Turning My Personal Tools Into Profitable SaaS Products

Tell us about yourself and what you're working on.

I'm Michael Ramirez, full stack developer/engineer. LabelGrid is an audio platform that allows labels, podcasters, and creators to cut through the noise in today's crowded market. We do this by helping them build, maintain, and track their brand's audio content.

Through LabelGrid's dashboard, users can upload and monitor their content on dozens of third party services like Bandcamp, SoundCloud, iTunes, Spotify, and Beatport. By publishing everything from a central location, our users save massive amounts of time and increase the accuracy of their listings.

I started LabelGrid in 2007, and since then I've spun off a variety of complementary products as well. In total they bring in almost $5,000 per month in revenue.

How'd you get started with LabelGrid?

LabelGrid started out as a set of tools I created for my own record labels: Plush and Section 8. They allowed me to automate posting of my content to various places on the web, and they also helped with managing the metadata and assets for my own shops.

At this point, my tools had all been written as standalone scripts. I ended up taking the tools I used the most and built them into a basic dashboard. In order to validate the idea behind this dashboard, I created a landing page with copy that focused on the benefits of the product. I connected it to a Wufoo form so I could gather leads.

We got 2,000 or so emails within a short period of time. Everyone I showed the project to was absolutely into it, which gave me motivation to pursue it further. I still get reactions like that to this day.

What did it take to build LabelGrid?

I did all the development for LabelGrid myself. The main server was running from the closet here at my home studio. During development I continued to validate the idea by talking to people about it, and I also constantly tested the system by using it to distribute and manage my own labels.

I eventually partnered with 3rd party distributors like Symphonic and TripleVision, providing them some services and utilizing some of their services in return. Then I moved on to get direct deals with iTunes, Google, Spotify, and various other music apps to ensure we could support labels who are taking a more direct approach with their distribution models.

In addition to development, I also funded LabelGrid myself. I was working semi full-time as a freelance consultant and software engineer for three other companies at the time, and I used the money from that to support myself. I'd also sold my house around year 1, so that gave me additional cushion to eventually go full-time on the project.

Have you hired anyone to help out?

I've rotated several people in and out of the project over time, both friends who volunteered and contract developers every once in a while. The majority of the work has fallen on me, however — everything from dev to support and marketing. Hiring employees wasn't essential, but it freed me up to focus on biz dev, product development, and lead gen.

To this day, we do not have full-time employees. I've automated and streamlined the majority of the platform so that operations requires only a few hours a week of my time. So in short, the majority of my outside help comes when I switch to growth mode (seasonally) in order to scale our onboarding efforts.

I might have a more interesting story here if I'd sought funding and hired a bunch of people to really go after this market, but I have been happy not going that route.

What've you done to attract users and grow LabelGrid?

The only marketing I really did was letting people in my immediate contact list know about LabelGrid — my first users were my friends and colleagues. I am somewhat well-connected in the music scene from running DnBRadio, so I let people around me naturally learn about the project without being too pushy. From there the word spread quite a bit among small labels and artists, but onboarding (training) users proved to be a challenge and hindered initial traction.

It took years to land some of the higher profile clients, too. Due to the cautious nature of label owners, a service like LabelGrid really had to show that it would stick around for a while before they would take a chance on it.

As I mentioned above, our first direct partnerships were with iTunes, Symphonic Distribution, Digital-Tunes, Juno, TripleVision Distribution (who does physical distribution), and a few smaller digital entities. Working with distributors directly helped me attract users who already have existing distribution contracts (the majority of them do). By enabling them to use our dashboard without affecting their current distribution contract, I am able to speak to them directly and understand how they currently do things.

In the early months I also created a service for posting to SoundCloud, YouTube, and others, as well as a way to track sales, follower counts, and chart placements on Beatport. These partnerships and integrations allowed us to begin targeting labels who use those services. For example, we were the first platform to offer automatically fetched daily sales reports for Beatport. The feature quickly spread and became a norm for distributors, and we were able to license this tech to our distribution partners who wanted to offer it to their clients.

Having these partnerships was essential in attracting users, because it allowed us to provide services in areas where our potential users could be found.

What's the story behind your revenue?

The service was free to use for a long time so that I could validate, test, and encourage people to put their content on the platform. I was not ready to scale for a while, and I did not charge until many months down the road.

The most successful way I've grown revenue (and also proxied interest) for LabelGrid has been by breaking out some of the features, turning them into standalone SaaS products, and then cross-promoting them. For example, my service BeatTracker does one thing (track the top 100 chart placements on Beatport), and it's gained new paying subscribers very rapidly. Another standalone service we launched is Promo.ly, which has revenue comparable to LabelGrid.

There are a few other standalone tools I've launched which follow this same model, which allows us to pull in leads while monetizing a separate service at the same time. Also, the partnerships I made helped me bring in additional revenue by licensing to them as customers, which enabled me to build out additional features. Altogether, everything earns an average of $4,600 per month.

Another way I've grown revenue is crowd-funding. It worked well in the beginning, but quickly faded, however. I launched a traditional freemium model, but with the option to donate and a periodic nag-screen which pops up reminding people that the project relies on user contributions. We took quite a few donations at first, but now we've done away with that and have a plain freemium model with a pause-able subscription via Stripe. People who aren't using the service for months at a time can subscribe to a lower plan or switch to the free plan on an as-needed basis.

As for expenditures, the most significant cost has been time. I have put in countless hours ensuring our platform rests on a lean and low footprint infrastructure so that we can easily scale. I also put in a ton of work building the underlying MVC framework which allow us to create new dashboard features with very little coding. This allows us to develop new features very rapidly.

The monetary costs are now quite low, because I've been diligent about creating a lean distributed setup. Keeping things lean with regards to operating costs and hosting is probably the biggest challenge I've overcome.

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

Some of the obstacles I've faced is finding reliable people to work with on a partnership level. I tried to find a co-founder but came up dry, so I kept my head down and focused on building. Some of my ideas also got stolen shortly after I launched them or disclosed them to someone, which discourages me from working with people in the future. On the other hand, it's validating to see these ideas resonate with people in the market.

As for things I would do differently, I'm not sure. Nothing comes to mind, and I feel very confident about all the decisions I've made up to this point.

What have been your biggest advantages?

Our biggest advantage in my eyes has been recognizing where the market will go, validating that prediction, and then executing on it. For example, I mentioned how we were the first to offer daily sales insights to our users, but we were also the first to offer SoundCloud automated posting, as well as YouTube video generation. Today it's a common thing you will find many large distributors offering in their dashboard.

I focused on building a robust dashboard in the very beginning over 7 years ago, and I'm told our dashboard rivals that of all of the top label distribution services out there. And lately I've seen many many distributors out there putting lots of resources into creating advanced dashboards for their clients or even outsourcing it to another company such as LabelGrid.

Some of the new things I've created include Instagram video generation, which I decided to pursue because the reach and engagement for labels on Instagram is a lot better than Facebook at the moment. Even if Instagram is phased out, the core feature we've created (teaser content generation) is going to remain, because it's essential for content managers and marketing.

Also, since I put in a ton of work creating a specialized MVC framework (even before starting LabelGrid), we've had the advantage of being able to quickly launch new standalone SaaS products that stem from our core product. This allows us to constantly add new value to the market, which is tremendous for our reputation over time.

Some of my best ideas for growth came while I was researching what other successful businesses did. I looked at businesses that I admired and that were similar to us. Seeing how they approached marketing and product strategy inspired me and often gave me an idea of where to start. Companies like Buffer, Dropbox, 37Signals and so many others have paved the way for us. Constantly looking for inspiration has kept me driven.

Finally, having thick skin and being able to persevere through hard times is important. Out of all the ideas, pitches, and partnership opportunities that didn't work out, I was able to view them all as learning experiences and grow from them.

What are your goals for the future?

My motivation is purely personal. I have devoted so much time to music and programming as my hobbies and career. I'm motivated every day to develop things that benefit thousands of people, and I want to continue doing that. So my goal is to grow the business so I can continue down this path, and hopefully see LabelGrid become a cornerstone for any label manager and any independent creator who is serious about their craft.

I am also working on automation and notifications systems more and more these days... even bots. I want to make operating a label fully automated and self-service for the artists, which is something I know we will see more of in the future. Since A&R is a collaborative effort, I want to ensure our system keeps all parties fully informed and empowered to take action on data and content strategy.

We've seen a massive amounts of positivity from people, so I do believe it's possible to see massive growth through content marketing, streamlining of our onboarding process and developing more apps, but at a high level I just want to continue building new tech for this industry and adding to the pool of innovations that we see coming out.

What's your advice for other aspiring indie hackers?

Fail fast. Focus on what's working. Constantly revalidate your results.

Where can we go to learn more?

Michael Ramirez , Creator of LabelGrid

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  1. 1

    What is your tech stack?

    1. 1

      Thanks for your question. We are mostly LAMP stack at the moment. Lots of shell scripting for some of the backend stuff as well.

      1. 1

        Great. All the best for your product