divide your savings by the difference, and the result is the number of months you have left.

If your income exceeds your expenses, nice work! But some savings wouldn't hurt, as MRR can go up and down. One note about savings: Only include the savings you're willing to spend. For instance, don't include your nest egg or your child's college fund.

The equation for how much money to save

If you're trying to calculate what you'll need to save, then you've got to take the equation above, and throw some algebra at it:

The equation for how many months of runway you need

Here's how you can figure this out:

Desired MRR, in this case, would probably be your total expenses. At the rate it took you to get here with your business, how soon can you expect to pay your bills with it? You need your runway to last that long, plus cushion.

What most indie hackers recommend

Beyond that, how much runway you need will depend on your responsibilities, your ability to handle risk, and your plan B. The absolute minimum that I've seen recommended is six months of runway. However, most indie hackers seem to go for 12 months. I've also seen both 24 and 36 months.

Some folks take it a step further. Pieter Levels says to wait until your revenue surpasses the income of your job for six months, and have three years worth of savings, too. For many, though, this is too high an expectation. You really have to decide what is best for you!

How much runway did you have when you went full-time? Let's chat below!

Discuss this story.

📰 In the News

from the Volv newsletter by Priyanka Vazirani

🏛 The 2022 US midterm elections will be a major test for TikTok.

🇭🇰 Hong Kong is exploring legalizing retail crypto trades.

🚀 You can now send the ashes of loved ones into space.

🤩 Consumers are still obsessed with logos, despite what designers say.

🖼 This famous painting has been on display upside down for 75 years.

Check out Volv for more 9-second news digests.

⛱ Do You Work on the Weekend?

by Annabel

I've been an indie hacker for a few years now, but I still struggle with taking breaks during the weekend.

I keep bouncing back and forth between two mindsets:

1. Every minute you're not working is wasted, which leads to eventual burnout.
2. Take a break whenever you need it. You're your own boss, after all.

What do you do to find balance?

Sharpening the ax

J. Clifton Lee sees taking time out for himself as "sharpening the ax:"

If I keep going for too long, I'll burn out. Recovering from burn out is way more difficult for me than preventing it. I have to really pay attention to my body for the signals that I need to take a break.

Right now, my self-care routine relies heavily on working out every day, eating well, sleeping well, getting outside, connecting with others socially, meditating, journaling, and affirmations. That's what works for me.

Kick some butt

Anatolii was in the same position:

At work, I was thinking about work. At home, I was thinking about work.

A gamechanger for me was jiu-jitsu, the martial art. It's fantastic for unplugging, since you physically can't stay plugged in on the mat. You need to pay attention to your coach, and to what your opponent does. A single one hour session is enough to unplug from a busy day completely. Practicing twice per week is enough to have a healthy, flexible mindset that switches from work to life more easily.

If martial arts is not your cup of tea, try doing some other sports. I would recommend sports where you deal with other people, either as a team or as a competition, face-to-face. The gym did not do it for me.

Yusup agrees:

I found my peace with Muay Thai. I think it is the most effective way for me to kill my background process in my subconscious. And, of course, getting physically stronger helps a lot with the mind as well.

Unplug routinely

Topher takes Shabbat every week:

Shabbat is from sunset Friday until sunset Saturday. November will be my third year doing this...no work, whatsoever.

I'm not Jewish, and neither are many others who embrace the Sabbath. It's a wonderful way to reconnect with yourself, with family, and with God (if you're a person of faith).

Get your mind off of it

Joe Kristofzski recommends that, when you take a break, do not think about your project:

Everyone's brain needs a chance to decompress a bit. Here are some great times to give your brain a break:

• Walking. This can really help clear your mind.
• Social gatherings (unless, of course, the gathering is about your project).
• Meals with others.
• Hanging out with family and friends.

Commit yourself to the current activity. Catch yourself as you start to think about one of your projects.

The best part? You'll likely have better ideas the next time you start thinking about your work!

No more to do

Aesop recommends starting by planning your ideal week, including what you want to achieve:

After that, do no more. And, if you finish before the time allocated, you have even more free time. Don't keep adding things to your to-do list, because there will always be more to do. Accept what you can do in a reasonable amount of time each week, and learn to be happy with that.

Do you unplug on the weekends? Share your advice below!

Discuss this story.

🧠 Harry's Growth Tip

from the Marketing Examples newsletter by Harry Dry

You need a header with personality:

1. Allay fears: “Dental visits without tears...”
2. Sprinkle humor: “...little - and big - kids”

Go here for more short, sweet, practical marketing tips.

Subscribe to Marketing Examples for more.

🏋️‍♀️ Ben Leonard Grew His Business to $6M ARR

by Bobby Burch

A severe heart condition derailed Ben Leonard for a long time before he became a founder, and he was on a cocktail of drugs for six months. While on the road to recovery, Ben realized that he wanted to invest in his health and fitness, but he needed better gear...so, he designed it himself.

Beast Gear, a Scotland-based e-commerce fitness brand, was launched as a side project, and Ben grew it for three years to nearly $6M ARR, derived largely from Amazon. He marketed and built the brand, in part, through Instagram.

Ben sold Beast Gear in 2019 for $2M+. Now, he's building Ecom Brokers, a marketplace for selling e-commerce businesses.

Indie Hackers spoke with Ben about his founder's journey!

Why did you get into e-commerce?

I realized it was an easy way for my brand to reach a disproportionately high number of people.

I was able to bootstrap the whole thing. I invested several thousand dollars of my own money, which felt scary at first, but turned out fine. I borrowed about $10K from my dad across a three year period, and I was very fortunate to be able to do that.

Take risks, but take sensible risks. Test the concept first with an amount you are willing to lose. If it works, then take bigger risks.

What is your philosophy as a founder?

Slow and steady wins the race. For example, I have been developing a new brand now for two years, and we are still not ready to launch. That is fine.

You need to launch a great brand and great products. If it takes time to get it right, so be it. Passion is key. You must have a passion for what you are doing, otherwise you will have no drive to push the business on. Revenue is a vanity metric. I'm more focused on growing profitably.

What was your biggest mistake?

I had a huge challenge when someone tried to sue me. Get your intellectual property position checked and strengthened by great IP lawyers. Luckily, I did that. Stand your ground if you are in the right! Don’t be bullied.

Get your IP position audited, then get all trademarks and patents set up by top IP lawyers from the start.

Any advice for founders setting a million dollar goal?

Don’t. A million dollar goal is pretty arbitrary and meaningless. Focus on one that makes more sense, like your business achieving a goal related to your mission. If you are looking to exit, this could also be a valuation goal.

What are common founder mistakes that you see?

With some founders, their business has no compelling brand identity. They transform into boring corporate speak.

Or, they don't tell anyone. The best brand in the world will achieve nothing without marketing. This is why marketing is more important than branding.

Any advice for founders?

Give yourself permission to try things you are not technically qualified to do. I had no business experience, no marketing experience, and no product development experience. I just tried.

Analyze results, make changes, and test, test, test.

Build strong relationships with everyone: Customers, team members, manufacturers, and other founders!

Discuss this story.

🐦 The Tweetmaster's Pick

by Tweetmaster Flex

I post the tweets indie hackers share the most. Here's today's pick:

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Special thanks to Jay Avery for editing this issue, to Gabriella Federico for the illustrations, and to James Fleischmann, Priyanka Vazirani, Annabel, Harry Dry, and Bobby Burch for contributing posts. —Channing