Why You Should Bootstrap Your Startup for as Long as Possible: The TimeSvr Story
After many years of helping other entrepreneurs build great SaaS companies, I’ve started to feel the itch to start up again. At the moment, I’m incubating a fascinating idea which may or may not become an actual business (another story, for another day).
Going back to my bootstrapping roots after a few years of working on well funded, fast growing products brings back memories of my very first “real” startup, TimeSvr. Today, I wanted to share the story behind that company and some of my earliest battle scars as an entrepreneur.
“Why don’t you just hire a personal assistant?”
In 2007 I was a bored Senior at the National University of Singapore who only knew one thing for sure: I didn’t want to be another stereotypical graduate — working for a prestigious firm and climbing the ladder of mediocrity all the way to the top. I had always been “into startups” (in my defense, it was before they were cool) and a part of me just expected myself to start a company after graduation. However, I didn’t chance upon on an idea that excited me until I spent an evening in New York City…
I remember sitting in a dingy bar with some friends — a few years older, employed and living the New York dream. What they all shared was the washed out, burned up look all Analysts have after one too many 70 hour workweeks. I recall someone complaining about how they don’t have time to make reservations for a dinner they were supposed to be hosting. So, I naively asked:
“Why don’t you just hire a personal assistant?”
I figured that with the money they were making, they should be able to save time and get things done. Ultimately, their answer always was along the lines of “I don’t know where to start” or “That sounds like something only wealthy people can afford.” TimeSvr was essentially founded off the back of those conversation using the mantra of: why not get busy people the help they need to make better use of their time?
Specifically, TimeSvr aimed to provide a “virtual” personal assistant who could handle basic or time-consuming tasks, such as: getting someone to pick up your washing, booking flights and accommodation, or even ordering your partner flowers or birthday presents.
It wasn’t a new idea, but historically you would have needed to use a concierge service, which cost a considerable amount of money. We were going to provide this assistance virtually, via a support team accessible by phone, email and instant message.
I returned to Singapore and quickly assembled a team of co-founders, also fellow soon-to-be graduates at my school. After some — but not nearly enough market research — we decided to build a lightweight CRM to store client information such as frequent flyer numbers, purchase preferences, and personal contacts. All assistants on our platforms could now perform any requests, giving customers 24/7 access while reducing costs by sharing the workload.
How we bootstrapped the business
Armed with precious little experience, I used my savings to invest some funds into the business where they were needed. We also borrowed $1,000 from my dad. The plan was to work on the product in Singapore while setting up our assistants in Karachi.
We decided to hire assistants full time, but again, this was before it was commonplace to build business models around contractors. Thus, while we were coding the platform, there was also a team of skilled assistants capable of fulfilling any tasks our future customers would request.
The best decision I made at TimeSvr was born out of hunger — because we had no marketing budget to “acquire” customers, I decided to set up a blogger outreach program. This was five or six years before “influencer marketing” became a thing, and well before bloggers were used to working with startups.
The closest analog I could find to our space was the burgeoning “personal productivity” blogging niche — Tim Ferriss had only just published the “4 Hour Work Week”. Lifehacker was the big fish in that little pond, but we reached out to other, smaller, niche bloggers.
The idea was to ask them to get some of their customers to sign up for a “free beta” until we were ready with our full platform. We figured we’d give away free service to prospective customers, a lot of whom would convert to paid once we showed them value. We’d also be able to train our three new assistants on to the platform we were building. I know — a foolproof plan!
And for a while, it worked! TimeSvr fitted nicely into the niche we were targeting — lot’s of people were starting to write about how to “get things done” faster, better and smarter. We were able to get lots of signups for our free beta period — over 200, in fact. We also opened the free beta to a few bloggers themselves, with the hope that perhaps they would write about us someday.
The “oh f-ck” moment
So in late August 2008, we were almost ready to go live. The Assistants were doing their thing, our 200 non-paying customers (now that’s an oxymoron) loved our service. The bloggers seemed happy too. Our approach was working: we’d ask them to try out our service for free, and also sign up a few of their readers to the beta itself. It turned out; bloggers loved giving freebies away to their readers. It built loyalty and made them feel a little like Oprah, I guess (who wouldn’t want to feel like Oprah?).
Since we were ready with our offering, feeling good about all the tasks we were doing and most importantly: running out of money, we decided to end our beta and ask our happy “customers” to convert to a paid plan. We figured 15–20% would, but we wanted to do the right thing, so we gave ample warning and a discount to our beta users as a thank you for their loyalty and support!
Day 1: zero conversions to the paid trial. Ditto, Day 2 and 3
In fact, I think only 1 of those free users converted to paid in the two weeks of warning we gave them. That was a real “oh, fork!” moment for us! It was also one of my first actual rides on the emotional rollercoaster that is entrepreneurship.
What if we’d built a dud?
What if we weren’t providing as much value as we thought we were?
Why didn’t all of these actively engaged users want to pay us for providing so much value?
If wisdom is what you get when you don’t get what you want, then we entered those days as boys and emerged wise men. However, we still had one more ace up our sleeves — the bloggers themselves.
I reached out to a few and lifted the publishing embargo I’d asked for on any stories about us. A few responded, one of the very first being Sid Savara, who did an excellent post complete with infographics and detailed workflow information. Emboldened, I started asking more prominent bloggers to write about us: always offering a free trial and asking for no input on final content at all.
A personal highlight was when Josh Kaufman, who’d just written an international bestseller called the Personal MBA, decided to not only write about TimeSvr but also start paying us for our most expensive plan.
And as for revenues? We were break-even within three hours of that first post about TimeSvr. It turned out we only needed about 30 paying customers to sign up. In fact, we had to shut off new signups while we struggled to deal with the surge of new users.
3 Things I learned from TimeSvr that stuck with me
1. Free users are not proper product validation for your new startup
This one’s an obvious point when you think about it this way: paying for something is part of evaluating if it’s worth your time, or not. I still see so many companies using free user behavior as a proxy for reaching product-market fit, something that is particularly common when internal teams are building new modules on top of existing products.
There is space for free usage for a product — especially when you’re validating the user’s experience itself; just don’t mistake it for actual product market fit.
Another funny observation, which I’ve repeatedly noticed in my career: a small percentage of free users tend to be more demanding than paid customers. I think this ties back to value and attention spans.
2. There is no replacement for real word of mouth style content
I could tell you that it’s essential that you build a channel that allows you to acquire customers from a particular niche and give them compelling reasons to try your product right away, but you already know that. What’s less obvious is that we didn’t do any of our “content” ourselves. I never saw it as our job to say great things about us. We just asked, helped and prodded folks we thought others would want to hear from to talk about us.
Or in other words, we didn’t build a single fire. We helped a whole bunch of people light their own. I believe in this so much; I even spent four years of my career helping grow a company dedicated to you building your army of advocates.
3. Pick your battles (and your people) well
I ran TimeSvr for about 18 months before I realized that it might not be the right business for me to scale long-term. In that time, I also started another company, building games on the burgeoning Facebook platform. Introspecting between my two “jobs,” I realized I’m not going to be an excellent fit to scale a services business.
I also realized that I was not very good at working with one of my co-founders, who was doing a lot of the legwork to build the company, and we didn’t agree on much at all. As a consequence, I learned a lot about the kind of person I enjoy working with: as a rule of thumb, if you don’t see yourself wanting to have a beer with your co-founders after work, do not start a company with them!
You need to align more than your skills: values, goals, and ambition are equally important and much harder to quantify. I eventually exited to that co-founder to focus on another business. Do I regret not seeing through the original vision for the company? Yes, of course. Would it have been worth going ‘to war’ next to people I didn’t want to be around? Nope! Nothing ever is.
Bootstrapping can make you a better entrepreneur
I firmly believe bootstrapping made me a better entrepreneur. I’d recommend almost every company to bootstrap their business to real revenues before considering their first outside investment. The lack of a safety net activates our primal ‘fight or flight’ instincts and gives you hunger to succeed that you’re going to desperately need, especially early on when nothing is figured out. Hunger also clarifies; it forces you to only think about “the most important thing,” whatever that is to your business.
I love hearing from, and helping entrepreneurs build their businesses, whenever I can. Share your story here, or get in touch via Twitter or LinkedIn. Meanwhile, I wish you the best on your entrepreneurial journey.