$5000 from an unexpected source of revenue
by Pablo AlayetoHi everyone 👋
3 months after the beta launch we just got our first paying customer, even before activating payments on the website!
We are very happy, although it's not the kind of customer we expected.
Our product aims the $15-$99 monthly fee range, and our user target is someone who wants to add a form with calculated fields to their website.
We've known this customer for a couple of years because they have a SaaS of their own, and we do freelance work for them. Just out of the blue they reached out to build a "tool to allow their users to create forms builder with calculated fields", and immediately thought about offering Calquo to them, but there were a few points to work on. Their SaaS is medical-related, so they wanted to store their sensitive information. This meant they pretty much wanted to use the front end of Calquo, so we'd have to create some kind of API to integrate with their backend.
We had no idea on how to price that service, because our plans were a subscription based service, but they wanted some kind of white-label in-house Calquo.
The starting point for us, given that we already worked for them hourly, was to look at the hours we already spent on the product.
Since they just wanted the front-end part of it, we didn't add the time used for the back-end. It added up to around 160h –yep, a lot of time for an MVP 😅–.
We didn't think charging the full amount would be fair, so we halved it. Somehow we thought we did half of the development for them and half for us... but at the end of the day it sounded like a reasonable amount of hours we could use to estimate the right price.
With that starting point the numbers were clear: 80 hours * 60 $/hour = $4800 ≈ $5000
We also agreed to charge them 60 $/hour for any additional work, i.e. customisation and work needed for integrating with their backend.
Should we pivot and offer a white-label product to other companies?
Is it too risky to give them a copy of our source code? We agreed some license terms with them, like they couldn't resell our code, but nothing too formal nor reviewed by lawyers.
We don't know if it was a good decision TBH, but those $5000 feel like an incredible push to our side-project and some kind of validation of the product, even not the expected one.
What do you think? Would love to read your thoughts.
-
4
Pipe that money into the business and make it grow.
Although cool (rooting for ya), this says nothing about the model you are targeting, so nothing changes for the business. Don't consider this as any kind of validation, unless you pivot to be a white label solution & now your customers are other businesses like this. I would say, its just good positioning at the right time. Keep figuring it out :)
-
1
Thanks for your feedback! You're right. That doesn't validate the business since is not our current user target.
We'll focus on getting our first paying customers and start earning MRR. If we can't make it to a decent MRR, at least we know we can try to pivot to a white label solution :)-
1
At the risk of sounding negative, not even that. Its just 1 customer. 1 customer can pay me for sitting in a chair by chance, doesn't mean a bunch of others are going to do the same :)
Remember, you are looking for product-market fit.
-
-
