I realize that HN doesn't encourage heavy self-promotion, but what is this business? Where is its website? Your story sounds wildly implausible, though it obviously isn't impossible.
Still, it reminds me of the comments I got on my post about "You’re Not Going to be a Professional Blogger, Regardless of What the Wall Street Journal Tells You:" http://blog.seliger.com/2009/06/17/youre-not-going-to-be-a-p... . People would say things like, "I run a group of online entrepreneurs, and am a member of another, and between the two groups there are well over 200 people, a majority of whom are pulling down 6 to 7 figure incomes based primarily on the advertising on their blogs, not by “selling ancillary services.”" But they wouldn't link to the sites in question! To me, such claims smell bad.
I'm extremely open about my business. I've thought about writing this type of article to share on HN before, but it always comes across as bragging instead of sharing so I can the idea soon after starting.
This is not an overnight success story. I earned my first paycheck on the internet when I was 15 or so, 10 years ago. I've had a long time to build my skill at development and marketing, try ideas, and build up my user base across the websites.
Some of the sites took a year or two to break even on up front costs and hardware. But since I build services that require almost no ongoing development or support beyond basic "how do I sign up, where do I find feature X" questions, each customer added in the following years is almost pure profit.
Very incremental, steady growth, and sometimes a leveling off. A bigger business wouldn't want a site to level off at a couple thousand a month in revenue, but if it's only supporting and supported by one person, a couple of those and yes, you hit 6 figure annual profit.
I also sell websites from time to time, if they level off and it seems like it'll require more work than I'm willing to put in to reverse that trend. Here's a site I sold on Flippa for $90,000 earlier this month. It generated over $200,000 in sales in the 18 months leading up:
http://flippa.com/auctions/84185/11000month-Revenue-No--1-In...
Personally, I'm always interested in such stories about running businesses on the side or full time. Businesses, mind you, not startups aiming to sell in a year. Those are very different in terms of decisions taken and work style and such.
Plus, if you've got it, flaunt it.
I'm trying to do something similar with http://visualwebsiteoptimizer.com/ - hopefully I will also be able to join the "5-hour workweek" club.
Thanks for replying. Yup, I am committed to the product and thankfully it has been positioned as one of the easiest website optimization products available. What I meant by the comment was that I was quite impressed by W3ROI as a product and thought it was a consistent effort. But when I realized it is a "5 hour" effort, I was really surprised.
Rest assured the product isn't going anywhere. I have built a team (not a single man effort anymore) and is a serious startup now. What I said was a bit like hyperbole, sorry if it came across as I am abandoning the product :)
I generally buckle down for a few weeks of hard coding (meaning 4 hours a day for 3 or 4 days a week), once or twice a year, and the rest of the year I'm just doing customer service, system administration stuff, and limited marketing. Just maintaining the architecture for the sites is the biggest time sink -- one of the webapps has two different kinds of database servers (MongoDB in the front, MySQL in the back), web servers, worker servers doing incremental processing/rollups... and I keep things PCIDSS compliant which means self-audits, lots of security patching, etc.
Running affiliate programs for my products and encouraging customers to use them to refer others has been extremely important. Affiliates do all the PPC marketing, article marketing, social bookmarking FOR me, with their affiliate links.
Just goes to show there are a hundred ways to run a successful business. The venture backed 60-hour-week startup isn't the only option.