By Alex Morgan, Senior AI Tools Analyst
Last updated: May 11, 2026

5 Unexpected Side Projects Transforming Startups in 2023

Over 40% of successful startup founders revealed that their most effective projects began as side endeavors rather than fully-funded launches. This statistic shatters the long-held belief that transformative startups must originate from sweeping innovations or grand visions. Instead, it underscores a crucial reality: smaller side projects are often the breeding ground for fast user engagement and profitability.

In a year where traditional startup models are waning, these side projects are not only attracting significant investment but also redefining what success looks like in the entrepreneurial landscape. Here, we explore five unexpected side projects that have propelled startups to new heights in 2023.

What Are Side Projects?

Side projects are small-scale initiatives initiated alongside a founder’s primary business efforts. Typically pursued with minimal resources, they allow founders to experiment, learn, and innovate without the full weight of a traditional launch. For many founders, side projects provide an avenue for creativity and customer engagement that a primary product may lack. This approach aligns with the insights found in 5 Surprising Lessons from Startups on Client Relationships You Never Knew.

These projects matter now more than ever because they pave the way for agility in a volatile market. Much like how a sidecar can stabilize a motorcycle during turns, side projects lend a critical balance to a founder’s primary venture. The ability to pivot quickly based on real user feedback transforms these smaller initiatives into powerful growth catalysts.

How Side Projects Work in Practice

1. Dropbox: The Incremental Innovator

Dropbox started as a side project by Drew Houston in 2007 while he was a student at MIT. The product ran on a freemium model; users received basic storage for free, with the option to purchase more. Initially, the project was merely a solution for Houston’s file sharing dilemma. However, its user-friendly design led to a staggering 700 million users by 2023. This demonstrates the immense potential of incremental innovation—small, user-centered improvements can lead to massive user growth and sustained revenue.

2. Basecamp: A Lesson in Focused Development

Basecamp showcases how focusing on side projects can yield profitable outcomes. Originally a project management tool for 37signals to manage its work, the platform gradually evolved into a widely-adopted solution for teams worldwide. Jason Fried, co-founder and CEO, stated, “It’s often the side projects that teach us the most about customer needs.” By addressing their own internal challenges, 37signals created a product that generated enough revenue to achieve profitability within three years. This reflects how side projects can directly inform full-scale product development, a concept also explored in 5 Game-Changing Side Projects That Redefine Startup Success in 2023.

3. GitHub: From Hobby to Industry Standard

GitHub, which began as a side project in 2008 by Tom Preston-Werner, Chris Wanstrath, PJ Hyett, and Scott Chacon, has grown into the essential tool for millions of software developers. Initially built for sharing coding repositories, GitHub now boasts over 100 million repositories. Its success illustrates how side projects can evolve to fill critical gaps in existing markets and transform industry practices, similar to the innovations discussed in 5 Surprising Not-AI Startup Projects Redefining Innovation in 2023.

4. Instagram: A Simple Starting Point

Before exploding into a billion-dollar platform, Instagram was born out of a side project called Burbn, created by Kevin Systrom and Mike Krieger in 2010. Systrom’s original vision mixed elements of location-check-ins, games, and photo-sharing, but the team quickly recognized that users were most interested in the photo-sharing aspect. Within weeks of launching a simpler version focused solely on photos, Instagram garnered 25,000 users. The app was later acquired by Facebook for $1 billion in 2012, demonstrating how pivots born from side projects can lead to colossal outcomes, much like the trajectories of successful projects covered in 10 Remarkable Non-AI Projects That Are Reshaping Startups in 2023.

5. Webflow: A No-Code Design Tool

Webflow started with a side project aimed at helping designers create responsive websites without needing extensive coding knowledge. The tool has evolved into a no-code platform that enables users to design, build, and launch responsive websites visually. Today, Webflow is used by 3 million+ users and is helping redefine the workflow for designers and developers alike, further emphasizing how side projects can invite significant industry innovation.

Top Tools and Solutions

To harness the potential of side projects effectively, founders should consider utilizing tools that improve efficiency and engagement. Here are some recommended solutions:

Leadpages — A landing page builder perfect for generating leads and collecting user feedback on side projects.

HighLevel — An all-in-one sales funnel, CRM, and automation platform that can streamline project management for startups.

Self-Publishing Surge: How One Book on Personal Finance Defies the Odds can also inspire founders considering their own side ventures.