16 January 2007
Built a web app? I need you for an article on TechCrunch.
I’m going to be writing a five-part series for TechCrunch called “Web Apps 101″.
I’ve got lots to share, based on our experience building DropSend and Amigo. However, I’d be a fool if I thought I knew it all.
This is an invitation!
If you’ve built (or are in the process of building) a web app, I’d like to hear from you. Please answer the following questions (by commenting on this post):
- How much did it cost to build your app?
- What percentage was spent on each area (Development, Design, Marketing, Legal, etc)?
- Did you bootstrap or raise funding?
- Are you glad you funded it the way you did, or would you do it differently next time? Why?
- What are some lessons you’ve learned that you would like to share?
- Are you profitable? If so, how many months did it take to get there?
- How many hours per week do you spend on tech support? Who takes care of it?
I look forward to hearing from you!
Please remember that anything you write here might end up on TechCrunch, so please double-check your comment before submitting it :)
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Ian Landsman
# January 16, 2007 - 6:59 pm
Thanks for the opportunity to hitch onto your coattail :-)
Note, I’m not sure if my application fully qualifies since it’s web based, but not hosted.
My App is a help desk software application called HelpSpot (http://www.userscape.com/products/helpspot/).
1. About $10,000 with hardware and professional services fees.
2. These are approximate but it was about 40% on computer hardware, 20% legal fees, 10% accounting fees, 20% design, and 10% miscellaneous including some small advertisements.
3. Bootstrapped
4. No way would I do it differently. It’s definitely the best decision I made. My company was profitable from the first month on.
5. I share a bunch of them on my blog, it’s hard to pull out just a few. I’ve always focused on being successful not necessarily being “famous”, acquired, etc. So my tips tend to come from that perspective.
For me I wanted to pick a market where I wasn’t inventing something brand new. I wanted to take on an area where the existing options were old, not sexy, and improve on them. It’s worked out great and I would recommend any first time entrepreneur to start out that way.
I’d also recommend blogging from the first day you start development. Blog the entire thing, don’t be secretive about it. Nobody really wants to copy you that bad and they certainly won’t put the heart into it that you will. By doing so I was able to basically spend $0 on advertising and be profitable in literally my first day of sales.
6. Yes, 1 month post launch to get there.
7. I spend about 15-20 hours a week on support. I do most of the support, though the one other member of the company also does some.
Thanks again for the opportunity. Let me know if you’d like more details.
Great blog BTW, keep it up.
Peter Cooper
# January 16, 2007 - 7:08 pm
You might not want to use this as it’s rather dull, but this is the skinny on my Feed Digest (.com) which launched in July 2005 (although it evolved from something I first launched in early 2004). I must admit I am mostly writing this for my own benefit in actually noting this stuff down.
1. $500-$800 per month in hosting, server certificates, etc. Since the official launch, probably about $10000 spent in total, on mostly regular operational expenses. My time, on the other hand, would probably contribute about $50-80k in otherwise lost consulting revenue.
2. 98% of the money has been spent on servers. 2% on miscellaneous expenses such as company formation. I do the accounts and so forth (though this will change next year!).
3. Bootstrapped development and then raised funding to provide a safety cushion for after launch. It was (financially) unnecessary in the end, but through it I got some useful contacts as well as some extra drive inspiration for pushing the business further so the investors will get some love later on.
4. Next time I’d probably take a lot more risks with the money, possibly even throwing a lot of my own money into it, but at the time I didn’t have much (still don’t really!).
5. a) Try to get other people involved. Doing it on your own gives you a lot of control, but it makes things take so long. This is what I am just figuring out. b) Your users are more interested than you think. They are happy to contribute their ideas, and even do some work! Don’t feel pressured to accept these offers though. c) Get the pricing structure right from DAY ONE. It’s VERY HARD to fix it later (as I am now finding). Make sure that with a reasonable amount of users paying a reasonable amount of cash.. you can more than cover all of the main things you want to do. If there was one thing I’d get across in your article, it’s getting the pricing right. d) Anticipate your service being 10 times more popular than you initially expect, and architect for that.
6. It was profitable from the end of the first month. It turned out people actually wanted to pay and get paid accounts straight away, which was a surprise (to this pessimist). It is still low revenue in the grand scheme of things though, so it’s not possible to hire other people yet.. but this is due to a stupid pricing structure which is about 10 times lower than it should have been (even when asking customers about it).. it’s being resolved as I speak!
7. A few hours. All me. For approximately 1000 paid subscribers, the amount of support mail is curiously low, especially considering the system serves up 200 million dynamic requests for users each month.
jon
# January 16, 2007 - 7:09 pm
Hi,
A friend of mine just linked me to this blog entry and suggested a made a submission. Regardless of weather you choose this app or not i’d love to hear what you think of the idea.
What is send2 all about?
Send2 in a nut shell is essentially a free sms text message website with a whole host of unique features that makes it stand out from it’s limited competition.
Let me get straight to the hard sale. Send2 has an online calendar application built into it that lets it’s users add events, reminders and alarms to an online interface that sends the user a text message at a set time.
Let’s say Amy is running low on milk. She knows she is going into town tomorrow but she wants to make sure she doesn’t forget to get some at the store. She can go to the send2 application and add a reminder at a time she is going to be in town tomorrow to get some milk.
Let’s say George knows Amy is going to forget the milk when she goes into town tomorrow. George can login to the send2 application and add a reminder to the calendar that sends a message to Amy so she doesn’t forget the milk.
Along side the calendar application is a TV listings section that lets users browse through TV listings for the coming weeks and set reminders for shows that they don’t want to miss. They can easily subscribe to a TV show and every time that show comes on they’ll get a text a few minutes before reminding them that the show is on.
Something that the slightly more geeky user base will enjoy is the RSS reader feature of the website. Users can add RSS feeds to the application and then every time that feed is updated they receive a text message letting them know. This is a great way to keep up to date with blogs and other such things. Most email services offer RSS feeds so it will be quite easy for users to setup the system so that every time they get an email, they get a text message letting them know.
The system is also totally scalable. It’s incredibly easily to add new features that people can subscribe to.
Obviously the site also lets you send free text messages to your friends and family.
Drop me an email if you’d like to talk about the project further.
Regards,
Jon Wheatley
Peter Cooper
# January 16, 2007 - 7:19 pm
I missed an important point. e) Be flexible. Six months after you launch you’re going to be hitting yourself on the head when some new development comes along or the industry changes a little, and you’re not agile enough to go with the flow. Being able to change with circumstances is important in all businesses, but in an industry that changes every year, you need to anticipate change constantly.
Hal!
# January 16, 2007 - 8:04 pm
1. $4000 – $5000
2. Partially in legal, the rest in Development. I did everything else. :)
3. Bootstrap baby!
4. Having funded it myself, thankfully the only person I have to wrestle with on big decisions is myself. Depending on the next project, I would bring in an investor or do it myself again. Having someone to share ideas with is good, but I also don’t need another person calling me at 1am bugging me about stuff.
5. Biggest lesson is really understand where the other person you are involving in your project is in their life. I ran through a few developers, mostly because of their personal lives or personal goals got in the way of getting my project done. The first developer wanted to run a company, and kept on poking his head into the things that I had a handle on. He would not focus on the technical aspect of the project. The next developer, I wasted 3 months of time and money because he didn’t tell me he was going through a divorce. I am a compassionate guy, but after 3 months of “dev time”, and no results, I had to move on. The last guy, which has turned out to be great, was about 2 months from having his second child when I first met him. Gah! More drama. Luckily, there has been little derailment from the timelines we set. So the biggest thing I learned, find out where the other people you are involving in your project are in their lives.
6. Profitability and success, for my project, are relative. Right now it is not going to take much to recoup the cost. After that, I have to cover monthly costs of hosting (which is minimal). I am hoping to start to see a profit within a year of launching.
7. No tech support yet, but I will be handling it. Hard to estimate how much time it will eat up though.
Looking forward to you articles.
Stuart Grimshaw
# January 16, 2007 - 10:24 pm
Hi Ryan,
Here are the answers to your questions. They are about an as yet unreleased web app that I’m writing in my spare time, it’s a bit of an old school “built in the garage” approach, but with the nature of web apps I think that can work.
1. How much did it cost to build your app?
Nothing, except my time. I’m a mild mannered developer by day, so I’m using my own skills and experience to build it. I’m motivated by the fact we need some extra cash, and I don’t fancy working behind a bar.
2. What percentage was spent on each area (Development, Design, Marketing, Legal, etc)?
Well, seeing as my time is the only expense, I’d say that so far it’s been shared out 60% design & development, 30% research & financial planning (your articles on Barenakedapp really helped there) and the rest on marketing & chatting to friends about my ideas.
3. Did you bootstrap or raise funding?
Bootstrap all the way baby. I did approach an investor initially to help pay for some design work, but I quickly realised that the simplicity of the app really didn’t require it.
4. Are you glad you funded it the way you did, or would you do it differently next time? Why?
I’ve already started to think about my next application, and it will be developed in exactly the same way as far as possible, hopefully more smoothly with the lessons learned below.
5. What are some lessons you’ve learned that you would like to share?
If, like me, you’re a techie and not really all that business minded, talk about your idea with someone you trust, my potential investor has been really helpful to bounce ideas off.
Don’t cut corners on the research & design, it was this that saved me the expense of hiring a designer.
Writing copy is hard.
6. Are you profitable? If so, how many months did it take to get there?
The product isn’t launched yet, but my projections say that it will turn a profit within the first few months of being launched, mainly due to the fact that I have no debt on the project.
7. How many hours per week do you spend on tech support? Who takes care of it?
Again, the product isn’t launched yet so I spend no time on
Matt Massey
# January 17, 2007 - 3:23 am
These are the details on a web application called ConferencePath. The site “officially” launched in August of 2006, but has been under development forthe past 3 years. This is actually version 2 of the site.
1. $650 per month in hosting, server certificates, etc. There are about 600 hours of development time in this version with an additional 30-40 hours of updates & upgrades each month. So, overall, i would say about $75000 to $85000 total.
2. 95% of the money has been spent on servers. The remainder has been for such things as business cards, virtual desktop sharing on sales calls, etc. Nothing on Legal. Marketing is coming up. Expect to spend about $5000 to $10000 on marketing efforts this year.
3. This entire thing is bootstrap.
4. In some aspects I am glad I did it this way. I have total control over all aspects of the site and the direction it is taking. I dont have external pressures dictating deadlines or feature sets…
BUT, It would be nice to be able to focus more on the marketing aspect of the site (that is where my expertise lay) than on development. With outside funding, I could have paid someone else to develope the system.
5. Once you have hte idea, carry forward until you have accomplished what you set out to do. Don;t let anyone tell you the idea wont work. I had a major client tell me that they idea wasn’t that good, but now they are my biggest customer.
6. We are profitable. We were “profitable” the first month. The real question is how do you account for the development hours used over the past few months, etc… I will consider myself “profitable” when I feel like all the hours have paid for themselves.
7. I spend about 5 hours on tech support. I handle all customer calls and emails. The majority come from speakers needing accounts reset. There are a few conference managers who need help setting a feature up, or requesting a new feature.
Maykel Rodriguez
# January 17, 2007 - 4:22 am
This is a great opportunity to introduce my Ruby on Rails hosting service :) (www.speedyrails.com)
I wanted to host my first RoR application a few months ago and I didn’t find a good hosting provider. I went with two of the famous ones and it was a disaster.
After a few months of trying out different hosting providers I decided to create my own service together with a friend that have a huge experience in Linux servers administration.
The service and its applications are still under development but we are confident about the future.
Here are the answers to your questions.
1. How much did it cost to build your app?
We started working on the design of the service about 4 months ago, working part-time during the first two months and doing tests with some close customers.
Main cost have been the servers infrastructure so far (plus our own time), from 300 to 1,500 in monthly costs and growing up every month as more customers are coming.
2. What percentage was spent on each area (Development, Design, Marketing, Legal, etc)?
I’d say that so far it’s been around 85% in servers infrastructure, 15% in miscellaneous stuff.
3. Did you bootstrap or raise funding?
Bootstrapped!
4. Are you glad you funded it the way you did, or would you do it differently next time? Why?
Yes, I am, but every project is different, I can’t assure I would do it again next time.
5. What are some lessons you’ve learned that you would like to share?
The main lesson so far is that you are never ready for the launch date, of course you have to offer a quality service, but feedback from real customers is always the best way to improve your service. My advice, go live as soon as you have the first small version, then listen to your customers and improve your service every day.
6. Are you profitable? If so, how many months did it take to get there?
Not yet, we forecast profitability after about 4-6 months.
7. How many hours per week do you spend on tech support? Who takes care of it?
We offer 24/7 support, so basically we never sleep :)… we are two very passionate guys and we pride our selfs of offering a very personal and flexible service. Since we don’t have a very big number of customers yet we spend about 2-3 hours per day on tech support, but of course we will spend more time in the future, and full time tech support guys will be hired.
Emmanuel de Merode
# January 17, 2007 - 6:38 am
Hello Ryan, it would be wonderful if you could write up on wildlifedirect.org (which would not exist without your initial advice). As you know, we’re a not-for-profit wildlife organisation using a web app to provide support to otherwise isolated African wildlife conservationists. I’ve been following your work very closely, and we still have a lot to learn!
1. How much did it cost to build your app?
We’ve spent around $25,000 on it so far (doesn’t include my time)
What percentage was spent on each area (Development, Design, Marketing, Legal, etc)?
Development (inhouse developer) – $18,000
Design ($1,000)
Marketing ($0) – but a lot has gone into building partnerships with African conservationists
Legal ($4,200)
(I’m not including what it cost to set up and run the Africa Conservation Fund, which is the mother organisation, just the web app)
Did you bootstrap or raise funding?
we raised the funding as gifts from individual and grants from public donors. We’ve also had a some free support (eg Ryan Carson)
Are you glad you funded it the way you did, or would you do it differently next time? Why?
absolutely! We’ve been very luck to have untied gifts
What are some lessons you’ve learned that you would like to share?
Unlike in most other sectors, in the web industry peoples’ goodwill provides more valuable advice and support than anthying you can buy at great expense – this has proved to be shockingly true – and we’ve learned the hard way
Are you profitable? If so, how many months did it take to get there?
Profitable for us means delivering financial support to our partners at less than 5% overhead costs for the whole organisation. For that we need to raise $8m per year, and right now we’re raising about $100k, but we’ve only been going two months. We reckon it will take 4 years to reach that target
How many hours per week do you spend on tech support? One person full time
Who takes care of it?
Ken Murei, our web developper based in Kenya
Michael (Nozbe.com)
# January 17, 2007 - 12:09 pm
I’m just about to finish my second web app (my first one is HitRSS.com) – Nozbe.com. The beta testing will start at the beginning of the next week and official launch February 1st.
Nozbe is a GTD (Gettting Things Done) web application which helps work on your to-dos, next actions, projects and accomplish tasks faster and easier by putting them in contexts.
I tried many web apps like Backpack, Basecamp and their competition and every time I felt the GTD thing is missing there and I couldn’t use them for my purposes, so I started developing Nozbe in my free time…
Now to your questions:
1. How much did it cost to build your app?
It all started as a “do-it-in-spare-time” and “for-internal-use-only” thing – I just needed an app which would help me get things done. Then I introduced it to my company and my team and now I’m launching it this month.
Since I have (like Ryan) a running business (apivision.com), I’ve used some of my company’s resources like my equipment, my know-how, my working hours and my graphic designer who is hired full time by me.
So it’s hard to estimate but let’s say if I spent this time and resources on client work, I would have easily earned a solid $1G per month (but i would have worked too much… and developing a thing you love doesn’t feel like working :-)
2. What percentage was spent on each area (Development, Design, Marketing, Legal, etc)?
Most of it – development and research (which is very important – I’ve spent lot’s of time in researching the similar web apps, similar products, reading blogs about GTD… before actually starting to work on the app itself – in GTD the important thing is to find YOUR SET UP – your way to go – Ryan wrote about it earlier)
Design – as I said, I’ve used my own employee (web designer) when he didn’t have too much stuff to do.
Marketing – this is coming – depending on the initial beta user reviews and comments, I’m willing to spend about $2G for marketing this year.
Legal – not all that much, maybe the Payment routine set up, the domains, terms&conditions… about $500
Infrastructure – I’m using my company’s dedicated server during the initial release and depending on the traffic and # of users, I’ll move and set up more servers. The Key: Stay low and expand when needed :-)
3. Did you bootstrap or raise funding?
Just like most of us – boostrap. It all started as a hobby and an actual NEED for a GTD-web-app and
I’ve used my company’s resources when we didn’t have all that much work to develop the app. It was fun and as I need the app very much (can’t live without it now), I’ve happily dedicated my spare time developing it.
4. Are you glad you funded it the way you did, or would you do it differently next time? Why?
All in all I’m glad.
The only thing I didn’t like is my hesitation to launch it earlier… I’ve been using Nozbe locally in my company for almost half a year already as my main GTD system, it was constantly under development, but worked… but still I was too hesitant to launch it earlier and see what others would think of it (although my wife actually demanded me to launch it as she wants to use it in her work!)
Guys, we really should get a grip and launch our apps earlier because we need people to have a look at our “babies” and let us know what they think to make them even better right from the start!
This month I’ve finished the last pre-launch feature: “sharing” – where people can share projects with one anther and use GTD collaboratively and now let’s see what people will think of all this work of mine :-)
5. What are some lessons you’ve learned that you would like to share?
I guess I’ve written about it above :-)
6. Are you profitable? If so, how many months did it take to get there?
Well, it’s not yet online, so nope. I guess, not counting my own involvement in the app, it should start “paying for itself” after 2-3 months… and we’ll see where we go from there.
It started as a hobby, and yes, I would love it to bring me some $$ as a reward for my time, but the most important thing now are the users and helping people (who have similar productivity issues like me) to get things done and be productive and live a stress-free life.
7. How many hours per week do you spend on tech support? Who takes care of it?
Looking back at my other web app (HitRSS – http://www.hitrss.com) and outsourcing work I do for my customers’ apps and internet shops, I think this will be 10-20 hours per week.
Again, I’ll do the support thing partially myself (to get to know what people are thinking), and partially using my employee who is responsible for customer support of my company and of my cilents’ apps.
To sum up: It’s really good to have a running business (like my apivision.com and in Ryan’s case: Carson Systems) and in the meantime, using your resources at hand, develop new products you believe in and you actually need and thus you might suspect, others might need them too.
Using my company’s resources and employees has helped me a great deal in cutting the development costs, but yes, it made the whole development process longer… so if you’re not in a rush of launching the app (just like I wasn’t), it’s definitely a cost-effective way to go.
Hope you’ll find this useful. Thanks for this blog Ryan!
Jean-Francois Noel
# January 17, 2007 - 2:40 pm
We are far from finished with our product, but we have a small mashup running. So I’ll share the details of that mashup with you.
1. We’ve spent 300$ on hosting. We arranged to pay for the design when we’ll be profitable, so it’s 0$ for now. We bought 50$ of adwords to get some test traffic. Finally we put about 160 hours in the project.
2. Until now: 60% development, 20% design and 20% marketing. I guess these will shift toward 30%, 20% and 40% respectively, if we want to make it profitable.
3. Bootstrap. We would like to raise fund, but we didn’t have the time to do it properly. Of course we don’t have the time because we have to do consulting to pay the bills. I guess we are just too scared to allow 100% of our time to this project.
4. We are glad we bootstrapped since even if it takes longer, it allows us to continue to work on our other profitable activities. Starting another project, we’ll ensure the project is funded enough to deliver in a timely manner. This means we would probably look for external money.
5. To develop even a very simple solution takes forever. Many big problems get trivial when you just work on solving them, instead of figuring how to best solve them.
6. No. We don’t even have revenues, so profitability is still just a dream.
7. We don’t spend any time on support for now.
Ansar Mehmood
# January 17, 2007 - 5:42 pm
Hi Ryan,
A quick blurb about us:
We are a UK based startup, passionate about mobile technology. Probably the simplest way to describe us is as a mobile content distributor, but really we’re much much more. We aim to create a thriving community of mobile users where you not only try out mobile content but also connect with each other. Your PDA/Smartphone is only as good as the software it runs, and we enable you to really spice up your device. Whether its casual games, for those quick plays on the bus, or productivity suites to help you organize your life’s work, you’ll find it all at yobject.
1. How much did it cost to build your app?
We’ve spent approximately £40K to date.
2. What percentage was spent on each area (Development, Design, Marketing, Legal, etc)?
These are approximates: 70% on development, 20% Design, 3% Legal and 7% General.
3. Did you bootstrap or raise funding?
Bootstrapped, (and still are –ing)
4. Are you glad you funded it the way you did, or would you do it differently next time? Why?
This largely depends on whether we are successful/profitable. If everything goes well then we’ll all forget about the difficulties we faced (no salaries, having to beg and borrow from everyone etc) and think it was the best decision we made, not having to give away equity. But I’m not sure I could manage a repeat.
5. What are some lessons you’ve learned that you would like to share?
Be extremely careful in your choice of developers/designers. Whether this is outsourcing to an external company or taking on an employee(s). Outsourcing turned out to be an absolute nightmare for us with minor changes in spec taking weeks to resolve. This eventually forced us to virtually start from scratch in-house. When taking on employees be sure to look at more than just development experience, I realize this may seem obvious but taking on an employee who doesn’t have the enthusiasm for your product/service can massively affect the whole team. One other lesson: It is impossible to meet the development deadlines you set. Always have a backup plan :)
I would also agree with Micheal’s point above, about launching early and getting end user feedback.
6. Are you profitable? If so, how many months did it take to get there?
We’re still pre-revenue, readying for launch in February 07. Development of the yobject system started in April 06.
7. How many hours per week do you spend on tech support? Who takes care of it?
Not really applicable as yet, though it will be in the very near future.
Ian Ozsvald
# January 17, 2007 - 6:02 pm
Our website is ShowMeDo.com, we host tutorial videos that show you how to do things. Our 130 (free) videos are made by our users (23 authors and climbing all the time), mostly about programming and graphics tools (including Python, Perl, Ruby, Java, PhotoShop, Blender, Flash). We’re based on the south-coast down in Brighton, UK.
1. Cost
Initial costs were low – just hosting and some a/v software. Later we bought a video camera to make a real-world video (Perfect Coffee) and some production software. We’ve spent close to £3000 in the last year this way.
The biggest expense would be our time – for the first year we devoted evenings and weekends to the idea. Now in 2006 we’re using a bank loan (well, a 0% credit card) to fund 50% of my time as we test our commercial ideas. We both have real-world jobs related to computing and artificial intelligence, not web development, though we’ll be switching to full-time in ShowMeDo just as soon as we can support ourselves.
2. Percentage spend
A small percentage was spent on legal (company incorporation, some advice), none on design (Kyran is self-taught as he goes), most of the cost goes into running the site itself.
3. Bootstrap?
Totally bootstrapped. During the first year we just spent some of our savings, now we’re working from a loan. We’ve had offers of funding but we’re declining these until we can demonstrate that our revenue streams work (thus making us a less-risky proposition).
4. Glad we funded it?
We’ve learnt a lot doing things this way, I’d probably do it the same again. Given that our time was severely constrained, we’ve had to think long and hard about each step so as not to waste time. This has led us to be very clear about our goals. I’ve worked before in a start-up that had too much money and time – focus was lost. That’s not a problem we’ve had to face here :-)
5. Lessons
Release early and often – we discussed the idea for ShowMeDo in November 2005, we had the prototype on-line with our first Python videos on December 31st 2005 and we’ve grown consistently since then – feedback from users is worth its weight in gold and you don’t get that if you don’t release.
Ask users to help spread the word – many of our users help us with our marketing, as they like the fact that we support open source. We intend to give money back to open-source groups as we grow and again our users like this approach.
Working in a small team (2 people) works well, it helps if you have a history of working together (Kyran and I worked on a previous idea for 6 months, before shutting it down, so we knew we could work well together).
Patience – working in spare hours means that everything takes a long time…but you can be sure that you’re making sensible progress when you do
No rush for profitability – if your costs are low and your risk is sensible, you can afford to take some time. You don’t need to make rash decisions towards getting a quick income (this of course depends on your final goals)
Test-driven development is essential, as is source control.
Remember to eat your own dog food.
6. Profitable?
No, in fact we’re only just about to start selling our first 1 hour video set (Python programming for Newbies) in February, after 14 months of site development. We’d expect to be covering our costs (the major cost being our salaries) in 6-12 months.
7. Hours on tech support
The website is simple, so we don’t spend many hours on tech support (maybe 1 per week, on average, mixed between us). Most of my time is spent talking to users and helping them to make videos. Test-driven development helps keep support issues to a minimum.
Ryan – many thanks for the chance to post.
Ian.
Creation of a Web Application » Blog Archive » A Small update
# January 17, 2007 - 7:05 pm
[...] I’ve posted some details regarding the development of seeyourhotel on Carsonified!. It’s worth to check out the information about other web app there. Ryan Carson is going to write a series of articles about building web app on techcrunch, it’s going to be a must. Other than that we are working on some back end enhancements that don’t show much, but it’s making the site better nonetheless. [...]
Brad
# January 17, 2007 - 7:42 pm
Hi Ryan,
I’m probably getting this out a little earlier than I had planned, but your article is just too good to pass up this opportunity. And it may even make it work harder/faster!
My web app is currently in development, although it’s nearly completed for Phase 1.
I used much of the 37Signals ‘Getting Real’ approach to my application. There will be no beta versions etc. I took the ‘it doesn’t matter’ approach and cut down on the amount of functionality the app does. Based on user feedback, I will add new functionality in the future of course, but not for phase 1.
Application Background.
The app is called PlugMyEvent(.com). A few months ago someone from another office asked me if I knew of a web application that allowed them to put their event online and allow for registrations. We searched and found some great software packages, but either they were too elaborative or they didn’t function the way the user wanted. Being that, I put another project on hold and started developing right away.
The business model is simple. You create your free account. There are 2 types of events as far as the software is concerned: 1) A Free Event which does not allow for paid registrations and 2) A Paid Registration event.
If you create a Free Event, you can collect registrations and PlugMyEvent does not charge you. However, if you wish to opt for the Paid Registration, PlugMyEvent will charge $25us one-time fee for the Ecommerce-type service.
That’s it.
1) All development and design was completed completely by me on my own time. I own the parent company (Dizzytree) but I did not take any equity during the development. COST: $0.00
2) Percentages
Well, 0 at this point, However, I do plan on creating a budget (within the next few weeks) for Paid Google Adwords.
Approx. $200-$300us
3) No fundraising at all.
4) I have NO REGRETS about doing this on my own time. Even my ‘web company’ did not borrow any money.
5) Lessons Learned
There were several different things that I found difficult. a) Choose the right name and a domain
b) Release early with the approach that ‘Less Is More’.
c) Blogging. One thing that I really regret is not blogging at all about the application. The main reason was so I wouldn’t have any deadlines or anticipated customers that were getting frustrated with delays. I felt if I just build it and release when I’m ready, I’d be happy. But now I feel that I should have been blogging all along. (This is my first public annoucement for it).
d) Blog about the industry. I’m currently studying about Event Management. I plan on blogging not just about the application, but the industry as a whole.
6) Profit? Not sure yet. I hope so. For me, this isn’t about neccessarily the money. We all hope to make money, but I wanted to create a simple application. Thats it. Just for numbers sake, 100 companies/organizations utilize the paid service per month = $2500/month. Without paying myself, I anticipate the monthly hosting fee to be $100.00.
7) Tech Support. Since the application is so simple, I really do not anticipate too much support. Of course there may be bugs, but since I kept so many functionality concerns completely out of the app, it will be much easier to support in the long run.
Launch Date? ASAP. Especially if you techcrunch it!;-)
Thanks Ryan! Once again you came up with a great article!
-Brad
Dennis Eusebio
# January 17, 2007 - 11:26 pm
1. 5700
2. Development – 5200, Legal – 200, Hosting – 300
3. Bootstrap and raised money from family and friends.
4. We’re glad we kept things to a minimum. It keeps us from making costly lazy decisions that people do when they have money. We’d take the same approach with any future projects.
5. http://weareonlyhuman.com/stories%3Bsearch?t=s&q=running+a+startup – Here’s our lessons, everyone’s welcome to share them here as well.
6. Not profitable, scheduled to even out within the first year.
7. Our developer takes care of tech support and we spend anywhere from 10-25 hours on it a week.
Ryan Carson
# January 18, 2007 - 6:14 am
Hey everyone!
Thanks for sharing. I’m going to start sifting through these comments and choosing relevant examples.
I’ll email you if I have additional questions.
Thanks again for the feedback.
- Ryan
Cristian
# January 18, 2007 - 6:52 am
Hi Ryan,
My web app is Groopik ( http://www.groopik.com ) It is a small groups management and connection (social network) system for churches with small group ministries.
In response to your questions:
1. Cost? PHP book: $49.99…..Starbucks: $97.44….iTunes: $31.68…….Having my wife mow the lawn all summer long: priceless
2. At this point, being that we spent almost nothing on development, we’re planning to spend 95% on marketing.
3. Bootstrapped – I worked on development, and my wife helped with the design.
4. It’s easy to underestimate all the work involved in developing a web app. I am hoping that next time I will have some resources to be able to outsource some of the design or development.
5. I have learned so much with this experience, and it has little to do with coding. It’s been all about passion. I’ve learned how to push myself and to ask myself, “How bad do I really want this?â€
6. We just launched a couple weeks ago, and we presently have 6 churches on board (total 2500 names in the database).
7. I do all the tech support – about 5 hours a week.
Thanks,
Cristian
Paul Marculescu
# January 18, 2007 - 8:31 am
Hi there,
At first I felt a little reluctant to write about our web application here, since it’s still under development, but after I saw Brad’s comment I decided to do it.
The application that I’m talking about is called Teamness (http://www.teamness.com) and it’s a SAAS application (software as a service). Its purpose is to offer a collaborative platform for teams for any kind of project. In other words, we aim at becoming one of Basecamp’s competitors. We have a few strategies for that and we hope they will work.
Now, for your questions:
1. How much did it cost to build your app?
Currently, we are 2 developers working on it full time.
The costs are mainly translated into our development time. So no notable financial investment so far.
2. What percentage was spent on each area (Development, Design, Marketing, Legal, etc)?
Development & Design
We did the development and the design, except for the logo, for which we paid 100 euros.
Marketing
Our plans are to spend as little as possible in the first period after launch, by using our connections with individuals and companies in need for such a product. Most of those activate in other areas than IT, so they are not familiar with these type of service and we feel they will find it appealing. After that, we intend to extend to markets in different countries by attracting partners and we will maybe buy advertising from search engines.
Legal
We didn’t get to any legal aspects so far. Our company, bitground.com, was already funded at the beginning of 2005.
3. Did you bootstrap or raise funding?
Bootstrap.
4. Are you glad you funded it the way you did, or would you do it differently next time? Why?
I can’t tell we have regrets here. We chose this way to do it because we had enough money from previous contracts, so there was no need for a fund raise.
5. What are some lessons you’ve learned that you would like to share?
* Stay focused on the job. Read the Carsonified! blog for advises on how to do this. :)
* Stay alert at what happens around, in the web dev and mostly in your area.
* Plan your development so that you’ll be ready to release very quickly, to obtain feedback.
* Blog about the application, stages of development, marketing ideas. Each new reader is a potential client and there are a lot of potential readers.
* Set milestones to guide you through the development process.
* Keep a realistic cash flow. Carson knows how. :)
* If you’re a developer, acknowledge that marketing and customer interaction will be an important part of the job, aside the development. We, programmers, often tend to ignore this. So try to familiarize yourself with situational analysis, market segmentation, positioning and other marketing gizmos :)
* Extract information from different businesses: it happened a lot of times to be involved in a conversation about the application with someone from a different industry and to explain all the features that Teamness has and the result was a blunt “Aham”. But when I offered a solution in that person’s “language” to a problem that I identified in her job, I instantly got the vivid: “Ahaaa”, meaning that she could be very interested to buy one of our plans.
6. Are you profitable? If so, how many months did it take to get there?
Nope, not yet. We are also aware that it will take some time, maybe a few months after the release, until we’ll get some money back.
7. How many hours per week do you spend on tech support? Who takes care of it?
None for now, since we didn’t release yet. We estimate at most 10hours per week for tech support, since the application is intuitive and easy to use. Of course, we know there are going to be customers requiring special assistance, especially for usage scenarios, but we expect this to be limited.
We estimate to launch at the end of this winter. If you’re interested, please signup on the http://www.teamness.com page. We’ll use your email address only for announcing the release and for via-gra offerings, of course. :)
Ryan, thanks for the opportunity to present this.
Paul
Nick Allen
# January 18, 2007 - 9:40 am
Hi Ryan
Our web app/service is called SafeMe (http://www.safeme.co.uk), and it is a multi-user (family) online safe for all your personal information. We officially put the service live in May 2006. I have answered your specific questions but please feel free to contact me should you require any more info.
1. How much did it cost to build your app?
To date – £40,000 + no salary for 1 of the team.
2. What percentage was spent on each area (Development, Design, Marketing, Legal, etc)?
This is just approx.
70% – Design and Development
20% – Setting up the business (banking & merchant accounts, domains, legal, office infrastructure, hosting)
10% – Marketing
3. Did you bootstrap or raise funding?
Bootstrap – We sought funding near the start of the project, but the offer presented just didn’t work for us and so we decided to go it alone.
4. Are you glad you funded it the way you did, or would you do it differently next time? Why?
Self-funding is definitely hard work and carries with it a lot of pressure and risk, but I believe it all comes down to the type of service being created, the skills that are freely available to the internal team and how much cash you have saved up! It’s difficult to say how things would have turned out for SafeMe if the correct funding package was received, I think more cash for marketing would have been the biggest benefit. If a team has the passion, determination and skills required then I would probably always bootstrap as far as possible, in the end of the day you can always seek funding once you’ve run out of your own internal resources. I am currently working on my next webapp and I have no qualms about bootstrapping it.
5. What are some lessons you’ve learned that you would like to share?
The internet is bigger than you can really comprehend, marketing your webapp is going to be tough or is going to cost some serious cash (assuming you do not have an internet presence already).
Internet Partners, affiliates and networked circles (blogs etc) can be the key to success, devise this strategy like your life depends on it. Take note of what works and learn from it, when it doesn’t work try something else.
Acquiring a Merchant account can be tough work, even for established businesses – be prepared and be persistent.
The team should have a clear understanding and description of the problem domain, a shared vision of the final product, and how it contributes to solving the problem.
Functional scope creep is a killer especially when you all think it is a good idea!
Be prepared to work every waking moment – sometimes it just has to be done.
Finding good people that can manage themselves and their work as independent thinkers can be very tough, we eventually lost quite a few members of the team due to lack of capability, effort or delivery, leaving the few remaining with a lot to do. When you find the good ones do whatever you can to keep them sweet.
6. Are you profitable? If so, how many months did it take to get there?
No – not yet.
7. How many hours per week do you spend on tech support? Who takes care of it?
Currently no more than a few hours a week, but since the system was built to take care of itself we very rarely need to do much. General support is shared by the team.
ShowMeDo Blog » Blog Archive » Ryan Carson asking about web-app experiences
# January 18, 2007 - 12:35 pm
[...] Ryan Carson has posted an entry asking for start-ups to blog about their founding experiences and a number of small companies are posting details. [...]
John Peters
# January 18, 2007 - 12:55 pm
My web app is for holiday accommodation management. The application started as project for a villa agency that wanted to display the availability of their properties on the web. This evolved into an application that included property and tariff details. The company was so pleased with the software that when they had problems with the inflexibility of the CRM, booking and invoicing software that they used, I was asked to look at including these features into the web application.
1. How much did it cost to build your app?
Most of the costs have been covered by the company the application was originally developed for. They have ended up getting the application at a very low price. This is partly because they have also invested a lot of time contributing to the development process and as the application was developed with the understanding that I would be selling a version of the application on the open market.
2. What percentage was spent on each area (Development, Design, Marketing, Legal, etc)?
Currently 100% on development costs. The next stage is allowing the application to be customised for different companies and be made available in a number of plans with different limits and features.
Raising money for marketing will be the next challenge. It is hoped to provide free plans with limited functionality allowing holiday home owners to add availability calendars to their own websites. These would include a promotional link to the services website. Legal and accountancy costs have been covered within my normal consulting work costs.
3. Did you bootstrap or raise funding?
Bootstrap / funded by original client.
4. Are you glad you funded it the way you did, or would you do it differently next time? Why?
Yes, the feedback and input from the client was worth as much if not more than the fees paid.
5. What are some lessons you’ve learned that you would like to share?
There seem to be a lot of web apps developed for problems faced by IT, creative and web development companies. Project Management, email marketing and invoicing applications spring to mind. These target markets that web developers understand, but
Limiting functionality is difficult when working with a client. You need to look at what your users really need. Find ways to eliminate additional features that will only be used a small number of times.
6. Are you profitable? If so, how many months did it take to get there?
No. I’m probably running at a loss if you allow for development work I’ve had to turn down.
7. How many hours per week do you spend on tech support? Who takes care of it?
Currently I set aside 1hour a day to handle support and updates to the original system. Tech support will become a major issue as the number of user’s increases. It will also be an opportunity. If I’m able to sell the application to other agencies, I can also sell training for their staff.
Dary Mc Govern
# January 18, 2007 - 2:29 pm
Sensatus is Brighton, UK based company, developing a suite of web based professional trading tools aimed at individual investors and investment clubs. The product is being branded as timetotrade.
Currently professional trading tools, such as those based on fundamental and technical analysis trading strategies, require software downloads. You are typically restricted to running the software on one computer and most employers, understandably, do not permit the download and use of the software on their internal networks.
Therefore what happens if your investment conditions are met when you are away from your PC, be it at work, or on your way to an important meeting? With existing solutions – nothing; you must remain tethered to the computer running the application.
At Sensatus, our objective is to develop a professional suite of trading tools that can be accessed anytime, anywhere, from any device that has a web browser, such as a computer, mobile phone or pda. When your investment conditions are met, you will be notified via email, instant messenger or a text message sent to your mobile device. You can then access timetotrade via any wireless or fixed line web enabled device and get the information you need to make an investment decision.
Recent advances in web development technology such as Javascript plus the uptake in broadband and 3G networking, has enabled the ASP (Application Service Provider) business model to be truly realised. It also opens up a whole new world of opportunities and user benefits, such as being able to collaborate on-line on investment decisions with other users.
1. How much did it cost to build your app?
We have currently invested about £115,000
2. What percentage was spent on each area (Development, Design, Marketing, Legal, etc)?
Development: 58%
Marketing: 23%
Legal: 12%
Data centre systems: 3%
Accounting: 1%
General: 3%
The Accounting figure does not reflect true cost as my wife is a Financial Adviser, therefore we only outsource payroll and she does not take payment for her time.
3. Did you bootstrap or raise funding?
Privately funded by the Sensatus founders.
4. Are you glad you funded it the way you did, or would you do it differently next time? Why?
Are you glad? – Absolutely.
Would you do it differently? – Yes I wasted time and energy trying to get funding when I initially had the idea for Sensatus.
Why am I glad? – Having been involved with two previous start ups, which went through multiple rounds of financing from private investors and investment funds, I have no desire to ever have to do it again. Fund raising is a real distraction to any management team, when ideally their energy should be focused on contributing towards the development of their business.
5. What are some lessons you’ve learned that you would like to share?
Where do I start.
The big challenge everyone in the online space is facing, is how to make money in a very competitive market. There are a several models used such as:
- User pays to use your product or view your content
- Companies pay to have their content/message distributed
- Distribution channels pay to get good content that will attract users and therefore advertisers
After some experimenting we have decided to go with a combination of a free offering supported by advertising and an up-sell to a subscription based model; such as using our investment tools with real time data, or being able to receive investment notifications via text alerts.
In developing our business model, we decided to test how sensitive users were to having to pay to use timetotrade. To do this we quickly put up an alpha version of timetotrade and left it free for all to use and then surveyed our user group through direct telephone and email communication. There were rave reviews, so as a next step we introduced a subscription only model to the alpha version (which is currently the main site). We then generated some UK focused PR through printed media (http://timetotrade.eu/blog/category/news/), to see how many would convert. Even though people claimed to love what we had to offer, only about 5% converted. I checked these figures with other companies and evidence suggests that you can only expect around 3% to 5% uptake if you implement a subscription model to a community that are used to using the product for free. Moral of the story is that web users are fickle, price sensitive creatures and hate paying for web content.
Other lessons? Features in printed media are great for brand development and establishing creditability, but does very little to drive users to your website. Each time there is a feature in a magazine we get new sign ups, but were we have had the greatest surge of hits has been via web links from other websites, mainly blogs. If there is one thing I’ve learnt over the recent months is the power of blogging, thanks to Ian Oszvald in another Brighton based tech startup called Showmedo (www.showmedo.com). If you can generate good blog content it can drive thousands of users to your website. The articles that get the most hits tend to be either funny or educational such as the following entries that have generated thousands of hits:
http://timetotrade.eu/blog/2006/12/01/have-the-borg-assimilated-the-banking-sector/
http://timetotrade.eu/blog/2006/11/27/dennis-gartmans-not-so-simple-but-materially-fewer-rules-of-trading/
As for sites like digg, they are a waste of time and do not bring the right profile of user to your website.
Have focused content that attracts a specific genre of user. Advertisers will only pay around £1 per thousand page impressions if you have a random user base. If you have specific genre of users, such as investors, advertisers are prepared to between 5 and 20 times the going rate for random users profiles. Advertisers want to get their message to a specific group of people; help them achieve that.
I will leave it at that for now.
6. Are you profitable? If so, how many months did it take to get there?
We are generating revenue from the alpha site, and are aiming to break even within six months of the launch of the beta site in the coming weeks.
7. How many hours per week do you spend on tech support? Who takes care of it?
We are a software development company therefore we provide our own internal tech support. As there are only six of us in Sensatus who are mostly computer literate, therefore tech support is not a major issue.
Matt McNeill
# January 18, 2007 - 3:48 pm
Our web app. is http://www.etickets.to – an online event ticketing solution designed to change the business model for the events industry. Rather than having to use a booking agent who charges customers a percentage booking fee on top (18% on average when we did a survey) and then holds on to their cash, promoters pay us a simple flat processing fee and take the money directly into their merchant account.
It’s designed for any size of event, our customers range from tiny corporate events to huge festivals.
It’s our second major web app (the first being http://www.sign-up.to which has been live and profitable for nearly 4 years now).
1. How much did it cost to build your app?
We used a lot of our internal resources when they we’re standing still long enough, and one freelance coder, total cash expenditure was around £10,000
2. What percentage was spent on each area (Development, Design, Marketing, Legal, etc)?
75% development, 20% design and marketing, 5% legal
3. Did you bootstrap or raise funding?
Completely bootstrapped! This was our second major web app and we have a healthy revenue stream from the first so it wasn’t hand-to-mouth but this app. had to pay it’s way.
4. Are you glad you funded it the way you did, or would you do it differently next time? Why?
Totally glad, we’ve built all our projects this way, wouldn’t do it any differently.
5. What are some lessons you’ve learned that you would like to share?
We took a much faster approach to market with this app. from idea to live in about 6 weeks and then we’ve been tweaking it every since – this was a great way to build as users started suggesting features we would never have thought of.
6. Are you profitable? If so, how many months did it take to get there?
Yes, we were profitable within about 8 weeks of launch. We’ve now got clients around the world. In December we processed just over $250,000 of ticket sales for our clients.
7. How many hours per week do you spend on tech support? Who takes care of it?
It’s shared amongst support for our other apps. but at the moment it’s about 2 hours per week on pure support.
Alan Alston
# January 19, 2007 - 12:46 pm
Hi Ryan. Our app is called Dynamo, and it’s an app for building small, efficient websites quickly. In fact, we’re blogging about the build of the app on the very app we’re building: http://dynamo.co.za/journal/ – yes, barenakedapp was inspirational to say the least: http://dynamo.co.za/journal/2006/07/19/in_the_company_of_900_pound_gorillas/
How much did it cost to build your app?
At this stage of the game (probably a month or two before launch) we have not spent any money on development, only time: our own. That said, we do have a monthly hosting fee of about R1000 (70 quid).
What percentage was spent on each area (Development, Design, Marketing, Legal, etc)?
All our time has been spent on development and design, for marketing we’ve only used the blog. And a bit of word of mouth.
Did you bootstrap or raise funding?
Bootstrapped all the way!
Are you glad you funded it the way you did, or would you do it differently next time? Why?
Hmmm, I wouldn’t mind a bit of funding: mainly to allow us to spend more time developing the app. We’re still holding down dayjobs!
What are some lessons you’ve learned that you would like to share?
You really need to believe in what you are doing. I think that’s probably the reason the Getting Real approach is so valid in today’s marketplace: it’s a conduit that allows you to express what you’ve always known to be right, and what you’ve always known will work: that itch that needs scratching. Our itch is web dev: we’ve built sites for all sorts of clients over the years and we’re taking our expertise and turning it into an app.
Also keep everything flexible; your code, your framework, your pre-conceived ideas as to what you think is right, even your business model!
Are you profitable? If so, how many months did it take to get there?
We hope to be, within 6 months.
How many hours per week do you spend on tech support? Who takes care of it?
Most of the time is still spent on development. I expect the table to turn here though.
Benjamin Curtis
# January 19, 2007 - 2:45 pm
The product I’ve been working on is ConferenceMeetup, a service which enables conference organizers to provide a community site for their attendees to interact with each other and the presenters before, during, and after the conference. It’s a fun project born of my experiences attending conferences and wanting an easier way to meet certain people or just get a Who’s Who of who’s there.
1. I’m a developer so the cost to build the app has mostly been my time. I’ve done a little advertising via Adwords (
Scott Meade
# January 24, 2007 - 4:45 am
1. I did the product design and development so those costs were $0. The other member of our LLC handles most of the day-to-day business activities. Neither of us are taking salary so costs have been low. $7,900 total spent so far to get to launch.
2. Estimates:
Hardware/SW: 50%
Accounting/Legal: 10%
Conferences/Professional Dev: 20%
Misc (office setup, mileage, books, etc):20%
Marketing: $$TBD
3. Self-funded / bootstrap
4. Glad – nothing different. Self-funding allows you to focus on your company and customers, not your investors. Besides, for most efforts listed in these blog comment, not much cash is required.
I have had offers to perform funded work and work for equity, but at this point in time do not want to have to answer to pressures of investors or stake-holders other than customers and clients.
5. Pick a product segment where you know there is demand and you cannot go wrong. Don’t try to invent a market. Few people have the initiative, imagination, and influence to do so.
I heard the demand for our product (small business lead and campaign management) from several small businesses in my area and then when I started talking about it on my blog got responses from around the country. Also, there are tons of competitors out there – which is another indicator of demand. So the issue becomes how to differentiate yourself.
We differentiate by a) focussing on verticals (e.g. releasing insurance agency specific functions this week), b) instant signup (no salesperson will call and bug you), c) semi-custom development – if there are features not present that customers need, we will work to improve the product with them.
Another lesson – get a product out asap – don’t wait. And as Ian said, don’t be secretive about it. There is no better way to improve your product than to get it in front of people. Don’t worry about being perfect or meeting expectations of everyone on your first take. Just get the basic core of your app out so people can start using it, start talking about it, and start helping you improve it. People love to give feedback. People love to see continuous improvements and enhancements. If you release your end-all product, what are you going to do to show current and potential customers that it will continue to improve? Release something simple and dazzle customers that your product is ever-improving.
Final lesson is something that I – as a technology zealot – need to improve on. Realize that unless your customers are other web-app builders or are in the tech business, you better learn their business. Most businesses have no interest in learning about IT. They just want to solve business problems. For example, don’t talk to your customers about how you are using the latest RubyOnRails or how you are all ajaxy. Talk to them about how your choice of tools allows you to deliver results and product faster! Talk about how your choice of browser technology allows you to make apps seem more responsive. Better yet – show them! Show them that you understand their business by demonstrating the benefits – not the features – of your product. Show them that your product increases their sales, or reduces their costs, or improves their customers’ experience.
6. Are you profitable? If so, how many months did it take to get there?
Just launched.
7. How many hours per week do you spend on tech support? Who takes care of it?
Unknown.
Ryan Carson
# January 24, 2007 - 6:00 am
Thanks everyone, for the quality feedback. I’ve just finished the first article and I’ve decided to wait to talk about funding until the 2nd or 3rd article.
I’ll email you if I decide to use something from your comment.
Thanks again for the feedback!
I couldn’t agree more with this – good point Scott.
Emmanuel
# February 1, 2007 - 11:59 pm
http://collegemedium.com
How much did it cost to build your app?
~$20,000 to date
What percentage was spent on each area -
30%-Dev
65%-Marketing
5%-Legal
Did you bootstrap or raise funding?
A little bit of both
Are you glad you funded it the way you did, or would you do it differently next time? Why?
I’m very glad it’s up and running and people are actually using it. I’d focus more on marketing if I had to do it over.
What are some lessons you’ve learned that you would like to share?
Marketing is essential
Sometimes the best way to target users is indirectly. :-)
Are you profitable? If so, how many months did it take to get there?
No Comment ;-)
How many hours per week do you spend on tech support? Who takes care of it?
Customer service is a big part of what I do.
Mike Sadler
# February 8, 2007 - 1:15 pm
1. How much did it cost to build your app?
$80,000 over the past 2 years building a nich CRM solution for the transportation industry (www.travel-manager.co.uk)
2. What percentage was spent on each area (Development, Design, Marketing, Legal, etc)?
Development $74,000
- $64,000 on developers
- $10,000 on a dedicated server
Design $2000
- Used Elance.com to find designers. Got a great deal from thenetmencorp.com (Argentina based)
Marketing $1000
- Again used Elance.com for having PR written and used PRLeap.com for sending PR out.
- used Google AdWords for keywords (currently spending less than $100 per month but anticipate this rising over the next couple of months as I hone the keywords)
3. Did you bootstrap or raise funding?
Bootstrapped all the way. Quit work and funded everything for 12 months.
4. Are you glad you funded it the way you did, or would you do it differently next time? Why?
Absolutely! Made me very focused on what I needed to achieve and meant I couldn’t blame anyone apart from myself. Learnt a lot along the way for sure. Probably wasted the first 6 months but as soon as the application started to come together it was easier to get into the stride of things.
5. What are some lessons you’ve learned that you would like to share?
- Believe in your idea, if you don’t nobody else will
- Be infectiously enthusiastic :-)
- It doesn’t cost a lot to start your own online business
- People do want these types of applications you’ve just got to find them.
- Start learning all about marketing from day one – don’t leave it until launch day
- Your never to old to get into this game (me I’m 59 and counting :-) )
6. Are you profitable? If so, how many months did it take to get there?
Cash flow positive. Profitable (get my initial CAPEX back) within the next 6 months.
7. How many hours per week do you spend on tech support? Who takes care of it?
20 – 25 man hours per week. I take care of it right now. Everything is web based so it means I can usually do this in my own time.
BradM
# February 19, 2007 - 8:20 pm
Hi Ryan,
I’m not sure if it’s too late, but I officially launched PlugMyEvent.com
Thanks again.
Brad
Building a Web App? Be realistic with your timeline… at North x East
# February 21, 2007 - 7:21 am
[...] Software development is not easy, especially good quality software development. If you are planning on building a web app, take your time, plan effectively, make sure you have a solid relationship with your developer and your designer and give yourself the best shot at success. If you’re interested in what people pay and their experiences in this field, have a look at the comments to this carsonified blog post, they are gold mine of information. [...]
Grant Bowskill
# February 24, 2007 - 3:53 pm
Hi Ryan, I’ve a regular reader of your blog and was very interested by this post when you first put it up, at the time my web application wasn’t yet launched so I decided to hold off replying until it was.
Monkey Duck (http://monkeyduck.net) aims to provide bands with all of the tools they need to build a complete online presence and connect bands, fans and venues. At first glance it might seem that we are a MySpace clone but we believe MySpace is more about people whilst Monkey Duck is all about music and live performances.
Some of the main features are:
* Continuous Playback (Even when changing pages using Ajax goodness)
* Playlists (that can be shared with other users)
* Buy/Sell Mp3s
* Setup a shop selling merchandise
* Friends Feed – See what your friends have added recently, new gigs etc…
* Recommendation System – Get music recommendations based on the types of music you like (Using clever neural network goodness)
* Access Control – Release songs to your friends only.
* Blogging
* Tagging
* Statistics – See what is popular on your pages
* Discography Management
* Better Integration of photos, videos and songs within your blog.
* Video, photo and MP3 uploading.
* Daily Charts
* Gig Listing and Searching + Gig Reminder Emails
* Mailing List Management
Once we have a good number of bands, users and venues we plan on setting up regular gigs where the highest rated bands are invited to play, shows will be recorded and put online as will podcasts showcasing the best in new music from unsigned bands.
I also plan on setting up an API so that bands can have their own websites which have a custom look but read all of the data (mp3s, gigs, blogs, discography, photos and videos) from the Monkey Duck website so in a way; we act as a content management system.
1. Building the web application has cost very little, mainly because I finished University last summer and have been setting up my own design and development company since so money has been tight. This has forced me to examine closely all spending decisions to look for the most effective in terms of both cost and end result.
In total, I would say so far I’ve spent less than £100 on various pieces of software (Wimpy Music Player Bundle, A JavaScript Scrollbar Implementation, and Some Stock Illustrations). Under £50 on stationary and printing for promotional items and currently around £12 a month for hosting.
One of the impacts of the lack of capital is the need to keep growth costs minimal as well; my hosting is currently £12 a month which should provide enough space for 2-300 users at least. Understanding this need to keep growth costs low the site has been designed such that I can spread it across multiple shared hosting accounts as needed until it gets to the point where it’s cheaper to get 1 dedicated server then multiple shared accounts. This way my growth costs are the absolute minimal they can be without a big initial capital investment in servers.
Another recent decision that’s occurred because of keeping costs low relates to leaflet printing. I need around 10,000 leaflets initially; I worked out that if I made them myself it would cost around £50 but to have them printed would be over £100. A tiny saving but a saving none the less, I brought materials to produce 1000 leaflets to give it a test run, it turns out the printing is easy, the quality is good but the cutting out of A4 into A6 is extremely time consuming and prone to errors which reduces quality, the only way to overcome this is to invest in a good guillotine which would cost more than having them printed professionally. For this reason I am now paying the extra to have them made for me rather than doing it myself.
I would class myself currently as money poor but time rich so I’m happy to spend whatever time it takes to make the site work and will only spend money when it’s absolutely necessary.
2. So far, it’s probably 80% development and 20% marketing but this is all set to change now the site is launched and I’m ramping up marketing.
3. Bootstrap.
4. I would’ve loved to have lots of money so that I could’ve had a proper launch and had lots of marketing going on but I don’t have any regrets and would rather bootstrap than get into debt.
5. Development, however hard it seems is a lot easier than marketing. If you can afford it, get somebody to take responsibility of marketing and get them started early.
6. The site only launched a couple of weeks ago so it’s not profitable yet, but with such minimal costs it won’t take much to reach that point.
7. Tech support is minimal at the moment but I’m currently spending time working on video tutorials and an extensive help system which will have contextual entries embedded within the most complex pages so that people can find solutions to any problems very easily themselves, hopefully minimising tech support.
I think a key lesson I’ve learnt is, understand your weaknesses, especially if you’re a one man team like me. My weakness is PR and Marketing, I find developing fun and relatively easy but I have no clue when it comes to selling my product to others.
The other lesson I’ve learnt, no matter how keen friends are on being involved, don’t rely on their input until they put their time and money where their mouth is.