Bootstrapping a Startup in Pursuit of Freedom
We all see software shaping the new world. You build software one time and get its returns in multiple folds. That’s the remarkable benefit of making software. However, in most cases, this exponential benefit is not enjoyed by the actual maker or the one who writes the code. Today, most people work in the tech industry as in any other industry. They follow a 40-hour workweek, not realizing their real potential.
This may be because engineers have always been trained for handholding. In the old days, engineers were less powerful; they were only in charge of their narrow domain of building things rather than running the whole show. Things are different today. Today anyone can build and run a company wearing pyjamas, with a laptop and a good internet connection. The costs of servers have come down substantially, thanks to cloud services. Platforms like Producthunt, Hackernews, Indie Hackers help let the whole world know about what you have built. There is a paradigm shift underway on how software gets built, and indie makers are getting empowered by the day.
Now coming to me. My name is Shyjal, and I have been working as a software developer for the last 3 years. I always felt that it was not what I wanted to do with my life. I wanted to taste the freedom that every maker deserves and do something where I could feel the impact of my work and, most importantly, take control of my time. So this journey started as a journey seeking freedom.
Finding the problem (worth solving)
I have been in search of a problem for the past few years. A problem with a simple solution that requires less capital and takes off without much effort in the real world. ‘Solve the problem you know in and out is what everyone preaches. So most makers try to solve the problem that they face in their daily life. However, this was not something I was looking for.
I wanted to solve something outside of my day to day life by putting myself in another’s shoes and experience it like it was my problem.
I got my breakthrough when one of my good friend, Saran approached me one day and told me,
“I am getting good traffic on my website, but none of those was converting to customers. Can you help?”
We began exploring different ways to solve the problem. During our research, we came across some products and articles about the conversational revolution and chatbots.
The following weekend, I decided to hack a little chatbot widget for his website. A chatbot that is proactive and engages every single visitor. One that is a 100% automated, needs no human intervention and still adds a human touch through the conversational interface. We added the bot to Yatramantra’s landing page. It worked! Within a few weeks, we observed a spike in his conversion rates.
Now that I realized I had found a problem to solve, I decided to build a SaaS product. I wanted to make the solution available to small businesses all around the world. Everyone should be able to make a bot without any coding efforts and use them at a price affordable to them.
My two cents for those who are in search of an idea or problem is to pick up a problem (that worth solving) that you face in your life that technology can solve. Alternatively, try to get inside someone else’s shoes and study the problem from their perspective. The latter one worked for me. The same can also work for consultants who see tons of problems faced by their customers. You can quickly filter out a problem worth solving.
Making the product
I must admit that I am a lazy perfectionist. Many of my previous products didn’t see the limelight because I was trying to be a perfectionist all the time.
When I tried to make things perfect, I found that it took me more time to finish the project, and my initial enthusiasm would fade away.
This time I used my laziness to my advantage. I focused on getting to a shippable product rather than making it perfect. As for the UX of Collect.chat, I was inspired by the products I admire and use every day.
After many weeks of coding sprints, I finally had the product. What I tried was to build an MLP (Minimum Lovable Product) instead of an MVP (Minimum Viable Product). I did not want to build a crappy MVP that would be abandoned after a user tried it for once. Instead, it had to be something that people love. They should give me feedback and talk about it with other friends. The next thing I had to do is to launch it to the mass market and see if it worked the same way it did for Saran.
The product is not validated unless people are willing to take their card out of their wallet and pay for it.
I thought I should write the payment code as well. However, writing tons of code that didn’t contribute directly to my MLP was not the best idea. I had to release the product before I lose inspiration. So I decided to go with a dummy pricing page and tell customers that the first three months are free. It worked! People signed up. They chose a premium plan without actually paying. For me, half of the product validation happened here. Onboarding free users should help me understand if they are getting value out of my product. Getting paid users would be my next step and the other half of validation.
Giving the product a name and finding a logo are two things I used to waste much time for in previous projects. This time, I had nobody on the team, and this saved much time. After searching several .com domains, I decided to go with something that is easy to pronounce and remember — ‘collect.chat’. ‘collectchat.com’ was parked at that time, and I made a mental note to purchase it when money came in. (I did buy it!)
Launching on Producthunt was the best thing that happened to Collect.chat. PH definitely was an inspiration for me. Without this community, this product may never have been born in the first place. Collect.chat was launched on August 1, 2017, and ended up being the #4 product of the day. More than 250 websites started using the bot from day one, and then it grew virally.
I got several feedback via emails, twitter, and PH on that day. It’s a fantastic feeling, a mix of satisfaction and happiness, when people from different parts of the world appreciate what you’ve built.
Apart from ProductHunt I also tried several other methods to reach more people. Things like spamming my LinkedIn and Twitter contacts, mass mailing over 10k tech journalists (Gmail banned my account for a few days for doing this), and posting on other communities like Reddit, Hackernews, beta list and whatnot. All these were just a waste of time. Then again, it might work for you.
Quitting my full-time job
I was prepared to board the emotional rollercoaster. I quit my job at the startup based in Dubai and packed my bags to move back to my home country, India. This was the second time I quit a stable day job to startup. However, this time I was more confident knowing that I have something that people want and it adds value to the world.
I do not recommend quitting a full-time job without earning $$ consistently or at-least Ramen profitable.
Why and how I found a co-founder
This was the stage when my college classmate Aslam joined the journey. Aslam was free because he quit his job to do his higher studies. It was like perfect timing for both of us.
Doing a startup is tough. You will have a mix of emotions and problems to deal with and many choices to make every single day. Not getting appreciated by anyone. Sarcasm from friends and family members telling you — “You are going in the wrong direction”. So, it’s always better to have someone with whom we can share, inspire each other and maintain our consistency (the key to everything). Solo bootstrapped journey is excellent (I was inspired by great solo founders like Pieter Levels from Nomad List, AJ from Card, Josh Pigford from Baremetrics, and even Jeff Bezos etc..), but I chose to have a partner/co-founder. His skills were perfectly complementing mine, and our values and aptitude were almost the same. He hated corporate jobs as much as I do, we both were very open to new things and experiences.
It is difficult to stay motivated when you’re a solo founder. You’re always looking for validation and motivation whenever a new idea pops-up.
The best place to find your co-founder is from college, where we know them deeply so we can continue to be friends after disagreements or debates. One important thing is to look for the core values they live upon and what they want to achieve in life. Aptitude or values should be similar to yours, while skill sets should complement.
The real validation, aka Revenue
Now I have a solid product, a co-founder, steady growth in signups and tons of positive feedback. However lacked the only thing that matters and decides the health of a business, that is REVENUE. Free users do not validate your startup. We were confused AF since the real validation of the product was not achieved yet. Aslam and I spend day and night figuring out the best pricing plan for our would-be customers.
The objective was to neither to make it overpriced which would throw off small businesses nor to undervalue ourselves to the point that users question our quality and we end up loosing the revenue on the table.
Subscription model billing is indeed a fantastic concept. The idea of offering your app not for sale but for a subscription that keeps it going. If people stop paying, they also can’t use your app anymore. For the customers, it's less money to spend upfront, no commitments, and hence they can switch the vendor anytime. Also, for us makers, we get a predictable revenue that is relatively stable. That’s the beauty of the subscription model.
Finally, we arrived at a convincing subscription pricing model. We incorporated our company in Delaware, USA, using Stripe Atlas. I quickly finished coding the payment integration, and we launched our paid plans in the mid of October 2017. We mailed all our users, hoping that we would get our first customer on the first day itself. No one came. We waited and waited. Two days later, we got our first customer! The same day we got the second one, and more people started paying in the following days.
Growing the business
Growth as a bootstrapped startup when we had almost $0 to spend on marketing was a huge hurdle. Fortunately, the ‘powered by’ link on our free user’s bots and a custom landing page for those visitors were doing the magic.
After the launch day, another thing we concentrated on was building backlinks and optimizing SEO. Our product is built such that people come in, use it and then pay for it without a sales team or even us to push them. We put our efforts into making sure that people loved the product. This, in turn, made sure that they spread the message that we exist and brought other users to our website. We knew Google was a goldmine for this. By concentrating on building backlinks and optimizing on-page SEO to boost organic traffic, our organic traffic got steady growth.
Another thing we tried and worked well was relaunching our product. We built a collection of 50 chatbot templates and launched it to our existing user base and the world. This helped us a lot in increasing our SEO juice and acquiring more customers.
There are tons of other small factors that fuel our growth, like partnerships, affiliate programs and more. We started reinvesting heavily after generating a sufficient amount of $$ every month. However, the above factors are still the major contributors to our growth.
Delivering an exceptional customer experience has been something we were obsessed with from the start. We didn’t lose an opportunity to make our customers happy, going beyond their expectations. As a result, we got three things in return: customer retention, referrals, and upsells. Every single decision on building the product, choosing the right tools, and replying to support requests was heavily influenced by this obsession with providing the best experience.
Automation was in our DNA, especially because we were very resource-limited. We tried to automate anything and everything we could. Looking back at our 10-month journey, bootstrapping has helped us to keep our costs bare minimum (Tools, marketing, consultants and such) and focus on things that really matter.
What matters to us at the end of the day is keeping customers delighted and making the business profitable. We didn’t waste our time preparing investment decks, attending useless startup events or trying to get attention from the press.
Now we are growing at our own pace with the investment we have from our customers. We didn’t have to compromise on quality. We didn’t lose focus or mess up because we were accountable to our customers only. Instead, we are more focused on customer friendliness because of bootstrapping.
I like comparing VC funded and bootstrapped startup to the growth of fruits.
VC-funded is like being supplemented with chemical fertilisers to make them ripe faster, and being bootstrapped is similar to an organic fruit that grows naturally at its own pace.
Starting up is extremely hard, especially when you don’t have investors money to run. But for the freedom and excitement that kicks into life, It is definitely worth doing 😍
TL;DR / Key Takeaways
- Find a problem in your life or by observing others and then pick one worth solving.
- Build a Minimum Loveable Product (MLP) instead of a Minimum Viable Product (MVP).
- Ship fast and often.
- Find organic ways of marketing from day one.
- Don’t wait to charge your customers or find an alternate business model. The product is not validated unless people are willing to take their cards out of their wallet and pay for it.
- Do not quit your job unless the side project is ramen profitable.
- The best investor you can get for your startup is your customer.
- Automate anything and everything.
- You do not need more people or fancy office space to build a profitable startup.
- If you know to code, you can create software that works for you while you sleep.
- Be obsessed with delighting customers. You get back customer retention, low CAC, and High ARPU.
- Profitability is the real health of your business.
- Other than delighting customers and profitability, nothing else really matters.
You can follow @collectchat on twitter for updates.
Feel free to reach me at firstname.lastname@example.org or https://twitter.com/shyjal
Originally published at collect.chat blog on June 08, 2018.
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