We thought we were making progress, but after 18 months of building, we were no closer to venture funding than we were in month 1.
Users loved the app. Many were active daily. We had ESPN and iHeartMedia radio shows using it and people were actually using the app to record their voices and engage with radio stations. We had a handful of podcast shows with active communities and a few were paying us a monthly subscription. But, it was becoming clear that we couldn't grow revenue enough to make this product work.
An Unexpected Pivot
I suspect it was desperation that propelled me to pull an all-nighter and build the audio to video generation tool that became Wavve and would end up changing our lives forever. With app use and engagement declining, this was sort of a Hail Mary moment for me... one last big effort to do something that could help drive people to our audio communities and help us monetize the app.
An App, IP Address, & Paying Customers
Pro Tip: "You don't need a Domain Name to Validate a Market"
During the first two years of launching our startup, my mindset was "build it and they will come." We had a unique idea. Users gave us great feedback. But we couldn't monetize it. In 2015 and 2016, I built an iOS app, Android app, social network, audio sharing platform, embeddable player, and more. I was still working my 9-5 job (here's my how-to guide to starting up with a full-time job), but whenever I could find time, I was busy building features, managing releases, troubleshooting mobile bugs, etc.
We spent thousands of hours building a really cool product, but we should've been focused on building a business. During the fall of 2016, we totally flipped our approach. Baird started selling this new audio to video tool and people were actually paying for it.
It blew my mind. Here I'd invested about 6-figures of dev time into a massive audio sharing platform, and now this little tool that took no more than 50 hours was outperforming it in pure dollar terms. Here's the crazy part.
In November 2016, we had some early customers of the beta version. You could hardly call it beta though. But we didn't even have a domain name! We'd upload the image assets customers sent us, and then we'd share our tool's IP address (shown in the screenshot above http://22.214.171.124:8888).
I taught Baird how to add an image to AWS S3 and how to commit the image to an assets folder in our GitHub repo. I set up automatic deployment so each image would redeploy the app and then customer images would be available in the dropdown. This was how we onboarded the first 15-20 customers.
Building for ROI
By December it was far too time-consuming for us to continue this way (not to mention the app was totally embarrassing), so I finally committed to build a proper web app. I probably spent 100 hours over the following 4-6 weeks writing user authentication, setting up design themes, and getting an angular front-end designed and setup. I helped Baird get comfortable working with HTML so he was able to tackle much of the front-end marketing stuff while I worked on infrastructure. At this point, we still didn't have any sort of editor so we were mostly having to create design templates by hand.
I knew this wouldn't scale, but I remained hesitant to sink a bunch of time into a new, seemingly niche product after nearly killing myself to build all of the product features and infrastructure for our previous venture, uTalk. For most of Q1 2017, I continued making marginal improvements, but a big problem remained and was keeping us from seeing the potential for Wavve. Baird was still having to make manually onboard each customer by requesting design assets, creating a template, and uploading each.
In April, Baird went to Europe for two weeks so I took over all support responsibilities and had to do all the manual design setup. I'd been pretty well insulated for how painful this process was, and it was even more hectic than usual because signups started really picking up. We were adding 2-3 users per day and each of them need 3 designs setup and configured. I was also trying to balance a freelance job and I was also in the middle of a massive project to migrate all of our uTalk infrastructure for someone who wanted to buy our tech.
I started researching solutions for making the design process totally self-serve and by the time Baird got back from Europe, we decided to make this a top priority which meant moving me from the other dev work onto the big new project.
An Inflection Point for Wavve.
Most months are slow and steady when you're building a SaaS business. Josh Pigford describes this period as "The long, slow SaaS ramp of death."
We'd been plodding along adding 10 customers in February, 23 customers in March, and 34 customers in April. In dollar terms, this wasn't much money when our ARPU was only $8 (our early pricing was way to cheap). In late May we made some big decisions and by the end of June we'd executed them. By July we were on an entirely new trajectory as a company.
There are months that can change the entire trajectory of a company. For Wavve, that month was June 2017.
There were 3 Big Developments in May & June 2017
- We hit our first company goal for Wavve. $1,000 MRR.
2. We hit a home run by hiring Rob Moore. His background in data visualization was just what we needed to take our video quality to the next level. And with his help, I suddenly had free time to invest in building our custom editor. It's never easy finding a contractor that you trust. It took quite a few interviews and some misfires before we found the right match.
☝️ Plot twist. He was so good, we made him a co-owner of Wavve in 2018.
3. After a month of hardcore dev and testing, we released the editor to customers.
We took it live on June 30th, and were immediately greeted with positive customer feedback.
I left for vacation the following day and nothing blew up! For the first time since jumping going down the startup road in 2015, we had a high-quality engineer who was able to cover for me while I was away. If you've ever been the sole engineer or head of engineering at a small company, you know how hard it can be to truly relax. There's this impulse to constantly check-in to make sure nothing has blown up in your absence. With Rob on board, I was able to relax and recharge without worry for the first time in years.
If you're interested in the journey since then, I've documented much of our continued journey here. You can also checkout our updates on Indie Hackers.
Switching to Operator Mode
Since 2018, we've switched gears to operator-mode. What I mean by that is we're spending less time on product, content creation, engineering, etc, and more time optimizing for revenue. We've learned so much about maximizing profits, re-investing for ROI, and so much about customer retention... specifically how to reduce churn.
That's why we're launching ChurnKey. We're on a mission to save a lot of companies a lot of money over the next few years. If you're starting a subscription business, or have been operating one for a while, be sure to check us out.