Boostrapping to $1m in annual Revenue. The slow growth option.
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This document summarizes the growth of a SaaS tool called Small Improvements, which helps companies provide feedback. It began in 2010 and became profitable by mid-2013. Over time, it grew its revenue from €7k to €283k and customer base from 2 to 230 paying customers through a focus on usability, a great work environment, and careful growth without overpromising or wasting resources on non-essentials. While it had some successes, it also made mistakes like focusing too much on unimportant features and not prioritizing employer branding.
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Boostrapping to $1m in annual Revenue. The slow growth option.
- 1. Bootstrapping to $1m annual revenue Choosing the slow growth path
- 2. Small Improvements • A SaaS tool that helps give and receive feedback within a company • Focus on SMB market • Started with an idea and €50k in the bank
- 3. A brief history • Prototyping since 2010 • GmbH founded in 2011 • “Ramen break-even” in mid 2012 • Profitable since mid 2013
- 6. Some numbers
- 7. 0 $ 75.000 $ 150.000 $ 225.000 $ 300.000 $ 0 75 150 225 300 Quarter Q3 ‘11 Q4 ‘11 Q1 ’12 Q2 ’12 Q3 ’12 Q4 ’12 Q1 ‘13 Q2 ’13 Q3’13 Q4’13 Revenue collected 7k 8k 22k 65k 40k 72k 140k 193k 257k 283k Active paying customers 2 7 19 32 50 73 111 145 195 230 Customers vs Revenue
- 9. How to do it?
- 10. How to do it? Careful. All startup advice is wrong!
- 11. What we did well
- 12. Market fit • I built a tool that I wanted to use • I knew that companies paid for this kind of tool • It looked like a disruptable industry (correct!) • It looked like not so much competition (wrong!)
- 13. Avoiding time sinks • No fundraising: We knew that without traction, we’d not be interesting to VCs anyway • No cold sales, very limited marketing, only basic SEO, no Adwords, FB or LI ads, no channels, etc • Avoided customer visits, conferences, meetups, etc unless useful for recruiting • Avoided financial micro-optimizations (Paypal!)
- 14. Avoiding time sinks (2) • Said “no thanks” to too large customers and other non-fitting customers (Adobe!) • Never promised features, never had deadlines
- 15. Technical Debt • I wrote some very crappy code • During first 12 months we had no backups, no encryption, no terms of service, no company • We shipped very thin features for a quite a while • We’re still busy cleaning up!
- 16. (So what did we do with all the saved time?)
- 17. Usability • Our initial releases are rarely great • But we iterate like hell when we see traction • Usability = happy customers who refer their friends • Spending on usability is like spending on marketing, but it lasts
- 18. Work environment • It’s better to have a great office in a mediocre location, than a mediocre office in a great location • A great office helps with morale and productivity, recruiting and PR
- 19. Wedding office
- 20. Trip to NYC
- 21. Being picky • We throw away most applications • We call only a handful people per week • We invite almost nobody to an onsite interview • And then our coding test takes two days • Time consuming! But so worth it!
- 22. What we didn’t do well
- 23. Lots of smaller mistakes • Too much effort on features that didn’t matter • Created product videos too early • Premature performance optimization • Lost a developer early on because I didn’t spend enough time with him
- 24. Employer branding • As a startup, it’s very hard to attract developers • Even harder so if you’re enterprise startup • A bland website and a deserted blog didn’t help • We’re still struggling with this today!