Ask HN: Bootstrapped and profitable - what would you like to know?
13 comments
What part of the business did you know without a doubt that you could do, and which part did you know without a doubt that you couldn't do (but you did it anyway)?
Is the original business idea living in the current site, or did you significantly pivot? How did you recognize when and in what direction to pivot?
How did you all and the business stay alive before profitability? Jobs? Credit cards? Sold your antiques?
Is the original business idea living in the current site, or did you significantly pivot? How did you recognize when and in what direction to pivot?
How did you all and the business stay alive before profitability? Jobs? Credit cards? Sold your antiques?
I don't question myself very often, I don't see myself as super smart or super competent but I believe that you can do anything you want as long as you are willing to pay the "price". Sometimes a project may demand from you more than you are willing to give, but rarely a project will demand the impossible. So I guess I never questioned if there was anything I couldn't do, but I was very aware there are certain things I wouldn't be willing to do (black-hat SEO for example).
We have pivoted at least twice but we did so by small steps, we never sat down and decided on a brand new direction. Instead we analyzed the data and changed the incentives in place to guide the community to one direction or another.
Regarding keeping the business alive, we didn't quit our day jobs right away and for the first couple of years we treated more like as a hobby. Then eventually we started supplementing our income with it, etc, you get the idea.
We have pivoted at least twice but we did so by small steps, we never sat down and decided on a brand new direction. Instead we analyzed the data and changed the incentives in place to guide the community to one direction or another.
Regarding keeping the business alive, we didn't quit our day jobs right away and for the first couple of years we treated more like as a hobby. Then eventually we started supplementing our income with it, etc, you get the idea.
This may be obvious but what you did to get to those million users and if you have any regrets or what you would do differently. Sounds like an interesting article, can't wait to read it!
Absolutely, I am going to try to detail the process of securing our first million users with as much detail as I can :)
My biggest regret is that many things we did back them were motivated by the kind of "get rich quick" mentality that now I know does more harm than good.
I wish we had focused more energy on serving our users well instead of focusing so much on trying to rank well on Google.
However, the interesting question is: if we had focused less on SEO and more on the product as I wish we had, would we be having this conversation? (meaning, would we have survived?)
My biggest regret is that many things we did back them were motivated by the kind of "get rich quick" mentality that now I know does more harm than good.
I wish we had focused more energy on serving our users well instead of focusing so much on trying to rank well on Google.
However, the interesting question is: if we had focused less on SEO and more on the product as I wish we had, would we be having this conversation? (meaning, would we have survived?)
How many users did it take you to reach profitability? What was the product or service fee and was it all paid or you made money via advertising? Basically what was the monetization strategy and how did you make it work?
Congratulations.
Congratulations.
Thank you :)
We were profitable almost right away as long as we were not working on it full time. It wasn't until we were generating 20-30 million impressions monthly that we were able to quit our day jobs.
The service is free and monetized through AdSense - although we have just introduced a virtual currency as an experiment.
We were profitable almost right away as long as we were not working on it full time. It wasn't until we were generating 20-30 million impressions monthly that we were able to quit our day jobs.
The service is free and monetized through AdSense - although we have just introduced a virtual currency as an experiment.
"Online community" can mean many things. What sort of business do you do?
Our product is based around multi-user chat rooms and instant messaging with social networking features on the side. People basically join our service to make new friends instead of connecting with their real world friends.
Looking forward to the article! Some questions I would ask:
How about how you formed your founding team? How long it took you to release the product? Did you seek out advisors?
How about how you formed your founding team? How long it took you to release the product? Did you seek out advisors?
It started with just me for the first 3 months, and then a friend joined me. Took me about a month to build the very first version and well, it was awful! (but at least it was live)
We didn't seek out any advisors and we still don't have any. Maybe this is something we should be considering?
We didn't seek out any advisors and we still don't have any. Maybe this is something we should be considering?
How did you get from 0 to 10k users? What approaches did you try that worked/didn't work?
The first 10k users were hard to get and we had to do a little bit of out-of-pocket PPC advertising to seed the community, after that we focused on building links, SERP and building a product people liked. It was a long road and between 0 and our first million users and we almost gave up many times. At some point we even had the site up for sale on eBay - I am so glad we didn't find a buyer :)
How do you moderate/manage the community? How do you handle abuse and conflicts?
This is a tough one, probably deserves an article by itself!
We have a team of volunteer moderators that I find incredibly valuable. These are users that love our product so much that they are willing to spend a lot of their time helping us without any sort of compensation - and I cannot thank them enough for that.
Other than moderation, we also have to deal with all sorts of spammers and scamers. We were so naive at first, we built a system expecting everybody to be honest and good - well, that turned out to be a mistake.
Fast forward a few years and now we have generated enough IP on automated countermeasures against spam/scams and automated moderation that we could probably spin off a business to monetize that.
Anonymity definitely brings out the worst of some people, it is rather shocking.
We have a team of volunteer moderators that I find incredibly valuable. These are users that love our product so much that they are willing to spend a lot of their time helping us without any sort of compensation - and I cannot thank them enough for that.
Other than moderation, we also have to deal with all sorts of spammers and scamers. We were so naive at first, we built a system expecting everybody to be honest and good - well, that turned out to be a mistake.
Fast forward a few years and now we have generated enough IP on automated countermeasures against spam/scams and automated moderation that we could probably spin off a business to monetize that.
Anonymity definitely brings out the worst of some people, it is rather shocking.
What kind of monthly revenue are you guys doing now?
What is the background on yourself and partners?
There are two of us and we are both technical (and we have just hired our first non-founding team member, also a developer). My partner is a rare hybrid of brilliant developer and competent designer, something I am very grateful for.
Both of us have a background in high-performance computing and that has helped keep hardware costs down to a minimum - we served up to 2.7 million users from one single server and it wasn't until we switched to MongoDB that we had to buy more servers.
Both of us have a background in high-performance computing and that has helped keep hardware costs down to a minimum - we served up to 2.7 million users from one single server and it wasn't until we switched to MongoDB that we had to buy more servers.
Marketing.
Some PPC, a lot of link building. Our strategy was to rank well on Google and rely on organic traffic to grow. I am not sure if that was a good strategy to start with but it has paid off handsomely (although it took a while...). Having free visitors delivered to us everyday by the search engines is quite an asset to have.
How did you do your link building and what did your ppc ads look like?
We were complete amateurs back then, we literally emailed hundreds of sites asking for links. That didn't work so well but it was enough to secure some organic traffic. We tried doing a few press releases and in retrospect, the content of those releases was rather embarrassing - but hey we were learning by doing right?
The PR generated quite a few back links but it is hard to assess how effective it was. We also tried to buy links and that didn't work out at all (too expensive).
I will check our AdWords account to see if I can retrieve our PPCs ads text.
The PR generated quite a few back links but it is hard to assess how effective it was. We also tried to buy links and that didn't work out at all (too expensive).
I will check our AdWords account to see if I can retrieve our PPCs ads text.
thanks - what was the link building strategy you ended up focusing on and why?
look forward to seeing the ad texts. thx for sharing.
look forward to seeing the ad texts. thx for sharing.
How you monetized it. At what point did it become profitable? What do you think the draw was for membership?
We monetize it mostly with AdSense, we tried other ad networks but nothing quite compares. Adsense combines near infinite inventory with the highest RPMs I have seem anywhere.
We were "profitable" right away because our costs were so low and because we designed the site to run in auto-pilot, requiring very little maintenance. Even so, it took 2-3 of years before we were generating enough revenue to consider quitting our day jobs.
We were "profitable" right away because our costs were so low and because we designed the site to run in auto-pilot, requiring very little maintenance. Even so, it took 2-3 of years before we were generating enough revenue to consider quitting our day jobs.
What kind of traffic/numbers did you need/have before you had sufficient revenue to consider quitting?
Thanks so much!
Thanks so much!
We were serving 20-30 million impressions monthly when we started working on it full time. At that time we could live comfortably with our revenue although we still couldn't afford that orbital laser canon quite yet :)
so it takes 2-3 years from idea to launch to profitable? my question if that's not correct is how long does it take you to go from idea to today? at what point of the timeline when it becomes profitable?
thanks.
thanks.
I guess it is a matter of how you define profitable. We were profitable right away but our profits were insignificant. I would say the "big moment" for a bootstrapped business is the day you quit your job and go full time.
Every business is also different but if you could charge your customers at least 2x more that it would cost you to acquire a customer through PPC - you could scale quite aggressively to "quit-your-job" kind of profit in a short period of time.
Every business is also different but if you could charge your customers at least 2x more that it would cost you to acquire a customer through PPC - you could scale quite aggressively to "quit-your-job" kind of profit in a short period of time.
Not to detract from rfurlan's thread, but is there really a lot of interest in the stories of bootstrapped and profitable companies?
I would, yes. I'm much more interested in what people can do with limited resources.
Good question, I guess I simply assumed there would be an audience for it because people always ask me a lot of questions about it in events, etc. I thought it would be nice to have an article to refer them too instead of telling the same stories over and over.
So, is there interest? :)
So, is there interest? :)
What kind of events? I'm curious about this question because as a cofounder of a bootstrapped business myself, nobody seems to care too much about what we do or how we do it. It's a world apart from the experience of funded companies, who get enormous amounts of press, attention, and interest( from other entrepreneurs, anyway - we have no problem getting the interest of our customers ).
If you get a lot of questions, I may be completely wrong about my perspective, here.
If you get a lot of questions, I may be completely wrong about my perspective, here.
Standard fare SV events, pitch competitions, cocktail parties etc. People in the hardcore entrepreneur circles don't care much about bootstrapping at all - it is almost as they see it as a sub-optimal way of starting a business. Well, it is probably sub-optimal so I can't really blame them, can I?
This may be a geographically unique phenomenon to the SV area. Then again, I don't really go to pitch competitions or cocktail parties. We'll just continue quietly building our business :) Thanks for your input.
That is probably an optimal strategy ;)
What aspects of bootstrapping an online business should I focus on?
Which questions would you like me to answer?