On the show today is one of the best bootstrappers in the business: Paul Farnell of Litmus.com joins me and shares some great stories.
A podcast focused on great products and the people who make them
What can you expect when you build your own SaaS app? How does growth happen? Paul Farnell returns for part two, and man, it's going to blow your bootstrap and socks off. He shares growth numbers, revenue and users, as well as insights on running an app in Europe as opposed to America. If you have a product team, you probably want to know where you're wasting time and how you can be more efficient.
Speaker 1:For this, I use sprint.ly. It helps surface the things that slow down development so you can focus on shipping faster. It's project management software for agile software teams. You and your team can try sprint.ly for free by going to www.sprint.ly. Listen all the way to the end of the episode today because we've got some news and shout outs after the interview.
Speaker 1:Now it's time to get back with Paul in part two.
Speaker 2:You mentioned that building email client testing ended up being actually a really difficult problem. And you didn't quite realize that it was going to be that hard. And there's kind of a trend that I've noticed with a lot of apps. There's some apps that, let's say, take project management software. Project management software, you have to get some things right.
Speaker 2:Like you have to get the user experience right and the way that you you have to have maybe a philosophy of project management behind it, etcetera. But technically there's not a huge hurdle there to overcome. But in your case, and even if Let's think about something like Stripe where there's actually It's just like this mucky world that no one wants to go into. So no one wants to go into email testing because that's yucky. Designers don't like HTML emails.
Speaker 2:You have to deal with all these horrible clients. And then if we take Stripe as another example, here's another really gross problem. You have to deal with banks and payment gateways. First of all, what got you through that point of saying, Well, this is actually a really kind of yucky problem? Like it's not ended up being a lot harder to do.
Speaker 2:What got you through the development of that? And, yeah, maybe just start with that.
Speaker 3:Sure, yeah. No, I think that's actually really a very perceptive thing, actually. Yeah, that you mentioned, you know, the trend of there being more things like this, and I think you're right. Yeah. Know, companies like Simple, Stripe, and folks who are there's a lot more kind of challenging stuff going on in the back end than maybe there was a few years ago.
Speaker 3:Yeah, what got us through it? I suppose it was, I suppose, just relishing the challenge of making it work, you know, and that incredible satisfaction when you, you know, when you it felt to me, I suppose, I understood how it was working, but it did feel just magical to send an email to this random address that was shown on a webpage, and then wait, and then the Ajax updating of that page, saying when the email had arrived and then showing screenshots of that. I mean even now I still find that kind of just a I don't know, it was a, kind of a magical thing when we got it working. Because it felt quite different. It felt, yeah, it's just it's hard to describe it, but it feels, I want to say more robust, but feels like a certainly more challenging than building, yeah, you know, a to do list app or you know, project management app.
Speaker 3:That's not to make light of that because it's had its own challenges. But yeah, it was, I don't know, I think, yeah, just relishing that challenge. I know that Matt in particular, you know, just loved building it and loved building something that people hadn't actually done before. You know, at that point, automating Lotus Notes seven, you know, on an old version of Windows Yeah. Through all these, like, com libraries and all this crazy stuff.
Speaker 3:Writing, you know, c plus plus, to get this thing to work, to then deliver that result, you know, to a beautiful, rails, you know, web app, on the front end with this great design. Just I don't know. It's a really interesting thing to work on, I suppose. And it just, yeah, felt like a challenge, but very much in a good way. You know, just exciting to get it to work.
Speaker 2:You know, I'm trying, personally, I'm trying to challenge my thinking on it because when I get an idea, often it's here's a form, you input data, the data goes in the database, you retrieve the data, you show it to the user. There's a lot of web apps built like that and there's a lot of value in there too. Think there's still room in that space if I wanted to build another CRM or what have you. But there's this other space, I don't know what else to call it, that yucky stuff that no one wants to deal with. And often we don't think about those opportunities.
Speaker 2:You know, like now that we've seen Litmus and Stripe and some of these other things, we say, Man, that makes so much sense. Like, yeah, you can see how that would be, there would be some hurdles to overcome, but then you can see there's a great business in kind of these unsexy stuff that people just grind through on a, you know, all the time and don't even think about it, just like, I just have to grind through this. It's an unfortunate, unsavory part of my job or whatever. But there's like actually a lot of opportunities there.
Speaker 3:Yes, yeah. No, I think you're absolutely right. And I suppose we didn't think about it, you know, as insightfully as that. When we began, you know, we didn't see this as like a barrier to entry, like, because we're dealing with a really yucky kind of tough problem here. We just I don't know, we just kind of built it because we thought it would be neat, it seemed like something that people were struggling with, and so there was value in solving that.
Speaker 3:But yeah, I mean, are still very, very, very few people, doing email testing. And and and also as part of our business now, we have an API and and lots of integrations, with, with partners who are using our email preview tool within their own applications, you know, which I think just underlines what you were just saying. Know, this is a tough problem to solve, and that technology is hard to build. And so, you know, when other people there's obviously lots of other people that need an email preview feature as part of their app. They don't want to go build that whole thing themselves.
Speaker 3:And so they're very, very happy to come to us. So that's a decent chunk of our business now is that, people outsourcing that feature to us as Yeah.
Speaker 2:I'm going to have to have you come back for a future episode, because there's a few things that I've thought about that I'd love to talk to you about in the future. One of those is, you know, this idea of building a product with other people. So often we build things as, you know, we try to build things as solo founders, it looks like you've done a good job of teaming up with folks. We're not going to talk about it this time. Other thing I wanted to talk about we're not going to talk about this time, people can expect this in the future, I'll have to get you back, is it looks like you've been able to build a great team as well.
Speaker 2:And I think that could be an interesting subject. What I would like to talk about in the last minutes we have here is I think the marketing. So what have you done to grow this company from a 100 sign up trials on-site v Vista? What what have you tried that's worked? And maybe just give us a sense of, you know, growth.
Speaker 2:Like, how how how does growth happen with the SaaS app? What could people expect?
Speaker 3:Yeah, good question. Gosh, we have tried all all sorts of things. I mean in terms of growth, growth was honestly, it was very slow for the first I mean, we're seven years in now for the first three years or something. If you look at our kind of curve of revenue, it starts off growing very, very slowly for the first two and a half years at least, and then kind of gradually picks up pace. And the last, you know, year or two have been really good for us.
Speaker 3:Can you
Speaker 2:give us a sense of, like, where were you at two and a half years in?
Speaker 3:Where were we at? That's, gosh, that's a great question. I mean well, well under a million a year. I would say probably, you know, dollars $203,100,000 a year, something like that. Like two or three years in, I think.
Speaker 3:Yeah, that kind of region, anyway.
Speaker 2:Okay. And how many active users?
Speaker 3:Yeah. Good question. I guess I should know all these off the top of my head. I mean, I know I can't stuff. Yeah.
Speaker 3:Gosh. I guess I mean, probably in the in the region of I'm gonna get this wrong, actually. Like, 500 or something like that.
Speaker 2:Okay. You
Speaker 3:know, relatively small.
Speaker 2:And and how many users do
Speaker 1:you have now?
Speaker 3:Yeah. I mean, users now, we're we're up to, just over a 100,000, you know, which is
Speaker 2:Woah. Awesome. Wow. Yeah. So a 100 so from so from around let's just say ballpark, 500 users two and a half years in to now seven years in, you're at a 100,000.
Speaker 3:Yes.
Speaker 2:And so, I mean, to me that actually seems like fairly, fast growth. What what was there a big spike at some point? Or was this just kind of gradually adding, you know, a thousand users, a month or something?
Speaker 3:Yeah. No, I would say that there was a there was a spike or what felt like a tipping point. Yeah. Around that kind of three year mark, three, three and a half years in, I guess. Yeah, I mean, it would be great to be able to say, hey, we did this, you know, these two things, and that's how everything, kind of took off.
Speaker 3:There was a whole, there's a whole combination of things, some product, some marketing, that I think taken together, things things kind of started to take off. Mean, we I mean, I go over a few of them, and it's because they all happened around the same time. It is frustrating that I can't point to to one that was great, and maybe there's something else here that actually made no difference at all. We opened an office in The US, so it was around that point that we kind of came to America, came across a pond. And at that time we were still just five people three years in.
Speaker 3:And I was the first to move we're all in The UK, I was the first to move over here to Cambridge. And I think that had an impact. We had a lot of customers in The U. S, and we also had a lot of potential partnerships in The U. S.
Speaker 3:That we were losing out to other competitors, larger companies of ours that were based in America. And, and I think as a as a small kind of underdog, that was also overseas, and our, you know, API agreement was in UK law, actually for for the longest time we were charging people in, in euros, which, now seems crazy. But the time we thought, oh, we won't use pounds because, know, it's only Britain. The Euros means the whole of Europe. I mean, knows the Euro.
Speaker 3:Exactly. Nobody knows the Euro. Nobody knows the Euro unless you're in a country. Use the Euro. Certainly no one in North America knows has any clue what the exchange rate the euro is.
Speaker 3:Certainly, I'm a bit shocked if you ever bought anything online that was priced in euros. That was one of our biggest mistakes, honestly. And actually just that is one thing, honestly, I can point to you and say, when we switched from euros to dollars, basically that same week we saw a shoot, up in sales. That was crazy.
Speaker 2:Is that? Because I mean, would say the same thing. I would say, I mean, Europe is a huge place. There's there must be, you know, thousands and thousands of companies and lots of dollars in play. How come America is still the place where web apps seem to thrive?
Speaker 3:That's a good question. I don't know. I mean, I'm not sure that it's I don't think it's the only place that the web apps thrive. But certainly, I think if you're selling anything online to the English speaking world, you're best off charging in U. S.
Speaker 3:Dollars. I think that's just a given. I think our mistake with the euro is, yeah, Mainland Europe and all these countries are using the euro, but, you know, we're not doing it in their language, So I don't know, was just this weird kind of in between, it was all in English, but it was in a currency that, you know, predominantly non English speaking countries. But no, I mean, do think that, yeah, and certainly I can say from personal experience moving from Manchester and office was in Leeds, just like an hour away, so kind of the North Of England to Cambridge, Massachusetts made a huge difference just in terms of the people you meet and the kind of expectations that people have here was, was really interesting to me. You know, I don't know, kind of goals and their, what they're kind of aiming for is so much bigger here.
Speaker 3:It's crazy, you know. Whereas I think, I don't know, I think it's such a generalization, so unfair, really fair. But you know, I think in Britain at least, people were thinking, the people that I ran into, at least in North Of England, thinking much, much smaller. So it kind of opened my eyes a bit coming over here and, you know, and kind of living that in a way that just reading about, this kind of thing online didn't do.
Speaker 2:Yeah.
Speaker 3:Does that make sense?
Speaker 2:Yeah. Yeah.
Speaker 3:The difference to kind of live it.
Speaker 2:Yeah. So the environment, just being in this environment where, you know, a climate where people I mean, Boston is a pretty entrepreneurial, area. Is it Boston that you're in right now?
Speaker 3:I live in Boston. We're in Cambridge, just across the river.
Speaker 2:Okay.
Speaker 3:That is where our office is.
Speaker 2:Yeah, so that area is quite entrepreneurial. So I can see just sometimes being in that environment where everyone's thinking big and everyone's kind of going after, you know, something bigger than just a local market. That can make a huge difference.
Speaker 3:Yeah, yeah, I think it, I mean, I really do think it did for me. Yeah, just, yeah, having that kind of energy around you made so much difference, just at least for me personally. And I think kind of reinvigorated us. Then anyway, we began hiring people over here and Matt moved over here as well. And now most of the team is based in Cambridge.
Speaker 3:But yes, that definitely made a difference having The U. S. Presence and winning some of these partnership deals that I don't think we would have ever really got to if we'd have only ever been in The UK, which is a bit frustrating, suppose. Do you think that as a software company, online, the Internet, doesn't matter where you are, still kind of does. Some things do, if it's a larger deal or I think just, yeah, it still it does still matter where you are, whether that's the kind of public aspects of the company and how much people trust you or want to do business with you, or whether it's even just your own kind of mindset and being around people who are like minded and are kind of working on similar things.
Speaker 3:And there are these, just these hubs of that, you know? And the biggest of those are in America.
Speaker 2:Yeah. Now, how big of a deal were those partnerships in terms of your growth? Was that did that lead to kind of that inflection or tipping point that you had around that time?
Speaker 3:Yes, I think so. Yeah, they definitely helped a lot. I don't think they were as big a deal as we actually thought they were going to be, in all honesty. But I think what they actually helped with, so for example, you know, you can use, you can use, Litmus' preview tools from within, Campaign Monitor, tool. You've heard of it.
Speaker 3:Obviously, you work at a competitor, but, but, you know, you can use lots of tools from within there. And, and their audience is very much like web designers, people that design their own templates and a fairly tech savvy. Mhmm. And that's been an amazing partnership. I mean, we love those guys, love what they're doing, love the integration.
Speaker 3:Everything about that's positive, think, on both sides.
Speaker 2:Mhmm.
Speaker 3:But I think what really helped for us more than just the actual cash that came from campaign monitor to us each month, you know, through that partnership, what helped more was that affiliation with them and that exposure in a marketing sense to their customers, you know. And I think that we have gained a lot of business, through that kind of referrals from them, and and made more money through that, I think, than actually through the direct integration. Does that make sense?
Speaker 2:Yeah. And and how did you pursue that partnership? Did they approach you, or or did you approach them?
Speaker 3:Yes. So with that one, they approached us actually, in the very, very early days. They were one of the first people that approached us about that. It took us a while to actually figure out the details and get that partnership signed up, a year or two later on. But, but yeah, they were one of the first people to reach out to us and say, hey, we'd love to integrate this into our product.
Speaker 3:Which was actually, you know, at that time we were getting a few inquiries like that, from email service providers, and that was a side of the business that we hadn't ourselves considered, you know, this kind of integrations side of things that turned out to be, you know, a great channel for us.
Speaker 2:Yeah, yeah. And what else? What else did you think that you've done that has worked for you in terms of because the biggest problem a lot of people have is just getting people to know, first of all, know about your company and your product and then getting them to care. So what have you done, do you think, in that respect? Getting people to just even know who you are?
Speaker 3:Yeah, I mean, in the earlier days, I think one of the things that set us apart was the design of the software. I don't know how, you know, replicable this is, for other people listening here, but, at that time, you know, few sites, know, sites, trying to think of some of names out, but like CSS Beauty. There were like a handful of these kind of showcase sites that would, you know, pick up on cool new CSS design. This is around the time, I guess, or a little bit after the whole switch from tables to CSS. And, and obviously being a tool for designers, a big, big, big, big source of traffic for us was when we would get featured on these sites.
Speaker 3:And so actually just, you know, trying to build a we got featured a lot when we first launched the site vistex, had quite a unique design with this fruit as part of it then. And then we got featured quite a bit again when we when we relaunched as litmus and the redesign there. So that definitely helped a lot to get the word out around our target audience. It's been featured on those slides. I mean, honestly, I knew a fair few people in the industry through doing the freelance work for a while, So getting them to, to kind of share it, and this is the whole blogging things, you know, kind of bigger than that.
Speaker 3:But, having people write reviews of us and share their thoughts on their blogs and that kind of thing in that industry that was all fairly close knit, and I guess still is. That was definitely really helpful. I mean, maybe it sounds obvious.
Speaker 2:And and maybe give us a sense of scale, like, when when you convince some people to write blog posts about you. How many times did you do that? Five times? 10 times? 20 times?
Speaker 2:Like, what kind of scale are we talking about?
Speaker 3:Yeah, that's a good question. Yeah, mean, I guess a few dozen times, you know, that would be that we get written up, you know, maybe a couple of months or something like that. Uh-huh. You know, reaching out to people or I mean, what we like to do as well is we would these little tricks that we try to suppose, but we would every single time before we launched any kind of new feature, we would, make that available to a handful of people. You know, we'd email out directly to, to people that we wanted to to write about us and say, hey, we worked on this really cool thing.
Speaker 3:I'd love to get your feedback on it, like, before we launch. Do you wanna, you know, use this code or this link or whatever? Go go try it out. And then they will be kind of chuffed about that, and they would want to, you know, write up a little post because they want a few people to go to see this like ahead of time and That's, that kind of that definitely worked well for us to kind of give them something first.
Speaker 2:That's a good trick, giving them something exclusive. Here's a little preview just for you, and, because people like that, and then they want to share that, that they've, you know, they've got this exclusive look at something new.
Speaker 3:Yes. Yeah. Absolutely. Yeah. Yeah.
Speaker 3:Definitely. Trying to think what else we did. We once, we it was at one of those future of, web apps conferences. I think this must have been the year before I spoke there. The one that I spoke at was the web design one, and maybe this is the future web apps before that.
Speaker 3:But it's a big, big conference in Britain, and it was about 1,000 people there or something like that. And we wrote a script that would from there like conference social networking site, it got all of the websites of the attendees or the domains of them. And then we wrote, a thing which would go and test their web page across all the different browsers that we supported, and then it would take a screenshot, obviously, of all of them. And, and then we turn that screenshot into a business card using, Moo, if you use Moo for that business card printing. Yeah.
Speaker 3:And so what we ended up with was this enormous, enormous number of business cards. And on one side, was a screenshot of their website, and on the back, was a little blurb about Litmus and a link to go view the browser test results that we'd done of their site. And then we didn't actually pay the conference anything. We weren't a kind of sponsor or anything like that. Mhmm.
Speaker 3:I just went there, got a table, put the table in the middle of the, entrance and laid out all these cards across the table. So as you came into the the the hall, you had to walk by this, this table that had all these little pictures on it, and you kind look at it. Oh, hang on. And it added me a little sign or something, and, and you realize, oh, these old people's websites. Oh, wow.
Speaker 3:That's my website. You know? And then you, you grab the card and you look at the results, and at least we, we got quite a few sign ups for that.
Speaker 2:You that I love that. I love that idea. Now I think this is where we're we're gonna close off because this kind of brings up something I wanted to talk about which is you a lot of individuals, product people have side projects. Litmus is a company that has side projects. You guys launched even this example you just gave, that that was an interesting side project.
Speaker 2:So can you tell me, like you said that one actually converted fairly well?
Speaker 3:Yes. Yeah, no, that was good. Yeah, that worked very well. Yeah.
Speaker 2:And maybe talk about some other side projects you've tried. What's worked and what hasn't in terms of getting people to care about litmus?
Speaker 3:Yeah. Yeah, the half year, I mean, I really like that way of putting it, you know, the company has five projects. I think that's totally true. Yeah, we have tried all sorts of kind of separate things. Let's see.
Speaker 3:Lots have worked, lots have not worked. We tried a couple of different, community things aside projects. So we had a site called Doctype. Mhmm. What's on top of an HTML page?
Speaker 3:And that was gonna be a community for web designers. Well, it was. And we set that up. It was around the time that Stack Overflow had launched. And we loved that style.
Speaker 3:Mhmm. But this is before Stack Exchange or any, you know, even the paid version of that. You couldn't use their software at all. Mhmm. And so we kind of built our own that was, I guess, model on their ideals, but not copying them
Speaker 2:Yeah.
Speaker 3:Design wise at all. And and we launched DocType, and we launched that to our list of web folks that we had at Litmus. But we did it as a completely separate thing, had a little Litmus logo off to the side. And that was good. I think it was a great community.
Speaker 3:We had some amazing people on there, especially the top contributors. Ultimately, think as a project to get people to sign up for Litmus, it was not great. And we did end up shutting it down, sadly, few months back. We shut it down. We kept all the content, but it's all just kind of static read only.
Speaker 3:So, you know, if people need the answers to those questions, it's all still indexed, but it was just the community is no longer there. I think the problem there for us was that it became more of a discussion forum for web design people as opposed to email marketing people Mhmm. Which is absolutely fine. That's just not really our core audience anymore. You know, I think, as I say, are better if you just wanna do browser testing, there are better products out there to do browser testing.
Speaker 3:And so, you know, we we really need to reach email folks rather than web design folks these days. Mhmm. And so it wasn't really successfully doing that. Wasn't converting people as well as it could. So, you know, we have to kind of focus where we can.
Speaker 3:And we shut that down.
Speaker 2:Was there another project that you felt like was particularly effective in kind of feeding a funnel into Lentmiss?
Speaker 3:Yeah. Yeah, I'm trying to think. Mean, there's there's been a few. Something that we launched years and years ago, actually now, was a tool called Fingerprint.
Speaker 2:Mhmm.
Speaker 3:Which was a way of letting you see what email clients people on your mailing list were using. So you embedded this little bit of HTML code, and then you sent it out to you sent out your newsletter as normal to your list, and then we would give you charts saying, you know, x percent of people using Apple Mail, x percent using Outlook, all that kind of thing. And actually at the time, this is fairly common now, or it's becoming more common as a tool as part of other email marketing platforms. By the time, nobody's actually done that, before. Yeah.
Speaker 3:And, and so that was fairly unique. And so what we would do, we we put, our own we would aggregate all the stats for people that had used this tool and put them up there as charts. And that was, like, the only source of, of reliable information for which email clients were popular. And so that got tons of traffic, and actually it still does. We we redirect it.
Speaker 3:People still hit the old URL. And that worked really, really well. And that was so that was its own product. You could pay for these tracking codes. The stats, of course, and the content on there were free.
Speaker 3:But that was really good. And that's obviously very targeted to, you know, if you care about which email clients people on your list are using, then you're gonna care about how your email looks across those different email clients. That felt like a much better, you know, lead in to to the core Litmus service. And what we eventually ended up doing is folding Fingerprint into Litmus, and now we have this email analytics tool, which is part of Litmus, that you get on on certain levels of price plan, which does the same thing and and much more, and that's the analytics part that I touched on at the beginning. Mhmm.
Speaker 3:The fingerprint is no longer in that sense. But that was a great, a very, very successful I mean, so successful it became part of the core product. So that's a nice example of something that worked well.
Speaker 2:Yeah. You know, I think what's great that I've been able to like Litmus, you do try a lot of things. There's these side And I think it's great that you can start something and try it out. And then if it doesn't work anymore, to either stop doing that or if it's successful, even say, Well, why don't we just put this into the product? That's fine too.
Speaker 2:I just love that idea of a company that is actively building side projects all the time.
Speaker 3:Yeah. Yeah. I mean, it's something that we we actually what we did, I guess it's a few months ago now, we did like a like a hack week here at Litmus where everybody, dropped all their normal work. And each engineer built their own side project that had to be something related to Litmus. They did that in a week.
Speaker 3:And the goal of that, what they absolutely required that at the end of the week by Friday at like 3PM, it had to have been launched into production and announced on our blog. And so what that did is I think we have four or five projects came out of that, all like kind of five projects. There was an email client stats one, there was like an interactive page testing one. There was a Windows desktop application that let you use some of the Letmys' features as a desktop app. There's a whole host of stuff.
Speaker 3:And each of those then we've kind of tracked which one is getting decent traffic and, what people are using. So eventually, you know, the best of those will be folded in and start to let this again. And, and the ones that are less popular, you know, we may have to discontinue eventually. That was a nice way to, within a week, get, you know, five more of these five projects up and actually launched.
Speaker 2:Yeah, man. Paul, I'm going to let you go now, but first you have to promise me that you're going to come back sometime in the future so we can finish this up and talk about I think I've got a whole other show just with some of the things we didn't talk about.
Speaker 3:Sure. No, I would love to, Justin. That'd be great.
Speaker 2:Perfect. Well, where can people find you online?
Speaker 3:Yeah, I mean, I'm on Twitter as unsalted.
Speaker 2:Perfect. And you can see litmus at litmus.com. And, you know, certainly go and check them out there. Thanks so much for being on the show.
Speaker 3:Yeah. No. It's been it's been fantastic. Thanks, Justin. It was a lot of fun.
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