Bootstrapped, revenue-focused, and working remotely: this blog post is about the lessons learned from our most recent project, which we created in just 2 weeks, grew to $12k MRR in 5 months, and ended up shutting down following legal threats.
- If you’d like to follow our journey, we write regularly on Medium at The Naked Startup and on our blog at blog.ifnoreply.com.
- To see what we’re working on now, check out ifnoreply.com.
Before I get into the lessons learned from Profile Hopper, here’s a quick recap.
A Brief Walk-Through
December 2015: Initially we just wanted to view potential customers’ LinkedIn profiles in the hope they’d view us back (simple!). So we built Profile Hopper — a Chrome extension for precisely that purpose, and we used it to successfully grow our own business, JournoRequests.
It worked so well for us we thought we'd see if other people would be willing to pay for it.
January 2016: We quickly got our first paying customers, and over the course of the next few months we added more features to Profile Hopper, plus spent some time seeking out our customers online and talking to them. Through this process, Profile Hopper became a useful sales prospecting tool that could export LinkedIn search results.
We were still making less than $1000 per month in recurring revenue, and we spent most of our time running JournoRequests.
April 2016: Profile Hopper crossed the $1k MRR mark and was looking promising, so Harry and I decided to dedicate 1 month to marketing it, fixing bugs, building new features, and generally working full-time on it. That turned out to be a smart move:
We couldn't believe how quickly Profile Hopper was growing - this is the last screenshot I took, and at the time we were at around $11.5k in monthly recurring revenue, and growing at a rate of $10k per month.
May 2016: LinkedIn sent us an email threatening legal action. It was a tough choice, but we decided to wind Profile Hopper down.
Although it was sad to put an end to Profile Hopper's fast growth, we learned a lot from the process — here are 6 things we took away from the experience:
6 Lessons Learned
Lesson 1: build something you would actually pay for
This is the first hurdle that Harry and I hit with some of our previous products. For example, Hey Press is a startup journalist database we built that remains popular today - but almost everybody is a free user... and we realised we'd probably just use Hey Press for free too! (always trying to save costs as a startup)
The great thing about Profile Hopper was that we weren't even trying to sell it originally. We would definitely have paid for a competitor if a decent one existed, for the simple reason that it would have saved countless hours per week and been very profitable!
That said, I don't think being your own customer is a necessity - e.g. if you're selling software to construction companies but aren't a construction company yourself. However, when you are the customer it does make life a heck of a lot easier. You'll probably know what's worth paying for vs something that would be nice to have for free.
Lesson 2: actually ship early
I've spoken to a lot of people who preach about the Lean Startup, but still take half a year or longer to release a product (only to discover nobody is willing to pay for it). I think part of the problem is that lots of the concepts in the Lean Startup are quite abstract.
If you're a relatively inexperienced entrepreneur and are interested in B2B SaaS, I'd recommend focusing on very simple ideas (not $bn ones) and trying to successfully launch them and make them profitable.
Harry and I usually try to launch a product in 1 or 2 weeks (rather than months or years), always with the initial goal of reaching $1000 in monthly recurring revenue. Sometimes we do have ideas for "big world-changing startups", and we'll either chalk those ideas up for the future, or we'll break them down into a small product we can build in a couple of weeks (with the intention of expanding in future).
We've learned a huge amount from this process about building and launching products (and we can now see more clearly that some of our "big world-changing ideas" were in fact just terrible).
Lesson 3: continuously seek your customers
I now believe that a product launch doesn't really exist for most startups. There's not a big Tech Crunch article that's going to make you famous and solve all your problems, and users probably won't flock to your website in their masses.
With Profile Hopper we didn't really have a launch at all - not even on Product Hunt (someone hunted us on a Friday afternoon and we got a handful of upvotes).
Instead, we continuously sought our customers online. There were so many avenues we could go down - from joining small targeted Facebook groups, to guest blog posts, to answering forum questions, to marketing to our existing users of Hey Press and JournoRequests. We really just scraped the tip of the iceberg - and didn't even touch a lot of options, but it didn't matter. Each day we'd try to do 1 thing which would help grow our business... and it worked!
Lesson 4: don't undersell yourself...
Although Profile Hopper was one of our simpler products, it was also one of our more expensive, with a starting price of $19/mo, and plans going up to $250/mo (some even higher!). We had an extremely limited free tier for Profile Hopper too - which encouraged people who found it valuable to upgrade.
A pricing structure was unclear to us at the time, and we decided to fight our instincts to charge a very low price. Turns out our instincts were very bad and we made the right decision in the end.
Lesson 5: ... but do offer discounts to early subscribers
Usually when startups launch, their prices are very low and they raise these gradually over time. I think it’s fair that early subscribers pay a lower price than later ones (since the product will get better over time) — but I reckon a better way to do it is with discounts. List the full price you intend to charge eventually and then discount that price to reflect an early subscriber discount. This has 2 effects:
It tells your customers that your product is valuable. Someone expecting to spend $50/mo or even $500/mo for a vital piece of software might not trust your $5/mo offering.
It gives your customers an incentive to subscribe sooner. Discounts help avoid customers from postponing purchase decisions — so you should tell them if they’re getting an early subscriber discount!
Lesson 6: building on someone else's infrastructure is useful but risky
Profile Hopper was the fastest-growing product we've ever built, and I think this was partly down to the fact our customers already used LinkedIn and just wanted the ability to export their search results.
However, because we grew on top of LinkedIn and Profile Hopper only worked with LinkedIn, we ultimately had to close the doors when they threatened legal action.
Moving On - If No Reply
We'll be taking everything we've learned with Profile Hopper and applying it to our latest product, If No Reply.
If No Reply is a sales automation tool that integrates perfectly with Gmail. A lot of people use Gmail (our team practically lives in it) — and If No Reply will extend its functionality in a distinctly new way for salespeople and startups (I won’t go into details here, but check out our homepage to see how it could help you save time and make more sales).
Like with Profile Hopper, If No Reply is a tool that we’ve built on top of another platform, but there are 2 key differences — 1) the platform we’re building on (Gmail) is tried and tested by hundreds of other companies, and 2) ultimately we could develop If No Reply as a stand-alone product even without Gmail (we don’t want to, but we think it’s important to have this option).
If you’d like to keep up-to-date with If No Reply, we’ll be blogging openly about the entire experience at blog.ifnoreply.com
Thanks for reading — if you found this post useful then it's always good to know, so please do get in touch. Also, if there's anything else you'd like us to write about we're always open to suggestions.