Failing to Get Traction and (Almost) Giving up on the Road to My First $1,000 in Revenue

A few weeks ago I was listening to an interview of Patrick McKenzie on the podcast, and heard my name being mentioned.

Andrey (one of the hosts) mentions that he was reading my blog and found that I made launching and growing Bidsketch sound easy:

“It’s kind of like, ‘I announced it on Twitter, now I’m in beta and the beta is 600 users. Now I’m out of beta and it’s three months in, and I’m making $1,000 a month.’

This has been the experience of reading blog posts about how to launch a SaaS app, but this has never been my experience of launching a product.

So I went back through my old blog posts and read through them. Sure enough, reading through those posts it sounds like I had no trouble launching and growing my first real product.

But it wasn’t easy; it took a ton of work and I almost quit a few times.

So I’ve decided to write about how many times I failed to get traction, or almost gave up, on the way to my first $1,000.

(January 2009) Early Feedback Tells Me There Is No Pain

A couple of weeks after I got the idea to build a web based proposal app, I decided to do some “customer” research. At the time, I was focusing on designers, so I went to a few designer forums and asked what they found difficult about creating proposals.

I mostly was ignored. The few responses I got went something like this:

“Proposals are easy. I never have any problems writing them. I just copy an old template, rename it, update some fields, and I’m done.”

I had data that indicated there was demand (mainly keyword research) but I seriously started having doubts at this point. Maybe I made a mistake?

By this time I had discovered Patrick McKenzie’s blog and thought I would ask him about this problem. This is the key part of my email:

“I’ve recently started having doubts about whether I’ve picked the right market or not (maybe too niche). I started a blog and posted a couple of questions in web design/development forums to my target audience but interest seems pretty low. The blog I’m sure I can work on, but maybe I just picked too small of a market… starting to get bummed.

I wasn’t just bummed, I literally was ready to quit at this point. Lucky for me, Patrick was more objective and replied that he thought it was a great idea that had plenty of potential. He even was nice enough to recommend a blogging strategy going forward. This lead me to lead magnet strategies like proposal templates for website and design professionals.

With my confidence somewhat restored, I immediately went on to my next problem…

(February 2009) Estimate Helper Fails

Before I started building my product I thought I’d build a free tool that would allow designers to quickly create estimates for their client projects. Being that many people that create estimates would also need to create proposals, I felt confident that this would be a great way to generate leads for Bidsketch.

I spent a month building it and announced “Estimate Helper” on a few forums once it was ready.

Results? Take a look:

Estimate Helper

Big fail.

I ended up getting a bit of traffic in the first few days, then quickly dropped to about 1 visit a day.

I had just wasted a month building this. The worst part was that if I couldn’t even convince people to use a free tool, how was I ever going to get them to pay for one?

(April 2009) After 3 Months of Coding, I Start Over Again

After deciding that I’d give it another shot, I spent the next three months writing code (while learning a new framework), doing the design, blogging, and doing SEO. All at the same time.

I had learned that I should be marketing before the product was live, but trying to do everything at once (while working at a full time job) was rough.

I was spending all of my free time working but it felt like I wasn’t making progress. The really bad thing was that I was starting lose interest.

This was when I emailed Rob Walling to talk it over. I saw that he was having good results by outsourcing, and loved the approach.

After talking it over with him I decided to try a different approach. So I deleted all of my work and started over again by outsourcing whatever I could (given the tiny budget I was working with).

(I had to trash all of the code because I was working in a language and framework that would be difficult to outsource — Groovy and Grails.)

(November 2009) Freemium Doesn’t Work

I eventually made it to beta and launched my first product. I even had a pretty good launch and ended up with about 40 paying customers in the first few weeks.

Was it easy getting to this point? Not even close.

Some problems I had to deal with:

  • Fired two (maybe three?) contract developers.
  • The design sucked and it was a pain to outsource (mainly because of my tiny budget).
  • I missed my publicly announced launch date.
  • The average price people said they’d be willing to pay was ridiculous. Something like $5/month or so.
  • I struggled with AdWords. My clickthrough rate was at 0.40%.
  • I ran out of cash and had to finish that last 20% (which always takes the longest).
  • The day job regularly got in the way (critical systems going down and other “important” things came up from time to time).

You get the picture.

Anyway, I eventually got past all that and was able to get some early customers through the small email list I had built.

But suddenly I stopped growing.

For the next month I averaged one paying customer a week. For some reason, everyone was going for the free plan. To make matters worse, existing customers were canceling.

I was trying everything I could think of and not getting results. Couldn’t get more people to sign up to a paid trial, or get them to upgrade.

I kept thinking to myself, “I’m not sure if I can make this work.”

I’m not kidding when I say that I didn’t think I’d be able to grow it beyond the few hundred dollars that it was making.

How’d I get past this? Completely out of ideas and out of desperation I decided I’d get rid of my free plan, and it worked.

(February 2010) The Billing Mistake I’ve Never Talked About

I actually had to hit the $1k/month revenue mark, two times. This one is so painful, it still hurts to think about, so I’ll keep it short.

Basically, I accidentally deleted billing information. Lots of it.

(How it happened: I had a copy of my production database and was doing some testing in my local development environment. I switched my billing setup to point to my real account, and forgot to switch it back. A couple of weeks later I ran a script to delete 90% of the accounts, which made an API call that deleted everyone’s billing profile.)

This happened right after I had just hit the big $1k/month milestone. This meant my monthly recurring revenue instantly dropped to almost $0.

It also meant that I had to ask every single one of those customers to enter their credit card details again. Of course, I lost a fair number of customers at that point, but not as many as I imagined I would. What we imagine is usually not as bad as the way things actually turn out.

Eventually I worked my way back up to $1k/month in revenue, again.

(If it had to happen, I’m glad it happened in the early days. Needless to say, I’ve made sure this sort of problem won’t happen again.)

It’s Hard, but Not That Hard

Even after all of these problems, I managed to hit $1k/month in recurring revenue (and much more).

I have to admit, that was the hardest (and slowest) $1,000 I’ve ever made. But you know what? It was totally worth it.

Nowadays I’m earning more than I ever made at any job. More important than the money, is the freedom and flexibility that I’ve gained. I work on things that I love and get to spend as much time as I want with my family.

If I think about what I’ve gained for the work I had to put in, yeah, it’s hard…but it’s not that hard.

26 thoughts on “Failing to Get Traction and (Almost) Giving up on the Road to My First $1,000 in Revenue

  1. Enjoyed the transparency here Ruben – great post. You may have already done this elsewhere but it would be cool for a follow-up here mapping 2009-Present and its relative ups n’ downs.

    Or am I just being nosey 😉

  2. Hey Liam! That would be tougher because so much time has passed and I didn’t do as good of a job documenting things after the first year, but I’ll see what I can find 🙂

  3. Thank you so much for your transparency and sharing this. I am struggling to get to my first thousand in revenue, but well on my way. I can completely relate to this whole article and found comfort in it when I needed it most.

    ?I have to admit, that was the hardest (and slowest) $1,000 I’ve ever made. But you know what? It was totally worth it.”


  4. Wow. It was an inspirational history. I’m starting a new business and you made me very hopeful. Thank you Ruben

  5. We’ve been doing this since 2009 & only now starting to see real traction with a project. People tend to focus heavily on your current project & not all the stuff you’ve done to help you get to where you are now 🙂

    Bidsketch looks awesome, I had got guys in my previous workplace to consider it (after seeing a post on HN). Best of luck!

  6. Great read, very inspiring as I’m about to embark on building a product myself.

    How difficult was it to let go and outsource development? Where did you find your outsourced devs?

  7. Great post, tweeted this yesterday. For some reason, outsiders tend to view success as something that was a “clean” process that happened pretty much overnight. Thanks for sharing the real struggle of being an entrepreneur. Working on a SaaS side project myself at the moment. Great inspiration.

  8. Great article. One of the few useful ones on the topic I’ve found. Thanks for sharing this honest critique of your starting mistakes.

    Do you have any suggestions for building that meager email list? I have a product I built and am trying to validate (I know, bad idea). but I’m having a hard time reaching any sort of critical mass with followers/signups. Just curious what channels worked for you initially.

    1. Hi Jim! There’s no simple answer to your question. It totally depends on your market and solution. One of my favorite methods (for validation) is something Jason Cohen talks about. Peep how he used LinkedIn to help with that in the transcripts of this interview:

      I’d start with making sure you’ve got something people are willing to pay for before seriously building a list. After that, you’ll have a better idea of who your target customer is and where to find them (Facebook, niche blogs, adwords, SEO, etc.)

  9. Hi Ruben,

    Great post, thanks. I was wondering… you’ve seen some really good growth. Would you mind sharing what your best performing marketing activities are? Always the side I’m most interested in 🙂

    1. This is a tough question. The things that worked best in the early days aren’t generally the things that work best now. The only one still performing well is SEO (longtail). Early on integration marketing and cross-promotional deals were a big help. More recently it’s content and email marketing.

Leave a Reply

Your email address will not be published. Required fields are marked *