Bootstrapping a Marketplace to $1.3M by Talking to Customers

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

Hello, I'm Varun Aggarwal. I'm a computer science engineer, and in my early days I used to be a freelance graphic designer. I'm also the founder of Designhill, my first "true" product. I started it with my brother, Rahul Aggarwal, in October 2014.

Designhill is a complete online graphic design platform for small businesses, including SMEs, doctors, lawyers, photographers, real estate companies, technology businesses startups, mom & pop shops, etc. We help them out at an affordable price with whatever graphic design needs they have such as a logo design, complete brand identity for their businesses, website design, brochure designs, and many more options.

We bootstrapped the business and hit the magic $1M ARR number in a short span of 14 months. We are currently growing at 21% MoM, and we aim to grow 10x within the next year.

As of today we have an awesome community of 38,000+ graphic designers from 52 countries, and we've helped thousands of business owners fulfill their graphic design needs.

App Screenshot

How'd you come up with the idea for Designhill? What motivated you to start?

I got started because of the personal challenges I had with freelance design, as well as an awareness of the problems my customers were having. As a freelance designer, I worked on many platforms to find good freelancing opportunities, but I faced many problems:

  • Exposure — It was very difficult to find new clients.
  • Genuineness — It was a challenge to find clients who would pay me on time and pay according to the effort I put in.
  • Security — How would I secure my payments and ensure that I received them on time?

I also noticed that most of my clients faced many similar problems:

  • Quality designers were hard to come by.
  • Delivery often didn't happen on time.
  • Affordability was an issue for many clients.
  • Limited numbers of designs and revisions were available.
  • Versatility in the designs was also limited.
  • Professionalism was hard to verify in advance.
  • Discovery of new designers was difficult.

In order to address all of these issues faced by freelance designers and design seekers, we decided to build an open and innovative crowdsourcing marketplace.

Because I had been a freelancer for few years, I already knew the pain points on the designer side. To validate on the buyers end, I asked many of my past clients if they would be interested in this approach to design services, and the response was very positive. We even tested out the platform with a few designers and friends (as clients), and everyone loved the idea!

Create a product that actually solves a problem for the masses, not just a problem that exists in your head.

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It was clear there was a need for what we were planning to build, and the next step was to figure out how to build the product and target our potential customers. We launched the beta in April 2015, and we went fully live around October 2015.

What did it take to build the initial product? (time, money, tech, etc.)

As Designhill is a bootstrapped business, our funding came through our personal savings and family support. We had to charge our clients from day one, because we had to pay the designers for their work.

We started with a small team of four developers, but our first hires were not the best choices, to be honest. We soon realized that hiring is a challenge. But in the meantime we wrote the code in PHP, and it took us around 4-5 months to get the first beta out.

On the server side of things, we're using many AWS services, including EC2, RDS, CDN, SES, and Elasticache. I highly recommend moving to AWS to get the best performance, as it's easily scalable and very affordable.

We also rely on many tools to function smoothly, like Customer.io (segment emails), Hotjar (analytics), Ahrefs and Moz (SEO and competitor research), Zopim Chat (support), Trello, Google Apps, and many more.

What marketing strategies have you used to grow your business?

At Designhill we've tried and experimented with every possible marketing strategy in the book. Some have worked really well and some haven't. Every business is different, and each strategy may have a different outcome for a business.

Native advertising is probably the most fruitful and influential form of advertising we've used. No one wants to hear you talking about your business, and paying for ads all the time is just too expensive. However, creating share-worthy content that's rich in research and facts is the best and the most effective way of reaching out to potential customers. Also, it helps greatly with your SEO, so we focus 60-70% of our time on this marketing channel.

Like any other marketplace, we faced the chicken-and-egg problem...

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Getting the SEO right was actually a big challenge for us. Ranking organically is very tough. To be honest, we didn't understand how SEO worked initially, and nobody really knows how the algorithms work. However, we did know that a business like ours needed to rank on Google to do well. We eventually figured out that we had to create content that was unique, high quality, and extremely shareable. It ended being a huge success for us, helping to boost our rankings on Google and improve our branding, too:

These microsites, guides, and the quiz helped us rank organically and get lots of traffic. As a result, we've avoided the high costs of hiring a PR agency (I personally feel that the PR system is broken) while getting lots of coverage and boost to our branding regardless.

Month Sessions Pageviews
Jun 57382 665561
Jul 57995 575649
Aug 57102 538336
Sep 62303 622496
Oct 77198 745221
Nov 84591 767661
Dec 101962 948918
Jan 134583 1168660

We use all forms of social media channels, and each of them serves a different purpose: Facebook is great for community-building and attracting designers. Twitter is great for outreach and content marketing. Google Plus is great for getting your content indexed and finding connects. LinkedIn is more of a professional network, and we use it to promote our content through LinkedIn Pulse.

Another thing we use extensively are posts on forums and Q&A sites. These are a great medium for attracting clients and driving business, as they attract a lot of actual customers with real intent to purchase.

Sending follow-up emails (based on customer profiles and segmentation) goes a long way in converting leads and getting repeat clients. It's definitely something that everyone should focus on.

Finally, partnerships sound great, but in my experience very few of them drive real value. In a partnership, you need both of the companies to play a proactive role in promoting the other to its users, which rarely happens. Simply having a link on a partner's website isn't much help.

Indie Hackers community member channingallen asks: How were you able to grow both sides of your two-sided marketplace?

Like any other marketplace, we faced the chicken-and-egg problem. We had to get the right number of designers on the supply side who could fulfill all the design needs for our clients. Simultaneously, we had to ensure they were providing quality, on-time delivery and were able to rely on Designhill as a regular source of income.

On the buyer side, we had to convince our prospective clients that we were a credible business, as we're an Indian startup, and most of our clients were from the US, Australia, the UK, and Canada. It took time, but today if you check out any of the review sites like TrustedCompanyTrustPilot, etc., you'll see what our past clients have to say about us.

We started out by building a small community of designers. Without designers we wouldn't be able to solve any problem at all, so it was vital for our business to find at least a few good designers before approaching prospective clients. On the client end, we started out with our friends and families. They were our early adopters, and they were happy to try our service and give us some real feedback.

Award Winning Designs

Showcase of design content winners.

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

To date, we provide three different types of services. The first type is crowdsourcing via contests. Clients can post a contest, and multiple designers participate by submitting designs as per the brief provided. Here's how it works:

  1. As a client, submit your design brief through our intuitive onboarding process.
  2. Pick a package and launch your contest.
  3. You'll get 50+ designs in under 7 days.
  4. Provide feedback through star ratings, comments, and private messages.
  5. Pick your favorite design and you'll receive the original files.

Our second service is one-to-one freelancing projects. Clients can search through our directory of designer portfolios, handpick the one they like, and start a one-to-one project with them on their own terms.

Finally, we have a ready-made logo store, where you can buy from a curated selection of logos. Clients on a time constraint who are looking for a design immediately can buy from a highly curated list of logos from our logo store.

Last month (January 2017) we crossed the $1M ARR mark. Our revenue has been increasing at a high rate every month (21%), and we're hoping to hit the $10M ARR mark 12 months from now.

I've found that acquiring even a single customer is a very long process. If your prospective client is going to spend a penny on your product, they have to be 100% convinced and confident that your product can solve their problem. They will compare you with your competitors, look into reviews to see what past clients have to say, weigh the pros and cons, and then they'll make a decision.

Speak to your customers. Talk. Talk. Talk. Don't ever stop doing that.

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If anything goes wrong in between their first interaction with your website and actually purchasing your product, you'll end up losing a customer. Thus, apart from building a product, we've also been creating a brand value and perfecting our funnels. Our revenue has grown as a result of reducing our churn rate, improving the onboarding process, and performing lots of A/B testing.

Every time you perform an action it has an impact. It could be a positive impact or a negative one. It may increase your conversions by 1% or 10%, or it may decrease them by 50%. To attain an incremental gain, you have to analyze your actions and monitor the effects. Either you stick with the change, or you revert back, or you might modify the new change as per your analysis. And then you do it all over again. Keep doing that again, and again, and again, and again, and never stop.

Client Onboarding Process

The client onboarding process today.

What are your goals for the future, and how will you accomplish them?

Our end goal is that, when someone thinks about sourcing a graphic design (no matter what kind), Designhill is the name that pops into their heads. The online graphic design industry is growing at a very rapid pace, much faster than the offline graphic design industry, and there's still no "Google" or "Amazon" in this space. We want to own the design space.

We plan to roll out a multi-lingual/multi-currency website some time this year, and that should be a game-changer. Although we're based out of India, we're a global platform, so we need to have a presence in every country in their local language and currency. Once we've successfully achieved that, we should have a much wider footprint and presence.

If you had to start over from the beginning, what would you do differently?

Designhill is the first actual product we've built, and we've faced lots of challenges over the years. From hiring the wrong people, to hiring too many, to losing out on clients because our initial product was buggy. We waited too long to launch the product, and we even had to totally rewrite it at some point. We paid for these mistakes with time moreso than money, but I think it's been a great experience and has taught us many things.

If I had to start over, I would launch faster, get the right people on our team, and concentrate more on the core values of the business. By "core values" I mean the factors that drive business, like the onboarding process for clients, and other tools/functionalities that make it easy for people to use the website.

For example, we invested a lot of time into building things like designer levels, subscriptions, etc. We could have easily avoided doing these things for quite some time, as they weren't that important. It's crucial to know what's important and what's not, so you can channel your time, energy, and funds in the right direction.

What were your biggest advantages? What helped the most?

I think one of our biggest advantages has been our geographic location. We are based out of India and, because of that, we've been able to provide 24x7 customer support via live chat and email. As we are not a traditional digital agency, but a tech/digital company, we knew that providing round-the-clock support to our clients would make a difference, and it did.

That extra human interaction helped us grow faster and differentiated us from our competitors. Not only that, but it gave us lots of real-time feedback from our users that we could learn from. Any business that can provide excellent customer service will see a very positive impact in the long run.

What's your advice for indie hackers who are just starting out?

This was our first actual product, so our learning curve has been long, and yes we committed a lot of mistakes on our way:

  • Hire Intelligently — I think it's very critical to spend time finding the right team before you take the dive and start building a product. We made the mistake of not hiring well, and we paid with our time. Perhaps if we'd spent more time on putting the right team together, we would've been able to launch our product sooner.
  • Launch Soon — Don't wait to create a perfect product, because that doesn't exist. Launch your MVP as soon as possible, and gather as much feedback as you can. The more you iterate and experiment, the faster you will learn and progress.
  • Solve a Real Problem — Create a product that actually solves a problem for the masses, not just a problem that exists in your head. Build a product for your customers, not for yourself.
  • Speak to your Customers — Talk. Talk. Talk. Don't ever stop doing that. The more you speak to your customers, the better you will understand their problems.
  • Validate your Product — Create an MVP, launch your product as soon as possible, and validate that it's needed by your early adopters.
  • Build a Scalable Product — You don't want to spend years building something that only serves a few where you'll quickly reach a point have trouble finding new customers.

As for reading, I'd recommend The Lean Startup by Eric Ries and Zero to One by Peter Thiel. But most importantly, get out there and start doing something!

Where can we go to learn more?

If you want to get in touch with me, you can email me or follow me on Twitter (@varun3). You can also leave a comment below, and I'll try to get back to you!

Varun Aggarwal , Creator of Designhill

Want to build your own business like Designhill?

You should join the Indie Hackers community! 🤗

We're a few thousand founders helping each other build profitable businesses and side projects. Come share what you're working on and get feedback from your peers.

Not ready to get started on your product yet? No problem. The community is a great place to meet people, learn, and get your feet wet. Feel free to just browse!

Courtland Allen , Indie Hackers founder

  1. 3

    Designhill is such a great concept and platform for both designers and business owners. They have essentially taken on elevating the entire graphic design ecosystem.
    Additionally, the way they present their interactive guides with many thought-provoking and interesting facts.

    1. 1

      Thanks for your kind comments :)

  2. 2

    verything that DesignHill have is either stolen from DesignContest, 99desings or DesignCrowd! There are blocks of copied html and js. Typical for India! Their SEO strategy is good, but contradicts Google's guidelines and its only short time when their $100k/m will turn into $0

  3. 2

    Hi Varun, email A/B testing and follow-ups is really a cumbersome task. How did you manage to do that? We are constantly looking for ways to tweak our email marketing strategy. Please suggest some good approach.

    1. 2

      Hi Arbaella, Yes! A/B testing is very important and we use Customer.io for all of our email marketing. You can segment your users as per your requirements and then you can automate a series of emails accordingly. You can do A/B testing for all your emails through them and get real time statistics for the same. I think it really helps you automate your entire process. 😊🚀

  4. 2

    I would congratulate Varun and his team on such an incredible success. Social media presence is very important for any business to build a huge fan following and this can be done by sharing content that your readers or clients are looking for. Are there any tools that you use for social media sharing like hootsuite, buffer etc. ?

    1. 1

      Hi Ceylon, Thanks for your comments 🤗 and i completely agree with you. Social media presence plays a very important role. It helps in brand recollection and finding new customers.

      Yes we use tools like Buffer, hootsuite for scheduling social media posts. We have also used Quuu for content curation and promotion. They used to be free but i think now they are paid.

  5. 2

    Hi Varun,

    How much did it cost in total to get the marketplace MVP running?

    1. 1

      Hi PhaQuae, Apologies for the late reply. I wouldn't have the exact number but i think we started with somewhere around $20K-$25K for the MVP. Not everything was used up at once, but over a span of time.

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        Thank you for your answer!

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    How did you make the interactive micro sites? and how did you promote them?

    1. 2

      Hi Alan,
      Each interactive microsite takes a lot of research and effort. You have to first decide what is the aim/target for creating such a piece.

      Do you want to drive traffic? Get email sign ups? SEO benefits?

      Once you decide this, you can then start researching accordingly. To drive loads of traffic, you need something thats generic and would be of interest to almost everyone. It should have a virality factor where people should be encouraged to share it.

      For email sign ups, you could do a white paper or a guide.

      Design, UI are extremely important and you must ensure that its compatible on all devices. Remember majority of users view and share things via phones!

      Finally, promotion and distribution is the most difficult part and ideally you should spend twice the amount of time promoting and distributing such pieces than what you spend developing and creating them.

      Research for journalists/bloggers/websites who have written on such topics, compile a list and approach them from everywhere.

      Besides, a strong social media strategy is definitely required.

  7. 2

    Hey Varun, I'm not super familiar with this space, but I have heard of 99designs. I'd be curious to hear how you think about competition when first deciding to pursue an idea like this. Did you see something that they weren't doing well that you could do better?

    1. 2

      Hi Gabe,

      First thing one must understand is that competition is not a bad thing! Infact, it allows you to understand the mistakes committed by others and also the areas where you can differentiate and grow.

      Besides, startups are really dynamic and you keep iterating and changing things, so you never really end up doing exactly the same things that you started out doing.

      With us, we immediately identified various things, which we felt gave us a competitive advantage over our competitors, in terms of our interactions with our community, focus on customer service, differentiated product offerings.

      One really important thing is that you should look at the industry that you are entering, is it a saturated market or a growing one.

      In our case, we saw that the online design space is a rapidly growing market globally and it would continue to for many years to come. So, there was definite scope for gaining a market share and growing with it.

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        While intuitively I can understand that the freelancing market in design is growing, did you actually had a process to acquire data that can be replicated in other markets or was just gut?

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          This is the question that popped into my head too. I mean, I can assume the marketing automation industry is growing, but where do I learn the facts?

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            I think it boils down to your in-depth market research. Gut can only play a very little role, i think its more about data and numbers. What are the market trends? What are the growth rates? Whats the growth between online vs offline industry? etc.

            You have to think about your target audience. Who is you target audience? What metrics do you use to define your target audience? How big could be your potential customer base? How many of those users are exposed to an idea like yours? How many of those are actually using such service? What is the spending power of such users? And how many would be willing to pay you for your service? etc.

            There are 'n' number of questions which you would need to consider and the best practice would be to write them down and start finding answers to each one of them. Questions = Research = Answers = Informed decisions you can take.

  8. 2

    Hi Varun, regarding the marketplace chicken/egg problem:

    We started out by building a small community of designers.

    Would you mind expanding on this? Did you reach out to designers pre-launch? How did you keep them on-board and interested until the product actually launched? Were there ever issues with having too many or too few designers on-board?

    1. 2

      Hi Alex, its nice to meet you. Good questions.

      Did you reach out to designers pre-launch? How did you keep them on-board and interested until the product actually launched?

      We got in touch with a few designers and told them about our service. They immediately related, patiently heard and understood the problems we trying to solve. We made them our early adopters, gave them whatever benefits we could at that time and even got them involved in the product development. They gave us very valuable feedback and in the end that made them stick with us. We were very lucky to have them on board.

      And within few days we got our first clients so that started the engine. Some of the designers left us, but most of them stayed and have been with us till now. We are very grateful to each and every designer who has helped us grow.

      Were there ever issues with having too many or too few designers on-board?

      Honestly we haven't faced that problem till now. We don't have 1M designers and thats not even our focus for now. We want to have a small closed community, but a happy community!

      1. 1

        I like your concept of maintaining a tight, higher quality designer community more than chasing endless scale with whoever you can find.

        But at the same time, I would think crowdsourcing designs like you guys do would only be viable when using cheap designers. I mean, they have to provide 50+ designs in a week without guarantee that they will win the bid. What prevents them to bypass you and build their clientele on Behance/personal website if they're so great?

        So how do you maintain high-quality designers on Designhill? What's in for them? How much commission (%) do they get? Can you also give us an estimate of how many designers do you have in house?

        1. 1

          Thanks for your comments. I will like to explain this in greater detail. Earlier we used to allow designers to participate in every contest but now we have introduced "Pro Designers" and "Pro Contests". What are the benefits:

          1. Pro designers are handpicked designers on Designhill (they become eligible through certain parameters)
          2. All contests above $250 are Pro contests
          3. Only Pro designers can participate in Pro Contests
          4. So less competition and higher quality in higher tier contests = happy designers = happy clients

          Designhill really works well for designers in many ways. It helps them become a better designer and gets them an opportunity to work in a secure environment where they don't have to worry about anything but can concentrate on what they are good at, thats designing. They get to learn from their peers and understand what are the different trends in the design industry.

          On Designhill, crowdsourcing is one of the ways for designers to earn. We also provide freelancing services where a client can browse through designer portfolios and directly work one to one with them. They both can negotiate their terms and start working in a very user-friendly manner. We do have designers who do not want to work through contests, so this option works out really well for them!

          Plus, designers can also create their design portfolios on Designhill.

          Designers earn from anything from 65%-80%. We have around 3 designers in-house. :)

          Our goal is to become a go-to place for designers and clients!

  9. 1

    This is a great platform and its great to go for niche with our just launched http://designpixel.co

  10. 1

    Hi Varun,
    Thank you for the insights.
    I was wondering what measures you have made to prevent customers and designers to get in touch around the platform, and paying under the table?

  11. 1

    Hello @phaQuae and thanks for your insight (and Sivers article).

    Similarities are inevitable and copying an aspect or two of someone's work is fine, but blatantly copy-and-pasting someone else's work in an effort to win customers, as appears to have been done here, and pretending it's original content, feels wrong to me.

    If you worked for 20 hours building a content page to help your business and I spent 15 minutes to copy-paste it to my site (with a few minor edits), I bet you'd be upset also. If not, we may have to agree to disagree on this one.

    Best, -Mark

  12. 1

    “To date, we provide three different types of services. ” -- “To date” -> “Today”??

    1. 2

      Hi Sabbir, I agree the concept for the micro sites is similar. However our guides are more oriented towards our audience i.e. startups and small businesses. Also the color themes are chosen not according to your guides, but according to the color palettes of the respective social media platforms. Lastly, our guides are quite in depth and have a larger number and variety of questions and answers. So i really dont see this as a problem as the research is different and there can always number of inforgraphics/guides/videos/blogs on the same topic.

      1. 1

        Oh wow what a coincidence both our Linkedin header shares the same exact image: Yours: http://cdn-6-theme.designhill.com/images/lkBg.jpg Ours: http://imgur.com/a/JVfw2 If you would like I can forward you the unwatermarked version of the image.

        Facebook one literally copies the same layout design and starts with same question and intro paragraph.

        Twitter one questions are literally the same but seem to be placed in random order.

        We've put lots of effort into producing them and worked really hard to make them. I'm just disappointed you are passing on others hard work as yours.

        1. 1

          @varun3, Are you denying you copied ANY of the content or design? I looked at many pages and the duplications and similarities are uncanny.

          1. 1

            @mgav @sabbir

            You guys are going too overboard with this. Personally I would never find them to be inspired from one another unless someone cherry picked similarities and showed them to me, other than the core idea (which most likely aren't original from sabbir either).

            There's only so much variation you can have with websites. Had he flipped completely the word order would change anything, really?

            If you have looked extensively for stock photos online, you will see the same ones pop up over and over and over and over in different and completely unrelated websites. Most of the time because they're free, good, well-rated or a combination of them. So people tend to take the same.

            Multi-billion businesses have been built on top of existent ideas, and many of the featured here in Indie Hackers were built on the same premise.

            https://sivers.org/multiply

          2. 1

            @mgav Hi Mgav, We have taken some inspiration, and i don't think theres anything wrong with that. Instagram recently launched 'Stories', what Snapchat originally created. And few days ago WhatsApp also launched the same thing. Same UI. And I did mention above, the concept for the micro sites is very similar but yet different in terms of content and target audience.

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