Today it's exactly one year since we launched Spaceship. At the beginning we were three guys working on a struggling start-up called rentomato. Times were tough. We were quickly running out of cash, even though we cut down the costs to bare minimum. And all our credit cards were already maxed out.
We were desperately looking for ways to come up with some money. I remember one day, me and Raz held this unforgettable meeting — to which a brought a simple excel sheet with all our “quick buck” ideas (see below).
The list ranged from a housing platform in Nigeria to 3D printed weed grinders. (Sometimes I wonder what would've happened if we actually went for that one :)). The three most important factors on which we based our decision were: how much time we need to launch, how much is it going to cost, and how much can we make on it in the next 4 weeks. At the end, we've decided to go for Spaceship.
Part 1: Launching Spaceship
So we met on Saturday at my place, and during the weekend we put together the first MVP. On Tuesday, we started selling simple lead generation tools for Twitter at $4.99 (one-time fee).
Luckily, we sold a lot of those from day one. There was no magic to it — we reached out to everyone we knew, posted it in all FB startup groups we could find, and ran massive mail-campaigns. And we invested all the money we made back into marketing.
Part 2: HOLY SHIT! moment
When we started, I was obviously also in charge of the entire customer support. At the beginning, it was fun. I was happy that someone even considered buying our tools. And I did my absolute best to attend to every single email.
And occasionally we would get some praise from our customers, which was pretty much the only thing that kept me doing this for 15–16 hours a day. But after 4–5 weeks, the initial enthusiasm started to fade, I realised we cannot build a real business by selling tools for five bucks (one-time fee).
Why every founder should do customer support?
So I dived into all the support emails we've received. And I found out that many of our customers didn't really want a tool for lead generation, but rather a solution that would provide them with targeted leads at a scale.
Next thing you know, we are back at my place — revamping the entire site and our product offering. And on Monday, we started selling packages of 50,000 and 100,000 targeted leads. The only problem was that we priced them at $0.0019 per lead, which made us pretty much the cheapest lead generation company on the market including Pakistani competitors.(#fuckup #1) But luckily we noticed this mistake relatively quickly, and adjusted the pricing.
Part 3: “Dom, I cannot continue lone wolfing it anymore”
And the business started to grow.. Already in the second month, we almost tripled our revenue. In the third month, we quadrupled it again.
Sky is the limit we thought. I was hustling for new business, Raz was handling the product side, and Tom was in charge of pretty much the entire lead generation. And things were going great..
But I was so obsessed with growth, that I failed to notice that everyone around me started to burn out. And then one day, Tom came to me saying that he cannot do this anymore. I never told anyone, but I was really crushed at that point. We've been friends since uni, and he is probably the only person I truly regret losing on the way.
See, the problem was — we were growing quite fast in terms of revenue, but I completely failed to focus on scaling and growing the team as well. So we would do three-to-four times the amount of work with the same amount of people. (#fuckup #2)
Part 4: How we thought we can build a bootstrapped Rocket-Internet
When Tom left, Raz took over the entire lead generation, we hired a few more people. And I continued hustling more than ever before.
Sometime in April we got the first investment offer. And initially, we thought we should definitely take it; focus more on the #dev side, hire more people and everything will be hunky-dory. But then during one of the final meetings with the investors one of them was trying to convince me how fucking great the deal was for us, I got a quite angry and replied; “It's a fucking great deal for you, not so much for us, because we will make this money in the next few months.” (#fuckup #3)
We somehow still managed to leave that meeting on good terms, but we both knew we will never accept the deal.
Then, me and Raz had another one of those unforgettable meetings during which we've decided to use our lead generation engine and data we've gathered — to build a portfolio of bootstrapped companies. We were convinced we can build a completely bootstrapped version of Rocket-Internet. (#fuckup #4) And in a few weeks we launched our first spin-off called Spaceman.
The biggest mistake was that we got too cocky too soon. We thought — hey, we managed to build this nice, healthy business from nothing. We can definitely do it again, bring in some more people and replicate this as many times as we can. And in theory, I still believe it's possible. But in reality — companies are still made out of people (who should share the same goal) and you cannot build 20 companies on the same 2 people. So at the end, me and Raz just added another X hours daily on our already very busy agenda.
I never regretted rejecting the investment. Not because we did make the money in the next few months. But simply because this period taught us a lot — about how to scale on our own, how to manage cashflow, and how to learn from our own mistakes. What I do regret is how we handled it, because we should've been clear about what we want upfront.
Part 5: How we stopped talking
In June, we tripled our revenue again. And that's when the shit really hit the fan. Suddenly, we really realised how understaffed we actually are. Things got so stressful that in the office nobody would even dare to speak. (#fuckup #5)
We were late on quite a few orders, which wasn't really the biggest problem. The problem was, we weren't good at communicating this to our customers. And the communication within the team was frankly speaking horrible.
It got so bad that me and Raz didn't really speak to one another for 2,5 months, even though we share the same table.
Part 6: So, is there a happy end?
For shizzle, as Raz would say. We figured most of our real problems come from lack of communication, both within the team and with customers.
So in September, we started changing the entire team structure. Now every account has one responsible person. We are also scaling up the team as much as we can. And we will continue learning from our mistakes…
Spaceship's First year in numbers
I was once told that people lie, numbers don't. So to share some numbers from our first year in business:
- We grew in monthly revenue by 3000% (30x)
- We grew in average conversion value by 10200% (102x)
- We've worked with more than 700 different clients from 65+ countries
- And we grew from 3 people to 15* (many still part-time though)
But what truly matters to me is that we have grown personally and we managed to learn from every mistake we've made on the way. Sure, we didn't manage to build our own bootstrapped empire. But if you scroll up to the excel sheet with 3D printed weed grinders, I would say we've come a long way :)
Written by Dominik Vacikar.
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