Lessons Learned Growing our Startup to $50,000 in Monthly Revenue
It’s been seven months since we’ve officially started documenting our journey to $100k. Here’s where we stand today…
My cursor hovered over the “publish” button for what seemed like hours.
What the hell am I doing?
An email notification popped up in the corner of my screen.
I’ll post this later, that email is probably important.
Half an hour later of sending emails, calling our developers, and doing whatever else I could to put this off, I was back on the “publish” button.
This could be a really bad idea. What if people hate it?
I struggled with myself.
Ah, another email. I’ll just go check that out.
I played that game for four more hours.
To be honest, it didn’t really matter.
The die had been cast.
I had already shared the post with almost 100 people. And they were expecting me to publish it.
I was just nervous.
Up until then, Groove had been pretty much out of the public eye, aside from a blip on the radar when The Next Web wrote about us.
If this effort was as successful as we’d hoped it would be, things would be very different.
But if it flopped, I’d look like a complete idiot to 100 brilliant, successful entrepreneurs.
Finally, I gave up.
Whatever. Let’s do this.
The first post in our Journey To $100K blog was live.
I didn’t fully appreciate it at the time, but it marked a totally new direction for Groove.
But it also marked the start of something much, much bigger: the amazing community of startup and small business founders and employees that come to this blog every single week to learn and share their own experiences.
And almost every week, someone emails or leaves a comment asking me to post an update when we reach the halfway point in our journey.
This is that update.
The 7 Big Wins
1) A New Approach
About six months ago, we had a massive, fundamental shift in the way we saw our business.
In the past, our decisions had been driven by the ultimate question: how can we succeed?
And while that approach got us to a decent starting point, eventually things began to slow.
We tried to test and tune every aspect of Groove: our site, our product, our brand, our emails, our blog. Everything.
And through that process, we did hundreds of hours of research.
Surveys, one-on-one conversations, digging deep into our metrics.
One of the most enlightening things we learned was that when our customers succeeded, so did we.
It sounds so ridiculously obvious and almost trite, but it was something we’d never truly been confronted with before. We shouldn’t have been surprised by it, but it was a revelation.
When our blog readers succeed at business because of the lessons we share, many of them become trial users.
When our trial users succeed at making their whole team better at support, many of them become customers.
And when our customers succeed at making their customers happy time and time again, and growing their business because of it, Groove succeeds.
We realized that our success has very little to do with getting people to pay us money, and everything to do with delivering so much value that paying us becomes the easy choice.
This approach informed — and continues to inform — everything:
Takeaway: Your prospects care very little about your business. They care about themselves, and their own problems; we all do. Rather than thinking about how to benefit your business, think about how to benefit your customer, and the revenue will follow.
2) Committing To — And Investing In — Data
That research I mentioned above?
It would have never been possible without the right tools.
Sure, a lot of it was done by ‘hand’: emails, Skype, phone calls.
The data we got from those sources was unquestionably valuable. It led to huge changes in positioning and strategy, including the decision to improve our communication about product updates.
But a big part of the data we collect comes from the apps we use to track our business.
KISSmetrics for deep insights into our visitors and customers.
Crazy Egg for helping us understanding where our site was failing.
Campaign Monitor for super-valuable analytics on our email sends.
Qualaroo for breakthrough lessons about why visitors weren’t converting.
I talk to a lot of entrepreneurs who think that some of these apps are too expensive.
They say things like “when we get big enough, we’ll pay for it.”
We wouldn’t have gotten big enough without paying for it. These apps have paid for themselves many times over.
But it’s important to understand that apps aren’t everything, and neither is the one-on-one data collection. The two need to work in concert.
The way we see data at Groove is pretty simple: tools can tell us what is happening. It’s up to us to figure out why.
Takeaway: Research isn’t sexy, and it isn’t easy. But it’s the only way to get the deep understanding of your audience and customers that will put you ahead of your competitors.
3) Inbound Marketing
One of the most common questions we get is where do you find customers?
And the answer is right here.
This blog, the community around it, and our efforts to publish content that’s hugely valuable to readers every single week have all had a massive impact on Groove’s growth.
It’s come a long way since we first envisioned building a resource for entrepreneurs that I wish had existed when I started my first business.
We read everything we could get our hands on, talked to anyone who would listen and worked hard to build a network of influencers that would help us get 1,000 subscribers in less than 24 hours after we published our first post.
This blog is our brand.
Without it, I have no doubt that we would not have reached this milestone.
It’s our biggest source of leads by a huge margin.
And the best part? Unlike an ad, a good blog post pays off forever.
We get hundreds of visitors each day from people stumbling upon blog posts that are several months old.
That evergreen traffic benefit has helped us go from a $30,000/month business with very little online footprint to a $50,000/month business that ranks on the front page of Google for many of the topics we write about.
Long-Term SEO Benefits
If we had started blogging earlier, we would have reached $30,000 a lot faster.
And it’s not just subscribers and search traffic that comes from publishing this blog. We’ve gotten tens of thousands of visitors from our posts appearing on the front page of Hacker News, and from the bit of guest blogging we’ve done on the Shopify and KISSmetrics blogs. The latter is an effort we plan to double down on (in fact, we had a guest post published on the Buffer blog yesterday) and explore much further.
Takeaway: If you’re not blogging, you need to start yesterday. But blogging for blogging’s sake isn’t enough. Find a specific, unique angle to deliver value to your readers, and do it better than anyone else. You’ll be rewarded forever.
4) Improving The Customer Experience
The bigger and faster we grew, the more bugs and product issues we had.
It’s not that the product was getting worse. It’s just that with more customers, people were finding edge case bugs that hurt the customer experience for a limited group of users.
But as you grow, so do those limited groups of users.
And while one of the challenges of scaling is that we spend more developer resources fixing those new bugs than we do on building the product, we still never stop tuning and tweaking our app.
Reaching Product/Market Fit is not an excuse to stop building.
And while Groove hasn’t changed that much since that milestone, the features we’ve added have helped us grow.
For example, our HipChat integration, built in response to big demand from our own users, has opened the door to a massive new audience of HipChat users who now know about Groove.
Beyond actual product enhancements, we’ve been able to improve the customer experience by making everything around the product better.
Through better email onboarding, we helped customers get productive faster.
Through more proactive support, we’ve made customers feel comfortable that we’re here for them, and we’ve made it more likely that they’ll reach out with any problems.
And through behaviorally-triggered emails, we’ve been able to spot “at-risk” customers before they quit, and help them get back on track.
Takeaway: Product development never stops. Even if you’ve reached Product/Market Fit, there will always be more you can do to make customers fall deeper in love with your product.
5) Not Being Afraid To Break Stuff
If all we did for marketing was blog, we might have reached the $50,000 milestone.
It wouldn’t have been now.
It might have been in a year or two.
But maybe we would’ve gotten here.
The truth is, we’ve tried dozens of new strategies and tactics to deliver more value to people.
Some of them worked:
Introducing the Customer Support Academy has helped both customers and non-customers get better at support, and has led to traffic, referrals and signups for Groove.
Groove Support Academy
Putting together the Small Business Stack was a huge win for us; we helped thousands of startups and small businesses get access to software they might not have been able to afford otherwise, and we’ve given valuable exposure to dozens of really useful SaaS companies.
The Small Business Stack
Adding “Powered By Groove” to the customer satisfaction ratings page. Unlike the “Powered by” link in our support widget, this one reaches prospects after they’ve already received awesome support, so they’re far more likely to want to learn more about Groove.
Powered By Groove
Some of them didn’t work:
Offering discounts for Groove attracted the wrong kinds of customers, devalued our brand and cost us a lot of money
Tiered pricing confused visitors, turned people away and completely went against the simplicity we were trying to achieve.
The wins were big breakthroughs for us, but the failures were, too. We learned really valuable lessons when we did end up making the wrong decision, and we’re a stronger company for it today.
And if we were afraid to try new approaches because of the risk of failure, we would’ve coasted (or worse, stagnated), and never found the big wins that have helped us reach this milestone.
Takeaway: Don’t be scared to try new things. Even if they fail, they probably won’t do nearly the damage your worst nightmares suggest they will. And no matter what, you’ll learn from the process.
6) An Obsessive Focus On Support
As Paul Graham says, we’ve had to do a lot of things that don’t scale.
The most important of those things is support.
Of course, we use our own tool to make things easier, but delivering the best support possible will always require a human.
And delivering the best support possible was a big part of what got us to $30K, and now to $50K a month.
It’s not something we’re willing to compromise on.
Every customer gets the same personal attention now as they did when we were in beta.
In fact, they get more.
There are parts of the experience that we’ve been able to automate but we still offer a human touch to every customer that signs up.
And it’s certainly helped us grow.
The ROI of Support
Takeaway: If something made you special to your customers when you were just starting out, do everything you can to never compromise that differentiator. Even if it means doing things that don’t scale.
7) Focusing On Big Wins
Notice how few of the wins above are tactical.
No a/b tests of button colors.
No swapping icons or images.
No playing with email send times.
We’ve done those things. And we’ve gotten some results from them.
But they’re not the big wins.
Maybe one day we’ll be big enough where changing our button color makes a material impact on our bottom line.
But for now, our big wins — the ones that actually push the business forward — have come from big changes.
Changes in perspective, messaging, positioning. In the way we offered our product. In the way we understood our customers.
That’s where the breakthroughs have come from.
The 100%, 200%, 300%+ increases in conversion rates and engagement.
The jump from $0 a month to $30,000 a month to $50,000 a month.
Takeaway: Tactics are great, but strategy is where the big wins are for most startups and small businesses. Little tests can generate results, too, but big business-changing breakthroughs come from big business-changing tests.
The Next $50,000
There’s no question about it, Groove has come a long way since we started this blog.
We’re a more successful company, sure. But we’re also a better company.
There’s still a whole lot more to be done. We’re going to be exploring and testing:
- Referral programs
- More Guest blogging
- Community building
- More partnerships and integrations
And much, much more.
And we’ll keep working on the product, and on support, and on making our customer experience the very best.
Over the last six months, we’ve focused on completely relaying the foundation of our business, and re-engineering our strategy.
It’s paid off, but what worked for us won’t necessarily work for you.
And what didn’t work for us might be your breakthrough.
But I hope that above all, by sharing our experiences, we can convey how important it is to always be looking for big wins in your business.
Those big wins might lie behind a tiny a/b test on your landing page.
But they probably don’t.
When we study what’s happening, do the hard work to dig into why it’s happening, and then test big changes, we make huge leaps in our growth.
And I hope you will, too.