Is that a project or a business?
I like to do a lot of different things. One of the things I especially like to do is build software that meets a certain set of simple goals:
1. Solve a problem.
I enjoy thinking about problems and ways to 'fix' things. I find myself saying, "what if", "wouldn't it be nice if", and "someone should" a lot. And, since I'm a programmer with access to a few small servers, my head almost always goes directly to how I think I could 'fix' it with just a bit of software.
Often I consider the barriers so low that I figure I might as well test or challenge my theories by building a prototype and pushing it out to a few people to see and learn from their reaction. This is how and why, over the years, I've hacked or prototyped well over 100 personal projects.
2. Include a technically interesting challenge, but not insanely complex (at least on the surface).
Of course there are *a lot* of problems in the world that I think about which I never even attempt to build software to fix. After all, even I don't believe software alone is a magic bullet. The truth is some problems require a lot more brain power, effort, and energy than I have to spare.
So the ones that actually get me coding are the ones that I think I can either 'easily' put together, that are just out of what I think I 'might be able to do easily', or that I believe will be a great learning opportunity for me to improve my software development and problem solving skills.
At the end of the day, I want to push and improve my craft but I also want to actually fix and accomplish things (or at the very least, feel like I'm accomplishing things).
This is why, even though I'm excited about many ideas and challenges I'm presented with -- and as pointed out above I do build a lot of different things -- I don't just blindly attempt to build anything someone throws at me.
3. Could potentially make money.
I will often tell people that I don't care about money, but the truth is I actually *do* care about money, it's just never my primary motivation or concern.
That being said, I accept that servers cost money and building stuff requires time (which costs money in one fashion or another).
So the idea that each project could, should, and probably needs to make money at some point (sooner rather than later) is always in my mind as I pick what to build or not.
The ideal situation in my mind is to have a project produce a profit almost as a side-effect. That is to not simply exist to make a profit, but rather figure out a way to make a profit so that you can exist. So this is what I try to bake into my solutions and theories from the very start.
The above is my litmus test for every personal project I start.
But what you might have noticed is that none of this really speaks towards building a business.
And I talk a lot and think a lot about building businesses too.
I'll admit that many times at the start of a given project, especially as I think about ways that it might be able to at least fund itself, I let my mind wander a bit towards the grand vision and potential of it one day turning into a business that not just supports me financially but a whole team of people.
In many ways, that alone helps me to figure out just how/if I can make it work on a small self-sustaining scale.
But the majority of the time, and especially after digging into more of the research, data, and experience of a given project I discover that my initial passion and curiosity for the problem has been mostly satisfied. (Or even more likely, that I have no specific or distinct advantage in growing the thing into a real business.)
If at that time, the project has built up a set of loyal users, is self-sustaining, or just doesn't really hurt me in anyway to keep live...I generally do.
greentile.com, fubnub.com, and herobrawl.com, are all good examples mostly at this stage.
Still, every once in a while a project will come along that really excites me for one reason or another and then I do spend a bit more time, energy, and thought about building it into a real business.
When I get to that stage, my mind becomes consumed with a few additional crucial elements:
1. Mission compelling enough to be willing to suffer and struggle through most anything to achieve it.
2. Unique and unfair advantages that I have to help this thing grow & start to generate revenue.
3. How might I go about quickly finding large numbers of paying customers? What does my list of 'key 100' look like and what extra work is going to be required to properly engage with it?
4. What are the constraints I must work within and how do they affect the chances of success here? (Budget, team, and timeline requirements are the 3 big ones here).
5. What must I continue to evolve within the product or service? How might I continue to learn from & improve the experience for potential customers?
...and each of these of course leads to more questions to work through and focus on (it's a true rabbit hole).
It's while working through these types of questions with constant focus that I consider myself to be officially working on a potential business...but still the project might not actually become a business -- especially a business that generates a profit of any reasonable size.
So with all of that in mind, and to tie this all back to my title, here's how I ultimately break down my thoughts on the difference between a project and a business:
A hobby provides you with enjoyment, a project tries to accomplish something, a business generates a profit.