There's No Myth, Only Years Of Hard Work
lessaccounting.com
lessaccounting.com
That's not to say that their audience made their success—they obviously came out of the gate with great products as well. So if you can make a great product then you have half the equation. But the really interesting question to me (since I can build a product) is how to get the marketing right from a bootstrapping perspective.
We've built a bootstrapped $5M Revenue (70% pbt margin) run-rate business in ~1 year on the back of a HN post. Generated business that led to something like $500k on the first few days alone.
Why not rant over them, but only this guy who simply pointed out, that HN is not useless for marketing the product.
The product is priced highly ($10k minimum) and provides a tremendous amount of value. We only need ~350 customers to get to $5M. (The serviceable market is something like 10M in the US alone, so it's not very niche either).
I think HN gave us a great launching pad, and because we have a lot of friends who read HN, it was easy to push our product announcement to the front page. Wouldn't have been easy to do on Reddit. Techcrunch still won't cover us :) That said, we've been covered by larger outlets than Techcrunch and yeah, they have a similar effect to HN.
/s
Reality: It’s really really really hard. As you’re selling client services you’re also marketing and building a product, so you’re basically working two jobs. You’re promoting two company offerings, the product and the consultancy. In your brain you’re working through two problem spaces, juggling and assessing opportunities for two company, all without going insane or broke first.
I know many consultancies of all sizes that have tried to make the hop. They look at valuations of services firms (1.5 times revenues) and compare it to SaaS firms (10-12 times revenue) and try to make the move. The Accentures have tried this, as have the 5-6 people shops. The reality is it is very hard to go beyond reusable deliverables and into technology that people independently pay for.
I think what made it work is 1) reduced expenses by relocating to a less expensive place and leaving frugally, 2) fine control over our cash-flow and balance between freelancing and product.
I recently shared this little calculator which helps do the math:
https://www.wisecashhq.com/goodies/bootstrapper-calculator
PS: it is still hard and requires a lot of focus and organization, but works and is sustainable long-term (we started working on this in 2011).
PPS: I have enough time to play with my kids and do a bit of yoga daily, to give a data point :-)
Again, it's good to see that it works for you, and that you haven't had to sacrifice your family for it. Perhaps the supporting family is one reason why you're able to pull it off. (Kids care more about your time more than money anyway)
In response to the idea that getting listed on TechCrunch, HN, or the like, is somehow a "launch"
Though, I fully agree with you - as long as you are targetting narrow audience, getting 'general' traffic will not magically increase your sales.
If you're charging $5-30 / month, you're not going to grow well unless you are truly a fully self serve company. Charge 10x more and have happier customers. Even apps moved towards a model where they earn most money from high spenders from in-app purchases.
The technical platform problems around bootstrapping have gotten much easier, due to Heroku, AWS and all the services out there (Papertrail, Exceptional, New Relic, etc.)
Unfortunately relatively little work has been done on the "requires that you be a stubborn bastard" problem.
Serously, Breaking Bad is an excellent primer on entrepreneurship. It covers everything: distribution, marketing, negotiation, finding business partners, scaling, exit strategies...
That is by no means a reason not to do it, just that expectations need to be set about what reality actually looks like.
That's me!