Today marks the two year anniversary of when we published our launch announcement, telling the world of our plans to build Outseta. While we’ve consistently published monthly updates to keep our customers and audience abreast of our progress, the two year milestone is a good opportunity for us to share more broadly some of the decisions we’ve made and what we’ve accomplished. I hope this is a useful barometer of progress for other bootstrapped SaaS start-ups with equally ambitious projects.
Let’s get right into it starting with how much we’ve spent on the business.
We’ve written in the past about our decision to bootstrap the company and shared our operating agreement publicly so that customers and potential employees alike understand how we make financial decisions. Dimitris, Dave, and myself have yet to pay ourselves any salary and are instead trading our time for sweat equity in the business. We’ve tried hard to be extremely financially disciplined and fight the urge to invest in growth prematurely.
To date we’ve spent $32,179.72 building Outseta - roughly $8,000 in 2017 and $24,000 in 2018. The majority of our expenses in 2017 were related to software and development infrastructure required to build the product. Food and dining represented our biggest line item for the year - we admittedly got a little carried away there so we pulled back heading into 2018. Remarkably, Dimitris is still invisible when he turns sideways.
In 2018 you’ll notice some line items grew significantly. The $11,123.75 we spent on consulting services was primarily design related expenses, as James Lavine began working with us. We knew we needed more design bandwidth than we could afford, so James has been working for a combination of salary and equity (more on this shortly).
Forte fees represent payment processing costs associated with one of the payment gateways we support, Forte Payment systems. We invested about $3,000 in marketing, the majority of which was related to paid customer acquisition experiments we ran with Linkedin, Twitter, and Google Ads. We also signed up to attend MicroConf for the first time - an expense incurred in 2018 even though the event is this upcoming March.
One of the reasons we’ve been able to keep our expenses so low is that Dave, Dimitris, and myself have not yet taken any salary. Any time and money we’ve invested in Outseta has been in exchange for equity in the business. When we added James to the team at the beginning of 2018, we asked him to help us out 20 hours per month. We’ve been paying him for 8 hours of his time each month and he’s been earning 12 hours worth of sweat equity in the business each month. Here’s how equity in Outseta shakes out today.
Dave and Dimitris spent some time setting up our development infrastructure at the end of 2016 and invested more time in the business throughout 2017 as they worked to deliver our minimum viable product. Our founding team worked an equivalent number of hours throughout 2018, but Dave and Dimitris also kicked in some cash to cover our operating expenses which explains the differences you see in the equity allocation between each of us.
Dave, Dimitris, and myself will begin paying ourselves a nominal salary in 2019 - more on that in our next company update.
On the product front, we’re all very excited about the progress that we’ve made. 2017 was spent entirely focused on delivering our MVP. We began marketing and selling our MVP on January 1, 2018 while continuing to build out the product’s core functionality.
Dimitris has focused primarily on back-end development while Dave does both back-end and front-end work. James’ design work dramatically leveled up the usability and polish of the user interface throughout 2018. So far, we’ve built functional product that includes…
When we initially scoped Outseta, we envisioned SaaS metrics and reporting as a key part of the platform. While we still intend to build these features, we de-prioritized them as there were (and continue to be) a number of features more immediately relevant to our customers. We have the infrastructure and designs in place for reporting, but will be focusing primarily on additional improvements to the CRM moving into 2019.
Generally speaking the product’s core features are in place. We’ll now focus on taking each of them deeper by adding functionality to draw us closer to feature parity with the point solutions we compete against (as long as it’s specifically relevant to SaaS start-ups).
With the exception of about $2,000 spent testing paid online advertising, we’ve focused our marketing efforts over the last two years entirely on “free” channels. This has included:
Launching on Product Hunt and BetaList is worthwhile - these channels provided a one-time spike in website traffic and account sign-ups and are a great way to stir up some early users. The day we launched on Product Hunt we saw more website traffic than any other day in the last two years, and both the Product Hunt and BetaList launches resulted in 30+ account sign-ups each.
In addition to these launches the other major spikes in traffic were a result of another company’s blog post published on Hackernoon that did really well and linked to one of our own blog posts and one of the most successful articles that we published on our own blog, 4 SaaS Start-ups And Their Quest For Independent Growth.
Email prospecting was our second biggest undertaking from a marketing perspective. My approach to email prospecting is very time consuming, but it was effective in starting sales conversations.
Emails sent: 452
While email prospecting did start the majority of our sales conversations in 2018, in retrospect I wish I had spent less time here. While it’s a strategy that I think was appropriate given our stage - my goal was basically to stir up a small number of early accounts without spending any money - if I could do it again I’d focus more time in areas that would deliver longer term, sustainable gains. Like content marketing.
Content marketing is where I’ve spent the vast majority of my time and energy over the last two years - I began these efforts a full year before we had any product to sell. Our strategy has been pretty simple - we publish a monthly company update (only if we genuinely have something worth our audience’s attention) as well as one other post per month on topics primarily related to growing SaaS start-ups.
We published a total of 27 posts in 2017 and 16 posts in 2018, including a few guest posts on blogs from companies like Kissmetrics, Crazy Egg, and Capterra. Here’s our content calendar with a history of all of the posts we’ve published or you can check most of them out on our blog. Most of the content we’ve published either highlights our own entrepreneurial journey or is heavily researched, long form content of 2,000-3,000 words. Our top performing posts to date are:
I chose to invest in content marketing for a few reasons.
So how has it worked out for us?
In short, I’m really pleased with what our content marketing has done for our brand. In a relatively small period of time, we’ve developed a small but highly engaged audience. I’ve gotten a lot of positive feedback on the articles we’ve published from people I admire and whose opinions I trust.
As we continue to grow tying our content marketing investments to revenue is most important, but as an early stage company I’ve bought into a metric called Unsolicited Response Rate (shout out to Jay Acunzo for popularizing this measure). This is simply a measure of how many people send me an unsolicited comment or note after each piece of content that I publish. We’re all busy, so if someone goes out of their way to send along a note that says, “hey this post is awesome and/or helped me,” that’s a pretty good indication that the content is resonating and providing value.
Coupled with our publishing cadence, I’m proud that we’ve earned a “these posts are worth reading” spot in many people’s inboxes. More importantly in terms of measuring ROI, almost every account sign-up in Q4 of 2018 was either a referral form an existing user or someone who specifically mentioned that they found us through one of the articles we’ve published.
While the positive feedback has been great, I definitely haven’t spent enough time investing in what I call “deliberate SEO.” I have spent very little time on deliberate link building outreach, further optimizing older posts for target keywords, or working on content projects that were designed primarily for their SEO benefit or potential. Earlier this year I asked SEO expert Neil Patel how much time I should be spending on link building and he suggested 5 hours per week - I definitely haven’t done that.
While I’ve promoted my posts fairly aggressively (without paid promotion), my hypothesis has essentially been, “Focus on creating awesome quality content and links and organic traffic will follow.” While that’s proven to be true and our organic traffic has grown, outseta.com is still a low traffic website - I know we can grow organic traffic much more quickly.
I think that we’re sitting on a golden opportunity in the sense that with a little more time spent in this area, it should be relatively easy for us to grow our site traffic substantially. As we look to grow more aggressively in 2019, this is an area that I need to spend more time on.
Without spending much time on SEO, our website traffic went from about 4,000 unique visitors in 2017 to over 10,000 unique visitors in 2018. More importantly, account sign-ups grew from 32 in 2017 to 279 in 2018.
OK, OK, I know what you’re thinking. All of the above it great, but how is Outseta doing in terms of customers and revenue?
We’re not publicly sharing our customer count and revenue only because we haven’t really invested in growth yet. The majority of the companies that we’ve signed up so far have been opportunistic or inbound. Our numbers are still very modest, but we’re happy to share them with any prospect that asks.
Most importantly, we’re trying really hard to be patient and follow Mark Roberge’s framework:
Customer success. Then unit economics. Then growth.
Heading into 2019, the product and company is at a point where we’re now ready to invest more heavily in growth. We recently took on a project that’s essentially providing seed funding to support these upcoming investments - we’ll be detailing this decision in our next company update.
We’re also committed to sharing customer and revenue updates for the first time later this year in tandem with the launch of Outseta's reporting features. Stay tuned and you can hold us accountable to that!
We wanted to share this information because topics likely equity allocation and expenses are so often secretive in the world of technology start-ups. Beyond that, our social media feeds are so often flooded with the outcomes and performance metrics of a small swath of successful, heavily venture backed companies founded by celebrity entrepreneurs.
While our metrics and expenses are in no way jaw dropping, we think from product to marketing we’re chipping away and making slow and steady progress in the right direction. If you’re a team of “normal” founders that’s bootstrapping a side project into a full-time one, we hope this post is both helpful and reflective of what reality often looks like. Any and all questions welcomed!
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