[HN Gopher] Things we did not do while reaching $2M ARR
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Things we did not do while reaching $2M ARR
Author : plehoux
Score : 165 points
Date : 2022-04-06 18:27 UTC (4 hours ago)
(HTM) web link (missiveapp.com)
(TXT) w3m dump (missiveapp.com)
| neximo64 wrote:
| Just means money was left on the table judging on some but not
| all of the items on the list. But congrats nonetheless.
| cinntaile wrote:
| What's the difference between a coach and a mentor?
| myth2018 wrote:
| It's refreshing to read that. There is this whole lot of widely
| accepted, undeniable truths among entrepreneurs, investors and
| many others in the ecosystem, and it's really good to meet
| successful companies which dared to do what they thought they had
| to, no matter all the buzz around. I wonder how many companies
| fail for getting too distracted with this truckload of bullcrap.
| Maybe that's not the main reason, but I believe it's a
| contributing factor in many failures.
| chrisdbanks wrote:
| This sounds like all the parents who've had one baby that slept
| well and spend the rest of their lives telling other parents what
| worked for them. Very difficult to draw anything meaningful from
| a sample size of one. Sometimes a company just works despite all
| your best efforts to sabotage it, and sometimes even then best
| founders can't make something work. Right idea, wrong time.
| [deleted]
| treyhuffine wrote:
| I think what it really shows is how product-market fit is more
| important than nearly everything else combined
| threeseed wrote:
| But getting to product market fit requires effort and time.
|
| And you don't have either without some level of traction.
| Which in turn requires a GTM strategy and money to execute on
| it.
| treyhuffine wrote:
| You can't get to product-market fit without time and
| effort, but the amount you put in can be scaled up as you
| get a positive response. If you're iterative, you can adapt
| your GTM and funds invested based on feedback.
| swsieber wrote:
| > This sounds like all the parents who've had one baby that
| slept well and spend the rest of their lives telling other
| parents what worked for them.
|
| This sounds like quite the opposite:
|
| > The takeaway? Don't stress over all the things you are not
| doing but focus on the few you are doing right.
| chrisdbanks wrote:
| Maybe I was being too subtle. I mean it sounds like offering
| completely random advice that has no statistically
| significant correlation with success, and therefore is just
| as likely to be wrong as right.
| [deleted]
| dvt wrote:
| > offering completely random advice
|
| To be fair, _all_ startup advice is completely random
| advice. Really, there 's no guaranteed rulebook for
| success, so everything should be taken with a grain of
| salt.
| danjac wrote:
| It read to me more like general advice that one should
| carefully examine any industry "best practice" in the light
| of your company's specific needs and circumstances.
|
| So for example "we just used Heroku" might stick in the
| craw of developers who think AWS Lambda based microservices
| are the future, but for a small startup with limited
| resources and time Heroku is probably a safe bet.
| Mulpze15 wrote:
| That's exactly what the author says. He does not give
| advice. He just give a laundry list of facts for his
| business.
|
| The only advice is to not sweat over things you don't do.
| Do you suggest one should?
|
| As a business owner, it resonates with me.
| Brian_K_White wrote:
| Guess the article was too subtle.
| bambax wrote:
| Yes; in other words: don't do cargo cult. Do what needs to be
| done, not what you think needs to be done because you have
| read about it somewhere.
|
| But of course this is much easier to say than to put in
| practice; "what needs to be done" is very hard to know, while
| random generic advice is always top of mind.
| threeseed wrote:
| > not what you think needs to be done because you have read
| about it somewhere
|
| So then we shouldn't follow the advice in this article
| either.
|
| Maybe we should just do nothing lest we follow someone's
| advice.
| doctor_eval wrote:
| Agree, it's especially difficult avoid cargo cults if you
| are surrounded by people who insist that it's necessary to
| do certain magical incarnations in order to be successful.
| cyral wrote:
| Their competitor also raised $138 million [1] along a similar
| time frame. In fact both companies look like almost exact
| copies of each other. Maybe they _should_ have done some of
| these things.
|
| [1]: https://www.crunchbase.com/organization/front-app
| frouge wrote:
| We did not get humble
| httpz wrote:
| I really like this post. As a startup founder, it's easy to get
| distracted by advices from armchair startup experts.
|
| To use a tree/forest analogy, you'll often get suggestions like
| "why don't you use some fertilizer?" or "why don't use plant
| maple trees instead of oak?". In reality, your time is better
| spent focusing on planting more trees ...when you finally catch a
| break from fighting three different forest fires.
| slg wrote:
| >We did not waste money.
|
| Why did they have to go and throw this one in? This is entirely
| subjective. I guarantee that a full audit into their expenses
| would find at least some waste. Placing such a general comment as
| the last item in a list of mostly specifics gives it extra
| importance and seems to imply that the items above it are a waste
| of money. It gives the whole article a "we know better" vibe that
| is trying present itself with a "here is what we did" vibe.
| plehoux wrote:
| I wrote the article and I feel you are right, I should not have
| put it there... I just wanted to highlight we were frugal.
| vasco wrote:
| Agree, I loved it without it and that single one ruined it. You
| put it perfectly.
| bhelkey wrote:
| > We did not focus 100% of our work hours on only one business. >
| We did not pivot.
|
| Does this mean you didn't focus on 1 customer or you didn't focus
| on one product? Because if you built multiple products and
| focused on the most successful, I would argue that you did pivot.
| plehoux wrote:
| Before Missive, we created ConferenceBadge.com, which we ran in
| parallel until last autumn, when we passed management to a new
| team.
| wantsanagent wrote:
| We DID NOT hire a human to do our hero video narration.
| drewda wrote:
| Ha, thanks for a good chuckle!
| plehoux wrote:
| Lol, I will add it to the list.
| gcapu wrote:
| bigtones wrote:
| I could tell too, it sounded weird. The cadence of the
| 'speaker' was way off. Better than Alexa, but it really does
| not sound human. As the cost of a human to do this is minimal,
| and it's literally front and center on your home page which you
| use to acquire all your customers, you should have spent the
| $500 to do it right.
| bigtones wrote:
| Getting to $40k in MRR after 8 long years is not exactly fast
| growth.
|
| Still something to be proud of if it's still a small team of
| three people, but that's a lot of work your team put in so far to
| get to this point.
| bgirard wrote:
| > We did not type-check our codebase
|
| For me that's the most surprising. Personally type-checking has
| such an immediate ROI on productivity. Even if adopting it
| incrementally. It's certainly not required to build a business
| but it's not something I'd skip.
|
| I still like the overall point of the article.
| plehoux wrote:
| This is list is not a list of thing _not_ to do, simply some
| popular things we did not do. I 'm absolutely not saying type-
| checking is bad.
| bgirard wrote:
| Yup, I understood that. That's just the one I personally
| found the most surprising in your list.
| [deleted]
| hardwaregeek wrote:
| I love type checking but I do think the point at which type
| checking becomes a necessary business decision is very far in
| the future. Companies such as Stripe, GitHub, Facebook, etc.
| are examples of this. And with some typed languages, e.g. Rust,
| Swift, OCaml, there's an additional factor of a weaker
| ecosystem. Yes, even Rust's ecosystem is worse than say,
| JavaScript's for some areas such as desktop applications.
| teaearlgraycold wrote:
| I use typed languages not for a quantitative ROI. I use them
| to make programming not a huge pain in the ass.
| bgirard wrote:
| I worked on Facebook Web Infra while we were adopting Flow.
| And typing was a huge productivity and safety boost. Sure,
| you can build without out. There's no denying that. But now
| we're in 2022 and we have mature type checkers for JS so it's
| not something I would skip on today.
| timboslice wrote:
| > We did not A/B test anything.
|
| > We did not waste money.
|
| I would argue that you did waste (potential) money by not
| optimizing your marketing funnels. Regardless, this list was a
| great reminder that the core of what we should focus on is
| putting your product in front of customers and making it better,
| not micro-optimizing.
| onphonenow wrote:
| We did not setup automated email follow-ups.
| eatonphil wrote:
| > We did not switch to a new programming language after launch.
|
| Did you switch programming languages before launch?
| alain_gilbert wrote:
| Legends! I love to see your content, every times. Congrats.
| plehoux wrote:
| Merci Alain!
| 3327 wrote:
| TameAntelope wrote:
| We _did_ win the product /fit lottery.
|
| Must be nice. :/
| plehoux wrote:
| It's nice, but keep in mind it's a 7 years long journey. :)
| guiriduro wrote:
| Was there a moment when you felt a market fit step change?
| What was that like? You've told us what you didn't do (great,
| btw!), but perhaps you could distil a couple of things you
| did do around that time that made the biggest difference.
| altdataseller wrote:
| What was the ARR progression in those 7 years (ie what was
| ARR in year 1, 3, 5)
| plehoux wrote:
| ~ after 1 year: $600, 3 years: $192,000, 5 years: $780,000
| altdataseller wrote:
| Wow, that's quite inspirational, and a testament to
| having perseverance! Congrats!
| TameAntelope wrote:
| Oh!
|
| In that case, I think it's a little similar to how I could
| have gone to college but didn't. I ended up in a good place
| (as you did too) but maybe had either of us taken a more
| traditional route, perhaps we could have saved ourselves some
| time.
|
| Is there anything you'd say to your younger self about these
| things you didn't do that could have sped things along?
| plehoux wrote:
| Do Yoga. I have destroyed my body with the combination of
| working on chair 10 hours day, and then doing hard sports
| (Rugby, Ice Canoe, Running).
| foobarian wrote:
| My body is still fine. What I did not do: hard sports. Or
| any sports at all :-)
| TameAntelope wrote:
| I'm literally reading this in a hunched position, so
| yeah... I'm gonna go sit in my yard or something.
| ryanSrich wrote:
| So...what did you do to get to $2mm ARR? Because there's no way
| you just put up a site and people started signing up for your
| product. It doesn't work like that.
| hans1729 wrote:
| >It doesn't work like that.
|
| ...why? This quote matches my gutfeeling: "you're doing ads
| because you failed at marketing. You're doing marketing because
| you failed at product".
|
| Don't get me wrong, I'm not saying that survivorship bias isn't
| at play here, or that all or none of the things listed in the
| article are required to get anywhere. I'd just like to hear a
| coherent argument why a good product doesn't carry itself to a
| decent valuation.
| ZephyrBlu wrote:
| > _I 'd just like to hear a coherent argument why a good
| product doesn't carry itself to a decent valuation_
|
| Why do you need a coherent argument when you can do one
| better, observing reality. Lots of well polished products
| flop very hard. Ex: Quibi.
|
| Unless you're tautologically defining a good product as one
| which is successful (I.e. carries itself to a decent
| valuation).
| ryanSrich wrote:
| > you're doing ads because you failed at marketing. You're
| doing marketing because you failed at product
|
| Define marketing. Is having a website at all marketing? What
| if I have a private link to sign up for my product, but I
| have to email people for them to use it. Is that marketing?
| How can one exist online as a business without doing
| marketing? If you've ever made a single SEO optimization to a
| website are you not doing marketing?
|
| What I'm trying to say is that your quote doesn't make any
| sense. Not only does it fail at understanding what marketing
| is, it's also just patently false. Great products, amazing
| products, fail every single day.
| iamacyborg wrote:
| > You're doing marketing because you failed at product".
|
| And yet one of the 4 P's is for Product.
|
| You'd likely benefit from reading through Kotler's Principles
| of Marketing.
| mym1990 wrote:
| Ads are a subset of marketing, so I don't really understand
| how that quote works but a good product carrying itself to a
| decent valuation probably has some correlation with how good
| the network effects of that product's user base are and how
| likely those users are to spread the word. At the end of the
| day you need eyeballs on your product, and organic growth is
| usually going to be the slower path(albeit not the worst path
| for some).
|
| *If you have investor pressure to show growth(usually in
| terms of user base), you're going to opt for the faster
| progression.
| threeseed wrote:
| Notice how they specifically mention "we do not use Google
| AdWords".
|
| Would like them to also add "we do not use Facebook Ads,
| Reddit, Ads, ProductHunt Ads" etc.
|
| Otherwise they are just being disingenuous.
| plehoux wrote:
| I could add them, never used them too.
| plehoux wrote:
| Co-founder here, I'm sure there are many things I forgot to
| include in this list, still, a nice summary of the many things we
| haven't done.
|
| Were we successful because or despite of all of these did-nots?
|
| There are presumably many things there that would have made us
| more successful. And obviously many things we might do soon.
|
| The takeaway? Don't stress over all the things you are not doing
| but focus on the few you are doing right.
| the_common_man wrote:
| Congrats on your success! How big is your team?
| plehoux wrote:
| At the moment we are three (co-founders) + a part-time dev
| doing integrations.
| _tom_ wrote:
| > We did not grow our headcount past four.
|
| (Not OP)
| dvnguyen wrote:
| What did you do for marketing?
| scld wrote:
| Well, at least one part of it is this HN post :)
| manquer wrote:
| Congrats on making it!, and making it without doing things you
| didn't like to do! That is truly rate.
|
| You were successful because you have very good product market
| fit period.
|
| I think of all those did-nots as makeup, some are born with
| great genes don't need makeup or just basic excercise to look
| great to be in Hollywood or a model, for some they are good
| enough that they can make it with loads of makeup and lot of
| hard work to be in shape, and sadly for many there is no hope
| to be a model no matter what they do.
|
| Product market fit is like that, you can succeed without it but
| that requires a really strong fit, most products don't have
| that strong fit, so the crutches are essential for their
| success.
|
| The more interesting question for you is with some of those
| did-nots would have grown to say 20M ARR in the 7 years ?
|
| Maximizing ARR likely is not _your_ goal, you want to create
| your business and be happy doing only things you like. however
| when recommending your path to others you need to consider that
| hypothetical.
| doctor_eval wrote:
| I just thought this was such a great list. Some of them were
| head scratchers for me (untyped languages? OMG NO) but that
| seems to be the point.
|
| Can you tell us some of the things you DID do? I'm assuming you
| were focussed on building a great product? What did you do to
| get your first sale? What made you decide to pull the trigger
| and build in the first place?
| bspear wrote:
| And what were the right things for you?
| plehoux wrote:
| Main one was our ability not to be distracted. Plus, setting
| up ourselves for a long-distance run from day one.
| darod wrote:
| What does setting yourself up for a long-distance run look
| like?
| iamacyborg wrote:
| Go to the toilet before you start, ime.
| paxys wrote:
| > We did not apply for the government salary subsidies.
|
| This one is stupid. The startup R&D tax credit is essentially
| free money that you are giving up for no reason. Your accountant
| is probably being negligent for not automatically getting it for
| you.
| cheschire wrote:
| Money is never free, it flows from one pocket to another. Money
| represents an amount of intrinsic value which is at its most
| reductive and following all supply chains all the way down, it
| is simply representative of a given amount of energy. Energy
| cannot be created or destroyed.
|
| Even if you were to bring up the example of when more money is
| printed, it decreases the amount of value that all the other
| money is worth, and is therefore not free.
|
| With that basis, one may say that there are certainly some
| reasons why someone would not want to accept or support money
| that effectively dilutes value for all others.
| doctor_eval wrote:
| It's like all of these things tho. Like not spending on
| marketing or not using typed languages or literally all the
| other things. That's the point. They were successful without
| spending the not insignificant effort required to get grants
| and rebates, despite advice such as yours.
|
| Getting a product to market and getting sustainable revenue is
| the really, really hard part. Most of the stuff on their list
| is just work to be done - different kinds of technical debt, as
| it were. Leaving that work - even the low hanging fruit - until
| after the business is established is very disciplined.
|
| Now that they've established a firm product and financial
| foundation, you could almost see this as a to-do list. They can
| do these other things confidently, and measure the impact of
| them.
| Traster wrote:
| >Were we successful because or despite of all of these did-nots?
|
| I think that's a legitimate thing to ask, as the proverb goes:
|
| >Many people will seek credit for success, but few will accept
| responsibility for failure.
|
| The issue is that a valuable blogpost would go through each of
| those things they listed; and consider whether it was a good
| thing to avoid or not. It's fine to say "Don't stress about it"
| when you succeed, but there are _plenty_ of start ups that fail
| because they don 't have a business plan or they didn't
| successfully manage their network. What would be valuable is to
| share the insights you learnt on your journey rather than to
| flippantly celebrate your success. Anything succesful innevitably
| involves skipping things that turned out in retrospect not to be
| important - but the useful advice is how to figure out what was
| important ahead of time.
|
| Maybe I'm being overly pessimistic, maybe "you can still have a
| viable business even if you screw up lots" is something someone
| needs to hear. It's certainly true - you can actually succeed if
| you get the core elements right even if you get a whole load of
| things wrong.
| manquer wrote:
| OP is not claiming those things are ineffective, they can
| be[1], he is rather trying to say they are not absolutely
| essential, you can succeed without them too .
|
| [1] he cannot really comment on their effectiveness as he
| didn't use them anyway.
| doctor_eval wrote:
| Yeah, given their level of success without marketing
| expenditure (ie, its likely to be a good product) you have to
| wonder if they would have been able to multiply that success
| with some marketing effort.
|
| On the other hand, putting (apparently) 100% of their effort
| into product is maybe the reason it worked.
|
| I personally think a great product is table stakes for
| success, but I'm repeatedly shown to be wrong -\\_(tsu)_/-
| imron wrote:
| > On the other hand, putting (apparently) 100% of their
| effort into product is maybe the reason it worked.
|
| That's not what they did either:
|
| "We did not focus 100% of our work hours on only one
| business."
| doctor_eval wrote:
| well, I'd like to know what percentage of the time they
| spent on this particular business, was spent on product.
| Traster wrote:
| I think there's a lot of things that I have ignored in my
| career and come back to and then said "Oh, yeah, that was a
| massive net negative, I should've just done it right in the
| first place". Those are really valuable insights. Where can
| you skip the "best" method, and where is it really going to
| screw you.
| codeptualize wrote:
| Very impressive. I'm a big fan of companies like this. It looks
| like you have built a good product, did the right things, didn't
| fall into the traps, and now have a nice size stable business.
| Congrats on your success!
| stevenking86l wrote:
| Reminds me what great poet and scholar Eminem once said: "Will
| Smith don't have to cuss in his raps to sell records. Well I do.
| So f _ck him. And f_ ck you too"
| soared wrote:
| For reference $2mm arr is $40k revenue per person per month. A
| hypothetical 75% margin means $30k margin per person per month.
|
| Very impressive growth and 100% something you and a couple people
| could live off of. It is not a moonshot tech company/etc though,
| so if you're looking to build something big - these are not
| lessons you should follow.
|
| Spending money on advertising, hiring 1 salesperson, etc would
| drive a lot more revenue and enable them to scale. That is likely
| not their goal. I very much preferred working for companies who
| were highly profitable and didn't try to outgrow themselves,
| compared to the opposite.
| plehoux wrote:
| Accelerating growth is definitely on our radar. We took a
| different road up to this point, but I expect our future to be
| more similar to a regular tech business now that we're set on
| solid ground.
| amirhirsch wrote:
| How much of your growth is from existing customers versus new
| customers?
| plehoux wrote:
| Existing customers > New customers. Wrote about this there:
| https://missiveapp.com/blog/on-being-a-tiny-team
| amirhirsch wrote:
| Thanks for sharing and congratulations on the milestone!
| You are going to grow like crazy when you throw marketing
| and sales behind new customer on-boarding. If you find
| that you are growth limited by cash-flow, you are also in
| a great position to set your own terms for valuation.
| bb88 wrote:
| What are you doing to prevent competitors? It doesn't look
| like you have a very strong moat, and it looks like something
| MS Teams could copy tomorrow.
|
| I don't always agree that VC funded hypergrowth is good, but
| a well funded competitor in a crowded space will eat your
| lunch.
| philip1209 wrote:
| "You're doing sales because you failed at marketing. You're doing
| marketing because you failed at product." - Naval [1]
|
| So, my conclusion is that Missive built a great product.
|
| [1] https://twitter.com/naval/status/1505668279678824448
| treyhuffine wrote:
| Great example of how early startups are about finding product-
| market fit, not trying to check boxes that you hope lead to
| success
| AlchemistCamp wrote:
| Looks like they wrote a fairly vanilla Rails app and completely
| avoided micro-services, container orchestration, big clouds,
| static typing and a lot of the stuff most devs on HN (or even IH)
| write about: https://builtwith.com/missiveapp.com
|
| Maybe hitting 2M ARR is small for many here, but I'd be thrilled
| with building a SaaS to that level with just three founders and a
| single employee!
|
| Maybe in a couple of years when they have more revenue and a
| bigger team, they'll start moving towards a heavier dev process.
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