
There's No Myth, Only Years Of Hard Work - thibaut_barrere
https://lessaccounting.com/blog/service-business-37signals/
======
dasil003
The other thing to realize is that 37signals ideals and brand directly serve
their marketing. I'm not questioning their wisdom per se, but realize that it
is a tremendous positive feedback loop—one that they started cultivating for
at least half a decade before they released their first product. And at a time
when web know-how was a lot thinner on the ground than it is today, and being
any kind of professional agency that knew what CSS was actually a shockingly
huge differentiator. The other product launch I can think of with such a huge
audience and explosive success out of the gate was Stack Overflow that
followed a similar pattern of massive precision-tuned audience to market to
with an already-authenticated-and-trusted human voice announcing the product.

That's not to say that their audience made their success—they obviously came
out of the gate with great products as well. So if you can make a great
product then you have half the equation. But the really interesting question
to me (since I can build a product) is how to get the marketing right from a
bootstrapping perspective.

~~~
lessallan
Getting Basecamp linked up with any mention of Ruby on Rails helps too.
Outliners (like 37Signals) work hard and do great work but they're not the
standard we should compare ourselves to. Well unless you always want to fall
short and feel like shit.

------
lquist
_Myth: All I have to do is get TechCrunch. That’s marketing. Reality: You’ll
have 2,000 unique visitors today and zero tomorrow. Spend five hours on the
HackerNews front page and get a few thousand uniques from the most cynical,
judgmental visitors you can imagine. Traffic from press outlets and link
aggregation sites are NOT primed to buy your product and thus come and leave._

We've built a bootstrapped $5M Revenue (70% pbt margin) run-rate business in
~1 year on the back of a HN post. Generated business that led to something
like $500k on the first few days alone.

~~~
coldtea
Yes, I'm pretty sure your particular use case (if we assume it's genuine,
since you won't go on revealing anything about it which makes it worthless) is
representative of the situation at large.

/s

~~~
lquist
I didn't say that our case was representative of the situation at large. I
merely gave one counter example.

------
mathattack
_Myth: It’s easy to go from client services to products.

Reality: It’s really really really hard. As you’re selling client services
you’re also marketing and building a product, so you’re basically working two
jobs. You’re promoting two company offerings, the product and the consultancy.
In your brain you’re working through two problem spaces, juggling and
assessing opportunities for two company, all without going insane or broke
first._

I know many consultancies of all sizes that have tried to make the hop. They
look at valuations of services firms (1.5 times revenues) and compare it to
SaaS firms (10-12 times revenue) and try to make the move. The Accentures have
tried this, as have the 5-6 people shops. The reality is it is very hard to go
beyond reusable deliverables and into technology that people independently pay
for.

~~~
thibaut_barrere
Albeit we (2 people, a couple with children) are still small but growing on
the SaaS side, I found that mixing freelancing and products works fairly well
for us.

I think what made it work is 1) reduced expenses by relocating to a less
expensive place and leaving frugally, 2) fine control over our cash-flow and
balance between freelancing and product.

I recently shared this little calculator which helps do the math:

[https://www.wisecashhq.com/goodies/bootstrapper-
calculator](https://www.wisecashhq.com/goodies/bootstrapper-calculator)

PS: it is still hard and requires a lot of focus and organization, but works
and is sustainable long-term (we started working on this in 2011).

PPS: I have enough time to play with my kids and do a bit of yoga daily, to
give a data point :-)

~~~
mathattack
Glad that you can make it work. It sounds like you're very reasonable about
the costs and sacrifices involved. It's not just "invest consulting money in
product development", rather it's "invest and save every dollar possible."

Again, it's good to see that it works for you, and that you haven't had to
sacrifice your family for it. Perhaps the supporting family is one reason why
you're able to pull it off. (Kids care more about your time more than money
anyway)

~~~
thibaut_barrere
I will try to think about the things that could be replicated and share that
in an article later on; yes I think it requires a fairly accurate financial
navigation, and focus on family for sure.

~~~
mathattack
Any insights are appreciated. It seems like people look at the outcome first
(steady passive income) which is a good strategy, but hard to do if consulting
is the first master. At larger places that I worked, either the skills were
missing for the SaaS switch, or there wasn't a stomach for the investment
involved.

------
bdcravens
_Spend five hours on the HackerNews front page and get a few thousand uniques
from the most cynical, judgmental visitors you can imagine._

In response to the idea that getting listed on TechCrunch, HN, or the like, is
somehow a "launch"

~~~
lessallan
You'll find that unless you sell an impulse purchase (sub $35 price) targeting
developers HackerNews traffic doesn't equal sales. Being that we sell
accounting software for small business the traffic really doesn't affect our
revenue. Overall programmers are highly critical of software applications,
giving the most judgement support requests and demanding features deeming them
"easy to build".

~~~
alandarev
On the other hand, if the strategy is not directly applicable for your
business, that does not suddenly become a 'busted myth'.

Though, I fully agree with you - as long as you are targetting narrow
audience, getting 'general' traffic will not magically increase your sales.

------
diziet
_Realize to have $3,000 in monthly revenue, that’s anywhere from 100 to 600
paying customers_

If you're charging $5-30 / month, you're not going to grow well unless you are
truly a fully self serve company. Charge 10x more and have happier customers.
Even apps moved towards a model where they earn most money from high spenders
from in-app purchases.

~~~
lessallan
It's very hard to generalize pricing, we're $36/mo which is the top of our
market with pricing.

------
carsongross
This is my experience with bootstrapping as well.

The technical platform problems around bootstrapping have gotten much easier,
due to Heroku, AWS and all the services out there (Papertrail, Exceptional,
New Relic, etc.)

Unfortunately relatively little work has been done on the "requires that you
be a stubborn bastard" problem.

~~~
lessallan
1) Creating any business is hard, unless you sell blue meth. 2) Creating two
businesses is even harder (bootstrapping + consulting to make a living). 3)
Technical hurdles are getting easier but rarely does the best product win.
Marketing is hugely more important that product, although I wish that wasn't
true.

~~~
thenomad
I suspect you'll find even the meth business is tricky. Indeed, I believe
there's a popular TV series about it.

Serously, Breaking Bad is an excellent primer on entrepreneurship. It covers
everything: distribution, marketing, negotiation, finding business partners,
scaling, exit strategies...

------
alexmarcy
To me the SAAS space is no different than starting a band, being an actor,
etc. It is easy to get into at some basic level but almost impossibly hard to
become the next Rolling Stones, Tom Hanks or some other crazy successful
example of the field.

That is by no means a reason not to do it, just that expectations need to be
set about what reality actually looks like.

------
31reasons
Its pretty interesting that how people come up with the rules/"myth busting"
like its a Science. Every case is different and no one can teach you or tell
you how its going to be unless you try.

------
hackaflocka
I suspect we'll be reading another post from this author in a year's time.
About how after investing in his people, many of them walked out to other
jobs.

~~~
lessallan
I don't even know what "investing in people" means. We're a small team, our
newest employee has been with us for 3 years.

~~~
chrsm
Having met most of the LessEverything guys, I'd definitely say they know what
they are doing.

------
CmonDev
"Spend five hours on the HackerNews front page and get a few thousand uniques
from the most cynical, judgmental visitors you can imagine."

That's me!

------
sethammons
I hate to put a negative comment, but hey, bad reviews travel 10x faster than
good ones for a reason, right? Did anyone else get the chat model pop up
baiting me into reading another article? Completely pulled me out of the
engaged reading of the article. Poor form. I exited the window and don't
believe I'll be going back to the site. </rant>

~~~
dangrossman
I loved that thing. Read both articles because of it. It even got me to check
out Groove and bookmark them.

~~~
lessallan
Thanks Dan, GrooveHQ.com is sweet!

