
Bootstrapping a Software Product - babuskov
https://speakerdeck.com/garrettdimon/bootstrapping-a-software-product
======
garrettdimon
Author of the deck here. I'm actually in the middle of evolving these into a
book. <http://startingandsustaining.com>

Happy to answer any questions anybody might have.

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mootothemax
You've put together a great deck here, thanks for sharing it!

Can you give us a few rough details of what your initial customer acquisition
strategy was? (Or even something a bit more current, although I realise that
might not be information you'd like to share).

From what I can tell, Sifter is in a very, very competitive market, and I'd be
fascinated to know how you gained customers - and potential customers'
interest - when there are so many choices out there for them to choose from.

~~~
garrettdimon
I answered this in a little more detail further down the page, but the short
version is that I didn't really have a customer acquisition strategy. I just
had a little overlap from my blogging and a product that I wanted to build.
The rest was pretty basic. Do things and tell people. By talking about it, I
was able to reach a fair amount of people who were interested and start from
there.

In terms of a competitive market, I really just kind of went the opposite
direction from the established options out there. The truth is that those
other apps were and are great for some teams doing large complex software
development projects, but there was a whole other group of smaller teams that
didn't need all of the advanced features that those big players offered. I
thought the world need something between a todo list and those options, so I
tried to fill in the gap.

~~~
mootothemax
Very informative, thank you :)

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raphinou
I will possibly bootstrap a software product in the near future, but the hard
part for me is to decide in which market I can find a niche.

I find it hard to develop a new solution in a crowded market. I want to
develop a product I am convinced of, but doubt often gets in the way,
especially if the market is crowded.

I also wonder how these services get their first paying customers.

~~~
speg
I am going through the same thing. Everyone says enter an existing market
because you already know people are willing to pay for it. But I am afraid
that the existing solutions have soaked up all the customers. How am I
supposed to get those customers?

~~~
revorad
To both you and raphinou and others battling with the same questions, I cannot
recommend Rob Walling's work enough.

His blog [0], book [1] and podcast [2] address the exact concerns any new
software bootstrapper faces.

He also runs the Micropreneur Academy, but I don't have any direct experience
of that.

He also organises Microconf, and I really recommend watching his talk from
last year - <http://www.microconf.com/videos-2012.html>

The sheer number of products he has built, launched, acquired - both successes
and failures - over the years gives all of his advice a lot of weight.

[0] <http://www.softwarebyrob.com/>

[1] <http://www.startupbook.net/>

[2] <http://www.startupsfortherestofus.com/>

PS I don't have any affiliation with Rob. I'm just really grateful for all his
excellent work.

~~~
raphinou
Thanks for the links! Do you know of communities of self-employed/micro-
entrepreneurs? I'm not interested in a booming startup scenario, rather
looking to build a sustainable business.

~~~
revorad
I've seen a few people ask this, and a few efforts towards building an online
forum for bootstrappers to hang out. But they all tend to fizzle out.

The community is scattered around the web on blogs, Twitter, Mixergy and here.
I think that's a good thing - don't seek yet another place to shoot the
breeze. Just get stuff done, and when you have a specific question, seek
answers from experienced people in existing forums.

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rexreed
Great slides! In one chart he shows what the level of his pre-Sifter salary
was and it seems that the current app hasn't quite met that level, or am I
reading it wrong? It would be great to see some actual revenue numbers here,
but I can see why the OP wouldn't want to disclose that.

~~~
garrettdimon
This deck is over a year old. A lot has changed. I'm not really a fan of
disclosing actual revenue numbers because that opens a whole other can of
worms.

As such, I chose revenue and how it related to our ability to pay me a salary.

~~~
Simucal
If you don't mind me asking, have you hit your goal of earning your pre-Sifter
salary yet? In the slides it looked like you were close.

Also, is your partner on full time as well or still part time in your venture?

I have a co-founder that I'm starting a small business with and we frequently
talk about what level of reduced salary we would accept to come on full time
to grow the business.

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garrettdimon
I have finally hit my pre-Sifter salary. We could have technically afforded it
a while ago, but we only recently decided to make the adjustment. Of course,
that was my salary 5 years ago, and from what I've gathered, I'm still way
under what I could be making elsewhere--especially if you factor in benefits.

Keith, my partner, has never been full-time. He's always been involved at
about 5-10 hours per month, and that's still the case these days as well.

I have a blog post that talks about the pay cut side of things a bit on my
blog. [http://garrettdimon.com/post/34571624540/can-you-afford-a-
pa...](http://garrettdimon.com/post/34571624540/can-you-afford-a-pay-cut)

~~~
iaskwhy
You do you decide Keith's salary? I'm not looking for numbers, more like the
logic behind it (number of hours put in?, something else?). I will have this
"problem" soon.

Thanks for sharing your knowledge!

~~~
garrettdimon
Keith doesn't draw a salary at all. His equity is large enough that he's
simply banking on the day that we stop re-investing 100% of our profit and
start paying out some sort of dividends.

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quizotic
Wonderful! My favorite was the 1-month rise/fall in revenue (scary), followed
by the context. So true!

Questions re the pricing tier slides: (a) did you experiment with the prices &
number of tiers? It would be interesting to hear your experience with that.
(b) The lowest tier had the highest churn and demands ... but they were 25% of
revenue ... which is too big to ignore, no?

~~~
garrettdimon
There wasn't much experimenting. I've always been so heads down on the
product, I've been terrible about running tests. I probably rely way too much
on my gut feel with decisions like that.

That said, removing the $14 plan did not hurt us at all. Since the $14 plan
was half the cost of the next plan ($29), we were simply hoping that 50% of
the people that would have signed up at the $14 level would go ahead and be
willing to pay $29. At that point, the decision means we make the same revenue
on fewer customers. My theory was that would help me stay on top of providing
sub-30 minute email response times to all of our customers without going
crazy. :)

While I don't have exact numbers, based on our growth after the change,
probably 75% of people that would have chosen the $14 plan simply signed up at
the $29 level and the other 25% didn't sign up. So, the net effect was great
for us.

~~~
quizotic
Gotta love a happy ending... and the courage to put 25% of revenue at risk.

The sub-30 minute response time does feel good on the receiving end.

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dishank
I really like his point on the premature scalability having a big effect of a
startup's failure proability. It's really a hard thing to make sure you are
not growing too fast or too slow. It's much easier when you are bootstrapped,
since you only scale when the profits tell you. The problem arises when
dealing with startups that aren't bootstrapped and have that extra capital
laying around that is supposed to be used for scaling, but there is no
indication on when to start the process.

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rcirka
Good points in the slide. A question through, why have 2 web server and two
database servers? Was it for performance or redundancy reasons?

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garrettdimon
I can't tell from your question if you're asking for a simple "performance" or
"redundancy" answer or if you're asking for a deeper explanation about
application architecture. So, I'll try to answer both.

The short answer is redundancy. With virtual servers, problems on the host
machine due to neighboring virtual servers can be frequent. This can slow down
the application server and lead to performance problems. With two load-
balanced application servers, this isn't as much of an issue.

For the database, I'd suggest reading up on replication. In addition to the
master/slave databases, we also have hourly, daily, and weekly snapshots
stored offsite because a slave database isn't enough protection from some
types of data loss.

Application architecture is a whole beast unto itself, and my real
recommendation would be to find and hire a professional to handle this kind of
stuff for you.

~~~
rcirka
I was just curious. I would hope RoR would be able to handle more than 60
requests per minute. Nowadays I don't bother with manual replicated servers,
cloud servers handle a lot of those problems, but I understand everyone has
their reasons.

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gjkood
Most important slide for me:

"Know your costs" (Slide 67)

It is so easy to overlook the cost components that need to be factored in
while running a bootstrapped operation.

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mmorrell
Thanks a lot for this. The point about not going open-source probably just
saved me 6 months-1 year of potential time spent. I knew something was
bothering me about making my idea open-source at the same time I am making it.
Although I'm an idealist, and like open source software, having money doing
what I love was my whole goal in the first place.

~~~
clark-kent
How did you save time by making your software closed source?

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mmorrell
Focusing on shipping the product with all desired features instead of worrying
about which features to include/exclude in each version. e.g. not wanting to
include a very unique/new/proprietary feature in the open source library ,
that nobody else had. I was creating 2 versions for each of my projects, and
had planned on continuing as such.

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mkreef
Great deck. I always wanted to bootstrap. Never would have guessed there is a
big enough market to sustain you in bug/issue tracking.

Why do you now offer 14-day free trials when one of the slides is "don't do
free accounts, people will use anything if it's free, etc"?

I've had good luck with free SaaS beta/pre-launch and continued free trial
accounts (no cc required).

~~~
garrettdimon
Trials and free accounts are two very different things. Free accounts implies
that they are perpetually available at no cost.

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neya
I love this presentation. So wonderful, precise and valid. I sincerely wish
you best of luck for your future!

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jt2190

      > Didn't get a tech partner: I'm more of a designer first 
      > and developer second... 
    

Garett, you seem to be a "designer who programs"/"programmer who designs"...
Do you think of this as an advantage, or a limitation?

~~~
garrettdimon
It's both. The upside is that I didn't need to find a designer or developer to
build it, but the downside is that it's a lot of work to keep up with all of
the skills that I need. Ruby, Rails, design, front-end development, MySQL,
servers, etc.

Fortunately, as we've grown, we've been able to contract work to friends who
are experts in each of the areas, but it can be rather daunting at first.

The other downside is that when designing, I always begin to think about how
design decisions will trickle down the front-end to the application to the
database and sometimes even to the server. As a result, it's hard to just
design and implement. I'm always caught up thinking about implementation even
when I'm working in Photoshop.

These days, the biggest benefit is that even though I'm far from an expert in
any of the areas, I can competently navigate all of the topics and maintain a
pretty holistic view of both the business and the product. That makes it much
easier to effectively coordinate everyone as the team grows.

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imwilsonxu
Hi garrettdimon, sine there are so many bug & issue tracking websites, why do
you choose it to startup your business? Thanks!

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kintamanimatt
I wish there were a video presentation to go with this. There's so much
information missing when only the slides are present!

~~~
garrettdimon
Unfortunately, there's not a recording, but I'm doing my best to expand on the
slides and add in the year's worth of lessons learned since this deck into a
book.

<http://startingandsustaining.com>

~~~
kintamanimatt
Looking forward to it!

I had no idea you were in this thread so please feel free to disregard my
email as you've answered my question here!

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PhilipA
Thanks for the inspirational slidedeck.

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josscrowcroft
Fantastic slides, thanks! Will go through them again. There were a bunch of
"a-ha" points in there.

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martinced
+1 but starting with $16 000 is not exactly bootstrapping.

If $16 K is bootstrapping then most YC startups are bootstrapped.

I think a "real" bootstrap starts with way less than that.

~~~
gfodor
Pretty sure bootstrapping has less to do with the size of the strap and more
to do with the fact that you're doing it yourself. $16k of your own money is a
lot different than $16k of someone else's.

