This story has another lesson buried inside it, and it is one that I first learned not long ago in a video (unfortunately I can't find a link to it).
The lesson was: "The best way to get into business is to be in business". In other words, the best way to build a successful business is to get started. Do something, anything to get started. You have to do that to get into contact with people and start getting feedback to see what other problems they have.
I noticed the same lesson in this post. Initially, the author was making money from freelancing. But as clients began asking questions and providing feedback, a more profitable idea came to the surface.
Woody Allen later wrote in a letter: "My observation was that once a person actually completed a play or a novel, he was well on his way to getting it produced or published, as opposed to a vast majority of people who tell me their ambition is to write, but who strike out on the very first level and indeed never write the play or book. In the midst of the conversation, as I’m now trying to recall, I did say that 80 percent of success is showing up."
- 1989 August 13, New York Times, On Language: The Elysian Fields by William Safire
Wow. I didn't realize this would get so many upvotes, so I decided to put a little more effort into finding that video. I finally found it here: https://www.youtube.com/watch?v=-2m6JkJvv4w
Great Point, I guess that is what YC and other accelerators enable. They give you enough money to be in business and start talking to your customers. Then you pivot and find your actual business,
e.g. amplitude, justin.tv
This is the iterative path which helps you converge on a product/market fit.
This is a good story. I'm facing the same experiences with a small web app I did (tool for travel agents). I currently have just Google ads but now it's at least paying the servers.
The interesting is that every business is different to growth. I really tried a lot of strategies and the only one that have really worked well was the cold email I sent for potential customers. This to me seems really annoying to do because it's almost like spam I think, but when you really knows your "personas" and you have a good product to them, they answer you with a big Thanks and you feels good, like doing a favor.
There is a very thin line that separates the spam and the mail marketing.
Another thing I learn is that users don't help you, very difficult to someone answer you when you ask feedbacks. They only answer you when they think they will gain something valuable in change. Same behavior in all countries I tested.
My biggest dream is my App give me enough profit to I get out of my regular job and work on this full time. Storemapper is really a inspirational and motivational case to me. Thanks for sharing.
* I recommend A/B testing a pricing structure 3x what you currently charge. I'm guesstimating this to be the sweet spot, but I think you're underpricing significantly.
* Hire a professional designer to make the site look less amateurish.
* Advertise to web developers/consultancies. Again, I don't know too much about your customers, but I think marketing to web developers/consultancies will have a high ROI
Salute to another solo dev boostrapper from Brooklyn!
Do you have any stats on how effective the "Powered By" link was in getting new conversions?
The oDesk lead generators plan is something I am trying now with finding leads for press for a Kickstarter campaign. It works well when you can very clearly define the steps for what you'd like (in my case supplying the list of Kickstarter pages to research). It has to be repeatable and less up for interpretation. I'm using eLance and have had luck with some admins.
I also had a side project that turned into a full time project. Clearing away distractions and focusing on one product made a world of difference for me (still learning to do this). When I kept things as side projects, I wasnt fully able to test if what I was working on had real potential and I wish I would have focused earlier.
Nice job! Especially love the value you're creating in the analytics back-end... that a company can gather and analyze their users' location searches for planning and growth is great. I'm not sure I would have seen the possibility for that little gem.
One piece of feedback for you, in my opinion the sign-up form could really use some work. It has this "survey" sort of feel that does not excite me or give me confidence. I wonder how much this affects conversion - how many people follow a CTA from the homepage but fall off here. Some design & UX focus here could go a long way, happy to give more detailed ideas if you'd like.
For this line - "I know that starting from this position, with certainty that some customers will pay for the product is a fantastic starting point for a small business or passive income side project."
As someone who recently graduated college and wants to create some sort of startup/side-business some day; how does one go about finding what things someone would be interested in paying for?
Any tips on how to find that initial starting point?
Figure out who your audience is. The easiest is to pick someone like you or who wants to be like you. Are you a rubydev? You can probably solve problems for aspiring ruby devs, etc. Consultants can solve common consulting problems, (brennan dunn did (http://doubleyourfreelancing.com/rate/).
Find out where your audience hangs out online (forums, reddit, hackernews, blogs, etc). Start systematically going through the comments looking for pain points. Write those down. Then eventually you should find a pattern. Once you have an idea of a major pain you can probably come up with way to solve it.
That's basically what this guy just did to launch rubysteps: http://patmaddox.com/rubysteps/ . He realized there are a lot of aspiring devs that took the first step but couldn't figure out what they should do next.
Glad you liked it. So there are a million different opinions on this for sure. I particularly like Dan Norris's take on this to start solving a problem that people are already spending some money to solve now. Not necessarily that they are already spending money on a similar product, but that they are in some way spending money towards solving the same problem. Great interview with him here: http://productpeople.tv/2014/07/10/ep59-dan-norris/
Another tactic: most software can be done on a small scale by a human being behind the scenes. Before you build out some incredible software product, try to sell the service to a few folks beforehand. You can mimic the software product by literally giving them a form to input some data and you then you manually do the work that your code would be doing. Obviously doesn't scale but it's a great way to find out "if someone will pay."
I think the more important part is to build a subtractive methodology, a way of editing out and whittling down ideas that won't work.
Use the James Altucher idea machine strategy and go sit in a coffee shop with a pen and paper and almost anyone entrepreneurial can come up with 50 ideas for possible businesses.
Then you need to go work editing those ideas and brutally crossing them off the list. And don't get attached to those ideas. Be comfortable having 50 ideas and crossing all 50 off the list. But having the mode, of taking every idea that comes to you and then really thoroughly scrutinize it, can help you know when you've hit on something really good.
Odds are, that really good idea originates from some random source, not necessarily a system for finding a good idea, but because you're already in the mode of evaluating them properly you'll be ready to pounce on it.
I think this approach might work better for something who's been around the block a few times than for someone who recently graduated college. I mean, life and business experience is kinda important in this context.
Well, to clarify, I've been working as a programmer for about 2 years now (which to me is still pretty new). Was hired before I graduated ;)
But yes, in general I do feel like I have _alot_ more professional development ahead of me.
To me this approach seems like it would work really well. But yes, I definitely think experience would help in the "editing" part of the list. Although, I imagine there has to be creative ways to get feedback on what works or won't work, even if I'm new to an industry.
Start with audiences you know and love. Talk with them about their work, their hobbies, their lives. Look for problems they experience, and ask: can I solve that with the tools I know?
Last year I was talking with my brother about the pain of kids' swim meets. He brings his son to an event where hundreds and hundreds of kids show up. They are often in multiple events. Actual swimming time is short, but he had to hang around all day waiting for the right races. This year he told me that somebody had created an app: the meet organizers upload the race data; he can just go in and star the kids he's shepherding. Then he gets a real-time schedule showing just the races he has to make, letting them go off and have fun rather than hanging around.
You can bet that whoever built that app had a family member who told me a story exactly like the one my brother told me. But they went and hung out at a few swim meets and did followup interviews with some of the organizers. Eventually, an app was born.
Problems are everywhere once you start looking for them. Keep a backlog of problems and solution ideas, and sort them by how good a business you think they'd make. Eventually you'll find one where you'll say, "Well, I'm willing to bet some of my time and money that I can make something worth buying."
Make a landing page, Try and get emails, gauge interest vs. how much risk you are willing to take and go. I'm doing this right now which is interesting because every other time I tried it was "build and they will come". Marketing is definitely the harder part. Capture attention with your idea and then implement.
This is the kind of story that motivates me. I like being reminded that the internet hasn't become the place where initiatives (big or small) either become billion dollar companies or they fail completely, contrary to the picture the startup sphere tends to paint.
Truth is that having a backup like Storemapper can empower you to do something way bigger, in other words it can be the greatest investment you can make.
There’s a whole movement around Micropreneurship, which celebrates the fact that not all product businesses need to become "the next Facebook" to be successful. It all depends on your definition of success.
"Lesson learned: always test higher prices. I didn’t bother with the setup required to run simultaneous A/B tests. I just raised prices and watched what happened."
Not enough startups do this on a regular basis. They're too worried about losing clients. If you don't reinforce your value proposition on a regular basis by adding features, you will lose customer regardless.
With several of my side projects, I would add a new feature, then raise prices for new customers. At the same time, clients who renewed (I used a subscription based model) would get a discount. It was like magic. More people wanted in earlier, instead of waiting for a more mature, more expensive product. They gladly paid a lower monthly fee up front, in order to avoid the increase in price later on.
It's a great point. I struggled with how explicit to be about this. E.g. - do you email all the early adopters and tell them how lucky they are they are on a lower plan? Does that comes across as too sleezy? How do you translate this into NEW users? Do you put above the "sign up" button "Buy now before prices increase!"?
Maybe it could be added to the monthly receipts, showing the current price for new users minus their "discount"...
First, you could send an email to existing customers telling them that you are raising prices but that you are grandfathering them in and their rate won't change. Danger here is that you then go on record and may never want/be able to raise prices without losing them. YMMV.
Second, change their monthly invoices to show that they WOULD be charged a higher rate if they weren't grandfathered in. Loyalty discount. If you don't want to show a discount on the invoice, just rename their pricing tier to "Loyal Customer - Pro Edition" (or whatever). This lets you do it stealth and leaves options open for price changes in the future.
>> First, you could send an email to existing customers telling them that you are raising prices but that you are grandfathering them in and their rate won't change.
This is the approach I took, but worded similar to how cable companies word their advertising - that the discount is only valid for x amount of months. After that period, they could be subject to a "change" in price. The wording is left vague so you don't say there will be an increase, simply that the rate could change after their discount expires.
This was usually after a 12-24 month period. After two years of discounts, I finally increased the monthly fee, but only by about 8% which still left them paying less than new customers - which is an important point. Yes, they're paying more than they did, but it's still less than new subscribers, giving them the impression they're still paying less - when in reality, I'm just making back the discount I was giving them.
Not including my time, a few hundred dollars a month for servers and other services (like intercom.io). Gross margin is over 90% which is probably typical for micro-SaaS.
Great post. Would be great, Tyler, if you could also share the terms sheets and contracts, with whatever details redacted that needed to be redacted (names, addresses, and other personal information). THAT would be really helpful. Yes, you said the deals didn't work out, targets were too aggressive, etc. But studying and learning from failures is really valuable to everyone, especially learning from *other people's" failures. THAT is of extreme value. Thank you!
Great product but even better support. I integrated storemapper in a meteor.js based website for my brewery http://twbrewing.com/where_beers. The meteor framework gave me some grief as it tends to do with embeddable js widgets but Tyler got back to me within a day or sooner everytime I had a question.
This was a fascinating read. I'm having trouble with the statement "switching customers to monthly billing is great for your cashflow and sanity", given that the previous paragraph details switching customers from monthly billing to annual billing. Am I missing something? Which is preferred in this case?
For those who subscribed to the $99/year plan, I'm just curious, do you auto renew them for the second year? My current model is monthly, but I have been toying around with a yearly model.
And also, for those who subscribed to the $99/year plan, have you had anyone who wanted refunds?
Yes, it's an annual subscription the renews each year. Most of the time with SaaS annual billing you are pre-paying for the full year, so if you cancel you don't get a pro-rated refund. Customers are ok with that as long as you're clear about it.
Generally speaking have you had many customers asking for refunds (monthly or annually?). Currently in my product, the monthly charge is about ~200. But I'm thinking of doing a yearly option of a $1,000/year. Any advice on something that high of a price point?
If I were paying ~2400/yr and was given the option of ~1000/yr, I would think I've been grossly overpaying for the monthly option. In your shoes I would offer one month free for 2200/yr rather than 7 months free.
I'm currently in the pre-preparation process for moving to another country, something you alluded to in your article.
Argentina is one of the places I've been considering. Can you point me to any resources you used to decide where to live, preparatory work, any gotchas, etc.?
"With an eight hour layover in the Flagship Lounge I was looking at nearly 36 hours of free wifi, unlimited champagne and coffee and very few distractions." and you decided to nerd out.... I'd do the same but what does that say about us :)
Very well done, its always reassuring seeing smaller companies with so much success. Your execution and focus was so spot on, so many companies try to tackle so many different problems.
Seems like he would create a widget that injects code on to the company's site making the API limits per client domain and not all coming from storemapper.co
The merchants needs to have a copy of the Google Maps API on their site and need to follow Google's terms of service in that regard. If they have a ton of traffic they may need to pay for a license.
Hey Tyler, I hate to do this to you (and to SnapWidget and others), but there's something cooking.
With the API and feature rich product updates that are coming up, I think we'll hit a cross road. I don't think I have to go into details, you'll figure it out with this sample widget + Editor:
http://blogvio.com/widgets/util/map-with-google-maps/composi...
I just want to let you know that we appreciate you opened up and shared your story. I checked your product and it's cool. Keep up the good work! Don't hate the messenger. :-)
The lesson was: "The best way to get into business is to be in business". In other words, the best way to build a successful business is to get started. Do something, anything to get started. You have to do that to get into contact with people and start getting feedback to see what other problems they have.
I noticed the same lesson in this post. Initially, the author was making money from freelancing. But as clients began asking questions and providing feedback, a more profitable idea came to the surface.
Do something. Just get started.
Great post.