Latest / The Side Hustle Career Podcast with Fexingo: Second Income, Freelancing While Employed / How a Bookkeeper Built a 4000 Monthly SaaS Side Hustle
Transcript
- Lucas: So there's this bookkeeper in Ohio named Dan. Full-time job, two kids, mortgage — and he's pulling in about four thousand dollars a month from a piece of software he built in his spare time. Luna: Four thousand recurring? That's not a side project, that's a second salary. Lucas: Exactly. And the part that gets me is he didn't know how to code when he started. He just had a problem that annoyed him enough to learn. Luna: Okay, so what was the problem? Lucas: He was doing bookkeeping for a few small businesses on the side — nothing fancy, just reconciling transactions, generating reports. And every month, he'd spend hours manually categorizing the same types of expenses over and over. Restaurants, utilities, office supplies — same vendors, same categories, but his accounting software didn't learn from past entries. Luna: So he built a tool that automated the categorization. Lucas: Exactly. He built a simple web app that looked at past categorized transactions and suggested categories for new ones based on the vendor name and amount. It wasn't machine learning — just a set of rules and a lookup table — but it cut his monthly reconciliation time from six hours to about forty-five minutes. Luna: And that became the product. Lucas: That became the product. He called it Categorify — terrible name, but it stuck. He showed it to a couple of other bookkeepers in an online forum, and three of them asked if they could use it. He put up a Stripe payment link, charged them twenty dollars a month, and suddenly he had three paying customers before he'd even built a proper onboarding flow. Luna: Twenty dollars a month per user — that's low. How'd he get to four thousand? Lucas: He raised the price. After about six months and fifty users, he realized the tool was saving each customer at least three hours a month. At their billing rate, that's like a hundred and fifty dollars of value. So he bumped the price to thirty bucks, then later to forty. Nobody churned. Today he's at about a hundred paying accounts — mostly solo bookkeepers and small firms — and revenue is right around four grand a month. Luna: That's a beautiful little business. No venture capital, no employees, no growth-at-all-costs pressure. Lucas: It's the definition of a micro-SaaS. Low overhead, high retention, predictable revenue. And I think his story is more replicable than people realize. Luna: I want to push back on that a little. Isn't the technical barrier still pretty high? Most people can't build a web app from scratch. Lucas: Fair point. But Dan didn't build it from scratch in the traditional sense. He used a no-code tool called Bubble for the front end and a Google Sheets integration for the data. The whole thing took him about three weekends. The hard part wasn't the code — it was knowing which forty-five-minute problem to solve. Luna: So the real moat is domain expertise, not technical skill. Lucas: Exactly. Dan had spent years doing bookkeeping. He knew the pain points intimately because he lived them. That's something a generalist developer would never discover by just brainstorming ideas. Luna: What about the risk of working on this while employed? Did he have any non-compete or IP issues? Lucas: He was careful. He built it entirely on his own time, on his own equipment, and it solved a problem in a different niche than his employer's business. His employer is a mid-size accounting firm that does full-service tax and audit — they don't sell software to bookkeepers. So the conflict was minimal. But he did check his employment contract first, and he talked to a lawyer for a hundred bucks to make sure. Luna: That's smart. I know a lot of listeners worry about that. Lucas: Yeah, and it's worth the hundred-dollar consult. Most employment agreements have a clause about inventions, but they usually only claim ownership if you used company resources or if the invention is directly related to your job. Dan's situation was clean. Luna: So he launches, gets those first three customers. Then what? How does he grow from three to a hundred? Lucas: He didn't do any paid marketing. He just hung out in bookkeeping forums and Facebook groups. Whenever someone complained about manual categorization, he'd chime in and say, 'Hey, I built this little tool that handles that.' He'd offer a free month. People tried it, liked it, and stayed. Luna: That's basically customer discovery disguised as helpfulness. Lucas: Exactly. And he never tried to be a big company. No blog, no social media strategy, no ads. Just one guy in a forum helping people. Luna: What's the one metric he focused on? Lucas: Churn. He watched monthly churn like a hawk. In the first year, his churn rate was under two percent. That means he only needed to add a handful of new customers each month to grow. Compare that to a typical SaaS company that might lose five to seven percent of customers per month and has to constantly refill the bucket. Luna: Low churn is everything. If you keep people, the compounding takes care of itself. Lucas: Right. And the reason churn was low is because the tool became part of their workflow. Once you've categorized six months of transactions with it, switching to something else feels like a hassle. That's the lock-in. Luna: So what's the takeaway for someone listening who thinks, 'I don't have a technical background, I can't build a SaaS'? Lucas: I'd say: start with the problem, not the solution. What's a task you do repeatedly in your day job or side work that feels stupid and manual? That's your product idea. Then figure out the simplest way to automate just that one step. You don't need a full app — you need a script, a spreadsheet, or a no-code tool that does one thing well. Luna: And you need to be willing to show it to other people who do the same work. Lucas: Exactly. Dan's first users were people he already knew from forums. They trusted him because he was one of them. That's the advantage of domain expertise — you already have a network of potential customers. Luna: What about pricing? Twenty dollars seemed low, but forty works. How do you know what to charge? Lucas: The rule of thumb is: charge about one-tenth of the value you create. If you save a bookkeeper three hours a month and they bill at fifty bucks an hour, you're creating a hundred and fifty dollars of value. Charge fifteen to twenty bucks. As you prove the value, you can raise it. Luna: Dan's story is inspiring, but I wonder how many people actually follow through. Most side projects die before they launch. Lucas: Most do. But the ones that survive have a few things in common: they solve a real problem the founder has, they launch with paying customers, and they don't try to be too ambitious. Dan's Categorify is never going to be a billion-dollar company. But it pays his kid's private school tuition and gives him the option to quit his job anytime he wants. Luna: That's the real prize — optionality. Lucas: Yeah. And I think that's what most people in a side hustle are really after. Not a unicorn exit. Just the ability to walk away from a job they don't love, on their own terms. Luna: You mentioned earlier that Dan checked his employment contract and talked to a lawyer. That's a step a lot of people skip. I want to underline that — if you're building a side business, especially software, make sure you're not accidentally giving your employer the rights to it. Lucas: Worth repeating. A hundred bucks on a lawyer can save you thousands and a lot of heartache. Luna: You know, we talk about these side hustles a lot on this show, and one thing that strikes me is how many listeners tell us they actually look forward to our episodes each week. Lucas: Yeah, we hear that too. And it's genuinely humbling. We don't run ads on this show — we've always wanted it to feel like a conversation, not a commercial — and that's only possible because a small group of listeners chip in each month over at buy me a coffee dot com slash fexingo. Luna: If you've gotten value from an episode — maybe it helped you think about a career move, or gave you the nudge to start something — that's exactly what that support funds. It keeps the show ad-free and lets us keep digging into stories like Dan's. Lucas: So thank you to everyone who already does that. And if you're curious, it's buy me a coffee dot com slash fexingo. No pressure, ever. Now back to Dan — because I think there's one more lesson in his story that's easy to miss. Luna: What's that? Lucas: He didn't try to build a platform. He didn't try to add invoicing, time tracking, or client management. He just did one thing — categorization — and did it really well. That focus made it easy to maintain, easy to explain, and easy for customers to understand the value. Luna: The 'do one thing well' principle. Harder than it sounds. Lucas: Much harder. Because every customer will ask for more features. Dan said no to about ninety percent of feature requests. His rule was: if it doesn't directly help someone categorize transactions faster, it doesn't go in. Luna: That discipline is probably why churn stayed so low. He never bloated the product. Lucas: Exactly. And it kept his maintenance workload to about two hours a week. That's the beauty of a micro-SaaS — it can run on autopilot for long stretches. Dan's actually taken two-week vacations where the only thing he did was check for payment failures. Luna: That's the dream, right? A business that generates income while you're sipping a margarita on a beach. Lucas: It's possible. But it starts with a boring problem and the willingness to build a boring solution. Dan's tool is not sexy. It's not going to get featured on Product Hunt. But it makes him four grand a month, and it's still growing. Luna: How fast is it growing now? Lucas: Slowly. Maybe ten to fifteen new accounts per quarter. But because churn is so low, that's enough to grow revenue about twenty percent year over year. At this rate, he'll hit six thousand a month by the end of next year without changing anything. Luna: And he's still working his full-time job? Lucas: Still working it. He says he likes the stability and the health insurance. But he knows the side hustle is there if he ever needs it. Luna: That's a good place to be. Lucas: It really is. And I think the lesson for us is: you don't need to quit your job to start. You don't need a co-founder or funding. You just need a problem that annoys you enough to fix it, and the courage to show that fix to someone else. Luna: Alright, I'm going to go look for my own boring problem. Lucas: Let us know what you find. We'd love to hear about it.