September 8, 2020

How I reached $4,000 MRR in two months!⭐

Kevin Conti @Kevcon80

You can see all of softwareideas.io's metrics here: softwareideas.baremetrics.com

This project has grown faster than I could have imagined! I've written a lot about why I think this project has grown so quickly and so successfully before, and I'm currently working on a series of content (some free, some subscriber-only) where I'll deep-dive into specific methods I did to get such fast growth.

But here's the three "big-picture" things that I've learned or done that has helped the project grow the most:

(I wrote about these when I hit $2k, but I think this is some of the better advice I've given, so I'm writing it again!)

1. 📈 When you idea has traction, it will be obvious. If it isn't obvious, you don't have traction yet.

It's so easy to focus on an idea that feels like pushing a boulder uphill. Every lead is a battle, and every sale feels like a miracle.

Once you've really nailed a problem space, it feels different. You don't really need to convince people to buy. Instead, a lot of the work is just in figuring out who fits your ideal customer persona. If they do, all you need to do is tell them about it and they'll buy.

I know it's tough to decide when to pivot, when to stay the course, and when to give up entirely. I don't have great advice on how to choose.

But if you've been pushing a boulder uphill for a while now, you should consider finding a new path.

2. 💲 Pre-sales, pre-sales, pre-sales

If you're just starting out with a new product, I urge you to build the smallest thing possible that you can get in front of people (this may just be wireframes or a google doc!) and ask for money upfront.

I think pre-sales is a lost art, and I want to bring it back. So many founders build things that people think are "cool", but they don't want to spend money to fix.

By pre-selling $200 of my newsletter before I committed to the idea, I learned who my best-fit customer was and how much they were willing to pay before I even had a product!

I think IndieHackers are a super motivated group of founders. For a lot of people, the biggest risk with starting a side-project is that they won't finish. I don't think that's the case with Indie Hackers.

For IndieHackers, the biggest risk is that you'll build something that people won't pay for.

You can do all the customer validation you want. Get all the positive responses in the world, even have people telling you that your idea is the greatest and they can't wait to pay!.. But unless they are handing you money, you won't know for sure that you're on the right track.

3. 🧮 You need more sales than you think to get to $10k MRR

How much MRR do you get per customer? For me, it's $19. That means I need to do just over 500 sales to get to $10k.

That number seems small, until you start thinking about it deeply. If you did one sale per day, which I think is great if you're able to do, it would take nearly two years to hit that goal.

To unlock growth like getting to $2k in a month, it means that I couldn't have just one sale per day. It needed to be three or four per day.

This is where the importance of having reliable channels comes in. A lot of businesses fail not because the idea doesn't solve a pain, but because they can't reach the people it solves a pain for.

You need more leads than you think, so make sure you prove those channels early on.

Happy to answer any questions below!

  • Kevin Conti

PS: If you want to check out Software Ideas yourself, head to www.softwareideas.io

  1. 6

    Congrats Kevin! That's a big milestone.

    Am I the only one shy about pre-sales? I mean, I get what you say and makes total sense but still I am asking money for a promise :D Would you elaborate on how did you get to that $200? Maybe you already did in a previous article you can link?

    Thank you and good job!

    1. 10

      Hey Almavi!

      Here's the mindset to have with pre-sales:

      "I am offering you the chance to come in on the ground floor of this product, and help make product decisions so that it fits your needs perfectly. In a sense, I'll be working for you as a contractor as the product is developed, at a price much cheaper than an actual consultant would charge."

      Pre-sales is a great reality check. Either your idea is so good that people will want it DESPITE having to wait for the finished product, or they won't buy it and you know that the product just doesn't hit the need that's going to make it grow quickly.

      If you want specifics on all of the pre-sell and customer exploration conversations I had to pre-sell Software Ideas, I actually have released them all publicly here. It's inside a Notion template I've made for validating ideas.

      (I also have a 40 minute video available to Software Ideas subscribers where I deep-dive into pre-sales and that template - if you're interested)

      1. 1

        I am interested :)

        1. 1

          It's available to Software Ideas subscribers, like I mentioned. You can sign up at here

      2. 1

        Thank you so much. Those quotes are key. I can't upvote this enough!

  2. 2

    Hey Kevin,

    I've had a similar journey with - https://nugget.one/ideas

    Revenue here:

    https://www.dropbox.com/s/7a85vsmtj3kfy4r/Screen Shot 2020-09-09 at 11.17.14 AM.png?dl=0

    I ended up pivoting to founder training - https://nugget.one/bootcamp

    Give me a shout if you want to have a call to discuss the monetizing ideas side of things.

    Thanks!
    Justin

  3. 2

    Amazing work!!

    Has Twitter been your main marketing channel?

    Did you start out charging $19/m?

    1. 2

      Hey Pete!

      So far, it's Twitter and IH. I'm looking this month at finding my third channel. And yes, started out charging $19/month and probably going to experiment with increasing the price soon-ish!

      1. 1

        a fellow IH user here recommended me Twitter, and I have used it like 8 years ago. But I'm not sure what to do on Twitter - in my impression it's just texting like 200 chars. Do you have advice on how a beginner-again should use Twitter?

          1. 1

            ah hah! coincidentally I just started to follow him! I will follow you as well ;) and work on my bio like he said.

  4. 2

    Motivation. Congrats Kevin!

    1. 1

      Thanks! Glad I can be a motivator

  5. 2

    Congratulations Kevin! Also, as a subscriber, great job on the newsletter!

    1. 1

      Thanks, I'm always really happy to hear from readers! Glad you're getting value out of it!

  6. 1

    Why are people paying for this? (Serious question).

    I personally wouldn't pay for someone to give me an "idea". To me ideas are cheap, I'd rather find an audience and see their problem first hand, otherwise how can I build a real solution?

    But I am very impressed you got that many people to pay for this, to me it says you're very good at marketing and selling.

    1. 1

      Hey Tony,

      Did you get the free issue? I think it will help you understand. For many people, the newsletter acts as an outsourced market research service, which is appealing to people actively looking for a new software business outside of the niches they know and are familiar with (for example, their own hobbies or profession)

      I would think of it less as “idea generation” and more as “market research”

      1. 1

        Good explanation, will check out the free issue.

  7. 1

    Congratulations! How much is organic vs paid conversions?

  8. 1

    Correct me if I'm wrong, and not to be the negative guy, but given you've been operating for 2 months and you only charge every 3 months... you haven't actually had any recurring revenue yet, have you?

    Don't get me wrong, 4k in 2 months is pretty great for a brand new side project, but I imagine the real test will be whether people will renew when the next quarter comes around.

    Have you given any thought to how you'll bump retention in the lead-up to re-billing?

    1. 1

      It's about $12,000 in two months, which, since it's a quarterly subscription, equals out to $4,000 MRR :)

      You're spot on that retention is a big question come month three, but I do have some plans in place to improve it over time. Right now I'm waiting to get a baseline.

      1. 1

        I suppose the month is here. How did it go for you, Kevin?

        1. 1

          Ah, I'll find out over the next few days and weeks. The first customer subscribed on July 6th, so their subscription will renew on October 7th!

          So far, pre-emptive cancellations have been just 1.1%, which is very promising.

      2. 1

        Damn, even better. I'm still blown away that people are willing to pay to receive a newsletter - that shift seems to have happened really suddenly, and the demand certainly seems to be there.

        Best of luck with month three!

        1. 1

          It has to solve a problem, or be wildly entertaining. It's a higher bar than free news.

          At the end of the day, newsletters delivered via email is just a container. The primary value of the product lies outside of the format!

  9. 1

    Regarding #3, an old idea from "warriorfoum" types is having "upsells on the backend" which means you create higher value things like mastermind groups, seminars, in depth training courses. I am of course suggestion these things should be constructed to be genuinely valuable to the customer.

    These might sell for say $500-$5000 - so you don't need to sell as many.

    They may be harder to 'scale' as for $5k someone might expect some 1-1 time with you or someone you have trained. And if automated they would expect some quality stuff that will pay them back that investment.

    But if you have a lifestyle goal of say $10k a month then I think that would be acceptable to require a bit of your own time on each sale, if in total the hours are reasonable.

    I have no experience of this yet but would love to hear what people think.

    1. 1

      I'm actually front-loading the Software Ideas subscription.

      Instead of getting people in the door with a cheap offering and having premium on the backend, you get the entirety of the Software Ideas content for your subscription. Over time, that will include any/all newsletters, premium courses (starting with the course I'm working on called The Foundation), and access to the community.

      No upsells at all, just combining them all in hopes that the combination is more valuable than the sum of the parts.

  10. 1

    Congratulations, Kevin!

    This is a crazy milestone and very inspiring for most of us.

    You're right on all counts, especially the hard road to $10k MRR.

    1. 2

      Thanks!

      Yep, it's difficult and really makes you think about pricing. My next product (definitely a saas) will ideally be priced at $299, which would only be ~35 customers to 10k.

      1. 1

        I actually did think deeply about this.

        But then at $299/mo, you'll probably need to invest in a sales team and also woo prospects through selling.

        It's quite a hard sell to expect them to come from the ether, trial your product on their own, and then upgrade, all self-serve.

        So it can work, yes, but it's a different ball game altogether that I admittedly, as a solo founder, am not equipped to tackle.

        I wish you the best of luck though.

        1. 2

          I'll respectfully challenge your assumption! As an off-hand example that most IndieHackers will be familiar with, Tuple.app does exclusively inbound selling (not self-serve, but customers come to them).

          They charge 5-figures for a typical sale.

          I charge $19/month for this newsletter, which is a high price point for an individual. For a business, $299 is like an individual's $19.

          But it's all based on the market your in. If your competitors are charging pennies, you can only charge pennies. If you're in a market where the going price is $299, you're fine to charge $299.

          1. 1

            This is a lot harder than it sounds. Throwing around startup names is like waving a wand. Doesn't mean anyone can be like Tuple.

            They had product market fit early on, it's hard to find a audience that is under-served and deliver an exceptional product to serve them.

            Like you said though it does depend on the market/audience, you can't just show up to a heavily saturated market and charge $299.

  11. 1

    Congrats man! BTW I love the advice number 2 🤑

  12. 1

    Kevin Great Job!!!!!!!

    When you said: "A lot of businesses fail not because the idea doesn't solve a pain, but because they can't reach the people it solves a pain for." How did you advertise to those people? The issue I am running into is I know who my target is, and I try to contact them but everytime I post on places I just get banned for self-ad. And if I dm people on say; Discord they just assume I want to rip them off. Any Ideas?

    Thanks

    1. 1

      Take a look at some similar advice I gave this founder

      If you're getting banned for self-advertising, it means you're self-advertising! Which is doing it wrong.

      Check out the advice I gave that individual and I'm happy to talk more about it if you have questions!

      1. 1

        Hey,

        Thanks so much for the reply. That is a very interesting method where you provide value right off the bat. How would you recommend reaching out to people. Because as of now my only way to get in touch is to dm people on social media. Do you think I should just lead with: are you having issues with X, try doing X, and let me know if you would like some more help. Is that good? Because I want something that is quick but I don’t want to make it look like it was just a robot who sent it. Thanks so much

        1. 1

          What's your market / vertical? If the only channel you have is cold DMs, it's going to be a tough few months.

          If I had specifics I could give a bit more nuance to my thoughts :)

          1. 1

            Yeah, I help stock traders automate their strategies by using algorithms and I just cold dm people saying can I help you out. But the normal response I get is F off...

            1. 1

              Cold email is always rough, but typically that type of response comes from people feeling like you're trying to sell them.

              There's a lot of strategies out there for improving your cold emails. Sam Parr is known for being good at it, and he has a lecture: https://trends.co/cold-email-lecture-offer/

              It sounds like you could try other channels then just cold email though. Seems like there may be opportunity for a content play, or paid ads if you find they are affordable enough.

  13. 1

    Hey Kevin! Congrats on the milestone! What is your metric dashboard built on? It's so amazing!

    1. 1

      Thank you! It's on baremetrics.com, highly recommended (they are free before 2.5k mrr if you reach ask nicely :) )

  14. 1

    Your insights are awesome. I have spent time building things that i thought people needed.
    I will try the pre-sale idea.
    Recently launched my on web analytics and uptime monitoring tool for my firefighters blog.
    Thank you once again.

  15. 1

    Congrats on the milestone Kevin!

    Quick question: what are your monthly costs (if you don't mind sharing)? I guess you have huge profit margins, right?

    Really looking forward to publishing SoftwareIdeas' story on Failory.

    1. 1

      Hey Nico!

      Yep, large margins for sure. Mailchimp is my biggest expense at $50, my landing page at $29, and the members-only website is a Phoenix application which runs for like $15.

      The biggest expenses are my yearly subscriptions to databases of company information, at about $1,000/year

      Rest of it is pure profit, with the caveat that Software Ideas is currently supporting CoderNotes.io as well.

      I'm super excited for Failory! Hoping to get that Google sheet back to you this week, but I'm in the middle of a move so I'm sorry if I run a bit late!

      1. 1

        do you not count the $350/monthly fee for baremetrics ?

        1. 1

          Ah, forgot baremetrics above. It's only $50/month though

        2. 1

          oh sorry, I'm new to baremetrics.com and didn't realize there was a slider to determine your monthly cost. So I'm curious, what you're currently paying and do you count that as part of your monthly operating cost?

      2. 1

        That is really great. May I ask you which business database and how are you using it?

        No problem for the delay, man!

        1. 2

          I pay for two right now: Crunchbase and Owler.

          Crunchbase is great for news funding information, Owler for more accurate financial information.

  16. 1

    Awesome results. Love hearing about successful newsletters.

    If / when you create the content about your growth, let me know - would be good to include on https://letterstack.co

    1. 1

      Hey Paul, thanks!

      I do already have some great resources, most notable this validation template I spent a long time creating: https://www.indiehackers.com/post/my-notion-template-for-validating-ideas-bce4497119

  17. 1

    You’re doing an amazing job of converting free subscribers into paid ones. I’d be curious to know how you’re attracting new visitors to your website. What channels are working well for you?

    1. 1

      Twitter and Indie Hackers, and I'm looking right now at adding on a third (or getting better at twitter).

      I've recorded a bit of my thoughts over on my personal blog: https://www.kevinconti.com/blog/softwareideas-daily-blog/#september-4th

      1. 1

        This is cool! Will read everything tonight. Why don’t you post them also as Twitter threads?

        1. 1

          Oh, because I’m not smart enough to have thought of it until just now 😂

          Great idea!

  18. 1

    Hey Kevin!

    First of all, Congratulations :)

    Can you expand a little bit on what you mean by "channels"?

    1. 2

      Hey MJ!

      By "channel", I'm talking about a distribution channel. In other words, a method for reaching new users and leads.

      Common ones are:

      • SEO
      • Cold email outreach
      • LinkedIn Sales Navigator
      • Twitter posts
      • etc

      There's a bunch, but first-time founders always miss that it's one of the most important parts of creating a company. You need to find at least one that reliably works for you before you really know if you have something that will work!

      1. 1

        Awesome. Is my understanding correct?

        The founders should have access to their audience directly/ indirectly to know if they have traction?

        1. 2

          You need some way to get people to see your product. "Build it and they will come" is a myth.

          Most founders will guess that they can reach an audience with some channel, but they don't actively validate their assumptions before deciding to commit to the project. I think that you should test channels and know for sure if you can consistently reach people on that channel.

          I talk about these strategies in this blog post: https://www.softwareideas.io/blog/how-to-mitigate-channel-risks

  19. 1

    Wow, cool idea. Do you have any data on how many founders have executed some of those ideas? :)

    1. 2

      Thanks Abhishek! The newsletter has received tons of positive praise, and we have a couple founders who are starting out on some of the ideas (it's still pretty new!). But most of the ideas haven't been touched yet.

      Personally, I think it's still a great time to become a reader, since virtually every idea so far is still up for grabs.

      I always give specifics for subscribers who reach out to me and say they are interested in a given idea. I try to provide all the additional info I can (research I did which didn't make it into the newsletter), as well as if anyone has already started on that idea.

      1. 1

        Good leadership on your part :) Do update us when an MVP is available from one of your ideas. Unfortunately I'm not into coding as much as I'm into business and marketing, so I'm not a good fit for your membership platform. However, I run Steal My Marketing Media part-time where I interview entrepreneurs working on cool ideas on my podcast and newsletter. I'm curious to know more about your website. Where can we connect? :)

        1. 2

          Sure, reach out to [email protected]! I've really enjoyed the podcasts I've been on so far and looking to do more.