August 3, 2020
I want to share my story and insights from building a side-project. I could have achieved the same results in two years. Why? It took us over four years to get from $0 to $6k and then one year to go from there to $30k/ month. And it's all my fault...
Since we started
Let's divide that into 4 parts:
In 2015 I told my friend a story about "App of the Day". In 2014 I wanted to promote an app for a client of mine, so the sales team of “App of the Day” answered pretty quickly and told me it would be €15,000 for ONE DAY!!!
With over a million users you would get around 60k downloads over the following two to three days, which would catapult you to the top of the charts. Additionally, you would get organic downloads too. So the cost per app download would be €0.25 - reasonable even six years ago.
Our napkin calculation led us to the enlightenment that they could do between $500k - $1 million per month, depending on how many apps they promote.
First thought: Let's clone them. The first excuse, hmm but how do we achieve 1 million downloads in a short period of time?
Second thought: How can we steal their idea but use it for another market or vertical?
Learning: If you are looking for new ideas, spend some time searching Crunchbase, Indiehackers or StarterStory, etc. to see which companies earn money. And see whether you could do it for another vertical. Examples that we all know are Uber for X, Airbnb for X, etc. - but the same logic applies to smaller companies as well.
Idea: "App of the Day" for the ebook market aka. “Book of the day": How can we grow users? -> Ahh we are going to figure this out later...
So what's our business now?
It started with the app and now it has shifted to a newsletter where we highlight ebook deals daily in the German-speaking market and its called Buchdeals.de
This I am going to do as bullet points just so you see exactly why we could have done this better and faster.
Revenue has been steadily increasing Costs are around $1000:
End of 2018 realizing that the project grew to almost $6k without us doing much -> Finally realizing it could be a big(ish) opportunity.
Learning 1: If you somehow see an opportunity, go for it and don’t try to split yourself into different projects. We could have achieved the $30,000 much earlier and saved two to three years if we had stopped making excuses.
Learning 2: Even if you have a small project, it doesn’t mean it will stay small if you work on it. At $2-3k we kind of said okay, that’s a small project, it’s not worth the time for two people. Only after it grew organically and confirmed our initial assumptions were we confident and bullish. => Be bullish from the get-go.
This is going to be Part 2 and Part 3:
So, at the end of 2019, we decided to approach VCs to get some money. It took us eight months to get to a state where we signed the Term Sheet and were ready to go. But after an intense session with my cofounder, we decided to bootstrap and take a small loan from our bank instead.
Here is our pitch deck which helped us to convince the VCs. It is not perfect by any means, but it still worked. Obviously the projections had to be over the top to convince the VCs. Buchdeals Pitch
Why did we decide to proceed without investors? I have worked with investors before and if you do - you need to understand the following:
These questions helped us to decide:
All that led us to the decision to not take the deal.
Four months later, we could not have been happier. We scaled a bit and noticed that scaling to $10 million definitely would not happen so we had made the right decision.
So what are our top next priorities on the road to $1 million?
In Part 2, I am going to talk about how exactly we achieved 100,000 readers. So if you made it until here, stay tuned… :)