Ajay Goel (@PartTimeSnob) loves to code. He also loves to grow profitable Internet businesses. In 2003, Ajay transitioned from making websites for clients to building his own email marketing application, Jangomail, which he eventually grew to over $5M in annual revenue and sold to a private equity firm. He then retired to a life of luxury, conversation, and relaxation, and lived happily ever after… or did he? In this episode, we dive into the pitfalls of bootstrapping vs fundraising, the strategic decisions that differentiate big wins from HUGE wins, and why Ajay felt the need to come back for round two with his new business GMass.
What’s up, everybody? This is Courtland from IndieHackers.com and you’re listening to the Indie Hackers Podcast. On this show I talk to the founders of profitable internet businesses and I try to get a sense of what it’s like to be in their shoes.
How did they get to where they are today? How do they make decisions at their companies and in their personal lives? What exactly makes their businesses tick? The goal here, as always, is so that the rest of us can learn from their examples and go on to build our own successful businesses.
On today’s episode I have the pleasure of speaking with Ajay Goel. Ajay is a serial entrepreneur. He’s a software developer who’s been building online businesses since the early 2000s. Today he’s spending most of his time working on a project called GMass. Ajay, welcome to the show and thanks for joining me.
Thanks, Courtland. I’m super excited to be here.
I’m excited to have you. So, tell us a little bit about GMass, Ajay. What does it do and why do people use it?
GMass is a plug in for your Gmail account and what it lets you do is it lets you send email campaigns directly from inside your Gmail account. So, most people have heard of MailChimp. MailChimp is the ubiquitous name in email marketing. If you know what MailChimp does, we provide that functionality inside Gmail.
Let’s say you don’t know what MailChimp does. What exactly is an email campaign? Why do you need any sort of special tool to help you send emails rather than just Gmail itself?
Because when you’re sending an email to a friend or to a co-worker, that’s easy to do. You just type up a message and you hit send.
But anytime you get into sending a higher volume of email that gets a little trickier because most consumer email systems like Gmail or Yahoo! mail or Outlook.com or Live.com aren’t equipped to handle a large send from one single user where multiple emails are going out simultaneously.
Some extra software is needed when you’re sending out thousands of emails as opposed to one email at a time.
Yeah, and I’ve seen people run into this limit unsuspectingly where they’re like, “Hey, I’ve got an email list now. I just want to send 200 emails through my Gmail account.” And then Gmail is like, “You can’t do that.” And sometimes people are pretty surprised to see that’s not actually the case.
That’s interesting. You might be able to get away with 200 emails just by plopping those 200 addresses into the 2-field, putting in your subject and your message and hitting send in Gmail. It’s not the best idea.
There are better ways to do it, like using my product or someone else’s product that does something similar. But in a lot of cases our users are sending higher volume than that. And what a lot of people don’t know is that their regular Gmail accounts allow them to send 500 emails a day.
If you’re on the professional version of Gmail which is called GSuite, Google actually lets you send 2,000 emails a day just through your regular Gmail account without my tool, without anything special.
So one of the coolest things about GMass is just how much success that you’ve had with this product with such a small team. It’s pretty remarkable. GMass makes, how much? $120,000 a month in revenue?
Approximately, yeah. We’re growing slowly and steadily so this month will even be a bit more.
That’s humongous. You’re doing it with a tiny team. You and just a handful of remote workers are building this. What does your team look like, exactly?
So I’m a software developer myself. I write most of the code for the product. I have one contract developer who works for me part-time. I have a couple of Philippines-based virtual assistants who work for me full-time. I have a part-time marketing person and a part-time PR person.
Then some freelancers on Upwork who help me with design and illustrations and some WordPress stuff. That’s pretty much it right now.
Yeah, it’s the exact opposite of the prototypical Silicon Valley start up where you have a fancy office and you’re paying all these full-time employees extremely high amount of money to help you with your business.
Yep, and there are several of those types of companies who we compete against.
Exactly. So you are, in a way, living the Indie Hacker dream. Almost everybody that I talk to in the Indie Hackers community wants to achieve what you have achieved. Running a small team and generating an outsized amount of revenue. How did you do it? How do you actually get to this place?
I’ve had a long career in software development and email marketing products, specifically. My first email marketing product was a product called Jangomail, which I built and ran from 2003 to about 2013. I sold it in 2013 to a private equity group. Then I spent a couple of years just thinking a lot and reading and hanging out at Starbucks and trying to figure out what I wanted to do next.
I didn’t think I would ever go back into the email space. But something interesting happened in 2014 which caught my attention. What happened was, Google released an API for Gmail. Even though Gmail had been around for a while, at least 10 years at that point, this was the first time programming on top of Gmail became a lot easier. There were ways in the past to integrate with Gmail but with the API it made things a lot easier and cleaner. I’ve always been a big Gmail fan.
I tend to spend my day inside my Gmail account in one form or another. So, when the API was launched, it just started this process of creative juice flowing throughout me thinking about things that would be interesting to build. That’s when I started building products on top of Gmail and GMass is my main product I spend most of my time on.
So let’s rewind and go back to the very beginning of this story. 2003, you built your first online business, I presume, called Jangomail. Most people listening to this show are fledgling entrepreneurs, people who want to get started. What was it that lit a fire under you and convinced you to start a business rather than just taking a normal job?
That was something I was considering. I graduated from university in 1998. If you are old enough to think back that far, that was a time where every software company, every internet-based company was hiring anybody they could get their hands on. So, the job market was really green.
There were plenty of jobs to be had. I was certainly interviewing for jobs. Nothing really resonated with me. In the summers, in between my university years, I was building websites for friends of my dad that owned small businesses. I enjoyed that freedom, that independence, that creativity. I felt like – a lot of people, when I would say, “I’ve started my own software company.” They would say, “Wow, congratulations. What a risk you are taking.”
But at that time, back in 1998, it didn’t feel like a risk just because I knew I could get a job if it didn’t work out. I was single, I didn’t have any dependents, I was living at home with my parents. It was the perfect time in my life to experiment. I started out as a web development company and then one of my projects for a client involved sending email campaigns.
That project is what evolved into the Jangomail product. If you’re familiar with the email marketing space, if you’ve heard of MailChimp or ConstantContact or iContact, a lot of the competitors of Jangomail in that era were started under a similar story. A company that was a web development company, that had an email project for a client and then turned it into a product.
How did Jangomail go for you? You ended up running this company for something like ten years. What are some of the bigger milestones in that story?
At first it was easy to grow. It felt easy to grow just because by virtue of how growth works, it is easy to go from 100 customers to 200 customers to 300 customers. It gets a little more difficult to go from 1,000 customers to 2,000 customers to 3,000 customers. My growth for Jangomail was fueled entirely pay-per-click advertising.
This was before there was Facebook ads and before there was Twitter ads. If you are old enough to recall a platform called Overture, Overture was the original pay-per-click search model even before Google AdWords. Overture was what first fueled Jangomail’s growth. Then Google AdWords came along and that fueled growth even more.
At my peak I was spending, I spent $90,000 one month on Google AdWords growing Jangomail. Our average spend was around $60,000. This was a pay-per-click advertising fueled growth model.
And you were confident you would make up that amount of money in terms of customers actually coming in and paying you to use your software.
Yeah, I was more confident in the beginning when we were spending less and perhaps less confident toward the end. What justified it for me is that every now and then we would get – what I referred to as a “whale” of a customer.
So, a whale to me was someone who came in and needed to send 5 million emails a month or 10 million emails a month, where we would be billing anywhere from $20,000 a month to $50,000 a month. If I could land one of those a quarter, then it made the investment in Google AdWords worth it.
Our median customer back then was paying a couple hundred bucks a month. So, we weren’t making money on those customers, but we were making money on the whales.
What is interesting to me about this business is that you are running it in the dead zone of the internet era. There’s the dot-com crash and then the time you started GMass (sic), 2003, there wasn’t much going on, online.
There weren’t many investors taking risks on companies, there weren’t many people starting start-ups. How did that affect your decisions with running this business and how is that different than the environment today?
In a way it was a simpler time. Now I could argue that there’s the distraction or even the lure of going out and raising money because email marketing is a pretty proven business model now. Whereas, when I started with Jangomail in 2003 it really wasn’t. There wasn’t as supportive of a community around solo-software developers starting SaaS businesses back then. There was no Indie Hackers, there was no Product Hunt. There were no incubators in every major city to help tech startups grow. It was the wild west of launching software companies.
In a way it allowed me to focus more purely on the art of creating a good product and building a business without a lot of things that compete for my attention now. I find it harder to focus and be productive today than I did back when I started.
Back when I started it was easy to code for 14 hours straight and make massive amounts of progress in a day on a product, whereas now, now it’s a little harder.
You also didn’t have smartphones and your Instagram or Twitter blowing up when you are writing code.
Yeah, that’s right.
So a lot of these resources that you talk about, incubators in every city, online blogs and websites like Indie Hackers can be distractions but they can also be helpful because you can go there to learn how other people are building these businesses and get funding, etc.
How did you learn back then to make the right decisions when there weren’t that many resources and you had to figure things out on your own?
It was trial and error. One of the things that’s great about the internet now is there’s tons of resources that I can read. If I’m wanting to learn about digital marketing, I can read a million articles about that.
If I’m wanting to read about raising money, I can read a million articles about that. Back then that wasn’t the case. It was self-taught. It was trial and error. It was going to Meet Ups and conferences and talking to people. The learning was there but you had to make more of an effort to extract the information you needed. There were a lot of things I wish I could have done differently with Jangomail.
To give our audience some metrics and comparison, Jangomail and MailChimp started the same year. MailChimp took off and grew like a rocket ship and is probably worth over a billion dollars now. Jangomail hit its peak at around $5-6 million a year in revenue.
It’s easy now for me to look back and reflect upon that time period and thing about what I could’ve done differently to attain better growth. I’ve spent a lot of time thinking about that and I’m trying to apply some of those thoughts and learnings to what I’m doing now.
What are some of those learnings? I’m sure we’d all be happy to hear.
Email has generally been a high-margin industry. Anybody that has had a successful email marketing platform is probably operating on pretty decent gross margins. Anywhere from 20% to 60% based on your business model. I remember when I was first trying to get Jangomail acquired, I had a potential buyer accuse me of starving the company for cash and cheating the company out of its own growth by pocketing the profits rather than reinvesting the profits in growth.
That was my model at the time because I just didn’t know any better. I didn’t have enough of a marketing mindset or enough of a sales mindset to know how to reinvest cash into a business to grow it. So Jangomail became this highly profitable machine where I would pocket the profits but couldn’t figure out how to spend the profits to grow the business.
A lot of other players in the space at that time did figure that out. So MailChimp figured that out and iContact figured that out. What’s interesting is that when it came time to sell Jangomail, I sold it in 2013, there were other companies that were around the same size in terms of revenue, in that $5-$7 million a year revenue that sold for way more than Jangomail sold because they were on a good growth trajectory whereas Jangomail had flatlined for the prior three years.
So, one of my biggest lessons is that valuations of companies aren’t based on revenue and profit but based on growth trajectory. So now with GMass, it’s an interesting time for GMass because GMass is growing and it is profitable and I’m trying not to do what I did with Jangomail before, which was pocket the profits and not reinvest in growth.
I told myself, “I’m not going to do it this time.” But I’m getting caught – I’m getting painted into the same corner because GMass is profitable and I’m trying to figure out, “How can I spend this money to grow the company?” And I’m struggling with that. I don’t want to be profiting. I want to be reinvesting.
I’m not quite sure what the right way to go about that is. I’m wondering if that’s just not in my DNA. What’s in my DNA is to create profitable businesses where profit is the goal, not growth – profit growth over revenue growth. That’s a challenge for me right now.
On one hand that does seem like a good problem to have. You have too much money, how do you spend it? I think a lot of people would be envious of being in that position. Was there a moment for you where you looked at what you had built in the business that you created with Jangomail and said, “Wow, I can’t believe this. I’m kind of set.”
Certainly, Jangomail was – I was making more money than I’d ever dreamed of making when I was a kid. I did feel good about it. I think I’ve always been a “grass is always greener” type of person. I tend to be a fairly harsh critic of myself and I compare myself to my peers a lot.
And when I say my peers, I’m not comparing myself to my software developer buddy down the road, I’m comparing myself to other CEOs of other marketing companies. So, it’s a pretty successful group of people to try to keep up with. I think I’ve always had this desire to leave a legacy.
I’ve had this desire to be known for something. But Jangomail – by most people’s measure Jangomail was a great success, good base of customers, highly profitable, exited, sold the whole thing. But I tend to focus on the things I should’ve done better, the things I could’ve done that my peers were doing that allowed them to grow faster.
It’s such a double-edged sword because I’m the same way. And thinking that way drives you to be more ambitious, to achieve more. You’re probably more successful thinking that way than you would be otherwise but you’re also probably less happy and less satisfied with whatever you’ve accomplished at any given moment.
You’re absolutely right. I’m probably less happy than most of my CEO peers just because of the way I see things. So, it is a double-edged sword.
Let’s talk about the sale of Jangomail. I’ve had people on here who have sold their companies before, but I’ve never had someone who has sold to a private equity firm. What was that process like? What was going through your head when you decided to sell?
First, let me preface that by saying I had been wanting to sell for about the last three years of running Jangomail. So, I was actively trying to sell Jangomail from 2010-2013. And prior to selling, I had seven failed attempts to sell.
Oh, wow.
Meaning I had signed a letter of intent with the buyer. The due diligence process started and for one reason or the other at some point, the deal fell apart. And that was a pretty good learning experience for me as well.
A lot of the people I ended up in bed with, so to speak, were people that didn’t necessarily have the funds to buy the company but were trying to raise the funds from investors or a bank, while simultaneously doing their due diligence on the company. I just really didn’t know any better at the time.
It seems so obvious, why would you work with a potential acquirer that doesn’t already have the money to buy the company? But I just didn’t know any better and I assumed it was all the same, whether they had the money or not. I just assumed they could get the money if they didn’t have it. But that turned out to not always be the case.
So, when I mentioned those seven failed attempts prior to actually succeeding, a lot of those were trying to sell to somebody that didn’t have the money to begin with, which I learned is a bad idea.
How did you turn things around and actually find somebody who did have money and would be a good acquirer for your company?
It was a bit of luck and a bit of good timing. I hired a colleague of mine who was also in the email marketing industry, who knew a lot of the other CEOs of email marketing companies.
And I hired him to pitch Jangomail for me to potential acquirers. Normally this would be done through a professional investment bank or some sort of a business broker. And I had used outfits like that in the past as well, but it didn’t quite work. I had a personal relationship with this person, so we gave it a go.
He ended up finding somebody whose specialty it was to buy Software as a Service companies that were either declining or had become stagnant. This private equity group’s model was to take that, inject their sales expertise into the company to then grow it and eventually sell it. So that’s what happened, and I ended up selling to a private equity group out of Omaha.
So in addition to not attempting to sell your company to people who don’t have the money, what do you think your biggest takeaways were from that process and how could someone else who is preparing to sell their company ensure that things go as well as possible?
One of the most frustrating things about going through the process for the first time and not having the education that someone that has been through it would have, is just learning about what is involved in due diligence and making sure your books are in order and that your paperwork and contracts and customer lists are all in order and well organized and easily accessible.
One of the things that, from a buyer’s perspective, can make a deal go south is if there is a sense of chaos or disorganization in the company, which was definitely true when I first started trying to sell Jangomail. I wasn’t aware of everything that would be asked of me, so I just wasn’t prepared from a documentation perspective.
And I hadn’t been because I wasn’t organizing customer contracts and vendor contracts over the life of the company like I should’ve been. So, there was a lot of education just in how to run a clean operation that is simple to understand, that makes it easy for the buyer to do their due diligence.
So now you’re at this point where you’ve sold Jangomail. This is a business that was doing very well, it was making millions of dollars a year. I’m sure the sale actually also went well. Why go back into business? Why not just retire and go live on a beach somewhere?
That’s what I did for a period of time when I sold the company. I had just started dating someone. I was in a new relationship. I was living in a new city. I was loving life. I was reading a lot. I was not stressed.
When I reflect upon that year right after I sold, I still think that might’ve been the happiest year of my life. I just floated a long and had random conversations with strangers a lot. I never had to pull an all-nighter fixing a bug or bringing up a server that went down. It was just a really happy time. But I got bored of it, basically. I was yearning to create something again. I didn’t know what that thing was.
But I’ve always enjoyed creating software. So, when Google released the API for Gmail that spurred my interest in wanting to create something again. I think I’ve always been the type who can rest for a little bit, but I wanted to create something. I think part of it is fueled by this desire to leave a legacy on the planet.
I’m 41 years old now and I hope to live a long, healthy life, perhaps into my 80s or beyond but I have been feeling my own mortality more recently and as part of that I want to leave something that’s lasting. I want to create some lasting effect in the software world, beyond just making money. Part of the motivation is around that as well.
That makes a lot of sense and it’s easy to identify with. I think one of the challenges of being in your position is that you’ve already had this previous financial success.
So I can easily see you being in a situation where you come up with these different ideas for things to work on but in the back of your mind you’re questioning, “Is this going to be as impactful as what I’ve already built in the past?” Did that play into things with you or did you jump at the first idea that you had?
No, I didn’t. I cycled through a lot of ideas before I landed on what I wanted to build. But the way I put into effect the idea of creating a legacy or having a more lasting impression than Jangomail did was, GMass is a fairly economical product and a lot of people use GMass for free.
So, there’s a couple hundred thousand users of GMass and only a very small percentage of them pay to use it. But because GMass is in the hands of so many more people, I feel like it has the ability to create that lasting impact that I desire.
You can use GMass for six or seven bucks a month, based on what you choose. So that allows it to be used by a far greater number of people than say Jangomail, where the minimum pricing was $50 a month. And there was no option to use it for free.
Let’s talk about these early days of GMass. Most people listening in right now are in the phase where they probably don’t have an idea of what they want to work on, or they have a vague idea but they’re not sure if it’s a good one. How did you cycle through all these different ideas and decide that GMass was the one to go with?
I built it not knowing. I built GMass on a hunch and I think that’s one benefit that I have being a software developer is I can create a product, get an initial version out usually within a couple weeks, based on what the idea is, and throw it out to family and friends and other entrepreneurs I know and colleagues and see if there’s any interest.
So, when I was writing GMass I actually wrote it out of a hotel room in a Hawaii because my girlfriend at the time was doing her yoga training certification in Hawaii and we were living there for a month. I hacked together the first version of that in a couple of weeks working out of this hotel room. I launched it on Product Hunt.
This was now September 2015 we’re talking about. It was received pretty well. For someone who was an unknown Product Hunt user, who didn’t have a substantial following. It got a decent amount of uploads. I think back in those days it was getting a new user sign up every three minutes just by being featured on the Product Hunt homepage. So that’s what first introduced GMass to the world.
Then a couple bloggers picked it up. I was on a couple of podcasts. The ball got rolling from there. That’s when I thought, “All right. I think I’ve got something here. Let’s see what happens.” It’s an interesting thing because I guess I tend to live in a lot of self-doubt. So even now, you mentioned what GMass’ revenues are right now and there’s a lot of people using it.
But I still think, at least once a day I have the thought that this isn’t going to work out and tomorrow all my users are going to leave for a competitor’s product because I haven’t done a good enough job keeping up, or someone is going to create something better, or nobody liked my product to begin with, they were just on it randomly.
It fuels this cycle of self-doubt that I think is also healthy because it keeps me working really hard, this constant fear I have that everybody’s going to leave.
Yeah and I think one of the interesting things about GMass is you’re in this market that some might argue is crowded. There are lots of email marketing tools that exist.
When most people are trying to come up with an idea, at least most first-time founders, they think that have to come up with something that’s completely unique. It has to be something that’s never been seen before, when that’s not necessarily the case.
Were you worried in the very beginning that the existence of all this competition was going to make your life hard?
Oh, totally. Let me tell you just a little story about pricing with email marketing from the beginning of the email marketing days to now. So, when I first started Jangomail, we charged $5,000 per million emails sent.
So, if you’re sending 5 million emails a month, we charged you $25,000 a month. So that was back in the days where there were maybe 10-15 total email marketing software as a service platforms in existence. But eventually what happened is that the barriers to entry came down and it became a lot easier to start an email marketing platform, to the point email marketing became this commoditized service.
Everybody was selling the same thing. Everybody almost had the same tagline. Create your campaign, send your campaign, track your campaign. I can’t even tell you how many times I’ve seen the create-send-track tagline associated with some vendor. As more and more competitors flooded the market, prices were driven down.
Now an email marketing vendor is lucky to get $500 per million emails sent. In developing GMass, really the only reason I jumped back into email marketing with GMass is because I found something that nobody else was doing. And that thing that I found, which is the reason that I wanted to build GMass, was nobody had made it so that you could send an email campaign from inside the Gmail interface.
So, you’re not launching an outside tool and you’re not logging into something else. You’re doing everything from inside the Gmail interface. That continues to be our X factor. We have a ton of competitors that let you send email campaigns from your Gmail account using an external interface but the idea of doing that was boring to me, because that’s what Jangomail was.
Jangomail was an external interface that let you send email campaigns. And so, because I lived my own life inside my own Gmail account, I wanted it to work within that framework. And that’s the only reason I built it, was because that didn’t exist, and I wanted that to exist. I willed that into existence by building it myself.
Let’s talk about this in a little bit more detail. How important would you say is the initial idea of GMass being this unique product that lives inside the Gmail inbox compared to your competitors versus the importance of the subsequent execution? You making the right decisions, and advertising in the right places, and finding the right customers, etc.
That is a really good question. I don’t think that I’ve made a lot of extremely brilliant decisions outside of the fact that the product works inside of Gmail. We’ve done some things, like we have a blog and we’ve done some digital marketing, and we run Facebook ads, and LinkedIn ads and we support our customers.
We do all the things that other companies do but that one stand-out factor is the method in which the product is delivered. And for the technical folks out there, what GMass is technically is it’s a Chrome extension, which means that it’s a plug in for your Chrome browser which is what allows it to add things inside the Gmail interface.
So, I think that is the biggest factor in our growth. I’ve always tried to do things a little bit differently than everybody else. We have created some tools. Actually, we launched a tool today that is the first for an email marketing service.
We’ve always taken the approach of building the tool that nobody else has built yet. So that is probably a factor in the growth and then the fact that it operates, that the product is delivered in a way that is different from everybody else. That’s probably also a factor in the growth.
How helpful was it for you to have previous experience in the email marketing business? Is this something that you think you could’ve come in with no experience and done the same thing? Or was it crucial that you started Jangomail and worked on that in the past?
I think that’s turned out to be pretty relevant because there are features that I’ve been able to build and optimizations I’ve been able to make in terms of the delivery of campaigns that my competitors haven’t been able to because they don’t have as deep of an expertise in email marketing and email delivery that I do.
I can think of examples of how competitors have implemented something, where I can say, “Ah, man, they did that because they’re not aware of the fact that there’s blacklists that list URLs and you need to check those before validating whether a campaign is ready to send.” Things like that. There’s lots of expertise that I have from my years in Jangomail that have been relevant here.
So let’s go back to these early days of GMass. You sat down, you banged out this app in a couple of weeks. You eventually got it to the point where you felt comfortable launching it on Product Hunt and a few publications picked it up.
That’s where you got your first customers. How did you grow your business from there? What were some of the first decisions you made to take this to the next level and turn this into a real company?
One of the primary decisions I made early on, was that it was going to be a free product. So, I didn’t charge for GMass until about a year into building it. I had built up a user base of free users that were sending campaigns in the low thousands of emails a day, that when it came time to charge, most were happy to then subscribe.
So, by not having charged for a while, it allowed me to build up a base of users that I could collect feedback from that would help improve the product and that were joyfully using it, because it was free.
How did you find these users? Were you running ads that said, “Hey, free email marketing.” Or did they spread it through word of mouth themselves?
In the beginning I wasn’t running any ads. I didn’t run any ads until I had started monetizing and set aside a budget for paid ads. In the beginning it was some Product Hunt action, some Reddit action, being featured by some bloggers and then some visibility. Google gives you some visibility just for being a Chrome extension.
So, you get visibility on the Chrome Extension Store, which is officially called the Chrome Web Store. And that was enough to bring in 50-60 sign ups a day. And that was enough traction to keep me motivated to keep building the product and adding features and supporting those users.
I was always doing it with the hope that 50-60 users a day would turn into a bit more, which would turn into a bit more, until the time came to start monetizing and then I could turn it into a real business.
Did you have a detailed product road map at that point, knowing exactly what you were going to build? Or were you running mostly off of customer feedback and changing things every week?
No, I didn’t then, and I don’t even today. I tend to get distracted easily by a bright, shiny object in the corner. So, there are some days where I’ll wake up and I’ll think, “Aw, man, it would be so cool if we had a link validator tool built into to GMass.”
And then I’ll spend the entire day building that tool. Which probably isn’t the smartest decision from a business growth perspective. But that’s what fuels the software developer inside of me, is to be able to think of an idea and to execute it and to get this thing that I’ve been working on functional and in the hands of users.
The better business approach is to research what users want. Research what will add more users to the product and build that. Not by building the shiny thing that’s this interesting idea in your head. I get caught up in that cycle a lot.
I think it’s a common thing for programmers to get caught up in that cycle a lot. But it’s part of what makes it fun to be an Indie Hacker. You have this creative freedom to really build whatever you want and put that into the world, and you have the power to do it, in your situation because you’re a developer yourself. If you want to take a day to add your pet feature, then you can just do it and see how it turns out.
That’s probably why I would never be good at raising money or dealing with investors or dealing with a partner because that mode of operation probably wouldn’t fly well in a more structured environment.
So you say that you wouldn’t be good dealing with a partner, and you’ve been a solo founder through this entire experience running these email businesses. What skills do you think you are most lacking on?
Sales and marketing is where I’ve always been the weakest and it’s also why the model of all my Software as a Service operations have been salesperson-less models. My models have always been based on inbound lead generation and optimizing conversion rates, not on hiring salespeople to go knock on doors.
That’s mostly because I’ve never really understood sales. I don’t know how to hire a VP of Sales. I don't know how to create strategic alliances with other companies. In a way, that’s probably limited my growth. At some point maybe I will want to hire that skill, but also along with sales and marketing I also have a little bit of a fear of working with people. This plays into how we operate GMass. GMass is not a customer-centric operation.
I think a lot of Software as a Service companies, the conventional wisdom is to build a great product and provide absolutely fantastic support to your customers. Really hold your customer’s hands and that is what is going to create great vibes and a great company and culture going forward. We actually don’t do that. I focus on building a great product, but we don’t focus on customer support. We tell our customers they have to figure things out on their own and support themselves.
That goes hand in hand with my general fear or anxiety just in talking to people or in working with large groups of people and that’s why my companies have been the way they are. Very Ajay Goel-centric. Solo operations with a little bit of ancillary help in different areas of a company’s operation. But my personality, my culture is infused in all aspects of how GMass operates.
I think that is really great to hear. You compensate for the things that you don’t feel confident about or that you don’t like doing by thinking about your business from the ground up in such a way that you won’t have to do those things. Not that you are going to do a bad job at them, but you don’t even have to do them.
I think most programmers probably feel similar to the way that you do. I just want to build the features. I want the product to grow itself. I don’t want to talk to anybody and have to sell my product to them, etc. People run into issues doing that because marketing is hard as well.
Growing by reaching thousands of people without having to talk to them is a pretty difficult challenge. Is there anything you did to engineer your business from the ground up to make that part of it easier?
As a software developer, I have my software development strengths and my weaknesses. My strengths are backend code, databases, server-side stuff. My weaknesses are everything on the client side, the user interface, the user experience, the design of the product. I’m a terrible designer.
Knowing this, I wanted the barrier to entry to signing up and to start using GMass to be as seamless as possible. Because my weakness is design and user interfaces, that is also partially why there is no interface for GMass. Gmail is the interface for GMass.
There’s no external UI because I hate building UIs. Another thing I personally dislike about being on the web in general, is filling out forms. I hate filling out forms. So, to sign up and start using GMass you don’t fill out any forms.
It is literally a series of clicking things to link your Gmail account to the product and to send your first test campaign. In fact, the only time you have to fill out a form as part of the sign-up process is if you want to subscribe and that is to put in your credit card number.
Yeah, that is super smart to do it that way. You mentioned that you guys aren’t a customer-centric company and you tell customers they have to figure this out on their own. How exactly do you do that in a polite way that doesn’t upset people and piss them off?
It has been a struggle because I can certainly say that we have a lot of pissed off customers from over the years and even today, if I look through our support queue I guarantee there are 10 or 15 people who are like, “What the F? I’ve had a question in for a week now and haven’t gotten an answer.” It’s a balancing act. I try to communicate it as proactively as possible, so when you subscribe you get a notice saying, “Hey, look, most companies focus on customer support. We don’t, but this is how you can support yourself.”
We have this whole support philosophy. We have a post on our blog where we reiterate the same principles. But to counter that we’ve also written tons and tons of content that answers every question we can possibly think of that a user would have. What we do is when somebody asks a question that we don’t have a canned response for, then I’ll write an article answering that so hopefully the next time somebody has that question they will find it.
So, it has been a systematic process of creating content and adding tips throughout the GMass application, such that the questions don’t need to be asked in the first place.
Yeah, that makes a ton of sense. I think in addition to doing that you mentioned earlier that, you have hired this all remote team of people working in the Philippines, people working in other countries to help you out with PR and with support and with programming. When did you make your first hire and what is your philosophy for when to bring on people to help you out?
Actually, my first hire was in September of 2016. So, it was about a year into running GMass. And that first hire was a full-time hire in Chicago and she just helped me run the operations for both of my products, GMass and my other product, Wordzen, which we haven’t talked about a whole lot, but that’s okay.
It was just a time where I needed someone to bring some organization into the company and to help with everything from billing issues to technical support issues to server maintenance issues and I just needed someone that was highly trainable that I could teach to do a lot of things to get things off my plate. To answer the other part of your question, when do I know that I want to hire someone?
It is usually to off load something that I’m already doing. I feel like there is a better way to be strategic about hiring so I don’t always want to hire someone when there’s an urgency, which is how it’s always been.
I’m super busy and we have all these server maintenance issues, so now I need to hire a sysadmin to take that off my plate so I can focus on the million other things I have to do. A better approach would probably be to always be looking out for talent where it’s not always like a fire drill to get someone on board to alleviate the workload.
I like talking to you because you have this self-aware attitude about you where you’re like, “I’m doing things this way but here’s the better way to do it.”
Yeah, right, right.
But it’s demonstrating, you can build this company where you are generating a lot of revenue, you are making over a million dollars a year, but you are not doing everything perfectly and sometimes things feel duct-taped together and sometimes you are just following your passions and building the features that you want, running your business the way that makes you comfortable. I think that is what makes running your own company enjoyable.
Totally, I recognize that I have a lot of freedom and independence and a lack of accountability where some of my other tech/CEO friends don’t because they have raised 10 million bucks, 20 million bucks and now they are accountable to these stakeholders in their company. They don’t have the freedom to just run the company they want to.
Their payday comes when the company exits. My payday can come steadily as I run the company and run the operation. There’s a tradeoff because if there is a big payday for me at the end where GMass gets acquired, it probably won’t be as sizeable as someone that has taken on money to fuel hyper-growth.
You talked earlier about having this desire to leave your mark on the world, to really leave something lasting behind. Let’s say I gave you this hypothetical where I can tell you, “Ajay, I’m 100% certain that if you raise money from investors, you are going to leave your mark on the world.
GMass will turn into something where you really feel accomplished about it, but you are also going to hate your life and feel accountable and not be able to make the decisions that you want. Or you can go the way that you are going and you are going to be 100% likely to succeed and make a lot of money and build something that is a successful business but maybe isn’t as impactful as you want it to be.” Which option would you choose?
Here is where some cognitive dissonance kicks in because even though I said earlier on and I believe that I want to have this lasting impact and I believe that option one, taking the money to have a bigger impact would be the way to leave a legacy, that’s probably never an option I’m going to pursue just because the sacrifice in independence and just the time and resources that it takes to get a deal done.
Whereas, I could spend that same time and resources in building the product and making it better and fueling the software developer side of me. So even though I want the one thing, I’m not willing to take the approach that will get me that one thing.
To be fair, I’m drawing a false dichotomy here, it’s not necessarily the case that you have to do all that stuff to build something and leave a lasting impact on the world. But it is interesting to see where your head is at and I wonder how you think about that today, knowing that you have the habits and desires to keep your business small and indie, do you really want to build this lasting impact thing?
I do but I want to do it at my own pace and in my own way while I’m still in control. In the end, my independence and my creative freedom probably trumps my desire to have a legacy, which is why I continue to operate the company the way I do.
There was a famous article in the Harvard Business Review that came out 10 years ago. It was called, ‘To Be Rich Versus King.’ I don't know if you’ve heard of this but the article theorizes that the CEOs that become super rich are the ones that take on money and eventually have a big exit but the CEOs that prefer to be king, so maintain their independence, control everything, are the ones that don’t take on money.
They don’t make as much money, but they continue to be in control, and it presents this path that entrepreneurs go down to be rich or to be king.
Yeah. It sounds like most people in the Indie Hackers audience really care about being king. And that’s not to say that being rich isn’t great but there are levels to it, and you can obviously make a lot of money while also maintaining some level of control over your lifestyle and your business and the creative decisions that you make at work.
Certainly.
Let’s talk a little bit about this process you mentioned earlier of going from having all these free users of GMass to deciding to flip a switch and start charging. How did that go exactly?
I remember that – my birthday is on August 4th and I remember that my birthday present to myself for the year of 2016 was that I wanted to launch my monetization on my birthday. So, July 31st, August 1st, August 2nd, I was working with my integration with Stripe so that I could launch it on August 4th.
I had started by sending out an email to however many users I had at that time, maybe 50 or 60 thousand, saying, “Hey, starting on August 4th, if you are sending more than 50 emails at a time we are going to ask you to subscribe.” And I was so surprised. It was such a rude awakening at how much negativity I got in response. I got a lot of “F- yous.” “You said this product was free and now you are going to start charging for it?”
That’s not fair. Or “Hey, you might think that $7 a month is a negligible expense but that is more than I can afford.” It was just eye opening because being a U.S. citizen, living in this country and being in a career that is generally thought of as lucrative, $7 a month does not seem like a lot, but we had a lot of users in third world countries where $7 a month was substantial. Initially there was a lot of backlash.
But the way it turned out is that, the users that wrote back, the people that were upset were the ones that wrote back. The ones that were totally fine with subscribing, I never heard from and they just paid when it came time to pay. So, it created this off-kilter perception in my head that I was in trouble because so many people were upset.
But I think it is how life goes. When someone is pissed off about something, they are more likely to write a review on Yelp! Or Trip Advisor than when they are happy about something. So that was the case with the initial response that I got.
It was scary. I remember when I flipped the switch. You compiled a code and I deployed code where suddenly you had to subscribe to send more than 50 emails and I’m waiting for that first credit card to be put in.
An hour goes by and two hours go by and not a single credit card has been put in. I’m like, “Man, is there something wrong with the code?” So, I test it with my own credit card, and it works. All right, it’s working but nobody’s subscribing.
Oh, man.
And then it hit me, I was living in the Chicago at the time. It was 2 a.m. Chicago time and I’m like, well, most of my users are the users in India and China. Maybe I just need to wait until morning U.S. time and then I’ll get some subscribers.
So, I went to bed having zero subscribers, waiting for morning to come and when morning came, I popped up out of bed and checked my phone and I had a handful of subscribers in the morning. So, it was totally a roller coaster of emotions.
Yeah, that had to feel pretty relieving. What do you think were some of the biggest decisions you made that helped you go from just a small handful of subscribers at first to the 7, 8, 9 thousand subscribers that you guys have today?
One of the primary decisions was to keep the interface inside Gmail. That makes the learning curve really low because you don’t have to learn an external interface. Another decision was to focus on technical content on our blog.
If you read a lot of competitor’s email marketing blogs, you can tell that the content is written specifically around certain SEO keywords and phrases that they hope to rank for. That always bothered me because I’ve always enjoyed writing and I enjoy reading but I hate reading an article thinking, “I don’t think this article was written to actually teach me anything. I think this article was written just to get some SEO juice out of it.”
I wanted to take a different approach from the beginning. If you look at our blog all of our content is fairly technical and fairly in-depth and teaches users how to do complex things in the arena of email marketing. And it turns out that has allowed our content to rank well. So that drives a lot of traffic and a lot of signups. Interestingly, by not focusing on SEO we ended up ranking well for SEO.
Theoretically, Google’s job should be to find the most educational and helpful articles and so you can kind of cross your fingers and close your eyes and write the best content and hope that Google takes care of the rest.
That’s always been the hope, but millions of SEO firms exist because they’ve figured out or are hoping to game the system a little bit, so. In the beginning I didn’t know if my organic, more mindful approach would work.
Have you ever worried about being so dependent on Gmail that if Gmail makes a change in their API or somehow changes a rule that your business is done?
Yeah, totally. In fact, something just happened a few weeks ago. On a regular basis, Gmail changes its code and GMass breaks. So GMass is rendered completely useless at least once a month because Gmail changes its interface to the point where all of the GMass buttons that we add disappear.
We’ve now written a system so that when that happens my phone blows up on me so I can address it right away. That happens on a regular basis. But Google has been in this process of changing things for a while.
And they just announced this change a few weeks ago, where everybody that has built an app on top of the Gmail API starting next year, is going to have to start paying Google a fee anywhere from $15,000 to $75,000 for them to audit our security. I guess there have been some less than scrupulous developers that have taken advantage of the API and tricked users into getting their data.
So, Google is taking a more serious approach to developers building specifically on top of Gmail. They are adding this whole audit/security/review process starting next year. I’m going to write a blog post about this, but my feeling is that this could stifle innovation because now it will be a lot harder to have an idea for a new app and just to throw it out there to see if it sticks.
Because one will have to go through this intensive security review process before an app can even be made available to the public. So, there are things like that have to be dealt with on a constant basis. Yeah, I do have this fear. What if Google decides, “Hey, no more third-party plug ins that send email in mass through our platform.” If Google decided that, then GMass would be in trouble.
So let’s say that did happen. GMass is dead tomorrow. What do you, Ajay Goel, decide to do with your life?
I wouldn’t go down that easily. I would try to adapt and circumvent our email sending around the Google ecosystem. But let’s say for argument’s sake that GMass was no longer, what would I do with my life?
I would go back to what I did after I sold Jangomail, which is, I would take time off, I would read, spend time with family, go to Starbucks a lot, random conversations with strangers and just wait until the next spark.
In the history of GMass, since you started this business in 2015, what, if anything, would you change if you could go back in time?
I know what I would’ve changed. I’ve mentioned that I’m a bad designer. The GMass website and the GMass Chrome extension reflect a bunch of poor design skills. One thing I would have done differently from the beginning is, I would have had a designer to spend a little bit of time initially to create a good design for the product. I think that could have had a significant difference in user adoption. We have a lot of users, but I think we would have even more if I had gotten the design right from the beginning.
What would your advice be for other people who are listening to this podcast who are inspired by your story and want to set out to build their own Indie Hacker business. What do you think they should do?
From an overarching standpoint I think one of the things that has allowed me to be successful is to not follow the patterns that everyone else writes about or blogs about. There’s tons and tons of content about how to grow you SaaS business and how to rank for a keyword and how to run a digital marketing campaign.
But in the end, I think what has allowed any company to be successful is to carve their own path and to figure out their own, unique moves. Their own, unique strategies that get the product in front of the users. I had this belief that if there’s a million articles that teach you how to do something, then learning that skill probably isn’t that important to your business.
A lot of the things that I’ve done to grow GMass aren’t the things you read about in the articles that exist on how to grow a SaaS business. They are just things I’ve experimented with and figured out. Making GMass a Chrome extension as opposed to an external interface. We have this delivery analyzer tool that tells you if your email is going to the inbox folder or the spam folder and figuring out the things you can do that are different from what everyone else is doing.
That’s great advice, Ajay and I think it will really help people build things that stand out. Thank you so much for coming on the show. Can you tell listeners where they can go to learn more about what you are up to with GMass and what is going on in your personal life as well?
Yeah, you can go to the GMass website, it’s GMass.co. G-M-A-S-S dot C-O. Someday I hope to get the dot com but it’s not in the cards quite yet. You can email me or find me on Twitter. I’m @parttimesnob on Twitter or email me at [email protected].
Thanks so much, Ajay.
Thanks, Courtland.
Courtland Allen If you enjoyed listening to this conversation and you want a really easy way to support the podcast, why don’t you head over to iTunes and leave us a quick rating or even a review.
If you’re looking for an easy way to get there, just go to IndieHackers.com/review and that should open up iTunes on your computer. I read pretty much all the reviews that you guys leave over there, and it really helps other people to discover the show, so your support is very much appreciated.
In addition, if you are running your own internet business or if that’s something you hope to do someday, you should join me and whole bunch of other founders on the IndieHackers.com website. It’s a great place to get feedback on pretty much any problem or question that you might have while running your business.
If you listen to this show, you know that I am huge proponent of getting help from other founders rather than trying to build your business all by yourself. So, you’ll see me on the forum for sure as well as more than a handful of some of the guests that I’ve had on the podcast.
If you are looking for inspiration, we’ve also got a huge directory full of hundreds of products built by other Indie Hackers, every one of which includes revenue numbers and some of the behind the scenes strategies for how they grew their products from nothing. As always, thanks so much for listening and I’ll see you next time.
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This down to earth interview was very, very helpful to me. I've been slogging away at rebuilding an application I developed for a client and offer it under an SaaS model, and it has been really tough trying to face how I'm going to deal with my shortcomings, especially without the funding (and the personal inclination even if I had it) to hire a sales team and multilingual support staff. Thanks very much for sharing your story Ajay. It's given me a lifeline to hang on to.
So excited this is live! Thanks @csallen. If anyone has any follow-up questions, please hit me up on Twitter, @PartTimeSnob.
wow... hacking at its finest!
Love this interview. Thanks @csallen and @PartTimeSnob
My Main Takeaways:
GMass makes over $100k MRR and is a tool to allow people to send emails to a lot of recipients via Gmail.
Ajay is a developer. He does most of the development for GMass, but has a contractor and a few virtual assistance on his team.
Leverage what you know: Ajay has a had a long career in software development and email marketing products specifically.
Ajay’s first email marketing product was called DjangoMail that he bought and ran from 2003 to 2013 and sold to a private equity group. He then spent the next couple of years, reading, and thinking about what he wanted to do next.
Ajay graduated from university in 1998.
Ajay built websites in the summers between university years, and he enjoyed this lifestyle more than getting a job.
In the early days, a lot of email marketing products started as web development client projects that turned into full on products.
The growth for Ajay’s first product was fueled entirely by pay-per-click advertising.
A few customers will be “Whales”, these are customers that make up a significant portion of your revenue.
In the early days of the internet when Ajay started business, he had to learn from trial and error, because there weren’t many learning resources.
DjangoMail and Mailchimp were launched the same year, Mailchimp took off, while DjangoMail only hit $6-7 million ARR at its peak. One of the reasons for his was because Ajay didn’t know how to reinvest profits, so he just pocketed the profits, while Mailchimp reinvested their profits.
Valuations of companies are not based on revenue and profit, but based on growth trajectory: Ajay sold DjangoMail for much less than other businesses that were generating the same ARR as DjangoMail, because the growth trajectory of DjangoMail flatlined, while the other businesses were growing.
Ajay compares himself to his peers, he’s always seeing how well he is performing in relation to others. (Courtland does this too).
Don’t try to sell your business to people who do not have to money to buy it: Ajay had actively been trying to sell DjangoMail for 3 years, from 2010 to 2013, and prior to selling, he had 7 failed attempts, where he had signed a letter of intent with the buyer, but after due-diligence the deal fell apart. (A lot of these people didn’t have the money to buy, but were trying to simultaneously raise the money from investors while doing the due diligence.)
Leverage your network: Ajay hired his marketing friend to pitch his business DjangoMail to potential buyers, and it worked, he found a willing buyer.
Work is Life: After selling DjangoMail, Ajay went into a “mini-retirement” where he didn’t work, he started dating, living in a new city. He describes this as the happiest year of his life. He was just “floating along, having random conversations with strangers, not having to fix bugs at night, etc”... but he got BORED! He wanted to create stuff again, he wanted to leave a lasting impact.
Ajay built GMass on a hunch, he felt curious and excited, so decided to build it. He then shared it with friends and family to see if anyone was interested. This is the benefit of being a software developer (Being able to build things on a hunch).
After releasing GMass on ProductHunt and getting covered by bloggers, his userbase started picking up.
Self-doubt will creep up on you: Even despite his success, every day Ajay feels like all his users on GMass will leave for a better product.
Ajay didn’t charge for GMass in the beginning, he built up the user base, so he could collect feedback and improve the product, so by the time he started charging, people were willing to pay.
In the beginning Ajay drove traffic through ProductHunt, Reddit, Bloggers, and the Chrome Web Store. This drove in 50-60 signups a day. When he started charging, he then started doing paid Ads.
Research what users want and build THAT (Ajay hadn’t been following this advice, he just built things in the moment when he thought of them.
Ajay says that he lacks skills in sales and marketing, so the model of his SaaS products have been salesperson-less models. Instead, he focuses in-bound lead generation, and optimizing conversion rates.
GMass is not a customer-centric company, Ajay just focuses on creating a great product. The users have to take care of themselves. Ajay’s personal philosophy has been embedded into the culture of GMass.
Ajay hasn’t raised money, so he has a lot of freedom to run his business how he wants. Ajay Chooses freedom over money.
GMass breaks once a month due to the fact that it’s based on GMail, and the GMail developers keep making changes, that render GMass unusable.
If GMass went out of business, Ajay would go back to what he did after he sold DjangoMail, which is to say that he would read, go to Starbucks a lot, spend time with family, have random conversations with strangers… until the next idea hits him.
Advice for beginners: Don’t follow the patterns that everyone else writes/blogs about. Carve your own path. Figure out your own unique strategies. Be different from everyone else.
Great interview! When growing a business on your own, most people struggle with self-doubt, specially when they are fully aware of their own limitations. But it's so great to see how Ajay is able to deal with all of that in a very smart way by playing to his strengths. Thanks for sharing!
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