Tell us about yourself! What are you working on?
My name is Rafael, and I'm from Mexico. I have a master's degree in marketing, and I've been making websites since I was 15 (I'm 30 right now). For the last 13 years I've been blogging at therror.com about marketing, technology, and other stuff.
Ten years ago I started creating services in order to gain financial independence. First I made a t-shirt site, then I tried my hand at an inventory system for small businesses, then a CRM for dentists, and then a movie tracking app that helps you find the closest theater for a particular movie. My latest service is Box Factura.
What is Box Factura, exactly?
Box Factura is an email service for your business' invoices — instead of receiving email, it receives invoices. The invoices are stored in a database so you can find them easily. You also get a push notification whenever you receive one, so you can find out if there's an error instantly. The service also does validation for you to find out whether a particular invoice is fake or not.
How'd you come up with the idea?
Here in Mexico, in order for an invoice to be deductable, you must get an XML file from your vendor. Usually, you find all of your invoices in your email at the end of the month, download them, and then type them into an Excel file. I thought this process was madness! Why should I have to print a digital file and then capture it again digitally?
I started looking for a simple service: one that receives the XML files, parses them, and stores them in a ZIP that also includes an Excel file, so I can forward it to my accountant. Simple, right?
Well, it didn't exist. Even worse, the more I looked into it, the more I found out that the whole industry is lagging behind 10+ years, starting with the government agency itself! This was a golden opportunity.
What did it take to get the product off the ground?
At this point I had a simple Ruby script for my own needs, which I'd been using for half a year. I have my own agency, and during some months of 2015 I had nothing to do client-wise, so I chose to give myself another job and started working on turning the script into Box Factura.
I started in January, and by April I had an MVP. I continued prototyping for the rest of the year with basically $0 revenue. By the second quarter of 2016 I had a much more mature product, and I started showing it to clients and friends. They loved it, as it saved a lot of time and pain and actually delivers a lot of value!
How does Box Factura make money?
We charge for three services. First, we provide an email account to which you can send your digital invoices. Our system processes the XML file, stores it on Amazon and in a database, and makes sure the information included in the invoice is correct (so you can be sure those expenses are actually deductable). Then, as described above, you can download all the files to a ZIP, which includes an Excel file you can send to your accountant each month.
This is the least expensive product, as it's focused on independent professionals or enterprises with 4-5 employees or less.
For bigger companies, we provide two extra products:
- Travel Expenses — Each employee gets their own email address to which they can send their expenses. This way, the administrator can know anything about their travel expenses, make sure the invoices are deductable, and save time on what is usually a very manual process.
- Supplier Portal — This is a mini website where our clients' vendors can upload their invoices to be paid in the future (30 days normally). The client gets reminded via email when it's time to pay. The service also blocks the vendor from uploading invoices when they shouldn't — it's very common for enterprises to only receive invoices on, say, Tuesdays.
All three services are billed monthly and have no installation/licensing fees. Also, Box Factura doesn't use a payment service since all of our sales are done personally, although I hope some day this will change. Currently, we're billing $1000 per month.
How have you found customers and grown your business?
Since launching in July 2015, I've tried everything that's not paid advertising. I believe in the importance of long-term growth, but I'm focused on short-term marketing right now because that's what's paying the bills:
- Cold calling — As digital invoices are a relatively new model, there's no leader yet. With my agency osom, we usually don't cold call or email. Nobody responds, as everyone is already has a website, a social media strategy, or an app. With Box Factura, however, the response rate has been huge! I believe it's because the service is very innovative and solves a big problem. Cold calling has been a great channel, although it requires a lot of time and patience.
- Onboarding — What happens when a user signs up? Because our target customer aren't very technical, we have to explain what Box Factura does step by step. This has brought us a couple of clients.
- Email marketing — Ok, so the user found Box Factura, signed up, and finished onboarding. Now what? In February I implemented a mailing list via MailChimp that reminds users every two days about the features of the product. When I finished it, I sent it to the current user base and got one reactivation, which ended with our second enterprise sale. Not too shabby!
- Selling to current clients — They know us, and we know they have issues with their invoices (everyone does!), so we got our start by speaking with them and explaining our product. The supplier portal idea was born out of one of these conversations. And now we're selling Box Factura's customers our web design services, too!
- Landing pages — The home page might be the user's first experience with Box Factura, so we have to make it count. In June, a designer and I revamped the home page and created two additional landing pages: one for the supplier portal and one for the travel expenses service. We receive three or four leads each week with these pages.
- Demos — The personal part of B2B sales is very important. I try to demo our products personally if the customer is close enough, or via a video call otherwise. Afterwards, we let the customer use our product free for 30 days.
Here are my long-term growth strategies:
- Content marketing — Having a blog for 10+ years has taught me the importance of content. Box Factura has a blog that explains accounting tips, tax laws, etc in layman's terms.
- Customer service — Every customer has to be served well, especially if they're early users. By developing trust, we not only preserve their business, but get recommended to other people.
- Social media — Although I don't think Facebook and Twitter are great sources for leads for this kind of service, Box Factura has a social presence just in case someone reaches out via that channel. Also, to keep those accounts looking active (and to keep costs down), we automatically repost one of our blog's articles every day.
- SEO — I'm focusing on getting the landing pages to the first page of search results. Also, the blog helps to drive users that have a specific issue with their invoices ("How do I get the invoice for X?"), so we can drive them to our product. Finally, although don't I believe social media is the best channel for leads, it provides great digital properties that help with SEO. Simply having the first spot in search results isn't as great as having the top 5 with official Facebook, Twitter, Pinterest, and GitHub pages.
- Videos — I'm working on finding a good vendor that could help us with a high production quality video.
Maybe I'll try paid advertising in the coming months.
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If you had to start over, would you do anything differently?
I would have moved faster, client-wise. One of the very first people I talked to about Box Factura was my accountant. Surely he could recommend us to his clients, as everyone was working with paper and wasting a lot of time, right?
Well, he didn't. Not only that, he often forgot what the features were from one week to another. He simply didn't care. He's old-school, and that's okay — some people are like that. However, I was getting anxious. I had a great product that helped me save time, but no one was using it. Worst of all, supporting the product was taking not only my time and effort, but also my money.
I got tired of my accountant and went searching for a new one. I was looking for someone who was interested in making my product better and, hopefully, using it in his business. And that's what I found! My new accountant became my first client.
Also, I wouldn't have wasted about 10 days trying to set up Stripe as our payment processor. I figured out it was too soon since Box Factura had very few hits. Nevertheless, my PC crashed and ended up erasing those commits, so I guess, thanks git?
What are some good lessons you've learned on your journey?
I'm glad I didn't sweat too much about some details I thought were important — the edge cases, the technical "what ifs". Turns out, the client doesn't care! She just wants to finish with her administrative work so she can go back to serving her customers, which brings me to my next point.
Listen to your customers. They know more than you about their problems. There are a few other options doing what Box Factura does, but I can see they're struggling — lowering their prices, pleading on social media about how they're just two young entrepeneurs, etc.. Go talk to customers instead!
Before launching, I set up a leads list so I could contact potential customers via email. I ended up with about 100. Talk to them. Talk about their problems. Doors closed? They won't listen? Offer them a free trial. As I write these lines, I just got paid for the first month for a client I gave one year free trial to. They asked for the supplier portal, gave me free feedback, and now they're a paying customer.
Be honest. Know what you are offering. Box Factura is not modular, it is not WordPress, and it can't be personalized. A feature needs to be useful to at least a third of our customers for me to work on it. Otherwise, the product will be a mess of exceptions, and it won't be maintainable. I explain, yes, it can be personalized, but not at this price. We're charging 10 times less than our closest competitor — a big enterprise solution with ERP integration. So be open and honest about what you're selling, and be very personal.
What are your plans for the future?
Box Factura just turned one this July. It hadn't been alive for six months before I knew it needed a rewrite — its database architecture is a nightmarish stepladder of models, and until recently it was a single-user application. I had to rewrite the whole app so it can have multiple users. (Remember: listen to your clients!)
Maybe I'll need to hire someone, rent an office (much of B2B is about appearances and service), and work with some integrations for popular ERPs. Also, an Android and iOS app would be very nice, as well as a rebranding, since I did the logo myself.
What's your advice for aspiring indie hackers?
The "build it and they will come" phrase is a myth for most new businesses. You have to go out there and show your product. It's not going to sell itself, and the very first sales will be hard, either because of your product's expectations or the client's worldview. Continue moving fast beyond these first rough experiences, and go and show it to someone else.
Also, try to validate your product early. And don't let the lack of funding slow you down. Maybe you don't need funding. Maybe the money you actually need is payment from your customers. This serves dual purposes, as you'll be both making money and validating your service!
Finally, talk to your customers. Do whatever it takes. Sometimes you'll even have to pay them for their time — do it!
Where can readers learn more about you?
You can check out therror, my personal blog where I often write about marketing and technology. (Although it's in Spanish — maybe you can practice it?) You can also follow me on Twitter. If you want to talk about marketing or startups, reach out to me at email@example.com.
You can also leave a comment below, and I'll try to get back to you!