How We Bootstrapped a $1M ARR Email Client
Five years ago, we launched Missive, an innovative but somewhat hard-to-define email client to the world. Fast-forward to last week when we reached US$1M in annual recurring revenue (ARR)!
I believe our journey to get there is fascinating for a couple of reasons:
- We’re self-funded.
- We’re a small team of three co-founders and one employee.
- We built a cloud-based collaborative email client (a.k.a. it’s not easy).
- We never spent a dime on marketing.
- We’re incredibly resilient.
On being self-funded
Missive is bootstrapped, meaning we never took a dime from investors. We funded it with the cash flow of our other business.
One doesn’t start a new email client without some solid finance and runway. The graveyards are full of email-related startups. We knew that.
The long story is I met my co-founders at the coworking space I had opened in Quebec City to meet other like-minded people. They were starting a web development studio and I was learning to code by doing fun/creative little projects and experimenting on different business ideas.
I got one of those ideas after organizing a game jam festival. As an organizer I was designing and printing name badges for all the attendees, judges, sponsors, etc. The process was really painful. I envisioned a Vistaprint-like service for name badges. I started building it alone, then quickly asked my now co-founders to work with me on the project. ConferenceBadge.com launched in 2013 and promptly got to profitability.
A year and a half in, it generated enough revenue for us to go full-time on the product. Having said that, we were not excited by the idea of working exclusively on an online name badge service. We brainstormed on problems we encountered while building Conference Badge and Etienne got the idea of building a collaborative email draft editor to ease support. This idea quickly morphed into a full-fledged collaborative email client; Missive was born.
It took one year to build the prototype, one more year to start charging for it, one more year to have a few real customers, one more year to get to profitability, and finally one more year to get to $1M ARR.
We could never have afforded to work on Missive for so long without CB paying the bills. Life is like a role-playing game; you build up.
PODCAST 🎙 Listen to my interview with Courtland Allen of IndieHackers (2017) where we discuss the early days of Conference Badge and Missive.
On being a small team
In the past five years, the team never grew past four full-time members.
Here are the roles we play:
|Me:||Feature development, bug fix, management & customer support|
|Etienne:||Front-end chief, bug fix, feature development & customer support|
|Rafael:||Back-end chief, bug fix, code review & customer support|
|Luis:||Marketing & customer success|
Etienne and I are fluent in 90% of the codebase and mainly focus on feature development.
Rafael, on the other hand, is the master of all code. He reviews every line that gets committed to the different projects. He makes sure the servers are healthy and that the databases survive the billions of queries they run per day.
Etienne uses his infinite web technology knowledge to offer a fast and secure HTML/JS experience on all platforms (Electron, Cordova, Web).
Luis designed the public website, maintains its content, writes blog posts and does demo sessions with customers.
I personally manage salaries, expenses, office, accounting, and long-term financial planning. These tasks usually take a small percentage of my time.
On most days, customer support represents ~33% of our working hours. This has not changed despite our growth. We spend a lot of time making the app easier to use and improve the documentation to decrease requests per customer.
We are quite proud of the level of support we offer; our customers are often amazed at the speed at which we can help and solve their problems, especially customers coming from competitor products.
We believe we can grow by another ~100% with only the four of us. Being small allows us to be flexible on product decisions. We are first and foremost product builders, not managers, and we want to stay that way for as long as possible.
On building a cloud-based collaborative email application
One reason it took so long for us to get to profitability, at least in our experience, compared to our other product, is the complexity of the space we chose to play in.
Building a collaborative email client is challenging and rewarding, but the list of things you need to tackle before you have a minimally usable product is infinite.
You need to balance the time invested in getting on par with existing products and innovative work. It is no surprise most of our competitors have raised tens to hundreds of millions of dollars; the space is hard.
Up to this point, most of our architectural decisions have weathered the test of time and growth.
To this day, I believe this decision is the main reason we can compete with massively funded startups. We refused three acquisition offers from unicorn startups; they were all interested in our skills and experience shipping one codebase on all platforms
PODCAST 🎙 Listen to Etienne’s interview with Wes Bos and Scott Tolinski from Syntax (2019) where they discuss the pros and cons of building desktop and mobile apps with a single codebase.
On finding customers
Our initial users were mostly early tech-adopters looking for a new innovative cross-platform email client. We found those by posting on different tech discovery communities like ProductHunt. Those early and mostly solo users wanted a different set of features than what would ultimately become our real paid customers: small and midsize businesses.
This tricked us for a while in a race to build more and more features not so consistent with our vision. For instance, we started offering read tracking as it was one of the most requested features of early adopters. Many users upgraded to a paid plan for this alone; they weren’t interested in any of the collaborative features of the app. Those soloish users were churning at a far greater rate than real teams and they were requiring far more customer support/server resources per dollar earned. At some point, this reality sank in and we decided to focus entirely on teams. We ditched read tracking as it was a magnet for such misaligned customers. Our churn rate plummeted. The hard-learned lesson: have the courage to say no.
We never spent a dime on marketing; the cost of customer acquisition in our space is crazy high. We can’t compete with subsidized VC-backed companies.
We charge less than our competitors. They have higher prices, usually negotiable for a one-year agreement. After their deal expires, the price increases significantly; this is when their customers look for an alternative and find us. We let VC-backed startups build the market with big advertising spending, and we wait patiently with a better and more affordable product.
On being resilient
We are conservative in most of our decisions. To keep innovating as a small team for the long term, we are frugal with our time and money.
We’ve always made decisions to ensure we’d still be able to allocate 66% of our time to work on the product.
Our workdays are not much different from what they were five years ago.
We don’t set goals or long-term road maps. Daily, we look at what seems to be a good use of our time, and we do it, period. Long-term planning is tiresome and always looks pretty useless for a team like us.
What’s the takeaway from our last five years at Missive? Resilience, our capacity to rebound from whatever hardship we face, to look at our work with fresh eyes, and stay motivated.
Our story is not one of risk taking, it’s one of consistent work. It’s my belief that the compounding effect of our work will rival the one from VC-backed startups shooting in all directions. Be resilient.