Smooz

Matthieu Varagnat explores the benefits of simplicity and of forming personal relationships with customers on his journey to 1000€/mo in revenue.

Hello! What's your background, and what are you working on?

Hi, my name is Matthieu Varagnat. I am the maker and founder of Smooz, a Slack app that allows seamless collaboration across teams by opening shared channels. It is used by hundreds of teams, mostly by agencies working with clients, because it is so much more convenient than having to invite/be invited to the other team's Slack. Several companies, like Segment, use it for collaboration with business partners. Some others use it to connect a "Core Team" Slack to a "Community" one.

My background is in engineering, in Materials Science, and I worked for some years for a large multinational construction materials manufacturer. I held various positions in R&D, in business development with innovative startups, and in product management. I am also a self-taught developer, and I built side projects for 2 or 3 years before deciding that I was more built for a maker's life than for a corporate one. I worked on a number of projects (startups or side projects) before creating Smooz.

My main satisfaction is that hundreds of teams use Smooz daily. I only recently put a proper monetization scheme in place, and I currently have about 20 paying customers bringing 350€/month. My goal is to grow it to at least 1000€/month.

What motivated you to get started with Smooz? What were your initial goals? And how'd you come up with the idea?

I have always been interested in the broad concept of "new platforms", i.e. everything from SMS or newsletter-centric apps, to message- and voice-based interfaces. I was curious to explore non-Android/iOS apps. For example, I made a chat back-end for entrepreneurs who wanted to start an SMS-based business. I was trying a lot of things out of curiosity. I started tinkering with Slack API more than a year ago.

My philosophy is that my progress is like a flight of stairs. Each step is a new technology I learn and a project I make, but only under the condition that I ship the product, share the code, write a Medium article on it, make a tutorial on Instructables, present it at a Meetup, or something similar. It has to ship. It has to get exposed to the world. This is the only way I can learn from users' feedback. This has allowed me to build my credibility, talk to interesting people, and get some visibility for my next project. Before Smooz however, none of my projects had generated revenue.

I eventually developed the initial idea for Smooz as a nice hack for some friends who were in way too many Slack teams. The initial thinking was to synchronize messages from several places. When I started Smooz on the side, I was working as a consultant back-end/product person. Since then, I have accepted freelance jobs from time to time (building Slack and Messenger bots) to pay the bills. As a result, I was able to devote a lot of time to the initial creation, launch, and iteration of Smooz.

What went into building the initial product?

The first hack was lousy. The logic of the Node back-end was essentially the same as it is now, but people had to copy and paste tokens. The onboarding in Slack was non-existent, so there were no clues to guide them. Still, several people in my communities were really intrigued and impressed. Some were quite enthusiastic at the prospect of using a more polished version. This initial support was great validation, and I'm very thankful for their initial testing, but there was little I could do to improve the product at the time given the set of APIs shared by Slack.

And then in December 2015, Slack announced their App Directory and a new set of API endpoints. I vividly remember waking up that morning, checking out Medium, and reading their blog post. I though, "Wow, I could turn it into a real app now." I spent the entire Christmas vacation at my in-laws re-writing the whole app to take advantage of the new features.

By January, I had a well packaged product that could be installed in one click. Opening a shared channel with another team was as simple as sharing a link with them and having them click on one button.

Since then, I have added a few features, but I've also killed most of them to keep the product clutter-free and simple to explain. What remains: users can open a free in-browser video chat with the other team, create shared channels with many teams (or several channels with the same team), turn shared channels into private groups, and manage their channels and invitations from a dashboard. It is more polished, but the focus is still on having a simple, one-click service.

What marketing strategies have you used? How have you attracted users and grown Smooz?

In December I started a limited access waiting list that I shared on BetaList and on a few Facebook groups — I think I started onboarding the first few users just before New Year's Eve. January was a busy month, iterating on every aspect of the product, removing bugs, and adding key missing features (@mentions, filesharing, user icons, and so on).

An over-enthusiastic user posted Smooz on Product Hunt in February at a very bad time — it was a Friday, at the end of the afternoon, and I was taking care of my two daughters while my wife was on a business trip. It was possibly the worst possible time. Thankfully, the PH team was kind enough to temporarily remove it, and I got it reposted the following Tuesday. It brought a nice number of new teams — a hundred I think, some of them are still among the biggest users.

By March I had about 300 registered teams, with perhaps 20% of them regular users. Since then, I have been naturally well positioned in terms of SEO for most relevant queries, and I also got Smooz into the Slack Directory, which brings a small but steady influx of users.

While marketing is not my strong suit, I've tried to go against my nature. I wrote a few articles on Medium, some of which got quite popular. I organized several meetups, including the first Slack France meetup, as well as contributing to the ongoing Chatbots Paris meetup. I tried direct sales to agencies and companies I thought would need it, but that was not very successful. I have not tried advertising though perhaps I will, but the feedback I got from other Slack app makers was that the impact was limited.

As of yet, I have not found a reliable, repeatable way to get in front of my ideal customers. Compounding the challenge, any direct customer of mine needs to convince his customers to install Smooz as well. If each of these steps has a conversion rate of 10%, it means the real rate is actually 1%.

What does work for me is to talk to all the users in the trial stage. I think I have 600 conversations in my Slack account right now. I've gotten an incredible amount of feedback from these conversations, and many customers signed up because of them.

How does your business model work? What's the story behind your revenue?

Initially, the project was only for fun and pride, to create a tool that would be used by many users. Quickly, it became clear that it was useful enough that users would be willing to pay for it (some even said so without prompting), and that I needed to generate some revenue to cover expenses and justify the time I was investing in it. Pricing it was probably the most difficult part of the whole project. I brainstormed for weeks over how to structure it. Everybody I consulted had a different opinion.

In May I launched version 1 of the pricing, with plans based on the number of channels. It was really bad. The free plan, when you opened only one shared channel, was way too generous and most users ended up staying with it. The paid plans, on the other hand, had steep transitions — if you had 3 channels opened, for example, creating a fourth one would bump you into the next tier and double your monthly price.

In November I revised the pricing around two principles: (1) no free tier and (2) smooth upselling. Now it costs 6€/month per channel you open, with a discount if you have many channels. I am really satisfied with this pricing. A good number of trial users convert, even if only for a modest sum, and some upsell themselves by creating new channels. They can also close a channel when they don't need it, which reduces their bill, but that's fine too! I believe that if clients find it is super easy to adjust to their consumption, and know they can turn it down when they want, they won't hesitate to turn it up when they need it.

The new pricing is cheaper on average, so I lost some revenue, but I recouped it in a month. My revenue is now growing at a healthy pace, around 6-8% per week, with currently around 20 paying customers and 350€/month.

What are your goals for the future, and how do you plan to accomplish them?

I plan on doubling my revenue in the next few months, and hopefully reaching my objective of 1000€/month by the end of the year. That would be a nice milestone.

Also, I am cautious of wanting to "build more stuff" on top of Smooz. I don't think it needs many more features.

I've spent a month building an integration for MS Teams, a Slack competitor, so that users will be able to connect to/from both Slack and MS Teams. I think both the platform and my product are neat, but I'll need to wait for the full launch of MS Teams to see if users like it and if it moves the needle in terms of revenue. We'll see. I think I'll mostly spend my time on marketing opportunities instead.

What are the biggest challenges you've faced? Knowing what you know now, what would you do differently if you had to start over?

Smooz was a great learning experience for me. It was full of the "fun" types of challenges: from idea to to product, from launch to scaling, and from waiting list to users to customers. I think, at the beginning, that makers should not hesitate to have their initial users try really crappy initial versions. Even if you are ashamed of the quality of the product at this stage, you learn a lot from these early interactions.

The second point is to try to keep the big picture in mind and not get distracted. The product should do one thing really well. I think I was relatively disciplined regarding adding features, but I still coded a lot of things that users were not clamoring for, that I had to scrap later on. The simpler the product, the simpler the onboarding and quality control. That's not fun to hear when you're a developer though.

As I mentioned, the main challenge I had was about pricing. Now, for my own projects or for my fellow solo-bootstrap-makers, I have one solid mantra : "Get rid of your free tier". I think I should write a Medium post about it — that might be good marketing for Smooz, too :-)

Actually, a posteriori, I realize that the two objectives of having paid users and having a great level of engagement and activity are not separate. They converge quickly, because free users are less committed to the product anyway. After a few weeks, only paid users are really retained.

What were your biggest advantages? Was anything particularly helpful?

Obviously, timing was good. Being there in the early days of the Slack Directory gave me a good amount of visibility. While visibility is nice, it is not sufficient in the long run. The biggest advantage of Smooz from the beginning was the focus on simplicity. Other solutions exist out there, but they are all clunky. Smooz allows you to share one link, and your contact has to make one click. That's it.

The second factor that users like a lot is that I am always available to discuss. It can be to discuss features, blocking points, payment, whatever. One user said, and I'm super proud of it, "I came for the trial, I was not expecting friendship." Another one cancelled his payment — I jumped on the phone, we had a long chat, and not only did he restart his subscription, he actually tripled his business with me.

I think indie makers, or even startups, are naturally more able to create this sort of emotional bond with their users. I see some trying to sound serious, official, and corporate-y, but I think it is a wasted opportunity and a bit sad.

Where can we go to learn more?

I am active on Twitter and Medium, where I write mostly about conversational interfaces. I can obviously be reached by chat on Smooz, but I'd be also very happy to answer questions in the comments below.

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