AR is something that will provide residuals that will continue for quite some time. During that time you will have to improve the product (at your leisure) and basically keep the infrastructure running. In return you will collect $29 to $199 per month, every month. No need to resell those that are already paying you money. You just have to keep them happy. Although I have some issues with the price points you have chosen (I know you have probably blogged about this and know much about it I would have taken a different strategy) leaving that aside for now I see the other things you are doing as simply distractions (as you realized) from spending time on the thing that will pay off long term.
I had an opportunity, way way back, to get in on the ground floor of the PC business but didn't have the capital. Instead of getting others involved I started another business to earn money which I sold profitably after 10 years but it was no way as successful as fulfilling the thing that I started out would have been. It was just a distraction. You stand the chance at getting sucked into the "success" of the consulting and the courses because they are making you money. And what will happen is that instead of creating things with residuals (like AR) you will constantly have to work to keep that up with new ideas and materials. Rather than just being able to have a residual business, which, from my opinion and experience, is much better. My advice is therefore to bite the bullet and take money from others that will allow you to grow the SAAS (and then create other SAAS).
My quick idea would be to setup a network of college students to sell the white label version walking literally door to door in office parks signing up professionals (doctors dentists) to use this product by giving them 3 months for free or something like that.
I suggest for anyone doing consulting or building an app that they build into the price a monthly maintenance fee as a residual. We have an app that was written for us about 6 years ago (+-$65000) and we pay $6000 per year just to have the developer make minor changes and answer emails quickly. Very little work on his part but it gives us a warm and fuzzy feeling. (He originally asked for $1000/month). We'll probably negotiate this down when we get around to it.
"hundreds of small checks over the next six years, even though the small checks"
Hundreds of small checks are also "forced savings". You can't spend them before you receive them. You tend to keep your finances inline this way.
I do this on many non-coding consulting gigs - and I know other folk do too. More because walking in then walking away means that clients often don't get the full benefit (since they fall back into old habits or have questions) so they need some ongoing support. Unless you get successful improvements you don't get the referrals - so it's not just about getting extra money on an ongoing basis ;-)
So, for example, an engagement might look like
* 5 days onsite
* four weeks of being available one day a week remotely/onsite during set hours
* N weeks of some number of remote hours / onsite visits depending on client/location.
IMHO this is a very valid concern for a "lifestyle" business, if that is indeed what he intends it to be.
Why, then, do you think he should take investment?
So I have been supporting it by consulting, but when I'm consulting I'm not selling Appointment Reminder accounts, and consulting is always more distracting than I expect it to be. (You think I would realize this after two years of it, but I persistently underestimate how much time it takes to e.g. prospect for new clients, negotiate/schedule engagements, travel to them, and deal with follow-up stuff like invoices.)
The traditional option for scaling a software business with a working product and actual customers is to take investment, but that's another ball of wax. There's fairly attractive options in angel investing these days, but taking any outside money would have an outsized effect on the character of my business at the moment, and I'm not ready to pull that trigger yet. Also, like consulting, raising an investment round is a very distracting event -- it basically commits you to months of doing near no productive work. (And unlike consulting, taking investment causes time debt which is impossible to discharge until you exit your business: you're now committed to keeping those investors happy and in the loop for, well, forever in business terms.)
But, having seen a lot of smart software companies do side projects (37signals was a big fan of it, and Amy Hoy and company have quite a bit of success) I decided to try my hand at it once and see how it went. So I started packaging one of my most-commonly-a-win consulting offerings as an online course, and decided to experiment with it once. (And, like Brennan says and like everybody in the space will tell you, I started by making an email list and sending them lots of free stuff they enjoyed which further burnished my credibility on the subject.)
The experiment was very successful: my customers seem to have liked what I produced, many of them have actually used it to positive effect in their business, and it raised a significant amount of money. (I'll probably blog in detail about it later).
An unanticipated side effect was, because of the topic I picked for my video course, I actually sat down and took all my own advice for a change (AR had an email strategy which I would have never let fly at a consulting client simply because I shipped the minimum necessary and never revisited that decision), and that ended up working out very well.
So, basically, yes: confirmation from someone else, this does work and it is perfectly compatible with running a software business.