Ask HN: What passive income attempts have lost you money?

[rthomas6]

I want failure stories. Passive income is a popular topic around here, and I've never heard people talk about what crashed and burned for them. What are things that you've set up and spent time on that have failed to even achieve beer money levels of income?

[jargonster]

Bought some website on Flippa for $1,500. Lost $1,500. Didn't do enough due diligence and the expected ROI was too good to be true (3 months instead of usually 10-12 months on this platform). The previous owner was making money from it but parts of the mechanism to make the business work turned out to be unethical.

I shut it down and it's a good lesson learnt: only spend time or money in a business you understand, and preferably that you build yourself. Since then I'm focusing on my startup (instaroid.sg) which is not passive at all but brings revenue on IP I own.

[josephschmoe]

Tip Calculator. I made one that was better in every respect than the one at the top of the app store by a lot.

I didn't realize that just because I could make a better app doesn't mean people would be able to find it. Search is based on popularity - and popularity for tip calculators is usually based on how high up you are on search. This creates a feedback loop - and I didn't have a good way to push myself into that #1 slot even for a short while.

If I had to do it over again, I would focus first on finding a way to get to that #1 spot for a week, and then I could cruise on the traction.

There's also the point that no one really needs a Tip Calculator. Make something that once someone tries, they can't live without.

[ssanders82]

"better in every respect than the one at the top of the app store by a lot" - I am curious about this, can you elaborate?

[junto]

I used to run a number of niche sites that used product feeds from affiliate sites. They were highly seo optimised and until Panda and Penguin they were making me ok passive income. They dripped off the scale last year and have never recovered so last week I canned the hosting account to stop the loss of hosting payments. Time wise everything was automated.

[rahimnathwani]

Would you mind sharing which affiliate sites you were using?

[scottlilly]

I wrote an ebook about a non-technical topic I had experience with.

I spent 18 months doing all the things I was "supposed to do" to build traffic and sell copies of it - frequent blog posts, SEO (including some recommended grey-hat stuff), weekly "newsletter" e-mails, etc.

Before the Google ranking algo change (Penguin? Panda?), I had my best month ever - US$ 150 in gross income. After the change, I lost 90% of my traffic and didn't have the heart to continue.

Even without the traffic loss, the site was going nowhere, due to a bunch of other mistakes I made. The biggest problem was that the maximum lifetime value of a customer was less than US$ 25.

[stevoo]

www.cygamerentals.com

I found a gap in my market and said that it needed to be used. Renting platform games in my country. You would pay online and the game would arrive by post to you. Play it and send it back to us in a month(max time).

Unfortunately it never caught on. My "partner" didnt really do anything. I designed, developed and marketed the whole thing. Tried to find clients and everything. But since i was alone, i lost motivation which come mostly to the fact that i was supposed to not be alone on this. If i was maybe it would have been different.

Either way, this never worked, people always complained that they bought a game,spend good money, played it for a month and then it ended at there shelf never used again. I believe that they would end up using the service. It was a win win.

Ended up losing a lot of money due to the games that we have bought. Amounted to around 1500-2000 euros.

Lesson learned : 1 ) Don't partner with someone that just talks and doesn't want to do anything. 2 ) Always do you due diligence and check that the market wants what you are about to offer. Talking to 2 - 3 people is not enough.

[cmaxwe]

www.golfingstat.com

I had never really created anything before and wanted to learn Rails.

Built it and have been paying $10/mo in hosting for the last two years. I use it and have around 30 active users (couple hundred non-active). So I kind of keep it going just because I realize that the 30 people who use it have invested a lot of time entering scores and stuff.

My monetization strategy was to get traffic and rely on Google ads.

[amarcus]

I wouldn't consider this as an example of having lost money. You built something with the intent of acquiring knowledge (Rails). It's also something that you use. I would say that it's a success based on your original goals for the project.