May 31, 2019

How to Grow Quickly and Never Turn a Profit

Michael Lynch @mtlynch

In January 2018, I launched my business Is It Keto right here on Indie Hackers.

For the past five months, its traffic and revenues grew consistently, but I was never able to make it profitable, so I'm shelving the project.

The attached link is my postmortem for the project, but here's the summary:

Finances

  • Revenues: $261.68
  • Expenses: $4,954.33
  • Unique Visitors (May): 10,788

What I did well

  • I chose “done” over “perfect”
  • I worked with familiar tools
  • I published monthly goals and stuck to them

What needed improvement

  • I obsessed over metrics
  • I forgot that food is cheap
  • I didn’t think through my monetization strategy

What I wish I had known

  • Search engines have a substantial lag
  • Good content writers are expensive
  1. 2

    Thanks for sharing!!! Sorry it did not work out, but it is very helpful to see both sides.

    1. 1

      Thanks for reading!

  2. 2

    Oh, I love your retrospectives! Thanks so much for sharing your story.

    1. 1

      Thanks for reading!

  3. 2

    Good to know when it's time to move on. What's the next plan? Are you open to having a co-founder?

    1. 1

      Thanks for reading! I'm planning to develop a tool aimed at copywriters. I haven't finalized it yet, but I've been interviewing copywriters about their workflows.

      I think there are plenty of benefits to having a co-founder, but I feel that I work better as as a solo founder.

  4. 1

    How your expenses are in close to $5K? This seems like crazy high!

    1. 2

      I am guessing most of them are for content writing. His site has few well-written blog posts and small articles on various foods.

    2. 1

      As @irshadnilam, it's mostly for content writers. I break down the expenses in the post here:

      But I think $5k is artificially low because I assumed that my time was worth $0. If I paid myself market rates for a developer, my expenses would be six-figures.

      In general, I feel like Indie Hackers are overly conservative about outsourcing things because they're afraid of making their profits seem lower. If there's something I can outsource and get a much better result than doing it myself (e.g., graphics) or something that I can outsource for a lower rate than I feel like my time is worth (e.g., content writing), I'm happy to outsource it.

      1. 2

        But I think $5k is artificially low because I assumed that my time was worth $0. If I paid myself market rates for a developer, my expenses would be six-figures.

        Well, your time is yours. You have invested it in the product. Trying to put a market rate on your time is hard for some reasons.
        If your investment paid off and became $50K/mo business, you can say that your time was worth $500/hour. But if your business makes $1K/mo, you need to work with that. This is how owning business works - the market rates do not apply to yourself. Your time is worth what you make. It's up to you if it was a good investment or not. But for the sanity of yourself, you should not chase the "market value" for your own time.

        If there's something I can outsource and get a much better result than doing it myself (e.g., graphics) or something that I can outsource for a lower rate than I feel like my time is worth (e.g., content writing), I'm happy to outsource it.

        True to that, but...

        In general, I feel like Indie Hackers are overly conservative about outsourcing things because they're afraid of making their profits seem lower.

        ... this is rather a strong assumption. Believe me, IH is like a rainbow - you can find every kind of person here.

        Only because I said, your expenses were crazy high, it does not mean I think you should not outsource. I have run a company myself with over 80 contractors, so it's not about trying to save on "unsaveable".

        The main issue is when you run a "company" vs "business". When you run company, you want some folk to help you out, you are the boss (or you do everything to be one) that direct employees/contractors. You are a conductor. You decide at what speed you go, your decisions will affect your passengers and staff (customers/employees). BUT, the train goes where the tracks go. You can't change your stops, you cannot adjust your route. You control speed, which affects many things, but your options are limited.

        When you are a "business", you are a private coach owner. You can decide if you need staff, what staff, if you want to go around to reach some destination that your customers request. Business is when you learn the processes, basics, and you optimize from bottom-up to make most out of it. The business focuses on making money, rather than just reaching some destination. The goal is to earn, grow, expand. When you run a company, your goal is to reach, survive, repeat.

        Outsourcing Twitter management? Cool. But if you don't know how to do it, you did not try to learn it, you did not experiment it, how can you say that the person you hired is a good person for the position? If he/she is nice and delivers reports that explain the amount of work, but the amount of work does not equal sales, should you be happy or disappointed?

        That's what the conductor dilemma is - by running a company you focus on hiring, delegating and running the "train", but from your front cart, you cannot tell if the food served to customers is right, if the blankets provided are soft enough. This is because you have not served them yourself, so you have no realistic way to determine what is what.

        So yeah, I think for a startup, or should I say side project (?), that deals with what your do, spending $5K/mo to run it when you have not really validated the idea is not a viable strategy (yet).

        ofc this is just some rambling from a guy that has some extensive experience. I have not researched your core market, nor did I research your product as well, so my "opinion" is based on some assumptions that more than often are correct.