How We Bootstrapped a $20K Website into a $4M/year Business
myclean.com
myclean.com
I never understood this.
For a group of people (programmers) that presumably have been ostracized, shunned, and picked on in their formative years, why do so many in the valley do this to 'MBAs'.
It's ignorant at best.
The fact is, as has been shown time and time again, the #1 factor for success in a startup is not technical knowledge (or even business knowledge). It's just an unshakeable will to figure it out and get it done.
If you are a technical startup with non-technical founders, that's just 1 set of challenges you have to deal with. However, if you are a technical founder and are bad with finance and other business stuff (and are trying to raise money or do a partnership deal with another company) you will have a commensurate amount of problems.
I wish we all, on HN (at the very least), would stop painting with a broad brush and bashing large swathes of people.
Everybody here wants the same thing. To build a lasting business. Who cares what background they have.
Congrats to you guys for doing this - despite, what I am sure, were incessant snarky comments you got from geeks.
P.S. I apologize for the rant, but I am both a geek & an MBA - both of which I would never apologize for, and both of which have completely changed my life.
MBAs aren't making you a good businessman anymore than studying philosophy is making you a good philosopher.
You still need the experience and the insights in order to create something like this.
But I wholeheartedly agree that you don't need to be a technical co-founder to do a company like this. However you do need someone to do it for you.
There are many brilliant programmers who will never build a sustainable business because they just don't have the will to get it done.
Likewise, there are many MBAs that will be middle management in LargeCo. all their lives for the same reason.
It has become Valley lore that u need to be a geek to build a successful business - when it is patently clear that is false. None of the AirBnB guys are geeks - they are designers!
There are always exceptions.
With regards to MBA's is there any evidence that getting one makes people more sucessful in their careers?
I know it helps if you already have a job to climb the ladder, but I don't think there is much in an MBA that isn't covered in a book like "The Personal MBA" and isn't much you will learn the hard way that isn't covered by starting your own company or joining a startup.
But each to their own.
Have there been many success stories of people with MBAs? Yes. Have there been many success stories of people with law /medicine/accounting degrees? Yes. Do each of those guarantee success. Hells no.
Does an education guarantee success? No. The only thing that guarantees success is determination to be successful.
For me...my MBA taught me how the world works. It is surprising how few people understand how it truly works - yet they speak as if they know. For that single achievement alone, I would encourage everyone to get an MBA. That being said, does that mean that everyone that gets an MBA understands the world? No. I think it was more my finance/economics slant that did that.
Even still...does everybody with those slants achieve the results I did? Absolutely not.
So as I said.....it's not about the single data point that will make you a success - it's more than that. Survivor's bias (not sure if that is the correct term here) does lead people to link the two - i.e. the people that are more likely to be successful are the ones that are more likely to get a degree like that.
That being said...all people who get those degrees won't be "successful" and all successful people won't have those degrees.
That sounds like quite a claim. Can you shed some lights on how the world works from an MBA's perspective?
In terms of the way the world works, I can say that politicians are not in the business of running the world the way it should be run - they are in the business of politicking.
It has become fanciful in the last decade or so, to blame bankers, wall street, the 1%, capitalism, etc. for all the worlds ills - but that's just not the case.
Politicians (many who I support also) are just as guilty.
Here is 1 truism that no politician of a heavily indebted country will say - bond markets are dead right.
If they demand a higher yield on a country's debt - it isn't because there are some "nefarious speculators" trying to make bank off of the demise of the poor people in that country. It's because the stupid policymakers and politician s have fleeced the country, the affairs are not in order and in order for them (bond market investors) to lend to your country in the crappy state it is in, they charge more than they will charge to lend to the US Treasury, Germany, etc.
Likewise, if the bond markets are showing very low yields to America despite all the rhetoric of America's economy in shambles and the debt-to-GDP ratio being too high at 90% - clearly something else is at work and the situation is not as bad as it seems. Financial markets are forward looking indicators - and by all indications, as a general rule, when it comes to properly (and easily) communicating what is TRULY happening with the state's finances, they tend to be spot on.
The issue is that politicians hate it because bond markets show up their lies and untruths. So they blame 'wreckless speculators' and tax bankers. When half of the time, the investors that are wrecking their bond yields are not even BANKERS!
But...it sounds good in a newsbyte because people like to believe conspiracy stories about the wealthy bankers that are enslaving the masses with interest on debt.
The fact is, debt, equity financing & capitalism in general have been the best mechanisms for growth, poverty reduction and standard of living increases over the past few centuries.
Most things you hear politicians blame things on, are just simply scapegoats that people accept because they know no better.
You're right though that debt, personal or sovereign, is not always bad.
The fact that U.S. bond rates are so low does not mean that "something else is at work and the situation is not as bad as it seems." It just means that right now, folks can't think of a better place to put their money than in U.S. bonds. That mindset could change quickly if market conditions change. It was not that long ago that mortgage-backed securities were highly rated and well-funded.
Note: I'm not predicting doom for the U.S. here--just making the point that financial instruments really need to be evaluated by their business fundamentals, not how popular they are with other investors.
Furthermore, while the U.S. bond market is resistance to manipulation due to its size, smaller bond markets are not so protected. Here's one example:
I never said markets predict the future.
I said they are a good forward looking indicator. Major difference ;)
> The fact that U.S. bond rates are so low does not mean that "something else is at work and the situation is not as bad as it seems." It just means that right now, folks can't think of a better place to put their money than in U.S. bonds.
Well....implicit in my example was that what people tend to do is to complain about America's debt-to-GDP and then suggest some other asset class that investors should be putting their money in - like gold or w/e. Given the large gold sell off a few days ago, I am sure many of those guys are pissed.
Either way, my point was simply that as a general rule, the sovereign bond markets are usually good, forward looking indicators about the health of the economy of a country (relative to others). That's all I was saying - which is contrary to what politicians tell the people. But because they don't know any better, they accept what they hear as gospel because it fits a narrative in their head - bankers are stealing the wealth of the world.
I still disagree that bond prices are good forward looking indicators about the health of a national economy. From January to September 2009, yields on Greek bonds actually fell almost a point--by your criteria, seeming to indicate strengthening future prospects for the Greek economy. Instead we all know what happened next.
I would definitely not say that low eurobond yields on Greek debt is related to strengthening prospects in Greece. But rather an expected likelihood that Germany and the ECB would bailout Greece at terms favorable to bondholders.
This can in my experience as well be said about MBAs
"They are in the business of MBA'ing or business"
It's the title not the skills that gives you access to a higher salary.
Those MBAs I met that where great where already great at what they did and clearly didn't need one. They just thought they did.
As of late, I tend to be very cautious of people who are mentioning their titles all the time.
The claims of the MBA education is extraordinary. They claim that this will give you an edge on everyone else. It's not just a normal business education.
That's the measurement here.
With regards to how the world truly works.
The world truly works in many different ways depending on who you are, where you live and what you do.
Did you learn how africans on the savannah live? How un-educated people in the Bronx live? How people without jobs get social security. Did you learn what a person who get cancer thinks or what someone who get their family killed feels?
What you learned was how the world looks like through the eyes of an MBA, but you have not learned anything about the real world any more than someone living on the streets learn about the real world.
If anything you are abstracted far far away from reality.
I do have an MBA and while I definitely think it was overpriced, the relationships with top faculty, in-depth case studies, and lasting friendships that I got out of it is definitely beyond what you will get from a book.
That said, experience is and always will be the best teacher. There is only so much you can get from relationships, classrooms, and personal accounts described on blogs. At some point you have to find out for yourself by doing. Doing is the hardest part and it constitutes about 99% of success, which is why so few people ever succeed or even try.
I know people who are not at all "technical" or "businessy" who run wildly successful small businesses because they just did and didn't know any better. Of course there were other things they had going for them- they were personable, had large networks of friends, etc., but my point is that there isn't a formula for success, but you do have to get shit done.
But I did start a design agency built it to 60 people and ran it successfully for 6 years working for client all around the world of all different kind of sizes.
I have more case studies than I care for.
I also build friendships and a great great network of connections.
And I made money while doing it.
Business is simple (not easy)
A lot of the time the "MBAs" place an overemphasis on the ideas themselves being more important than the ability to execute on them from a technical perspective (although i'd have to say that a lot of developers may have the reverse disposition)
The focus should be on the issue - i.e. people focusing on ideas and less on execution - rather than an archetype.
I realize this is probably just semantics but I want to chime in on one little tidbit here. These guys didn't start a technology company in the sense that they needed technology innovation to succeed. They started an innovative cleaning business that uses some technology. They were building software in well trodden territory with a clear scope and execution path.
If you want to revolutionize web search, or be the first company to create an eCommerce store, or run a PaaS hosting business, then you probably have a tech company. If you're starting one of these, you damn well better have a nerd or two around. :)
I'm not saying one is easier than the other. I'm just saying different expertise is required. MyClean sounds like a perfect company to be run by MBAs with technology pushed to the side. My gut feeling is the opposite for Heroku.
Because every technical person has a story about:
- "Idea people" telling them what to do and taking all the credit.
- A non-technical manager setting unreasonable deadlines.
- A non-technical manager trivializing a complex task.
- "Oh we'll just get him/her to write some code".
- Being treated as if their talents are a commodity.
- Being treated as if they cannot communicate like other humans.
- Putting in blood, sweat, and tears into a project for little or no pay.
- Studying like mad in college while everyone else seemed to be partying
(or this could just be me)B = MBAs
B ⊆ A
C ⊆ A
PG's outlook (if you are correct) is based on his background perhaps - this from his wikipedia page:
"Graham has a Bachelor of Arts in philosophy from Cornell University.... He then attended Harvard University, earning Master of Science (1988) and Doctor of Philosophy (1990) degrees in Applied Sciences with a specialization in computer science.... He has also studied painting at the Rhode Island School of Design and the Accademia di Belle Arti in Florence."
From this I can deduce that PG wasn't "business minded" in high school although maybe he did run some business on the side etc to make money (I don't know). But he wasn't interested enough in it to attend a business school as an undergraduate. If that had been the case instead of going to Cornell he might have chosen Wharton for undergraduate business. In Wharton UG (I graduated) most of the people - the majority of people that I met - knew that they wanted to be in business just like some people know growing up they want to be doctors. Only difference is those people can do something before college obviously nobody is going to practice medicine prior to training.
So I would suspect that PG's view of the world was based upon his ability to program and put together viaweb and without that programming skill (especially back then) viaweb probably wouldn't have happened. (Morris on the other hand, while a programmer, is a bit devious (worm) so that definitely is a quality that is helpful in business.
"Morris is devious for his worm, which is a quality helpful in business." You don't have any idea what Robert is like.
I would make the same statement about Steve Jobs with regards to the blue boxes.
With respect to Morris, this statement (wikipedia) to me indicates he is "devious":
"According to its creator, the Morris worm was not written to cause damage, but to gauge the size of the Internet. However, the worm was released from MIT to disguise the fact that the worm originally came from Cornell."
Some of that sentiment appear in your essays (and perhaps comments) - which people may take out of context.
First you try to belittle geeks for having been friendless, then call them ignorant. Then you break out the whole 'number one' nonsense, and even utilize a pound sign. And my favorite part is when you turn to the tautology of the 'unshakeable will to figure it out and get it done'.
Ha. Yeah, people who do can do X are the ones who can get X done. Hard to argue with that. And this group of 'MBAs', while they posses no uses that can actually be communicated or quantified, they have tons of je ne sais quoi to get it done with. And they'll fucking pwn the shit out of business with their endless supply of je ne sais quoi. And nerds? Ha, MBAs have more je ne sais quoi leaking out of them after slaying two 10s.
The point of dismissing these so-called 'MBAs' is not that a masters in business is some inherent flaw, but it's in calling that degree (or the concept of doing nothing, but 'being' awesome) an asset. It's in the type of person who does nothing, but wants to take from everyone else's pool of human capital and ride in their wake while pretending that the 'decisions' they make on the golf course while other employees are off actually working mean anything.
"I wish we all, on HN (at the very least), would stop painting with a broad brush and bashing large swathes of people."
Pretty conflicting statements. Asking HN not to disparage people while disparaging people in Silicon valley himself.
If a non-technical founder wants to build a photo-sharing app, how would she/he even build a minimum viable product without learning how to code or getting a technical partner?
It depends on the business. Some ideas like MyClean don't need much technical skills to start.
It's pretty disappointing that this is the top comment on this thread.
The point is still valid though. People sit here acting as if moan-technical people can't understand what is fundamental a people problem (is there a market for this)?
A lot of startups might spend all the time in the world making the most elegant software in the world, but if nobody wants to use it it's game over.
Bad execution doesn't matter if the problem is important enough to them(think of all the people running around still doing things in buggy DOS software from 1996). But if I don't want to use your social network for cats, it's a lot harder to get people to care about your website than it is to hire motivated people to make your site better.
Craigslist is a great example of using (relatively) low-tech means to get things done. It used to be a mailing list. Shady download websites with 10000 popups and buggy captchas and timers also show that it's about the demand.
Of course if someone else is competing in the same domain as you, the best differentiator (after previous mind-share) is a good UX (lot easier to make with good software).
What makes a good founder IMHO is the ability to see what kind of skills are currently missing. The next trick is to get these skills somehow.
It is hard to classify any group as being monolithic, but it has been my experience that an MBA really prepares you to be a good middle manager or consultant. Indeed, this is what MBA programs were originally designed to do and it still shows.
It also makes sense that middle managers would be the last people you'd want to hire at a startup (literally, middle managers are the last to get hired).
Of course, there are exceptions. A lot of exceptions in this case. If you have the startup bug, MBA or not, you'll start a company, but let's not pretend like this train of thought is completely unwarranted.
Because people make the mistake of constant blanket statements:
Technical people say: "MBAs always suck."
Non-Technicals say: "Techies are incessant and snarky geeks."
One blanket statement results in the retort of another statement, and then group polarization takes effect. So by making this rant, you're just setting a precedent for Techies to be flamed at MBAs even more.
Now, can you do this too? Yes. Yes, you can. Go and research markets where there is a lot of interest in a service or product, but there is a lot of friction is purchase. Remove that friction and allow people to interact easily. No need to do much else, but market it directly (which is rather simple). You can even launch this without writing any code. A simple Wordpress blog with a free theme and some manual labor. That's it.
Edit:
Why does your logo link to your blog!?
uship is probably more of the concept that the parent commenter was referring to that I replied to though as an example of reducing friction.
Not a new concept at all.
A few examples:
And others.
The hard part of this business isn't "reducing the friction".
It's hiring people that you can trust, that show up for work, that you can get at a price and still make a profit.
Obviously many people run mom and pop 1 or 3 person cleaning services in local markets and that's been going on forever. What you typically do is get a suggestion from a friend, see an ad or respond to a flyer put in your mailbox or door.
"The traditional way of hiring a cleaner or finding a cleaning job requires a lot of effort on both parties."
Finding a cleaning job is actually pretty easy. If you are good you can get a job doing this getting hired by an established company. Or, as many have done simply put flyers in peoples doors in neighborhoods that you want to work in (or in office buildings for that matter).
In short this is not a web or technology play at all. It is simply running a business (and that part is fine obviously) the secret sauce of something like this is managing people and quality control. If you can handle that there are a multitude of business opportunities where you can make money. But that part is not easy at all to do. Plus if you are competing with larger companies that offer an upward path to employees starting at the lower level and have economies of scale.
My friend's cleaners are all word of mouth immigrants who likely aren't insured or bonded, but your service solves a problem.
Way to hustle and use tech in a non-glamorous industry to solve a make people's lives easier!
Is it 4m/year revenue with 1m in profit, or is 50k in profit... makes a big difference.
They are likely reinvesting everything into the business, thereby leaving them with little to no profit.
I bet the company does most of their marketing offline, and the site is more of a brochure. So it's a bit misleading to say that a $20k bootstrapped web site led to all the growth in this business.
So assume they only get 30K visitors/mo. At a 7% conversion rate (which is listed in the article), if you assume that each clean is on average $50.
That's a cool 30,000 * .07 * $50 = $105,000 in revenue from NEW customers every month. - i.e. $1.2M in new revenue per year.
If you also assume that what they have been doing in the article is true (i.e. working on keeping customers happy) then they likely have repeat business (given that people always want to keep their place clean), it's definitely possible that with a $1.2M revenue growth yet per year - based on current traffic trends - that they could be doing $4M/year.
I have no idea why Wordpress made it so difficult to relink, but it's not easy to do.
You give it the room count, floor type, wc count, etc... and it produces an estimate of the size of the property and how much it would cost to hire the service.
To estimate room sizes I actually used my body as a ruler since I didn't have a measuring device at the time.
Fun project, too bad the economy in Portugal is so bad.
If you understand Portuguese: http://abelhinha.net
This a thousand times.
Too many times I've heard founders bragging to me about how awesome their website looks while completely missing how crappy the user experience is which is driving away business. Good to hear these guys really focused on the core of the business and what made it great.
You could literally be proficient in HTML and basic server management this afternoon if you tried.
I'm not saying you should or taking a cheap shot, I just can't understand why some refuse to learn when their jobs depend on it.
Dunno if this is why, but just a thought
Basic household needs have many pain points that are asking for innovation. Some of my pain points specially as a family with a kid :
- how to hire good/reliable house cleaners
- how to hire good/reliable nannies/baby-sitters (part/fulltime)
- I hate going to the groceries for items that are pretty much recurring. Eg.: milk,eggs,fruits etc. are mandatory and every time we run out, a trip to the store is needed.
- Food and cooking. ??
- Ordering regular organic vegetable and meat boxes (we get a vegetable box once a week and meat once a fortnight). Find who does that in your area and give it a try. We use http://www.riverford.co.uk/ and I can't say enough good things about them.
- Online groceries. For the longest time, I thought people shopping for groceries online were weird. Now I understand. Give it a try - it will save you so much time and energy. The first shop is a bit of a pain but the subsequent ones are really quick as you can just go through what you bought previously and pick what you're running out of. In the UK, we tried ASDA (messed up every delivery - awful customer service), Tesco (can't remember why we don't use them anymore. Think they were neither really good nor really bad) and Ocado (absolutely wonderful in every respect. And, just as they say, not more expensive than ASDA or Tesco).
I can't help you with the rest of your pain points, but I do own a great house cleaning service. We cover the San Diego, LA and Orange County areas, and we'd love to see if we can take care of item #1: http://goldenshine.com.
</shameless plug>
I have an MBA, and my sense is that part of the blame has to be on MBA education itself.
MBA programs teach everything but the "Two skills absolutely necessary" as an entrepreneur: 1) ability sale (your idea, vision, team, product, etc.) and 2) ability to execute.
Luckily, I had one professor who focused on execution part of the experience by creating a class that simulated what happens when you start a company.
I remember what she always said: "If you give me a great idea, I'll give a $1 as thats all they are worth. Real value comes from executing it the right away."
Just my $0.02.
Agreed.
Think that, in any market, for any talent, this would be a ridiculous arrangement for any manager/CEO to propose of a remote hire.
I think the author of this blog probably mentioned that anecdote as a comedic way to highlight the challenges of having product built remotely.
As someone part of a team who advocates for / tries to enable developers to work remotely (and employers to hire remotely), frankly, I'm happy to hear (and get excited by) stories of such arrangements working out for all parties!
Excellent story. Thanks, mkbrody.
If you're saying you can't empathize with people who are different from you ... well that's a different issue. Most people are not like you so you'll either have to learn how to empathize with them, or create businesses/products that directly address needs you understand (and have determined many other folks also have).
I noticed you are a technical co-founder at Thumbtack. I had an idea for a similar service that helps people with particular skills make themselves available for hire to their neighbours. Were there many business or technical challenges trying to reach so many localities across many different types of services?
It's a two-sided marketplace, which means we had the chicken and egg problem and the network problem. To add on to it, we had to figure out how to build trust using a medium (Internet) that has been traditionally untrusted.
We had to figure out how to scale customer service for a business where we quickly found out that people expect good customer service. The Google model for support wasn't working.
Further, the field is littered with the corpses of, sometimes well-funded, ventures that have failed in the same space.
And finally, our initial marketing plan involved boots on the ground, kind of like a political campaign (all the founders met in DC on a political campaign). That one failed quickly.
The latest, hardest part is scaling the matching engine without using humans. Not sure I'm at liberty to say exactly how we solved that.
Playing around with Thumbtack it's really cool how the taxonomy is sort of intelligent and fluid so if you type in SEO you will get digital marketers or if you misspell "babysighting" you still get babysitters in your area. And then the quote request forms are customized for each and every service type. I'm sure this alone involved a TON of work and experimentation.
There is a reason why ISS (not the space station) is a multi-billion dollar company.
It's a very common method to avoid all the pesky little taxes and legal liabilities that come with actually employing someone. It's also russian roulette for your company if the IRS decides your outsourcing partners are not actually real companies.
(I think the confusion is because of the term "ficticious self-employment"? I searched for a translation and that was the best I could find. I would welcome anyone to tell me what the actual colloquial term for this is)