My rollercoaster journey from $0 to $1k/mo, all the way to $30k/mo, and then failure (back to $0/mo)

[miles77]

In 2020, I was laid off from my bartender job during the Covid lockdown.

Suddenly I had a lot of time on my hands, and so I decided to code up a SaaS.

My product was Zlappo, a Twitter growth tool offering a suite of tools for power users, including advanced analytics, viral tweet repository, thread previews, auto-retweets, auto-plugs, etc.

I didn't have an email list or a Twitter following when I launched, so I had to get creative with how I got the initial word out and signed up my first 10 users.

It was a grind starting from absolute scratch.

What worked for me ($0-$1k/mo a.k.a. initial traction)​

A. TWITTER GUERRILLA MARKETING

Since my product was a Twitter-specific tool, it was only natural that I started marketing on Twitter.

I employed 3 successful tactics that worked to get my first 10 paying customers:

1. Sending DMs - I searched creator/marketing Lists and just directly sent DMs to users, telling them about how my product can help them to up their Twitter game. In order to make them feel special, I created a personalized link with a personalized promo code for them to get a discount upon signing up. This boosted my response rate. I did this for hours every day until I got rate-limited for spamming, then rinse and repeat for the next day.
2. Using Twitter search - One of the defining features of my product was the ability to schedule threads, which back in 2020 was a feature gap in most leading competitors. So I bookmarked a Twitter search link for the keywords "schedule threads," and every morning I responded to these tweets and plugged my product. This got visits to my site immediately, as I was helping them out directly with a problem that they had.
3. Tweet source label - Every tweet posted by my app borne my app name (it said "Zlappo.com") on the bottom-right of every tweet. If you're a Twitter user, you're probably familiar with the "Twitter for iPhone" source label that tweets used to have -- until Elon ruined it (more on this guy later...).

And just like that, I've seeded my app with its initial users who are using my app, paying me monthly, and offering their feedback freely and enthusiastically.

Notice how I never did any content creation, wrote threads, did profile optimization, etc.

B. REALLY FINE-TUNING THE PRODUCT

Once I got my first few initial users, I think the most important thing that really accelerated my path to $1k MRR, as a solo founder, was to focus 80-90% of my time/effort on getting the product right, transforming a wonky MVP to a passable/good-enough product that can compete in the marketplace.

Here are some specific things I did:

1. I filled in feature gaps so that my product is state-of-the-art for my product category, using customer feedback as my guide -- I worked on the most-requested features first.
2. I fixed every bug reported, even if I considered it edge-case (nothing is "edge-case" if a customer encountered it).
3. I sped up the site as much as I could, rewriting/refactoring tons of my code to utilize more efficient database queries for instance, adding more RAM/processing power to my server, caching generously, enabling gzip, minification, etc. etc.
4. I continually updated the UI/UX if I had a customer emailing me about something that was unintuitive or confusing.

In my opinion, having the product on point was my #1 way of user retention and also to encourage users to proudly share my app with their friends.

What worked for me ($1k-$30k/mo a.k.a. scaling)​

C. AFFILIATE PROGRAM

Once I had a small base of die-hard users, I created a generous affiliate program:

• I paid a fat 50% recurring monthly commission to incentivize my users to share and promote my product.
• I also provided double-sided incentive, in that every referred user gets 60-day free trial right off the bat (instead of the usual 30 days).

Soon enough there were users who tweeted constantly, wrote blog reviews, created YouTube reviews, and even ran paid ads to drive traffic to my site.

I assisted them by providing graphics, screenshots, copy, and also creating a simple affiliate dashboard where they can view their affiliate stats and redeem their commissions at any time using a one-click interface.

D. APPSUMO LIFETIME DEALS

I also ran an AppSumo Marketplace deal which eventually accounted for 50%-80% of my monthly revenue, depending on the month.

I could obviously sell lifetime deals on my own (which I did), but selling on AppSumo had several advantages:

1. It legitimized my nascent app.
2. It helped me garner 5-star reviews/testimonials.
3. It got affiliates to link back to my site and thus drive traffic.
4. It also increased the visibility for my brand by running paid ads on my behalf.
5. It jumpstarted word of mouth like crazy, as I later discovered "Zlappo" was mentioned so often within these lifetime deal groups on Facebook.
6. Don't forget... the revenue! I would have never hit $30k/mo without the boost that AppSumo gave my deal during times like AppSumo week and Black Friday sales.

Absolutely worth it, 10/10.

E. EMAIL MARKETING

As my user base grew into the thousands, email marketing turned out to be massively valuable.

I now had thousands of email addresses to leverage on, to whom I could blast offers or update emails.

I wrote a custom script to send emails to my user base who have trialed but not upgraded, or churned, and I periodically send out offers, discounts, product updates, etc. to get them to re-engage with my product.

And I regained many customers this way.

My downfall ($30k/mo to $0)​

My business had been humming along fine for ~3 years... until late-March this year, when Elon Musk announced that Twitter API access would no longer be free but will cost $42,000/mo.

Well shit, my entire business was built on top of Twitter, and there was no way I could pay $42k/mo.

That's a brand-new Tesla every single month!

So with a heavy heart, and after many sleepless nights, I decided that I had to shut down Zlappo, or at least deprecate like 80% of my features, which angered a lot of users and led to massive churn (the churn is still going on as we speak).

My 3-year entrepreneurship journey had ended in failure, and to say I was sad was a massive understatement.

But god damn what a ride it was.

Lessons learned​

The most important lesson I learned was to never hitch my star on another company's wagon.

Never have all your eggs in one basket, never have a single point of failure.

If I had diversified early (and integrated Facebook, Instagram, Google My Business, LinkedIn, TikTok, etc. into my product), I might have been able to attract a broad-enough customer base who wouldn't care too much if Twitter was deprecated.

Platform risk is very real, and, although it was a risk I undertook, it was quite unexpected that Elon Musk would buy Twitter, let alone cut off API access.

But it happened, and it can't unhappen, so I saw only 3 ways forward for me:

1. Build my next business
2. Give up and get a job for life
3. Just pack it in, call it a good life, and take a long walk off a short pier

I'm very far from 3, I'd rather die than to settle for 2, so realistically 1 is my only option.

If you want to follow my journey as a 3rd-time founder, I'm currently building Zylvie.

If you're a creator of any sort who sells stuff online, I invite you to please come along for the ride.

Otherwise, I'm open for questions if anyone wants to know anything in particular!

 

[miles77]

Hey @sen_, not sure why it wouldn't let me comment, but here's the reply I typed:

There were plenty of mistakes that I made, but here were the main ones:

1. The lack of product-led growth/baked-in virality made my marketing efforts more difficult that it had to be.​

I underestimated how apps don't just market themselves, even with solid word-of-mouth marketing from happy users. This literally doubled my working hours (and slowed my progress down x2) when it could have been automated by software from the very start.

IMO solo founders have NO BUSINESS working on ideas without a baked-in viral component. People literally give away 50% equity to marketing co-founders because they never started with virality in mind. It's an enormous strategic error most founders are too proud to admit.

What I mean by "baked-in virality" is when a product is front-facing and the user has to share their personalized page in order to get value out of the product. Think of Jotform, Tally, Linktree, OnlyFans, Gumroad, etc., where they share a personalized URL hosted on the platform's domain, and the platform gets to plaster a "Powered by" link at the bottom of that page, essentially putting your users to work by inadvertently marketing your platform whenever they use your platform.

2. I had low self-confidence and priced my plans too low.​

My pricing started at $9.99/mo, simply because my closest competitor started at $14/mo, and I didn't think my product was better. In retrospect, it was an unfounded fear. Many users switched over from my competitor to my product, because my product was faster and had a much cleaner UI.

On hingsight, I should have priced it starting at $19.99/mo, and go up from there. It was such a waste to have a user go through the entire gauntlet of my funnel (discovering my product, reading my landing page, become convinced enough to sign up, actually use the product, and actually upgrade to a paid plan) only to have it add less than $10 to my MRR.

3. When I ran lifetime deals, I made a mistake in mis-structuring my lifetime plans.​

I learned very quickly that lifetime plans must be done right to be profitable and sustainable.

Now, my principle is this:

• Cheap
• Pay once
• All future updates

PICK TWO.

I'm willing to provide all future updates and capture upfront your entire LTV if you pay a reasonable premium to justify it. I'm also willing to give you cheap limited access for a one-time payment, so long as you pay for optional upgrades in the future.

What I won't do is to offer heavily-discounted one-time payments for all features, present and future. That's just giving the store away, and I won't do that... anymore. Also, no more "unlimited" anything. "Unlimited" anything under any plan is a terrible, terrible idea.

-

Strategically, these were the main mistakes that I made.

With Zylvie, I've rectified the first one, since my product needs to be shared in order to be used. I host online stores for small creators to sell their products/IP, and they need to share their online stores to their audience in order to get sales. Win-win.

And down the line, I'll also make sure to price my monthly and lifetime plans a lot more sensibly and with confidence.

Hope this answers your question!

 

[sen_]

@miles77 NIce! My account is new, so that may be why.

Super response here! Really honest and solid insights. Thanks for sharing.

 

[vikimahauty]

@miles77 I am baking in some lifetime opportunities for people that book at a clients RV park, but they are limited (first 100 to book 12+ days or more) and only provide a lifetime discount.

 

[sen_]

@miles77 Hang in there! Best of everything for your next build.

Hey, apart from the platform risk, what lesson's learned and take-aways can you apply to the Zylvie? Bet there's more than one.

 

[saralynn1]

@sen_

transforming a wonky MVP to a passable/good-enough product that can compete in the marketplace.

This is the most important bit for me. I'm a product manager its kind of my bread and butter.

How you go about product development is super important. If you're just making assumptions and building what you think your users want instead of talking to them and building what they desperately need then your product will still be wonky no matter how much work you do.

Helps if you have other more established products to learn from, sounds like that was the case here. Reaching 'feature-parity' can be tough and maybe not always relevant if your product is aimed at a more niche audience.

 

[miles77]

@saralynn1 Yup.

If there's one thing I know after running multiple businesses, is to never "guess" what features you need to build.

You should primarily build features based on user request, and even then only the most-requested features.

 

[saralynn1]

@miles77 Exactly. When and who you listen to is really important. If you listen to every bit of feedback you get you'll end up with multiple conflicting priorities.

The 'art' is controlling this so that it benefits the most people while still sticking true to your vision for your product.

 

[samjazz]

@miles77 But I just watched a YT video of an AI SaaS everyone and their mom is gonna want

 

[hjjwosj0]

@miles77 Thanks for this post. I also got the expensive lesson of platform risk. Never will get caught again.

Diversification and owning the audience is something that should be tell to everyone starting the journey.

 

[miles77]

@hjjwosj0

I also got the expensive lesson of platform risk. Never will get caught again.

What happened, if I may ask?

And yes, owning the audience is so important.

This is why I don't like social logins and such, my apps all require email + verification.

That way I can send my audience offers and updates directly without going through an intermediary who can deplatform me for no reason.

 

[catholic348]

@miles77 If you build an app you don't have a choice. You need to provide apple login.

 

[miles77]

@catholic348 Mobile app, sure.

Web app, not really.

 

[texasmustang]

@miles77 it's really sad to see what Twitter did with the API, many products got ripped off

I saw many using zlappo, it's popular & got good reviews on appsumo.

Why didn't you sell it to some big players? (like tweethunter/blackmagic)

How good is appsumo in terms of revenue? As a seller, I will not like the 2-month refund strategy but it's good for customers. What's your experience with this - are customers abusing this term?

 

[miles77]

@texasmustang Yes, Zlappo at its peak was probably Top 3 in the Twitter tool category (TweetHunter, Hypefury, Zlappo).

I did consider selling it, but I decided to parlay it into a "bring your own API key" model, and I managed to retain some of my customers.

I was in negotiations with Hypefury and TweetHunter to buy me out, but ultimately they decided not to (they themselves had to suddenly accommodate a $42k/mo expense too).

AppSumo is great for revenue.

Think about it, it's passive income and free marketing. The 2-month refund strategy is a great conversion booster, and in my experience, if your product is halfway good, it will not be abused.

You have to understand that a lot of customers buy your AppSumo deal "just in case," not everyone redeems it, and not everyone who redeems it actually uses it, and not everyone who uses it actually still uses it in 6 months.

Use churn is very high in AppSumo users, and that's quite natural. So you won't have to worry about supporting a large number of non-paying customers, because it won't happen.

If you read AppSumo reviews on sites like TrustPilot, etc., you'll also realize that AppSumo puts up a good fight against users who ask for refunds excessively. So AppSumo is on your side when it comes to retaining revenue.

 

[ersjbmah]

@miles77 I feel sorry for you and all the other small business owners that got reemed by Twitter and Reddit.

Maybe I'm crazy, but I feel like 5-10% revenue is way more sustainable than a flat fee AND probably would make them more money, seeing as more tools like yours would survive.

 

[miles77]

@ersjbmah

I feel like 5-10% revenue is way more sustainable than a flat fee AND probably would make them more money, seeing as more tools like yours would survive.

Yes.

When they dropped the hammer on us, we developers banded together and literally petitioned Elon Musk to implement pay-as-you-go pricing, where they would charge us based on usage.

The big companies will end up paying them way more than $42k/mo, and the smaller apps get to survive.

But no dice, they were adamant, "either pay up or f*ck off" was the message from Elon, there was no room for negotiation whatsoever.

When my API access was cut off (mid-May this year), my inbox blew up with tons of angry emails from angry customers who had no idea was an API was or why I couldn't honor my end of the bargain anymore. They didn't give a f*ck whatever explanation I provided.

They just knew their app ain't working anymore, and they put the blame on me.

Tons of cancellations, tons of chargebacks, tons of angry 1-star reviews.

I underwent a period of depression during that time (which was a particularly-difficult time for me), because these were all hard-won customers, and I wasn't used to disappointing my paying customers at all.

But there was nothing I could do, it's not like I was doing it to them on purpose, and it also threw a wrench into my own personal life, as you can imagine, since my sole income source was suddenly cut off just like that.

Anyway, it's all water under the bridge now, I'm slowly recovering, and I'm already building Zylvie now, which may or may not succeed (let alone reach the heights of my previous business) -- I don't know yet.

But I'll give it my best shot.

 

[nevadabest]

@miles77 Sorry you had to go through this!

I am pretty sure you know Pally. He is still active with a Twitter tool. Regarding his MRR he mentioned, it was enough to cover the 42k.

But yesterday I looked and saw Twitter has now a 5K plan.

Looks like Elon had to pedal back, as not enough could afford the insanity…

 

[miles77]

@nevadabest He offered a $5k/mo plan long after most of us have moved on and lost most of our users.

Like 2 months late.

Plus it's no guarantee that he won't hike the price again or change the terms or cut off API access altogether.

I can't hitch my own future and livelihood to the capricious and unpredictable whims of an eccentric billionaire any longer.

I want to sleep peacefully at night.

 

[nevadabest]

@miles77 Totally can relate. Would not trust the manchild a millimeter.

About a year ago I really considered building a Twitter tool. But with Elon already onboard I got cautious… sometimes it’s good to trust your gut.

I wish you all the best with your new product!