Halfway There: The Road to $1M ARR
Nearly 2 years ago we built a small internal app for our former startup that lately evolved into Beamer, a complete changelog and release notes tool for SaaS who need to keep their users updated about their latest products changes and get their feedback. Today Beamer is used by more than 5000 companies, including many of the top 100 SaaS in the world.
My name is Mariano Rodriguez Colombelli, co-founder of Beamer and in this post I want to share the journey that took us from almost going bankrupt to pivoting and now being halfway to the holy grail of early stage startups, $1 million in annual recurring revenue (with a team of only 5!).
The journey begins
6 years ago, my co-founder Spencer Coon, and I started a team collaboration SaaS called Hibox. Our idea was simple, to solve two big problems for SMBs, communication and coordinating tasks, by combining team messaging with task management in one app. We wanted to target all non tech-savvy small companies all around the world, a very ambitious goal which later proved to be our biggest mistake.
Things were starting to go well. We were growing fine and adding many features to the product. Soon we realized that one of the most difficult product-related tasks was figuring out a good Feature Discovery strategy, in other words letting our users know there was a new feature they can now use to improve their experience. We tried several solutions but none of them worked:
- In-app product tours: Worked great for core features but could be overwhelming if you don’t limit them. Hard to set up and very dev resource intensive.
- In-app messages: It was our main communication channel for sales, support and onboarding so we didn’t want to abuse it and have some of our most important business messages ignored.
- Emailing: One of the most over abused channels, open rates for this kind of messages were way too low and engagement was even lower.
- Blog: Let’s face it, nobody knows when there’s a new post and most people don’t want to spend 15 minutes reading a long form technical release notes.
What we knew was that our users were really reading our in-app notifications, probably because it was a native part of our app and people hate to leave unread notifications, so we decided to add a small notification center dedicated just to changelog and release notes content. We not only wanted to let our users know about new features but also have a repository of past updates so they, and especially new users, knew that we were constantly improving our app. So we created a real MVP, and what I mean by real is that is was really minimal. At the time it was just an awful form for new posts, a basic newsfeed and the unread notifications red bubble.
All hail the power of the mighty unread notifications bubble! Being natively integrated as part of the app our users instinctively knew that those notifications had to be relevant. And we were right, open rates went over the roof, up to 5X what we got from in-app messages using our live chat app and more than 10X what we got from similar email campaigns.
On life support
Remember I mentioned we had a team collaboration product? Well, almost at the same time we launched, another unknown company started solving a similar problem, a startup you might have heard of: Slack ?. As history now shows, the idea of what we were trying to solve was great but that was all we had in common: 6 years later Slack was filling their IPO while we were struggling to grow. We were growing but way too slow compared to what was originally planned and the current scale of our company.
So what was the difference between Slack and us? Basically focus, they defined their niche from day one and focused on that while we were trying to solve everyone’s problem, which is tempting but ultimately wrong.
At that time we were almost 20 people with local branches in 5 different countries and cash flow was starting to become an issue. We knew that raising a new funding round would be very difficult considering we were not growing fast enough for a VC and were competing in a crowded space – so we had to make a tough decision and downsize the company, closing 3 branches, cutting our salaries and letting some people go. It was a very sad and stressful time, both professionally and personally, because I felt I wasn’t doing enough even though I was working up to 14 hours some days – Sadly this is a common feeling among the emotional rollercoaster of startup founders.
Suddenly, a ray of light started to appear, many customers and some other colleague founders started to ask what tool we were we using to announce new features and how they could get access to that? Apparently we were tackling a common problem, not only for us, but for all SaaS products, so we decided to act fast, gave it a name and created a quick Unbounce landing page for it: Beamer’s first beta was born in less than one day ?
Our lack of focus on a specific vertical or niche almost jeopardized our entire company last time around, for us this time it had to be different.
It’s never an overnight success
After a couple of success cases on some close friends SaaS products we got featured on Product Hunt, one of the biggest communities of tech early adopters. We got a bunch of upvotes and finished in the top 5 products of that day. But more importantly we received tons of great feedback and got our first paid customers.
After the bad experiences we had with log sales cycle on the corporate world, me and my cofounder were amazed by how well received Beamer was by total strangers and how frictionless it was to get them to implement and pay for it. “This is it, it has to be!”, that was our feeling.
After that initial traction we were convinced that we had something that was really needed, something that no one else was solving the same way we were. So finally, after many days of endless chats with my co-founder and mentors we decided to change focus completely to Beamer and semi-pivot. “Semi” because basically we launched Beamer as an spin-off, created a new company and move the founding team and core-team to this new structure while Hibox continued with an independent team.
Immediately after the pivot, we started to apply all the lessons we learned the hard way over the last few years with Hibox, we ended the Beta and launched officially on Appsumo, which allowed us to get 3000 one-time paid customers in one week. It was explosive! Our team was answering support chats 24/7 during those initial days, an incredible experience to hear first hand about real user cases that allowed us to keep improving our product.
During the following weeks we started to steadily grow due almost entirely to word of mouth, which was a great indicator that we were on the right path. This time our customers were more sophisticated, they not only knew what they wanted but how they wanted it. In fact most of them were either working directly in product teams at SaaS companies or startup founders themselves. We had our niche and buyer persona identified and well defined for the first time!
Never underestimate feedback from people who really know what they are doing and have experience. That actionable feedback helped us to iterate and improve rapidly, what began as a simple changelog became a complete tool for product marketing that helps you send targeted announcements, get feedback and reactions from your customers, scheduled posts to send at the optimal time, bring users back to your site with push notifications, customize our widget to match your product styles, segment users and see post analytics and basically improve your overall product experience and your user engagement.
While new and more sophisticated customers came onboard, new and more sophisticated questions started to be asked: Were we secure enough? Was the app able to scale? What about GDPR, SOC2 and HIPAA? We had to really immerse the team into this to improve not only the overall experience but also comply with lots of regulations that we didn’t even know existed before!
All that hard work began to pay off when we started to close big names in the SaaS scene like Zenefits, Clickfunnels, Freshworks, Vidyard, Buffer or Chargify among others. After only 6 months from the official launch we were already profitable.
But even if having a profitable business with great customers was already fantastic, one of the most satisfying experiences we had as startup founders was still yet to happen. Since we launched one of the main concerns raised by mentors, potential customers or investors was: “Why would someone use Beamer to announce new features instead of a live chat tool like Intercom or Drift?”. We understood why they were asking that because we asked the same question ourselves before with Hibox. In fact we love Intercom and Drift – they were both role models for the kind of company we wanted to become and we are even their customers for real time chats and marketing automations. Nevertheless we were convinced we were targeting a very specific issue that required a very specific solution.
So you can imagine how excited we were when both Intercom and Drift became two happy Beamer customers and see how they were using our product to keep their users updated about their latest product changes. For us that was a huge validation. Having your role models, among some of the Silicon Valley’s finest, and who some people thought would be your direct competitor, using your product is one of the most rewarding experiences you can have as a founder.
Beamer in numbers
Something most of our customers were surprised when they asked is the size of our team. Today we are just 5 full time employees and 1 part time, all working remotely, distributed between Barcelona, Colorado and Buenos Aires. Working remotely and distributed allowed us to cover a huge range of timezones for customer support while keeping our team morale high and overall costs low. Everyone loves working from their favorite cafe or cozy place in their homes and it allows you to be more efficient taking care of personal business. We work long hours and being able to work remote makes the long days way easier to take on!
We tried to automate everything that could possibly be automated. Our whole infrastructure is PaaS based what allowed us to serve more than 1 billion requests each month with minimal maintenance and almost nonexistent downtime (Thanks Google Cloud and Cloudflare!).
Beamer notifications have been seen by almost 200 million unique users and our customers have received more than 10 million reactions and feedback for their announcements, allowing them to improve their products even more.
Having infrastructure, billing, churn recovery and onboarding automated allowed us to focus more on improving the product and most importantly give the best customer support possible. All team members have to personally chat with our customers, that way we keep a personal touch that our customers want, while at the same time keeping a pulse on their most important needs and problems first hand.
A good, easy to use product and an even greater support team got us an NPS score of 78. Our revenue has been growing an average of 20% MoM over the last year with absolutely no investment in paid ads, all growth has been from organic (SEO and content generation), network effect (people see Beamer on other SaaS) and word-of-mouth (SaaS community is very open to refer good solutions to their colleagues).
Of course growing comes with its own new problems! For example, half of our leads come from word-of-mouth and referrals, the other half comes from content generation and SEO. That might sound great but what worries us is how scalable that is and how little control we have over that. I mean, we can keep improving our product and providing great support to keep getting recommended or generate more and better content for inbound marketing but it’s success ultimately depends on 3rd parties, in this case current customers or Google Search. SEO is being killed by paid ads, and ads are getting more expensive every day, so even if we are growing fast this is our main concern at the moment.
Another issue we encountered over these last few months are rip offs. This is the first time we have launched a product that got copied at least 5 different times, in some cases blatantly copying word for word marketing content from our site, quotes, slogans and images. On the one hand this is a good indicator that we have something worth copying. But on the other hand you it gives you an eerie and unsettling feeling when you see exact clones of your product. But it’s ok, we know competition is inevitable and better for our customers and ultimately execution is what matters.
To VC or not to VC?
Lately we’ve been approached by some top tier VC funds who have shown high levels of interest in partnering with Beamer. To be honest it’s really tempting to have those high profile names backing up your company. It would be a huge validation and most likely boost our growth and exposure. On the other side, having limited resources makes you prioritize better which translates to a simpler but better product so we are still weighing the pros and cons of going down the VC path.
Obsessed with size
Since we pivoted we set an arbitrary and temporary cap for our core team, only 5 members, and we really liked the effects that constraint had on product development. As I mentioned before, having limited resources influences the way you spend them. In this case our scarce resource is time, so we are really conscious of how and where we use it. The consequence is the inevitable focus on core features and simplicity. What might sound counterintuitive, limiting the features you add, is in fact considered a plus by our users. If you check our NPS responses, our promoters defined “Simplicity to use” as the most valuable aspect of our product.
I can say I have an obsession, almost a personal challenge, to see how much we can scale while keeping a small team. Automating most non core stuff is a must so we can dedicate most of our time to customer success. Of course the limit to this test will be set where this might start hurting company growth – so let’s see where this can take us!
In conclusion the following 5 takeaways are the humble advice I would give to any founder so you can avoid nearly going bankrupt like we did:
- Identify your buyer persona and niche first. This is probably more important than the product itself.
- Actively seek out and listen to feedback from that buyer persona. Once you’ve identified it correctly try not to be tempted to solve all possible use cases from other niches, at least keep it this way while you are early stage.
- Iterate fast until you find market fit. And I mean really fast. Some days, especially when we launched, we deployed up to 10 different versions of the app. A/B test all your landing pages.
- When you really find market fit you’ll know it – don’t try to force something that isn’t working. It’s easy to think that next month or next year things will change. You have to adapt to the market, the market won’t adapt to you (Unless you are Apple ?).
- Stay lean – beware of vanity metrics like employee headcount, it only makes sense if it’s organic. More employees or more ads won’t solve your market fit problems.
Hope this was helpful! I would love to hear your feedback and some of your biggest takeaways on the road the $1M in ARR! If you got something out of this would love for you to share ?