🗞 What's New: Software thrives during recessions

About 1/3 of the world economy will enter a recession this year:

• Fortunately for indie hackers, software typically explodes and thrives during times of recession. Below, we explore how.
• Targeting a relevant audience is one of the biggest challenges for founders. These tips can get you started!
• Founder Kyle Nolan hit $5,000 in monthly revenue in 2 years with his side project, ProjectionLab. Here's why he believes in spending more time building than marketing, how he grew a supportive user community, and why launching his side projects always feels a little like magic.

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

👩‍💻 Software Thrives During Recessions

from the Growth & Founder Opportunities newsletter by Darko

About a third of the world economy is about to enter a recession in 2023, according to the IMF.

In fact, we might already be in a recession. Let's rewind back to 2008: The National Bureau of Economic Research (NBER) declared that the US entered a recession in December 2007, but the official announcement didn't come until December 2008, a whole year later.

Fortunately, for indie hackers, recession can be a good thing. Let's explore how!

Company optimization during recession

In 2018, researchers Brad Hershbein and Lisa B. Kahn conducted a study that analyzed over 100M online job listings posted between 2007 and 2015.

One of their key discoveries was that cities in the US that were most severely impacted by the recession saw an increased demand for high-level skills, particularly computer skills. Many companies became more digitalized, increasing their investment in IT.

Why? Companies conduct layoffs during recessions to cut costs. Then, they realize that they need to replace the work of the people they laid off. Software is one of the main ways to do that.

The rise of FedEx

FedEx is one of many companies that thrived during a recession. The company grew the most during the oil crisis in 1973, which shrunk the US economy by about 2.5%.

Back in 1973, Xerox and IBM dominated the technology scene. They provided big corporations with huge mainframe systems that automated a lot of the work done by humans (who were no longer there due to layoffs).

The problem was that those systems needed to be repaired and replaced all over the US. So, Xerox and IBM needed to quickly ship massive hardware across the country.

This is where FedEx came into the picture. It started out as an overnight delivery service specifically for computer spare parts, serving major corporations like Xerox and IBM. While FedEx prices were significantly higher than the US Postal Service, they were still a more economical option compared to alternatives, like chartering a private plane.

According to an interview with the founder of FedEx:

Targeting enterprises is easier during a recession

Imagine you're a big company that often does in-person team building. You fly your team across the world for fun activities that increase team morale.

After a recession hits, you suddenly have to cut many costs; this is one of them. You still want to do some form of team building, but flying your team to the Bahamas is no longer possible.

Now, imagine there's a SaaS that helps companies with team building activities. Before a recession, it would be hard to get considered by such a big enterprise.

However, during a recession, a large company like this may be actively looking for software like yours.

Think of what you'll optimize or replace

During a recession, companies mainly decrease costs:

Don't confuse "decrease" with "eliminate." Many companies still have budgets for various things, just not as big as they were before.

This results in those companies actively looking for (often software-based) alternatives to accomplish the same thing, or similar.

That's where your software product can come in!

What are your thoughts on opportunity during a recession? Share below!

Discuss this story, or subscribe to Growth & Founder Opportunities for more.

📰 In the News

from the Growth Trends newsletter by Darko

🤑 Starting in February, you will be able to monetize your YouTube Shorts.

💪 11 super actionable landing page trends.

🤖 ChatGPT for marketing.

🍎 Has Apple's App Tracking Transparency created a recession in the social media advertising economy?

📺 Young consumers love outdated tech, because it gives them space from social media.

Check out Growth Trends for more curated news items focused on user acquisition and new product ideas.

🎯 Six Tips for Targeting a Relevant Audience

by Thomas Griffin

Targeting a relevant audience is one of the biggest challenges that marketers face. It's essential to convey your message to the right people to ensure that the traffic on your site contains quality leads that fuel your sales funnel.

For this, it's crucial that you identify the right buyer personas to devise efficient marketing strategies. Targeting an audience that doesn't represent your niche may lead to a waste of time, effort, and money. You end up attracting junk traffic to your site, which you can't convert into leads.

Knowing how to target a relevant audience is an art, and here are a few tips that can help!

1. Know yourself

Before connecting with your target audience, you need to be thoroughly acquainted with the solutions that you offer.

If you don't know all the attributes of your product or service yourself, it will be very difficult for you to identify the right people to showcase your brand as an ideal solution.

You need a proper understanding of your capabilities to reach out to a relevant audience, pitch your solution, and generate leads with high conversion potential.

2. Define your target audience

After exploring your product or service, the next step is to clearly define your target audience. It won't be possible for you to reach out to the intended people unless you've identified the right buyer personas.

However, this is easier said than done. You have to conduct a lot of research to find your potential buyers, but the result is worth the effort.

Your audience can be defined by demographic and psychographic characteristics. Using this information, you can create different consumer profiles and devise your targeting strategies accordingly.

Clearly defining your target audience helps you tailor your messages to present your solution in a better way.

3. Analyze needs and preferences

To target a relevant audience, it's essential to analyze the needs and preferences of your potential buyers.

The way people make their purchase decisions has drastically changed over the years. Now, they carry out extensive research and assess the alternatives that the market has to offer.

So, to increase your chances of being perceived as an ideal solution, it's best that you have a clear understanding of the needs and preferences that govern demand in your respective niche.

This allows you to tailor your marketing messages as per the need, offer personalized experiences, and present your solution in the best possible way to get traction.

4. Create relevant content

One of the best ways to efficiently target a fitting audience is to create and share relevant content.

People don't make purchase decisions on a whim anymore. They make informed decisions. So, you can't just haphazardly pitch your product or service. You have to earn people's trust first, and for that, you will have to help them find the answers they're looking for.

Producing and sharing relevant content enables you to build trust and generate awareness. It helps people connect with your brand and pay heed to what you have to offer.

Content is the key to targeting a relevant audience. So, it's best that you come up with a stellar content marketing strategy that enables you to address the concerns of your potential customers.

Producing content around topics that best represent your niche is a surefire way of grabbing the attention of your intended audience and capturing leads that yield more conversions.

5. Social media marketing

Social media platforms were reported to have a user base of around 3.96B in 2022, which is around half of the world's total population. People consume social media content on a regular basis, thus it has become a reliable source of information for them when making purchase decisions.

Whether you're a new business or an established company, you need a solid social media strategy to help your business grow.

Your goal should be to increase your brand's reach, and connect with an intended audience. Find the platforms preferred by users representing your respective niche, observe how your users consume, act, and talk on the platforms, and tailor your messaging accordingly.

6. Paid marketing

Paid marketing is an effective way to get your message across, and if done correctly, it will deliver quick results.

Paid marketing encompasses marketing strategies that not only require careful planning, but also a considerable marketing budget. Here, you leverage third-party platforms to boost your brand's reach and connect with the right audience.

Search engine marketing, social media ads, and influencer partnerships are all examples of paid marketing tactics readily used by businesses around the globe to attract potential buyers from their respective niches.

It's a wrap

There you have it, six tips for targeting a relevant audience. If you're having a hard time connecting with the right people, try the recommended tactics and see if they work out for you!

Have you had success with targeting your audience? Let's chat below!

Discuss this story.

🌐 Best Around the Web: Posts Submitted to Indie Hackers This Week

😞 I wasted 2022, and I feel like a failure. Posted by Mick Vandelay.

🤝 Anybody else dreading having to hire? Posted by Jay.

📈 Looking for SaaS businesses that thrive during recessions. Posted by Jerom Palimattom Tom.

🛠 Which tools do you use to manage your personal productivity? Posted by Erk447.

📱 The best SaaS leaders to follow on Twitter. Posted by AllOutNerdClan.

🤔 Is building for other founders a bad idea? Posted by Cody Potapoff.

Want a shout-out in next week's Best of Indie Hackers? Submit an article or link post on Indie Hackers whenever you come across something you think other indie hackers will enjoy.

🔬 Kyle Nolan Hit $5K MRR With ProjectionLab

by James Fleischmann

Founder Kyle Nolan built ProjectionLab to $5K MRR in two years as a side project. Also, he barely spends any time on marketing!

Indie Hackers caught up with him to chat about his product-first approach!

Building vs. marketing

I have a bad habit of spending 99% of my time building new features, 0.9% of my time worrying about the fact that I'm not doing marketing, then 0.1% of my time actually doing marketing!

But I think this may be one of those rare cases where having a laser focus on the product before marketing has been a good thing overall. By scaling up the user base gradually, I've been able to avoid drowning in support requests, and it has allowed me to preserve the free time I've needed to re-architect the product several times before arriving at the more polished solution that it is today.

I know that "If you build it, they will come" can be a seductive and dangerous mantra for solo developers, and especially first-time founders. But even so, after validating the idea with the first version, the main thrust of my efforts has simply been to make the product so dang good that eventually people in this space can't help but take notice. Maybe that's finally working a little bit.

To play devil's advocate, though, would the app already be doing better and seeing broader adoption if I was actually spending time on marketing? Maybe. But, on the journey so far, the paths I've chosen have been the ones that felt the most authentic and the most like me, and I think the energy and persistence that helps you maintain often pays some big dividends when you compound it over the long run.

Side projects and sacrifice

I'm bootstrapping ProjectionLab as a side project on top of a full-time software engineering job. I've been pulling 80+ hour weeks for the better part of two years to build it to the full-featured personal finance planning tool that it is today. The hard truth is that burning the candle at both ends means that you're not going to have time for all the things you want to do in life. Something has to give.

For me, that was playing video games. I still carve out time to see friends in person, but I used to also have a group that would play games regularly. It was my favorite way to stay in touch over longer distances. But the math on that just didn't work while trying to bootstrap a complex project on the side. Some day in the future, though, maybe I will come out of retirement.

Having a growing, supportive community of users is really energizing. Even though my work is scoped to nights and weekends, I'm more than happy to devote those hours because it really doesn't feel like work.

Side projects are cool

There's nothing that matches that feeling of taking something that's just an idea in your head, and manifesting it in the real world. It will always feel a little like magic. And, with side projects, it's refreshing and liberating to have full creative control, no meetings, no sprint retrospectives, no changing requirements, and no funding to worry about. Just pure, uninhibited creation. ProjectionLab started as one of these creative outlets. The business angle came later.

In my opinion, one of the best things about side projects is the risk reduction. If you take the leap to full-time right away, I bet that liberating feeling evaporates pretty quickly.

Try to find a problem that you understand deeply and truly care about solving, and build something that you'll actually use. There are often more hurdles on the path to finishing and launching a project than you can predict going in, but it's a lot easier to pursue an idea with persistence when you're working on something that you personally can't wait to use.

And, it's okay if something doesn't work. Over the past 20 years, I've accumulated a pretty colossal graveyard of poorly crafted video games and personal projects!

Growing

As a solo dev building a fairly complex software solution as a side project, I've had a product-first approach by necessity. It took several months just to create the MVP, and I wasn't even building with monetization in mind.

There was a grand total of zero paid users when I posted it to Hacker News on a whim. I closed the tab expecting it to go nowhere, then came back an hour later to discover my email inbox blowing up. I was astonished to see that the post had made the front page, and more than a dozen people had immediately signed up for Premium.

The price was way too low because I knew nothing about pricing. In fact, maybe it still is, because I still don't! At launch, I was just trying to answer one question: Would anyone out there pay anything for this?

Sometime in the following weeks, it reached 100 paid users. Word-of-mouth, coupled with the occasional post to places like r/SideProject, gradually propelled it into the low hundreds. Then came the 1K mark.

My pattern has been to spend nearly all of my time with my head in the sand developing cool new features, occasionally creating a post for Indie Hackers or Reddit, while also nurturing a community of users who love the tool.

Over the past few months, I was lucky enough to have some unexpected developments help to spread the word even more, closing the remaining distance from ~750 paid users to the 1K mark. Pete Adeney gave a shoutout on Twitter. Rob Berger created a video review. Cody Berman and Justin Taylor asked me to come on their podcast and talk about it there.

These happened from word-of-mouth, introductions from users, and from the few posts I made.

Treating users like royalty

18 months ago, I listened to a podcast where the guest emphasized the importance of treating your first 100 users like royalty. At the time, ProjectionLab had maybe a dozen users. A hundred seemed so out of reach that trying to implement that advice felt like over-dignifying something probably destined for the side project graveyard.

I've always done my best to be responsive, helpful, and understanding when people reach out with questions and feedback. Engaging with users has been one of my favorite things! I also feel lucky that the vast majority of them turn out to be smart, reasonable people who are genuinely fun to interact with.

There are some simple things you can do to make the process more friendly, structured, and efficient than a rudimentary contact email address or support feedback form.

For ProjectionLab, I used Changemap to create a free public roadmap where anyone can suggest new features and vote. I also set up a Discord server, which has gradually been growing into a thriving community where people can ask questions, give feedback on the latest features in early access, and chat about personal finance and other topics with folks who share similar interests.

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 Darko, Thomas Griffin, and James Fleischmann for contributing posts. —Channing