Going from $0 to $500k in 1 Year with no VC Money

http://thenextweb.com/entrepreneur/2012/05/01/build-the-rocket-first-from-0-to-500k-in-1-year-with-no-vc-money/

by antr • 14 years ago

245 82 14 years ago

Sukotto• 14 years ago

Inspiring, though short on details. Hope they do a Mixergy interview.

Mz• 14 years ago

And/or additional articles. Given my health issues, organic growth and reasonable work hours are my only hope of achieving some kind of financial success. So I, too, would love to see more of the back story.

auston• 14 years ago

MetaLab is very high on my list of "people who do awesome work". They've been plugging away at products for years now, I remember Billy He / Ali Bosworth announced one of their first products on HN - ballpark (http://getballpark.com) + (hn thread: http://news.ycombinator.com/item?id=557028).

You can catch an interview with Andrew Wilkinson here: http://5by5.tv/founderstalk/28

I've had the opportunity of having the Flow product lead (Luke Seeley) speak at my conference - seriously smart guy.

Congrats to them for growing to $500k+ per year on their own!

joering2• 14 years ago

re HN post: I know it was 4 years ago, but regarding to patio11 first post over there, even 4yrs ago SSL was really cheap. Having your customer decide whether they want to have their data securely transferred or not over such a minimal cost-difference made me wonder what were the owners thinking? yes, I know there is additional cost involved in encrypting/decryption but 4 years ago servers were not that much more expensive as today; plus they created MVP product and started with 0 users, I assume. Nothing stopped them from adding extra $5 to every plan they sell and set it aside for a stronger server given userbase will keep growing.

Its like giving users extremely fast rocket to fly on and telling them "there is no windshield and seatbelts are extra $5".

Bottom line: I would rather have less customers and everyone with minimum security over their data, than safe extra couple bucks. IF they would ever get their data sniffed and shit would hit the fan, guess who would media blamed for it?

mattmanser2• 14 years ago

It used to be a 'premium' feature of 37 signals products if I recall correctly. At the time it felt like others copied them, perhaps I'm remembering incorrectly. So I'm not surprised to see that.

I believe it was just a way to get people to upgrade. Views have changed in the meantime as it's dawned on everyone how bad an idea it is not to have SSL on for everyone given how negligible the cost is.

CodeCube• 14 years ago

who else read that as, "MethLab is very high ..."?

AVTizzle• 14 years ago

Well now I can't un-see it.

joelhaasnoot• 14 years ago

Is it just me or is the space of project/organization tools getting really swamped these days? Seems like every day I hear of a new one.

I guess it is something that comes down to preference alot, and some are too opinionated to be flexible and offer all the options (i.e Basecamp), others too simple. But maybe they're all the "MS Project" of this generation.

(Oh, and personally use Pivotal Tracker and love it)

debacle• 14 years ago

MS Project is the MS Project of this generation. All of these new offerings are in response to that obese, demanding, high maintenance bitch.

hackNightly• 14 years ago

I think that companies are just trying to be too broad about project management. It appears that they all want to be the "go to" tool for task management. However, I feel that there's opportunity in the project management space if some of these apps would cater to more of a niche audience. Think, "Task management for dog owners"

bdunn2• 14 years ago

I built Planscope (http://planscope.io) - very specific (freelancers) and so far successful after only being live two months.

Most products, including PM apps invent the tool and then try to find a customer, which ends up resulting in generalized products. There's a lot of opportunity for products to capitalize on a specific customer and their workflows.

sprobertson• 14 years ago

They've always been popular, I suspect a big influence from the well publicized success of 37signals in this area. And still it seems there's never a final answer to what the "best" option is. (That's why I'm making one myself!)

Jun82• 14 years ago

I still haven't found an ideal solution. The problem with most, including Flow, is that companies won't allow you to put data on the Internet (e.g. my office blocks Dropbox), which cuts most solutions. So you have to convince your IT to install it locally (for large corps don't try, you can't). What I'm looking for is a nice personal proj/org tool that would interface with email and calendar and would give a snapshot of my multiple projects.

Do you know anything like that?

saturdaysaint• 14 years ago

I use Workflowy and paste in Google Docs/Drive links to any file I need to reference. I love Workflowy's flexibility - it's amazing for everything from task management to taking meeting minutes to brainstorming... and then organizing it into one cohesive system.

sschueller• 14 years ago

It is getting swamped and not just by little guys: http://economictimes.indiatimes.com/news/international-busin...

syed123• 14 years ago

Perfect example of a great team work. 25% of their team worked on consulting projects to fund it. An example for Silicon Valley companies who raise million dollar fundings just based on prototype!

KaanSoral• 14 years ago

Very inspiring and in my opinion easier to achieve since you have no responsibility

cluda01• 14 years ago

I've been playing around with flow. It looks like a cocoa app. Did they use Cappuccino by chance?

Wondering what their stack was/is

nullmeatbag• 14 years ago

From their technical lead on Quora: http://www.quora.com/Flow-web-application/What-JavaScript-fr...

jQuery, (customized) Backbone.js, socket.io, and a fair amount of other custom JS.

e-dard• 14 years ago

This is great. However, did I read the article right - by the time they launched they had spent 300K?

Here's a question - is it possible to ever do something like this without the requirement of finding 300K via consulting gigs first? I assume that given there were 3 of them and they spent only a few months building it, they didn't need all of the 300K on salaries.

I suppose you would have to grow the product from a smaller stage, rather than build it and launch?

mattmanser2• 14 years ago

I wonder if that price was the opportunity cost of not being billed out at $x per day.

Estragon• 14 years ago

That's how I interpreted it. They do attribute it all to "development costs," so it must mean something like that unless they brought in outside help.

redguava2• 14 years ago

I recall that had a fairly impressive marketing video on their page previously. This could have cost $50k alone.

I think the main unexpected cost that you can incur is advertising/marketing. You can build the software cheaply, but it's very hard to get the word out without spending money (and it can add up very fast). Considering their fast growth, I would also assume significant spend in this area.

As long as you are getting a positive ROI from this spend, then it's worth throwing as much as you can at it, but obviously you need to have it to throw... that may be one the keys to their success.

metalab3• 14 years ago

The video cost us way, way less than that.

Jun82• 14 years ago

"By the time we launched, the price tag on Flow came in around $300,000."

That's peanuts compared to VC funding but still quite a sizable sum for a lot of people (e.g. me).

metalab3• 14 years ago

Of course, definitely a lot of money. We funded using cash from doing client work part-time.

guynamedloren3• 14 years ago

I'm assuming most (all?) of the work was done in house, so did the $300k go to paying employees? Thanks for sharing your story.

aytekin• 14 years ago

I wonder how much having a existing popular brand helped them on their success.

dave1619• 14 years ago

How is Flow different than Basecamp?

Bamafan• 14 years ago

Nice product and the team seems very talented. But whenever I read these stories (from 0 to $8 billion in 3 monthz!1!!!11), lots of important details are left out.

#1 How are you able to connect to 4,000+ paying customers so quickly?

Actually, that's it. I'm guessing any number of HN guys could create this product. But we don't know how to get people to buy it.

acabal• 14 years ago

That's what I'd like to know. How did they get so many people interested in yet another project management app (I swear I hear about a new one every month)? That's the most crucial piece of info they could possibly share, anything else is not really useful at all, frankly.

bdunn2• 14 years ago

People manage projects, and usually get paid for it. The audience is use and wildly segmented.

You see a lot of apps in this space for two reasons: a lot of people need project management tools, and most of these people will pay for one that works well for them.

angryasian• 14 years ago

By itself its a great story, but the background context is metalabs is a very successful company thats well connected prior to launching this product. This type of product is much more successful with the right sales people and connections.

ricardobeat2• 14 years ago

> we were tuned-in to what our users wanted because we built it for ourselves

That only works if there are people with the exact same expectations on the market (which seems to be the case).

dkrich5• 14 years ago

Sorry, this is just a shameless ripoff of 37Signals and Rework. This whole "you only have to work a few hours a day" philosophy will only take you so far. That's just simple economics. If something is that easy to build it means there are very low barriers to entry. When there are very low barriers to entry, profits eventually get squashed to zero. The only exception to this is when you are first to market with something unique. It is virtually impossible to be first to market with something unique in the bloated project management saas space. Actually, this site is a perfect example- from what I can tell they went from nothing to competing with 37Signals in one year.

dkrich5• 14 years ago

Aww, I guess I hurt some feelings. Sorry about that. (Not really, downvote away!)

marknutter4• 14 years ago

Always a good idea to follow up a negative post with a post bitching about down-votes.

TDL2• 14 years ago

"The only exception to this is when you are first to market with something unique."

The "first mover" advantage is largely a myth. Many successful companies that dominate their market segments weren't the first entrants in that segment.

dkrich5• 14 years ago

> The "first mover" advantage is largely a myth. Many successful companies that dominate their market segments weren't the first entrants in that segment.

I think this depends upon how granularly you bucket the different companies. If you just use broad strokes and say "Apple wasn't the first to make a cell phone", then what you are saying is true, albeit at ignoring the fact that they were the first to make a cell phone with a glass touchscreen, advanced software, app store integration, and sustained improvements. Now if you put companies into that bucket, you basically end up with Apple. Samsung followed, and makes outstanding products in the exact same space, but in that bucket, Apple is the leader.

Apple is an oft-cited example, but I'll bet that if you look at any product that leads its space, it was the first to do what it does in exactly the way it does it. The reason I'm skeptical about how well this can work for project management saas companies is that there are only so many pixels to manipulate on a screen, and only so many ways to organize a project. If you are making a "me-too" product you will lose out in the long run. That's all I was saying. Not sure why people get so upset with facts.

speg• 14 years ago

The sign up form is broken on my iPad. After I enter my name and move to the email field it loses focus.

juddlyon• 14 years ago

One detail left from the analysis: these guys are already well-known for their UX work amongst the crowd most likely to purchase Flow.

Reminds me of when Guy Kawasaki launched Alltop for "only 10K." Yeah, 10K + 500K worth of PR that comes with having an enormous following.

This is not to diminish what Metalab or Guy Kawasaki do, I'm admire both. But it's not like these results are as reproducible as they infer without significant connections.

redguava2• 14 years ago

It's not luck that they are already well known for their UX work. That is part of their hard work to get them to that point.

You say these results aren't as reproducible without significant connections... but getting significant connections is reproducible. I guess you could consider that step 1 in their process.

I would also say that you can build an audience and get connections with some hustle and/or money. A well designed pre-launch page and some paid advertising will get you an audience for launch day.

robryan• 14 years ago

Yeah, the article glossed over that step 1 though, lots of similar articles do. Once you have a big network of the right people have have your work well known and respected lots of things become easy.

nhangen3• 14 years ago

This is true, not to mention guys like Merlin Mann talking about them on 5by5. Nothing wrong with that, but it does certainly help.

paparoger• 14 years ago

Pretty sweet!

vgurgov• 14 years ago

Am I only one having this question: what is 500k states for? Is it 500k/month /year or total revenue? If its not montly, how can they hire 10 ppl?

ebaysucks• 14 years ago

It is very likely that the run rate of last month is more than 1/12th of the total annual revenue, as they are growing rapidly.

So let's estimate their run rate of last month at $75K and it becomes realistic - albeit a bit tight - to have 10 people on the payroll.

pakitan• 14 years ago

500K/month would mean 50,000 paying users and I'm pretty sure they don't have that. How can they hire 10 people? The same way other cash-strapped startups can - by giving equity instead of big salary.

systemtrigger• 14 years ago

He said it was recurring revenue and the context in which he said it implied annual. He also said they kept the team down to three until right before launch and only once they had predictable revenue did they start bringing the remainder onboard. He further explained that during development the team performed client work, which would have further offset their costs.

jasonkester2• 14 years ago

In case the Flow guys are reading this, please please please put out a simple HTML version of your thing.

Flow sits at the top of my "most annoying web app ever" list, because it follows the pattern of loading an empty shell, then populating it. I bet this works amazingly well for the guys developing it from their local dev server, but for those of us across the Atlantic from your servers it's really really painful.

Workflow involves clicking a link to look at a task. Then hitting the back button. Then waiting several seconds for the list to slowly repopulate itself. Then trying to scroll down (which is no easy feat since there's no scroll bar), and just before you get back to where you wanted to be, the list jumps back to the top. Repeat (scroll/jump/scroll/jump) several times before the page settles down, usually cutting the last item in half with no way to see it.

So yeah, Step One: HTML in a table. So that the back button works, and the page otherwise behaves like a web page.

Step two: Un-reinvent the scrollbar. The javascript thing you have in place that only works with the mousewheel just plain doesn't work.

Glad to see you're doing well for yourselves, but I'm sorry to report that I'm one of the people in your "churn" column.

marknutter4• 14 years ago

I'm guessing you don't actually use flow day to day. I'm also guessing that if they made an HTML version you probably wouldn't use that either; you probably have your own way of managing your projects and todos. I'm also guessing you're using this post as a sounding board for your gripes with single page javascript applications. Are any of these guesses accurate?

leptons• 14 years ago

My guess is you sound like a troll.

NeutronBoy• 14 years ago

Just because he doesn't use it any more doesn't mean the feedback is any less valuable.

It's great feedback. It points out specific problems and solutions. Ways that, from his point of view, the UI could be improved.

jasonkester2• 14 years ago

No. I used Flow on a daily basis for the better part of two months, to coordinate a team of six on a major product feature we were developing. The things I mention above are chronic issues I ran into every day, not superficial things I saw once before dismissing the thing.

They're also 100% fixable.

If you're going to do this sort of "empty container" app, it's worth modifying your approach a tiny bit and instead going with "filled container". That is, sending the actual page content over the wire, then doing all your smartness and auto-updating behind the scenes where the user can't see it. You get all the benefits that the browser gives you for free such as cache management and back-button support, and you can also build in all your rich UX just like before.

And of course, if you're going to rip out a 20-year-tested native control like the scrollbar, it's up to you to make absolutely certain that the thing you replace it with is better. Theirs is demonstrably worse in pretty much every way a scrollbar can be worse, and actually fails the simple case of "scroll the document", as it tends to lose its position. The fix for this is as obvious as it is easy to implement: use the native scrollbar to scroll your list.

If they do those things, they may win me and my team back.

mattm• 14 years ago

If you have feedback, why don't you email them directly?

Edit: Ok, I was downvoted for my comment. The reason I posted this is because the parent wrote a long comment about the product that has nothing to do with the content of the article and may not even be viewed by the team.

Zakuzaa• 14 years ago

>>"Going from $0 to $500k in 1 year.."

Congrats. Great work.

>>"..with no VC Money"

What makes it something to be proud of? Doesn't that imply taking VC money is bad? Why?

ericd• 14 years ago

It's more challenging to make and grow a business without much money than with.

andyl• 14 years ago

The best fundraising you can do is from your customers! You retain more equity and more control. And by the way, customer revenues is the only way to sustain a real business over time. Might as well get good at it early-on.

guynamedloren3• 14 years ago

> We usually clock between four and six hours a day, and most of us don’t even get to the office before noon.

Realllly interested to hear more about this. Can anybody from Flow elaborate? How well does this work? How did 4-6 hours come about? Why not 5-7 hrs? Or 3-5? How do salaries work - is everybody full time?

> We believe in working smart, not hard, and having lives outside the office.

Why can't you work smart and hard? Couldn't you accomplish in 8 hours what other teams could accomplish in 8-16 hrs?

Please share :)

TamDenholm• 14 years ago

One of the problems with old school thinking is that working hard means working long, which is absolute rubbish. Personally I can't be productive for 8 hours a day and I'm pretty sure nobody can, all the time you're not being productive you're generally wasting time by making coffee, checking emails, attending meetings etc. So why not actually just work the time that you're productive and then go and enjoy the rest of the time instead of just using up time doing things of little consequence.

That's working smart, IMO working longer just for the sake of it is working stupid because long and constant working hours aren't just wasted time, they negatively impact the time you wouldve been productive.

kevincennis• 14 years ago

Amen to that. I imagine the percentage of developers who can write legitimately good code for 8 hours a day is pretty low.

guynamedloren3• 14 years ago

I totally agree with you. I feel like I can produce a huge amount of good work over a 4-6 hour period of 100% focus; significantly more (and better) work than I can accomplish over an 8-10 hour period littered with distractions/meetings/etc.

I was just hoping somebody from Flow could weigh in with a first-hand account. Since everybody obviously has different work needs/environments for productivity, I was wondering how they managed to build an office culture that fosters these types of work habits.

japhyr• 14 years ago

This is why some of us can reasonably hope to launch a startup on the side while working a full time job. We're not putting in two 8-hour days, we're putting in 8-hour days at a full time job, and then putting in a couple highly productive hours on our own project every night or early every morning.

I'm pretty sure there are a good number of people on here who are splitting their days like this.

nhangen3• 14 years ago

I don't think it's 'old school' to work long hours. In my case, it's because I enjoy my work and I don't mind putting in 60 hour weeks.

That said, if I were on your team, I would love having the extra time away from work.

bentlegen• 14 years ago

NOTE: The people behind Flow are Metalab, a well-respected UI/UX agency. Most of the Flow team is also cross-listed on Metalab's team page (http://metalabdesign.com/about-us).

What does that mean? Perhaps they're only working 4-6 hours on Flow, and 2-3 hours for client work for Metalab. Who knows? I think there's a lot left out of this story.

noonespecial• 14 years ago

One of the first bosses (entrepreneurs) I ever worked for used to pride himself on how "well balanced" his work and life were (and that of those of his early partners as well). They'd roll up about noon and were out buy 4:30.

That all changed once they hired their first devs, for actual money. Once he was paying "$5000 per month for you" you damn well better be in by 9 and stay till 6.

I wonder how their culture will change when they start paying big bucks for real employees.

edbyrne• 14 years ago

I love all this talk about hours worked as if it's not a proxy for achievement - of course it is.

Will weak workers achieve great things in 6 hours or 16 hours? No.

Will over-achievers do brilliant things in 6 hours instead of 16 - depends on your definition.

Hours worked, working smart and all this BS doesn't matter. What matters is the size and complexity of the problem your working on, and how many problems you have to solve to move the needle on your goals.

So if you can do a great 30 hour week a move the needle - lucky you! Some people have to pour in 80-100 hour weeks just move the needle because what they are working on just cant be done 'smarter'.

I think the discussion needs to move from hours worked and quality of hours worked, back to quality of people : and hopefully the right people will work the right amount of time to productively deliver whats needed.

dgudkov• 14 years ago

Question to founders -- how did you get your first 1000 users?

metalab3• 14 years ago

We managed to get some nice launch press and a lot of organic word of mouth/referrals.

tbergeron• 14 years ago

I really love Metalab, I always looked at them for inspiration and seriously I'm proud of those guys.

They took the other road, the road which is in my opinion the best and the wisest. You must work hard to get to your point, being funded is not working hard (opinions may vary that while you're funded you can focus on your project instead of money but I think this is a very good part of the startup concept).

Once again, Metalab inspires me, my projects are starting to get real and I'm doing it the Metalab's way. I'm glad to see that I'm not the only one and that this method is successful as well. (I couldn't care less about having 4.2m or 500k, at least you have enough fund to back up your dreams and projects).

That was my 2cents. Keep up the good work guys!

cjmauthor• 14 years ago

We believe in working smart, not hard, and having lives outside the office

It is very difficult to not give every single minute to a startup. There is always so much to do. My first question is, if these guys were able to accomplish this with short days, would they have gone further and achieved even better results if they worked just a little bit harder. How do you know when you are giving too much, and is there really an amount of hours of work per day where you go from progress to regress? Does somebody say hey I can see your project and at this stage you can add a little bit at a time?

My second question is would this company have received so much more than the 500k had they had investors, and ultimately be better off?

I would appreciate any feedback or suggestions. My startup is http://1800businesscards.com and it is all self funded. Do I continue to put exhaustive hours in or do I step back and let it mature slowly. Should I seek venture capital or do I move slowly? There is just no resource or place for advice on these issues in my very small world. Thanks all.

bzloe• 14 years ago

Good stuff guys

Going from $0 to $500k in 1 Year with no VC Money

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