Hello! What's your background, and what are you working on?
My name is Thiago, I'm a 27 year old developer and marketer from São Paulo, Brazil, and the founder of Proposeful, the online proposals SaaS.
I was 19 when I quit my job and started freelancing full-time, and in 2013 I founded a small web development agency. While working for clients I was always inventing web and mobile apps. Since then I've built and launched at least 8 projects, most of which generated only a little revenue, until I launched Proposeful.
Proposeful is a proposal writing and management SaaS which is my full-time job now. We launched the first version in January 2016, but it wasn't until October that we saw any sign of product market-fit or revenue. This was after literally thousand of cold calls to potential clients, dozens of thrown-away features, months of development time, and exhaustive visits to conferences where we pitched to everyone.
Since October, we've hit close to $400 MRR and have clients in South America and Europe. We expect to hit $1,000 by February and $5,000 by June. It's still very early, but we aren't spending a dime on advertisement, so those are very exciting results for us.
What motivated you to get started with your business? What were your initial goals? And how'd you come up with the idea?
Proposeful's journey starts in 2013, when I founded a small web development agency with a friend of mine. I built a project and finance management tool for us to keep track of bills, projects, and tasks. I kept improving the tool, and by 2015 it was pretty neat, so we launched it as as SaaS product.
It acquired a few customers and we were invited to a pre-acceleration program in my city. It was very focused on market validation, and as part of the program I conducted close to 80 interviews with strangers — freelancers, agency owners, consultants, and other service providers — and mapped all their needs to try to connect the dots.
I realized these people had a constant problem with keeping their sales steady and not closing deals fast enough. I had been doing that for 5 years so I understood that challenge very well and believed that by teaching the lessons I had learned and providing great tools I could help them save their businesses.
So what I did was throw away 90% of the old product's features and rebuild it as a proposal writing tool.
What did it take for you to build the new product in terms of time and money?
The fact that I am a developer made building the product easier for us. Still, it took at least 8 months of constant user feedback and trial-and-error until we got Proposeful to be as intuitive and useful as it is today.
Interestingly enough, we were aware there were other tools in this space, but we never cared to see how they worked until we had a pretty solid version of our product. This allowed us to focus on actual usability instead of copying competitor's features. In hindsight, that really helped us.
Competition is, in fact, irrelevant. Focusing on their product will only deter your creativity. I believe that's what contributed to Proposeful being so different from other business proposals tools, and so effective for our customers.
Proposeful has always been bootstrapped, which I think is a great thing for a SaaS company. You simply can't afford not to consider profits from day one when you don't have other people's money to spend. Everything we do is aiming at acquiring customers the most cost-effective way and providing them with a tool they will use as long as their business exists.
What sales and marketing strategies have you used? How have you gotten Proposeful in front of customers?
When we launched, we believed that we just needed a nice website, a big "Sign Up Now" button and sales would come. But it doesn't work like that. Most products have to be revalidated and rebuilt until they align with the market's needs, and even then you need an amazing user experience to remove customers' barriers and increase retention.
A couple of months before launch, we noticed that people were signing up for a free trial but didn't really engage with the product. We decided that if someone wanted to use Proposeful they would have to talk to us first so that we could really understand what they wanted.
We requested their phone numbers and called everyone so we could better understand what they were looking for. This filtered out the merely curious and allowed us to chat with actually interested potential customers. Meanwhile, we were hypothesizing possible client profiles (like digital agencies or accountants), finding where those business were listed (usually associations and unions) and calling them, one by one.
We dedicated every week to a profile. For example, we chose coworking offices for the first week. We literally called all 232 coworking spaces that existed in Brazil and said, "Hi, can I speak to your sales department?". Then we pitched the right person. Some were rude, some were great. We acquired our first customers that way, and then did the same with digital agencies the next week, and consultants the next.
After close to 6 months doing this, the clients we hustled for were happy with the tool, we had the right features (thanks to their feedback), and were ready to try a self-service model again. So we rebuilt and launched our website in October, and the first sales came in the next morning. (Mind you, we had already built a blog audience and some traffic to our website.)
Here's a list of how we've been acquiring customers:
- The Proposeful.com blog (where we write about sales, prospecting, and negotiation) is what drives most of our traffic. We are ranked number one for most relevant keywords in Brazil and, with the recently launched English version, will soon be in most countries.
- Tawk.to was a game changer for us. It's a free but very complete live chat widget. 70% of our customers start some interaction when they are on the checkout page and we need to be available. I literally closed deals from the gym thanks to Tawk.to.
- Our mailing list gets all posts by email, averaging a 30% open rate and a 15% click rate, and eventually converting some clients.
- We are building partnerships with the largest startups in our niche, as well as consultants. This includes integrations, guest posting, and more. With other startups we have opportunities to improve both products by integrating them and to reduce churn while capitalizing on each other's audiences. With consultancies, we have respected authorities indicating our product to their customers and a new way of helping customers who need a more hands on approach.
How does your business model work? What's the story behind your revenue?
Proposeful taught us a lot about value perception. When we were cold calling possible clients, we were offering a very low price for unlimited use. Our idea was that a low price would allow us to validate the market need faster. But we were getting nowhere. We told them Proposeful was helping other users improve their sales in up to 30% (which is true, we measured this with our beta users) and the small price probably made this claim less believable.
So one day I decided to increase our prices almost 10 fold and go after larger companies. Surprisingly enough, that was all it took for us to close the first deals. The new pricing allowed us to dedicate as much time to a sale as the client needed and to seek companies that would have longer sales cycle but a stronger need for our solution.
Now we consider these companies our ideal customers, but also made Proposeful accessible to freelancers and smaller companies. Since users can sign up, purchase, and use our product by themselves, it's now perfectly viable for us. All Proposeful plans offer all of our features — like proposal templates, signing proposals by email, and tracking client access — and are only limited by the number of proposals and presentations the user needs to send, starting at $15/month for up to 10 proposals.
We've been able to capitalize traffic we already had at our blog by placing a banner on our sidebar and one at the bottom of every post. I've been guest posting a lot and this brings new customers immediately. The impact that these new backlinks will have on our SEO in the next few months should also improve our rankings and sales. Inbound will always be our core technique, and it's the most effective for any bootstrapped SaaS startup with medium-low tickets.
Currently we're seeing a nice 2% conversion rate from visitor to paying customer, which allows us to plan costs and campaigns accordingly.
What are your goals for the future? Are there any big challenges you see on the horizon?
A lot! As I said, our goals for Proposeful are larger than the proposal software we offer today.
We consider it a way to help business and entrepreneurs prosper, because we believe everyone should strive to build what they dream of. Today our tool helps dozens of business do that, and our content is read by tens of thousands of entrepreneurs every month, so we feel we are on our way.
Our company was born from the desire to do what we love and decide our own journey. We want both our product and culture to reflect this. But we have a rule here we use to help us stay focused: we don't talk about what we plan to do, we come back with results and share them. So I'll save the speech for when we've helped even more people.
What are the biggest lessons you've learned so far? If you had to start over, what would you do differently?
When we relaunched our website, we had to decide between freemium, free trial with credit card, and free trial. I don't feel freemium is an option for starting a B2B SaaS without VC money, so we crossed that off. Free trial with or without credit card was a tough choice, so we went with the fourth and hidden option: no trial.
That would let us test right away if there was any real interest in our product. And there was. People were willing to purchase it after seeing our proposal templates and product videos, because it was enough for them to think, "holy sh*t I want that".
Still, we thought we were limiting our growth with that, so after a few weeks we launched a demo environment, believing our conversion would go from 2% to maybe 3% or 4%. But it didn't. It fell considerably, and we removed that option after a couple of weeks. The reasons for that, we believe, are:
- People value things based on what they give for them. Free (even if trial) usually means no commitment, which is the toughest fight of every SaaS startup.
- When a user makes a payment, they will commit to spend a little more effort learning, and after they are hooked they tend to stay.
- Our clients sometimes are researching the perfect tool to use to send a killer proposal the next day, so we have urgency on our side. When they find Proposeful, they want it enough to invest a little right away and try it out.
- We do offer a 14-day money back guarantee on all payments, which reduces risk for buyers, but so far no one has requested it.
Overall, for us, it just works better without a trial. Leadpages.net does that too, maybe for different reasons, maybe not. But it probably works better for them as well, even if it's unusual for SaaS.
Of course some clients insist on a free trial. Some demonstrated a lot of interested but said the lack of trial was a deal breaker for them. So we gave out some trials, but it doesn't work well for us. Maybe one in five of those converted.
As I learned in my agency years, clients who want to pay cheap or want things for free are usually not ready for to be your customers yet, so don't focus your precious early stage, bootstrapped effort on them.
What's been most helpful to you on your journey? What do you think your biggest advantages have been, and what's your advice for aspiring indie hackers?
Everyone has read a hundred times that the secret is meeting the right people, improving yourself, setting goals, etc. So I'm going to offer more uncommon advice.
One thing that worked really well for me this year was increasing my productivity by reducing my availability. I base this on Parkinson's law, which states that "work expands so as to fill the time available for its completion."
So what I do is allocate only 6 hours to accomplish our critical goals for the day, instead of the usual 16 hours we tend to work if we don't set our boundaries. And, though you might not believe me, it's usually possible. I know from experience that if you start something by thinking it will take all day, it really will, but if you focus on finishing it in a couple of hours, you just might.
This offers a lot of advantages:
- More balance between work and other activities, which lead to more creativity.
- More time to sleep and exercise.
- Forces you to decide what is necessary and what's not.
- It aligns with our company's culture.
I strongly recommend the book Essentialism (by Greg McKeown) for anyone looking to fix their wasting of time.
What's your advice for aspiring indie hackers?
Some things I tell every fellow entrepreneur I care about in regards to starting and growing a company:
Forget scaling if you're starting up. In Brazil we have a saying: "You're placing the chariot in front of the horses." It's like starting going to gym and telling your trainer, "I don't want to get too big" on the first day. You won't. That takes years of hard work and experience, like growing a company, and you're not special. Not until you've worked your ass off. So start by creating something your market wants with no regards to how scalable it could be, and only when it works you have the right to start thinking about scalability "hacks" and whatnot.
Your success is up to you. Even if you have no technical expertise, have no money, no connections, your family doesn't support your plans, and your country is not a startup hub. Good entrepreneurs will always succeed, wherever they are. So go get what you are lacking.
Learn to question everything. Why should you charge the same as others? Do you really need to build an app? Don't follow the common advice like it's a road to success, because it's usually a road to mediocrity. Great things only happen when people decide to do things differently.
Have fun. You will never have enough. There will never be a point where you're satisfied with your wealth or growth and will decide to stop. Your company will never run itself after years depending on you. So enjoy your journey from day one and build the life you want today, not in ten years.
Where can we go to learn more?
And if you are an indie hacker looking to create a presentation for your company or need to send a business proposal, check Proposeful.com. We love to see creative people using our proposal builder in ways we didn't think of before.