Using Trial and Error to Grow ClusterEngine to $20,000/mo

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

I'm Dmitry Ivanov, CEO of ClusterEngine. I have over 5 years of experience in IT business, and our team is based in London.

ClusterEngine is a platform for convenient database management, monitoring, and storage. Our customers work in various software and IT spaces: IT outsourcing, mobile app and game development, online platforms and marketplaces, SaaS, Internet of Things, and more (including non-dev companies which use databases).

The platform allows companies to easily manage their data without having to be database experts. They just give us their databases and we set them up, run them, and provide access and security.

We also perform regular optimization and monitoring, which allows us to foresee potential problems and solve them in advance. This is very important when 100% uptime and 24х7х365 work is needed.

Finally, the ClusterEngine platform allows us to easily scale a customer's database, so that when the business grows, the database grows with it.

We currently serve businesses with an average retention time of more than one year. Our average monthly revenue is $20,000/month.

ClusterEngine

What motivated you to get started with ClusterEngine?

Our first business was a server company. While working on this project we were approached by clients who needed help with their databases. Database management is highly complex, so there aren't many companies who offer management, monitoring, and hosting. The usual process of managing a database (such as MySQL) requires a good understanding of a variety of configuration options, availability of monitoring, and staff to handle emergency issues.

This was the main motivation for creating ClusterEngine. We had already been working with databases for a long time, so we decided to create a tool that would allow us to easily deploy, monitor, and manage databases in the cloud.

What went into building the initial product?

The first task was to validate our business idea. To do this we created a list of questions that users of our previous server business had asked us, and which we had solved. The most frequent issues were:

  1. The company needs to solve issues with database management, but has no budget to hire a dedicated database administrator.
  2. The company has no resources for database management and service.
  3. There is a need for reliable, fault-tolerant, and scalable database hosting.
  4. There is a need for simple database implementation.
  5. The company needs help with upgrading database architecture to achieve high performance and have opportunities for optimization.
  6. The business is looking for an opportunity to simplify product development by outsourcing database management.
  7. There is a need for high security and the mitigation of the risks of data loss and theft.
  8. The company wants help with moving the database to the cloud (Google Cloud, Azure, AWS) and its support.
  9. The company needs to reduce the financial costs of product development, database management, and deployment.

In other words, we built ClusterEngine around our customers' real needs, and planned to make the service better using such feedback.

Before diving into development… collect important business metrics about how the product solves problems.

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To develop it we used Ruby on Rails and JavaScript for the front end, and Ruby on Rails, PostgreSQL, and Redis for the back end. The choice of these technologies was obvious for us because we'd been working with them for a long time, and had experience building web projects with them.

We use Docker/Rancher to quickly deploy and manage projects. For cluster monitoring, we use InfluxDB due to its speed and ease of operation.

The product development process from zero to MVP took about six months.

How have you attracted users and grown ClusterEngine?

We attracted our first users from our existing loyal client base (from the previous server business) and we have since worked to scale the product to a higher number of clients.

To begin this effort we tried attracting "fast" traffic, using all the well-known SEM channels of advertising. We wanted to get quick conversions and sales. But in practice things turned out differently — the traffic that came from these channels was not always relevant to our product.

More recently we spent quite a lot of money on AdWords, Bing, Twitter, and LinkedIn without getting paying clients. We made the mistake of not fully realizing who was looking for our product and how, or which database problems our potential customers needed to get solved first, or at what point the purchasing decision was made.

Going forward we plan to work more on customer development and on understanding the needs of our customers better. We think that to attract more clients, we'll need to improve our content marketing by demonstrating expertise on the topic (best practices, use cases, helpful tips, etc.).

The ClusterEngine Blog

On top of digital marketing, we've developed partnerships with dev studios, SaaS-services, and other companies we can work with to achieve a win-win effect. For example, we might advertise a 3rd-party service for managing databases on our website (or allow them to write a guest post to the same effect on our blog), and in return, the developer of this database tool might recommend us as database experts, or promote our service on their social network or blog. In this way, we work together for mutual benefit.

What's your business model, and how have you grown your revenue?

ClusterEngine uses a monthly subscription model. The price depends on the size of the database, required hardware parameters, and the overall system load. For new, potential customers, we offer a trial version of ClusterEngine with no constraints.

We've chosen Stripe for processing payments. It has an intuitive API, and unlike PayPal it makes it easy to charge clients based on their hourly resource usage (similar to AWS). This results in a less complicated card entry process for customers, and a higher conversion rate for us.

One of the problems we encountered earlier on was that, though a fairly high number of users would register for a free trial, we weren't able to convert many of them into real paying customers.

To resolve this we required new users to enter their credit card numbers during account registration, specifying that there would be no charge for the trial period. Although this reduced the total number of registrations, it served as a quality filter, increasing the sign up rates of customers who actually intended to pay for the service.

What are your goals for the future?

Our global goal for ClusterEngine is to attract more customers and grow revenue.

To do this we need to maximize our potential audience reach and master conversions. We also need to craft the core product.

Additionally, we're focusing on MySQL/MariaDB databases, while already working on adding support for more systems like MongoDB, PostgreSQL, ElasticSearch, Cassandra, etc.

What are the biggest challenges you've faced and obstacles you've overcome?

One of the biggest challenges with ClusterEngine is to educate the audience — many people don't know that there is a convenient service which helps make work with databases very simple. Another problem is that many customers just do not realize their databases are somewhat questionable in reliability, security, and scalability. Many corporate managers do not understand that nowadays hiring an expensive database administrator — starting from $100/hr — is not the only option.

Spend time on self-education, reading professional books… attending meetups and conferences.

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Another significant challenge is to persuade business not to fear data outsourcing — there are still lots of doubts about whether it is safe to share your business data with third-party vendors like us. To fight this we explain that there are always non-disclosure agreements signed and we are fully responsible for the safety and security of databases.

I do not see any big mistakes we have made yet, though maybe we could be more efficient when spending our marketing budget. On the other hand we've managed to filter irrelevant traffic. It is very important to perform customer development and have a clear understanding of our clients' needs.

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

My main piece of advice is to give lots of attention to building a team. If you manage to attract great people and professionals, it will be a huge factor in your future success. Also, before diving into development I recommend that you collect important business metrics about how the product solves problems and whether potential customers are interested in it. In our case, we first identified a problem based on real customer feedback, and only after it was confirmed did we put our hands on the keyboard.

Another good thing to do is to spend time on self-education, reading professional books (business and marketing), and attending meetups and conferences which could be a great source of knowledge and new connections.

Dmitry Ivanov , Creator of ClusterEngine

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