What's up, everybody? This is Courtland from the Indie Hackers Podcast and today I'm going to be talking to Josh Pigford, the founder of Baremetrics. In October of 2013 Josh came up with the idea for Baremetrics, built the initial version of the product, and sold it to his first paying customer in the span of eight days. Something like six months later he had $14,000 a month in revenue coming in, and today it's somewhere closer to $70,000 a month, but you don't actually have to take my word for it. You can actually go to baremetrics.com, click on the demo, and Josh has revealed all of his company's metrics in a Baremetrics dashboard. For those of you who don't know, Baremetrics provides a dashboard that gives you all sorts of analytics and insights into your company's subscription data so you can see the lifetime value of your customers, your total monthly recurring revenue, how often customers churn, and even a live feed showing you every single time a new customer signs up and gets charged. Baremetrics is a super cool product. Josh himself is a very clear thinker who spent years transparently writing about the behind the scenes of Baremetrics and what it was like for him to start the company and how he found his first users, so he's got a lot of great insights in this interview and I think it's really going to help you guys learn how to get your businesses off the ground in a reasonable amount of time and hopefully grow it to some degree of the success that Josh has had. This episode is brought to you by SparkPost, the world's fastest growing email delivery service, trusted to send over 25% of the world's non-spam email. Built on AWS, SparkPost's robust cloud API lets apps and websites send and receive email and is designed for the way developers work today. Sign up now and send 100,000 emails a month for free forever with all the same features that come with paid accounts. Go to pages.sparkpost.com/indiehackers to learn more. SparkPost. Start fast, deliver more. Guaranteed. Welcome to the show, Josh. I'm excited to have you on.
Cool, thanks for having me, Courtland.
I want to start by just having you describe in your own words what is Baremetrics and who uses it? What's the origin story behind Baremetrics?
Sure, so in a nutshell Baremetrics gives you insights into your revenue. There's a lot of different aspects of that. There's the metrics component. We help businesses forecast future things. We help them make more money by collecting on failed charges. There's kind of a whole suite of tools around basically helping businesses make more money. Now, the origin of that is a couple of years ago, well a few years ago, so 2013 I was running a couple of other SaaS products in the survey space and I needed these numbers, so monthly recurring revenue, lifetime value, churn, these core metrics for any kind of subscription company or subscription revenue company. At the time this just wasn't really anything great that existed. You could either do a bunch of stuff in an Excel spreadsheet which was kind of ripe for screwing up, or just not taking the time to manually input stuff, or you could use a generic analytics platform where you have to do a bunch of engineering work to get it up and running, and that also is kind of ripe for getting screwed up because maybe you can't get historical data in there or you get data in there but you didn't format the data correctly and it kind of screws things up. There were all these factors that really made it difficult to get access to these sort of core metrics. I was using Stripe on those two companies, so Stripe's a payment processor, and I figured, "Well, Stripe's actually got most if not all of the data that I need for this. Let me just see." "Let me build this little internal tool for this and see what happens." It actually turned out the first iteration was pretty easy to do. It took me maybe about a week of my time and I realized at that point that there actually was a pretty big need for it from other SaaS friends who were building companies, that they need this stuff too and they've been doing things in spreadsheets and all this stuff for a long time as well and it's a pain. That was sort of the origin. I launched that in 2013, really to scratch my own itch, and wasn't planning on turning it into any kind of company, but the demand made it clear that I should do that.
Yeah, I remember using Stripe back then when I was working on my SaaS product Taskforce, and I built out this entire admin control panel for Taskforce with all sorts of graphs and data that I was pulling in for Stripe. I think back in those days as you were saying, everybody had to do it completely on their own. There was no Baremetrics, so it's really awesome that you ended up scratching your own itch, and that's a pattern that I've seen throughout probably at least half of the interviews I've done for Indie Hackers. People need something really badly and they end up building their own product to solve their own problem. I think it's really cool that you didn't initially think that other people were going to use it. What changed your mind?
People saying ... Me asking some people, like some friends about it. Through conversations about asking what they used. I didn't want to build the thing. I had better things to do, in my head at least, so the last thing I wanted to do was build some new app. Typically it's a pretty bad use of your time to build internal tools that aren't specific to what is your core offering, but through talking with them and being like, "Hey, they don't have anything great either," and then saying, "Hey, would you use this if I built something that other people could use?" It was sort of a unanimous, "Yeah, definitely so." That was what encouraged it.
At the time you were working on, you said, two different other SaaS products, right? You were kind of scratching your own itch and you had, I presume, a whole heap of work to do for these other SaaS products. When did you decide, "Screw those. I'm going with Baremetrics all the way."
A few months after I launched Baremetrics. I launched the first version of Baremetrics in November of 2013, and by I think maybe January or February, the growth of Baremetrics was making it pretty clear that there's a much larger opportunity here than the survey products that I was working on. At that point I was a one man show at the start and it quickly turned into covering anything I needed so I could just focus on Baremetrics 100% and at that point it's like, well it makes sense to focus on this one thing that's growing really fast instead of three things. Exactly, yeah.
I had kind of a similar situation this summer. When I started Indie Hackers I was working on kind of reviving my old SaaS app Taskforce and I decided it's not going that well. I have this great idea for another product. Let me put a few weeks of work into this and see how it goes. The growth has been so fast that it's just like there's no point in working on this old thing anymore.
Yep, yep. It feels like you hate throwing out the stuff that you maybe have spent a ton of time. I spent a couple of years working on those survey apps while also balancing consulting work at the same time to ultimately pay the bills, but you hate to throw out that work, but at the same time it's all sort of this journey and so at that point it made sense to jump ship and focus on one thing.
Yeah, exactly. It's a sunk cost so at some point you got to go with whatever is growing the fastest and whatever has the most potential in the future. Speaking of building the product, I usually ask questions about the tech behind it because Indie Hackers is primarily made up of developers, so how did you build Baremetrics? Did you use a framework like Rails or Django? Where did you host it?
Yeah, so initially it was a pretty vanilla Rails app. I do very, very little development work now. It's better that I don't at this point. But I knew enough, especially a few years ago when I was doing tons of engineering work, I had enough of a skill set to build the initial feature set. I had been doing Rails stuff for a few years, so went with that. It was hosted on Heroku. Super, super vanilla Rails app. Like nothing fancy. Just one big monolithic app hosted on Heroku. Spending an arm and a leg really on background jobs. That was an obscene amount of money, given the scale of the app, but it got things out the door. I wouldn't have to spend any time on infrastructure.
Did you have some sort of overriding philosophy, like the Lean Startup Movement or fail-fast that was driving your initial strategy when you built the product?
I don't know. I guess there are some things that maybe would have coincidentally fallen in line with those things, but I had not read any of those books or followed any of those frameworks or anything. My mindset's sort of always been, for 15 years, been that I just want to throw something out there and see what happens, and so I'll throw lots of things out there. Baremetrics, I mentioned there were two SaaS products before this, but Baremetrics wasn't my third thing to ever build. It's probably my hundredth thing to build. There's been so many things before that all ultimately one stepping stone leads to the next and you end up at Baremetrics. I've sort of formulated or have ways of doing things that have come up over those years of just trying things and shutting things down. I guess I would subscribe to the Lean Startup philosophy, but I wasn't intentionally doing that.
A lot of people fall into this category of starting things and getting maybe two or three weeks into development and then just completely losing their passion for it and saying, "Ugh, I'm just tired of it."
Because it got hard.
Right. Building 100 products is crazy. That's way more than anyone I've ever heard of. What is your strategy to make sure that you can push through and what advice would you have for people who tend to quit when it gets hard?
Yeah, so I think the biggest thing is to not bite off more than you can chew. Early on, especially when you're in this idea phase, like when you're sitting in your car driving down the road or in the shower or you're mowing the grass or something, where your brain is just mindlessly wandering and thinking up random stuff, it's easy when you're in that phase to believe that you've got the greatest idea on the face of the earth, and so you get caught up in your own hype of, "Yeah, this is great and people certainly want this. "I can probably make a lot of money on this "and then I can be rich and famous." Whatever. You romanticize the thing really quickly and so it's easy to get started on something because you're mentally thinking it's the best thing anyone has ever heard of. Then you jump into it and at that point you realize that, "Okay, this is a little more complicated than I thought." Then the way that you get past that is to just scale back on what it is that you're trying to get out the door and understand that you can't build the greatest thing right off the bat. That's actually kind of a dangerous thing to do, to try to build the final product. You need to get something out the door just to prove that there's even a need for it. That's actually a very basic thing because you should just be solving just one fundamental problem and that should not be a really complex thing to prove, that you've got a solution to that problem. It won't be the best solution, the very first thing that you do, but you need to prove that you have a potential solution there and that's a really basic thing to solve. That's the only thing that you should be focused on getting out the door, and then that's a relatively easy thing to push through. Like I said, I built the first version of Baremetrics in about seven or eight days of my time. That wasn't enough time for me to throw my hands in the air and say, "Ah, I give up, this is too much work." It's a week. From that, my very first customer was a $250 a month customer which was great. Fantastic. That was pretty good proof for me. At that point you then, if you've actually started solving a problem, the momentum is kept up and you get this extra encouragement from the validation from actually having paying customers and at that point it's easy to push through some of the harder stuff because you've got real tangible evidence that there's something there.
Yeah, that's the best validation, having someone pay for your product right out of the gate. I think it's fascinating how much of startups and business comes down to psychology, because a lot of times people kind of follow their gut and do the intuitive thing, which is often the wrong thing. The intuitive thing is, "Man, this product really sucks right now and I don't want to get it out the door because every other product I see that's successful looks great." People don't necessarily have a window into how these products looked when they first launched. I bet you Baremetrics looked absolutely nothing like it does today, and so they spin their wheels spending weeks and months to get it perfect and by that point in time they've built the wrong thing and they don't even know it.
Yeah, the dangerous part is that you're making assumptions up until you've got paying customers. With assumptions you run a pretty decent risk of being wrong and the longer you sit there and assume things, the more wrong you have potential of being. You need to get away from assuming things as quickly as possible, and that just means shipping something as quickly as possible.
Your first customer paid you $250 a month, I assume right out of the gate. How did you find your earliest customers?
Twitter. It wasn't Twitter Ads or anything. I just posted on Twitter that I've got this SaaS analytics for Stripe thing, so I had a very specific niche which was not all subscription companies, not even all companies on Stripe, but SaaS companies on Stripe. That was a very specific thing to jump out of the gate with and that's a community that easily and readily shares with one another. I knew a few people so then I would mention on Twitter and those people would share it on Twitter and all these people, so it was a really easy sell. Again there was nothing that existed at the time that would do this. The ability to click on the link in Twitter, it takes you to Baremetrics, and then click a button that connects your Stripe account and then you're done. You could be up and running in seconds. It was a really easy sell to a market that was ripe for it, because this was also when Stripe was really starting to get popular. It had been around for, I don't know, a year or two at that point, but it was really starting to gain some steam but the ecosystem around Stripe was still really, really new. The timing on that just worked out well.
Yeah, and the product sounds like the ease of use, as you mentioned, for people going from clicking a link to actually having a working analytics platform for their Stripe metrics seems like it's killer. In the past I tried launching some stuff on Twitter, and for me it was kind of like firing off these tweets into this empty void of nothingness where no one heard me. I'm not sure how many followers you had.
Not many. It was probably under 1,000. I think the takeaway isn't launch stuff on Twitter. The takeaway is finding where your potential customers are and then making it a really easy sell for them. There was zero pre-launch. There was no landing page where you could drop in an email address. There was no private beta. I just flipped a switch and then started reaching out to random people I knew and then they shared it. I think the problem is you think of a beta testing phase or building up this email list ahead of time. The problem is you can get stuck in that forever and it buys you time that it does not need to buy you. You don't need ... Having a landing page where somebody can drop in an email address, you feel like you're doing something productive by having that there, and that you're building a business sort of, and it lets you just sit there and tweak random things on your product that nobody's seen yet, forever. You could do that for months and months and months. Some people do it for years, but your email list is going up and you think that you're being productive and you're not. You need to just have someone start using it and then try to get them to give you some money for it. Then repeat and just do that over and over and over again.
Yeah, and I think a lot of software developers that I've talked to are so biased towards whatever strategy will allow them to write the most code and talk to the fewest people.
Sure, right? Human interaction is so scary.
Yeah, yeah, let's just deprioritize any sort of human interaction, and I understand it. For my last product I spent so much time coding and I just didn't really want to do the marketing thing and for Indie Hackers it's all marketing all the time. I write almost no code. It's nothing but talking to people. The difference is stunning. If you just break through that barrier and get over the hump and just force yourself to do it, force yourself to try to sell, then I find the wall kind of comes down. At least it did for me.
Oh, for sure. Some of our earliest bumps in growth came not from feature additions but from marketing efforts. One of the biggest increases or changes in our growth rate came from doing ... Baremetrics data is public so you can go to demo.baremetrics.com and see all of our numbers, and we had done that a few months prior, but then Buffer was pretty popular as far as open startup kind of stuff goes, also uses Stripe and then we worked out a deal where they would make their Baremetrics account public as well which you can go see at buffer.baremetrics.com. They've got tens of thousands of customers. Way more than that if you include free customers. They just have a really significant reach in the startup space. When they made their Baremetrics dashboard public, that was something all arranged via email and required basically zero code on my part, but had a huge impact on our long term growth. That's the kind of stuff that will have bigger impact than adding some feature or even adding polish to some feature.
I noticed another big part of your marketing strategy is content marketing, because I was on the Baremetrics site earlier this week and you guys have a ton of awesome useful content on your blog. A lot of which I recognized from having seen it in my email or on Hacker News or people sharing it on Twitter earlier. For example you've got the Baremetrics Business Academy where you publish articles on teaching developers and entrepreneurs how to start, build, and grow their businesses. How has your content marketing strategy worked out, and how did you get started with it?
It's really the only type of marketing that we actively do. It's us playing the long game. Usually one piece of content doesn't instantly lead to lots of new customers, but it's the sum of all the content that we put out that ultimately drives lots of traffic and lots of really targeted traffic because we're targeting founders and entrepreneurs and so that's our customer. We put out stuff that's useful to them and then they eventually find their way to the app. I don't know that I initially set out to do like, "Okay, content marketing. That's our shtick." It just seemed like the thing to do. For me writing, and I write most of our content still. That won't scale forever. The writing about the stuff that we're doing at Baremetrics is somewhat therapeutic for me, in the way that it lets me work out my thoughts on a given topic and it helps me reflect on things that we've been doing or testing or trying, what doesn't work. Writing is a way for me to process all that stuff, so selfishly I think it helps me be a better founder, but at the same time it also happens to work really well as a driver of growth because it's going right after the people who are our customers. I think early on I just started writing because it helped me figure out how to run the business, and so it just happened to work out that that worked as a marketing strategy as well.
It's interesting that you listed some of the ancillary benefits of writing, especially that it helps you organize your thoughts, because I found the exact same thing. Every month I look back at what happened with Indie Hackers for example and I write a month in review blog post where I just analyze my traffic and revenue growth and my plans for the next month. Without fail it always helps me organize my thinking. I initially did it just to be transparent and keep people updated and hope that they would see things that I didn't see, and maybe we could bounce ideas back and forth, which brings me to the topic of transparency. I know you've done similar things with Baremetrics pretty much from the beginning. You've always given interviews and talked to people about what you're doing. You've opened up your revenue for the world to see ever since the day that you made your demo. Today you've got the Open Startups Initiative where other people can also open up their revenue and share it on their own Baremetrics dashboard, which has been super helpful for me and Indie Hackers because if I want to find someone to interview I just have to go to your dashboard and pick a company from the list, but it's also been helpful to other people in the community who want to be inspired by or see what's possible so they go look at these metrics and these dashboards. I think in a large way Indie Hackers could probably not exist without the transparency movement that companies like you and Buffer and others started years ago. What got you into transparency and why did you take up the mantle of being open about everything that was going on at Baremetrics?
For us, it would be generous to say that I intentionally set out to either start or even try to be a part of any kind of transparency movement. I think us making the dashboard public was initially borne out of laziness really on my part, because I wanted to have a demo available of what Baremetrics is and how it works instead of just screenshots, and instead of generating a ton of dummy data it made more sense to just make our stuff public. At that point we were still making relatively small amounts, I mean less than a couple thousand dollars a month, and there was no real risk to do that so it was an easy like, "Hey, cool. "Let's throw it out there and see what happens, "and I've just saved myself a bunch of development work "for having to build a demo page." Then that, I think the tangential benefit of that was that we were able to help other businesses. That's always been something that I enjoy doing. Some people have poured into me and answered all the questions that I've had and obscure emails to people I really didn't know but they still took the time to answer questions for me, and I wanted to repay that in some way. Having the public dashboard which distills the high growth myths that exist in the startup world, especially in startup tech media kind of stuff, that celebrates these unicorn stories instead of just showing how it really is. To me that made sense to do that and that was a nice benefit that came from that. Then but, like you said, you mentioned the stuff where you post about something and then all of a sudden you get all this feedback from people, that was the case for us as well where you put this stuff out there and then all of a sudden you start having all these interactions with other founders and other people in similar situations. I think there's this community aspect that comes out of it that is really beneficial to everybody. That's where we decided to keep doing the transparency stuff and that's when a lot of the blog posts started getting a little more transparent and really specific and mentioning numbers and all sorts of stuff and not trying to hide behind anything. It was because I found it really useful, again from that personal reflection standpoint and not having to hold anything back, but it also was really useful because we'd get the feedback from lots of people and also learn what other founders are going through, which also again, we can work that back into the app in how we're solving problems for businesses. That works out really well for us. I think the danger is thinking that transparency for transparency's sake is sort of somehow right or that it defaults to something that you should do, like everybody should be transparent. I don't think that's the case. I think transparency is only useful for the story that it tells. Buffer for instance is super open. There's no direct business benefit to customers knowing what their revenue is. There's no particular reason that that should matter, but what they're able to do is to tell this story or have this narrative around openness that brings a ton of attention to them and their company and what it is that they do, and so by helping lots of other businesses, those businesses also then learn about what Buffer offers as a product. I think when you're able to use that transparency as a way to tell a story then it becomes really useful. I think just making your numbers public and posting, say, a monthly revenue blog post and then leave it at that, in and of itself isn't terribly useful. Nobody's really gained anything. I think it's important to figure out why it matters to you and your potential customers. Yes, there's some trade offs. I think two probably the biggest trade offs are one, even though all of our numbers are public, the people that are able to see those numbers aren't privy to the decisions that we're making in the company based around those numbers. It might be easy to look and say, "Oh, well churn's up so something must be wrong with Baremetrics." No, we're fully aware of what our churn rate is and X, Y, and Z are in the pipeline to address that, but it can appear as though something's terribly wrong and things are doomed just because you're looking at a given number. I think it can also be from a competition standpoint, which I don't really pay attention to any of our competition but I think it spawned a whole slew of copycats. Somebody who hasn't ever built anything before or has any kind of real success with anything sees Baremetrics and then says, "Okay, so Baremetrics is making $60,000 a month right now. "If I made $6,000 a month that would be cool." Then they say, "Okay, I'll just do what Baremetrics is doing and I'll just have fewer customers and that's fine." Then you end up, just dozens of direct copycats, I mean down to the pixel, that all started cropping up after we made the dashboard public, because then you're able to see a number and then you get moneybags in your eyes and you start thinking, "Hey, I can do that too," and realizing it's not just the product that makes this something that's successful. It's the whole thing. It's the customer experience and the support and X, Y, and Z. There's so many different factors there, but having public numbers makes people think that it's an easy thing that they also can do and kind of rip off and copy you and that they've somehow done something successful.
I've never accepted the fact that people do a pixel by pixel copy of somebody else's website.
It used to drive me crazy, but now it just makes me feel sad for them. There's too many of them to --
It's just nuts. What are they thinking?
I know, and almost all of them disappear within a few months.
Another thing that's related that I think is super interesting is very often when an Indie Hackers interview becomes pretty popular, if it goes on Hacker News or if it spreads on Twitter, there will be this class of people that will take some very specific point from the interview, maybe an advantage that the founder had or a problem that they overcame, and they will conclude that that problem is 99.9% of why the business was successful. They will obsess over this service level detail and ignore all the stuff that goes on under the surface, all the customer support, all the cold emails that people are sending, all the difficult things that are happening. I'm wondering if there is anything like that at Baremetrics, some sort of behind the scenes going-ons that most people aren't really aware of but that are really key to your success?
We really do write about pretty much everything.
Okay, well what do you think is something that you do write about that's one of the most crucial aspects of Baremetrics?
I think that people underestimate the benefit of talking to customers. I spend, not as much as I used to, but I still spend an inordinate amount of time on the phone with customers. That's new customers, that's new potential customers, that's customers that have been with us for a year, two years. Spending a ton of time talking to customers. That's not exchanging emails, that's not in-app messages. That's on the phone. The big benefit of that is you're able to get real feedback from that. That's something that a little form field somewhere on a site does not give you insight to, or a little survey does not give you insight to. I think a lot of our success can be attributed to conversations with customers and understanding where our customers are coming from and what pain points they actually have. That's the thing with a phone call is that you're able to get their surface level feedback on something, but then dig in deeper to really figure out what's going on. It's not about they picked A out of A, B, C, and D in this multiple choice thing so here's what they need. No, there's more to it but you have to have a human conversation to figure that out and that just takes spending a ton of time on the phone.
How did you get started with the phone calls? Is it something that you were doing from the early days with the product or did you grow into it?
I started doing it within the first year, maybe within the first six months. It just started making sense. To me it was the easiest way to get fast feedback, and I found people, I hate responding to ... Okay, so if you had wanted to do an interview with me for this and it was all text, like it was like, "Hi, I'll email you 20 questions and you can email me back whenever you want," I would just never, ever respond. It's just too much work for me to type all that out. It's way easier for me just to stream of conscious spout out what's in my head instead of trying to sit there and type out these long answers to things, and that's the case for a lot of people too. If I sent them questions in an email asking for feedback, well they may have great feedback but taking the time to sit there and write it all out just seems like, for me and for other people, it seems like a lot more work than just hopping on a phone call and having a quick conversation. That's sort of really where it came from, was it's just easier to have a phone call.
Yeah, it's funny that you mention that because for Indie Hackers I do a lot of text-based interviews, and I'll send people these questions that take at least an hour or two to answer. Unsurprisingly about 50% of the people I send the questions to never get back to me, so maybe I should switch to your system of talking to customers at Baremetrics. What kinds of things have you learned by talking to customers on the phone that you didn't necessarily know before you got started with Baremetrics?
Yeah, so early on, I mean the first version of Baremetrics lasted two months and then I scrapped the entire code base and started over. That came from customer feedback in realizing I had ... Because it started as a thing where I'm scratching my own itch, it was just that first version was the things that I wanted which were really high level what's my current MRR or what's my current churn? There was no real insight into the historical stuff at all, and found out really quick that not only do people want that but it's genuinely useful to look back over time and see the trends of metrics. That was one of the earliest things that I learned right out of the gate, was giving people more information is a good starting point and then also something that we're spending a ton of time on now is helping people figure out why that information or why those numbers, why that data is useful and what to do with it. That's a really big problem in the analytics space is knowing what to do with the numbers is super hard to figure out.
Yeah, I used Mixpanel in the past and I basically just tracked anything that I could think of, and after awhile I just never looked at it because there was no obvious way that it can inform my decision making.
It's analysis paralysis. It's like you end up looking at the numbers and you're like, "Okay, cool. "This number's 37." So what? Who cares? "What do I do with that?" Yeah, so it's a big problem.
Education you would say is a big part of Baremetrics' business. Is that what the Business Academy section of your website is for? Do you direct your customers to articles in that section to help them figure out their metrics, or is it more for people who aren't customers yet?
The public facing content is more about marketing. We try to do any kind of, "Hey, what's my churn mean?" We try to do as much in-app guidance as possible. Sometimes that means, "Hey, go read these few articles to really dig in deeper," but I think there's a lot from just a UI to UX standpoint that can be done to help surface that kind of stuff.
Okay, so I've got some questions now that are a little bit less specific. The first is what have the biggest challenges been for you at Baremetrics? Has there ever been any obstacle that you were worried that you wouldn't be able to get over? Or has it been pretty much smooth sailing for you guys from the start?
This past summer was probably the roughest patch for Baremetrics. We raised about $800,000 over the past couple years and we ended up spending all of that, and so we were really close to running out of money this past summer. For us, everybody had to take a pay cut. It was rough so we're just on the tail end of that, coming out of that and getting everybody back up to full salary now, six, seven months later. We're fine at this point but there was a couple months there where it was a little rocky.
What's the story behind your fundraising? Because I know you started off bootstrapped.
Yep, so I started it in November and then through, let's see, July or August of the next year, so I guess that would be nine or 10 months, totally bootstrapped. I think got up to $15,000, $20,000 or something like that just bootstrapped. Initially we were built just for Stripe. Early on, like a week after launching the first version of Baremetrics, the guys at Stripe reached out and were super supportive. I mean really Baremetrics was probably the most significant thing at that point ever built on Stripe. Nobody had really tried to tackle any sort of add-on or thing that was powered almost completely by Stripe. There was a relationship that was started there that led to eight, nine, 10 months later. We had had a couple of conversations, I had flown out there a couple of times, and then that summer of 2014 went out there for a meeting with them and they decided to start this thing. What do they call it? The Stripe Platform Fund or something? I don't remember what it's called, but they started it so that they could basically invest in companies that were building stuff on Stripe to encourage this developer ecosystem. The initial $500,000 came from that. Then a year and a half later we were at the point where, and this is super typical and this is why companies end up raising multiple rounds, because you hire people and then you run out of money. We needed to raise a little bit more money, so then we raised an additional $300,000 on top of that first $500,000. That was $800,000 over the course of a year and a half, I guess.
That's a lot of money. Of course the pressure after raising money from investors is always to spend.
Well, right. I think the most investors aren't like ... There's no, "Hey, you should be spending lots of money." That's not the thing that investors say. There are some expectations around that, but again it's not in a ... I think it depends on the investor. We had two different investors that ultimately put in that money and it was pretty helpful relationships to have. They've been healthy and not this weird, like I feel like anybody's looking over my shoulder telling me what to do or anything like that. The money itself, they were the source of the money, and the money in and of itself isn't a bad thing. It was just my not being wise with the money, which is again, that's the case. It's why most startups that fail, it's because they ran out of money because they weren't spending it wisely. They were overestimating growth. You talk of even the guys at Buffer, where about the exact same time that we were having all this trouble, they wrote this really long article about how they had to lay off some people and cut back on expenses because they did the same thing. They overestimated growth and then it takes a while to course correct that stuff because the large majority of your expenses come from payroll. Those are knobs that are not easily twiddled. You can't just be like, "Oh, hey you know what? I'm going to not pay you next month." It doesn't work like that. There's peoples' lives that are affected by this stuff. As soon as you realize there's a problem, you have to sometimes take some drastic measures to save the business. That's how it goes.
Besides that, if you could go back in time, is there anything in particular that you would do differently, knowing what you know today?
I think there's some Baremetrics specific things that I would have done differently. I wish we would have expanded outside of Stripe earlier. I wish that I had been a lot more frugal early on, like not hired as quickly.
You ended up hiring before you raised money, right?
Yeah, I had hired one full time and two part time who eventually became full time after the fundraising. No, I mean, yeah I had enough. Bootstrapped I think it was $20,000 by the time the funds were in the bank account, so at that point, yeah, there was enough to cover a couple full time salaries anyways.
You mentioned earlier that it might not scale, but you're writing most of the blog posts and the content on the site and you're talking to customers on the phone and I'm sure you're also immensely busy with your other founder responsibilities. What's your day to day like?
Yeah, so it's a mix of ... Because I also play product manager, so we've got all these features in the works and so it's my job to spec that stuff out and then reviewing desig comps and then making sure those ... We've automated a lot of the process and got a pretty solid system in place where things can move forward pretty good bit without needing my intervention, but there's still, especially in the design phase and just figuring out how this will affect the app and the customers and the experience and all that stuff, I spend a lot of time on that. Yeah, not customer support so much as just talking to customers and figuring out what their needs are, but not so much trying to solve like, "Hey, this thing doesn't work inside the app." I don't really spend any time on that. Then yeah, writing content. I wrote a 2,000 word article this morning and 1,000 word article yesterday. I'll have a couple more articles this week. I spend a lot of time with that too.
That's huge. Have you found that the way you spend your time has changed a lot as Baremetrics has grown? Because I know at the beginning as a founder you have to wear a lot of hats.
Sure, yeah. I think I don't do, I'm not doing really any design work or any development work, and not a lot of direct customer support work. I'm almost more like a Chief Marketing Officer/Product Manager more than anything right now, and that's been the case for a while. I've hired out basically all the other major positions besides that.
Is it your goal to eventually replace your marketing job or your product management job?
Yes, from just optimizing the company. Yes, I think that makes sense to do that. There's a ton of stuff that we still want to do that it would make sense to hire other people for differing positions, then a marketing or product manager. Eventually I assume we'll get there.
On that note, it's pretty early in 2017. Do you guys set yearly goals and what do you see as Baremetrics' future?
Yeah, so the big thing, this should happen here in the next two or three months, is getting to profitability. If you're in the bootstrapped world, this is laughable, but here we are over three years in and we're like, "You know, we hope to be profitable soon." For a company that's raised some money, that's a big deal. I hope to be completely profitable here by, it'll probably be March or April. Then revenue goals, a million dollar run rate. Preferably more than that, but that's the realistic goal that we should be able to hit fine. Then we've got some really big product stuff that is in the pipeline. I think Baremetrics as a product itself will become super mature this year and become this really powerful analytics platform. That's sort of the goals.
It's exciting stuff. On a final note, I'd love to know if you can give one piece of advice to aspiring Indie Hackers who want to create a business of their own, what advice would you give? What mistakes do you see other people making to which the solutions might not be so obvious?
To start. It's easy to research building startups. It's easy to read stuff on Hacker News or even look at stuff on Product Hunt or just spend a lot of time looking at other things instead of actually producing something. I think that's the biggest ... Most people, it's not that they can't find a market for something. It's not that they're charging the wrong prices. It's not that their design looks like crap. It's just not ever doing anything, like just sitting there and talking about, "Hey, I'm going to do a startup one day." Don't do a startup. Just build something that solves a problem. You don't do a startup, you solve problems. I think most people don't, they just don't ever actually start anything. It's substantial. They sit there and stay in research phase for years on end.
Agreed, and that is a perfect spot to end the interview. If you're listening, get out there and start something. Build something bare bones in the next week or two and try to sell it to a customer. Josh, where can we go to learn more about you and what you're doing at Baremetrics?
Yep, so Baremetrics is at baremetrics.com. I'm on Twitter @shpigford, that's S-H-P-I-G-F-O-R-D, or you can shoot me an email. josh at joshpigford.com. I think that's all the major places.
If you enjoyed listening to this conversation, you should join me and a whole bunch of other Indie Hackers and entrepreneurs on the IndieHackers.com forum where we talk about things like how to come up with a good idea and how to find your first paying customers. Also if you're working on a business or a product of your own, it's a great place to come and get feedback from the community on what you're working on. Again that's www.indiehackers.com/forum. Thanks and I'll see you guys next time.