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Bootstrapping to $1m annual revenue.
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Bootstrapping to $1m annual revenue
Startup-Camp Berlin, Per Fragemann, 20.3.2014
https://www.small-improvements.com
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
A brief history
• Prototyping since 2010
• GmbH founded in 2011
• “Ramen break-even” in mid 2012
• Profitable since mid 2013
Small Improvements Team
Our customers
Some numbers
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
!$#!!!!
!$10.000,00!!
!$20.000,00!!
!$30.000,00!!
!$40.000,00!!
!$50.000,00!!
!$60.000,00!!
!$70.000,00!!
!$80.000,00!!
0!
50!
100!
150!
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250!
300!
01.10.11!
01.11.11!
01.12.11!
01.01.12!
01.02.12!
01.03.12!
01.04.12!
01.05.12!
01.06.12!
01.07.12!
01.08.12!
01.09.12!
01.10.12!
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01.01.13!
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01.06.13!
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01.09.13!
01.10.13!
01.11.13!
01.12.13!
Total!paying!customers! MRR!!
Monthly Recurring Revenue
https://tech.small-improvements.com
How to do it?
How to do it?Careful. All startup advice is wrong!
What we did well
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!)
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!)
Avoiding time sinks (2)
• Said “no thanks” to too large customers and other non-fitting customers (Adobe!)
• Never promised features, never had deadlines
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!
(So what did we do with all the saved time?)
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
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
Wedding office
Trip to NYC
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!
What we didn’t do well
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
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!
Small Improvementshttps://www.small-improvements.com/careers