Case Study: The $500 Side Project That Became a Real Business

Published September 23, 2025

The short version

Budget: $500. Time: nights and weekends. Outcome: first $1k MRR in 5 months, first hire at month 11.

How? A small, weird niche + a clear promise + a few distribution bets that weren’t glamorous but worked.

The founder and the bet

Alex (solo dev) noticed ops teams at boutique e-comm brands were drowning in returns. Everyone talked about refunds; no one talked about the messy workflows.

The bet: solve one gnarly sub-problem—auto-generating prepaid labels when return conditions matched a simple policy.

The $500 breakdown

$12 domain + $8/month hosting (first 3 months)
$100 in search ads to test “returns policy automation” as a phrase
$100 for 2 newsletter classified spots in tiny ops communities
$150 worth of coffee chats (gift cards) for 10 ops managers
$120 for a 1-page brand kit/template (look decent, move on)

First signals (weeks 1–4)

9 demo requests from the $100 ads (CTR meh, intent great)
4 demos → 2 pilots (both on Shopify, happy coincidence)
Every convo asked for the same thing: exceptions logic and a Slack alert

The build changed: exceptions logic first, Slack next, everything else later.

Distribution that actually worked

Cold DM to 20 Shopify agencies: “Have clients drowning in returns? 2 rules, automatic labels. Want a sandbox?” → 4 intros, 1 small partner
A single comparison page: “Loop vs. Happy Returns vs. Us (for under-500-orders brands)” ranked low but converted well from shares
A public mini-changelog on Twitter + one “here’s what we shipped for a customer this week” thread

Yes, also a few duds. A PH launch did nothing. A podcast cameo helped ego more than pipeline.

Pricing and the flip to real

Started at $49/month. Added a per-label overage after 1,000 labels. Month 3: two customers asked for annual—after a discount. Took it. Cash extended runway.

Month 5: $1k MRR. Month 8: $3.5k. A single partner account pushed three intros a quarter like clockwork.

The hidden moats

Boring integrations few wanted to build (carrier APIs, huh?)
A glossary and a few tactical posts that began to rank competitive keywords
Fast support with tiny, opinionated feature tweaks (Alex answered in under an hour, often with a fix)

What almost killed it

A full rewrite temptation at month 4 (talked down by a user who didn’t care)
Churn spike when a client outgrew the product—solved by a simple “handoff to enterprise” path with a referral fee

The after

At month 11, Alex hired a part-time support dev. At month 14, hit $6.8k MRR. No virality, no magic. Just a few loops compounding.

Final note

You don’t need a war chest. You need a small wedge, a few honest signals, and the grit to keep showing up. If you want practical templates and a community that helps you focus on the next right move, come hang out at Indie10k.