

Ask HN: Bootstrapped and profitable - what would you like to know? - rfurlan

I am writing an article about our experience bootstrapping an online community from 0 to our first million users - and profitability.<p>What aspects of bootstrapping an online business should I focus on?<p>Which questions would you like me to answer?
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sixtofour
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?

~~~
rfurlan
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.

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BryanB55
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!

~~~
rfurlan
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?)

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suyash
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.

~~~
rfurlan
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.

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typicalrunt
"Online community" can mean many things. What sort of business do you do?

~~~
rfurlan
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.

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fourmii
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?

~~~
rfurlan
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?

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sixtofour
Link to the eventual article or its location? 75% of us will probably miss the
HN post as it floats down the new stream.

~~~
rfurlan
On it!

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scottyallen
How did you get from 0 to 10k users? What approaches did you try that
worked/didn't work?

~~~
rfurlan
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 :)

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arkitaip
How do you moderate/manage the community? How do you handle abuse and
conflicts?

~~~
rfurlan
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.

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PonyGumbo
What kind of monthly revenue are you guys doing now?

~~~
rfurlan
I don't feel comfortable disclosing figures but to give you an idea, we have a
nice office, we own all our hardware, have just hired our first non-founding
member and we eat steak quite often.

~~~
PonyGumbo
Ah, sorry - I misread this as an anonymous thread.

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jaypreneur
What is the background on yourself and partners?

~~~
rfurlan
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.

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davyjones
Marketing.

~~~
rfurlan
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.

~~~
bschiett
How did you do your link building and what did your ppc ads look like?

~~~
rfurlan
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.

~~~
bschiett
thanks - what was the link building strategy you ended up focusing on and why?

look forward to seeing the ad texts. thx for sharing.

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Mz
How you monetized it. At what point did it become profitable? What do you
think the draw was for membership?

~~~
rfurlan
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.

~~~
rush-tea
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.

~~~
rfurlan
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.

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davidhansen
Not to detract from rfurlan's thread, but is there really a lot of interest in
the stories of bootstrapped and profitable companies?

~~~
rfurlan
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? :)

~~~
davidhansen
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.

~~~
rfurlan
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?

~~~
davidhansen
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.

~~~
rfurlan
That is probably an optimal strategy ;)

