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

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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

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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