(from the latest issue of the Indie Hackers newsletter)
New startups are usually looking to achieve breakthrough growth:
Want to share something with over 100,000 indie hackers? Submit a section for us to include in a future newsletter. —Channing
by Chris Monk
For startups to succeed, they need to find breakthrough growth. Think of the breakthrough as that moment where growth becomes easy, and paying customers and revenue flood into the business.
Not finding breakthrough growth is the reason why 90% of startups fail. But why do 90% of startups fail to find breakthrough growth? Read on for more!
Many startups fail to reach breakthrough growth because they've been told this lie: The key to growth is a great product.
And so, with that belief, they make one (or both) of these mistakes:
Neither the freemium nor free trial business models stop startups from making these mistakes. Why? Because for these business models to work, the product needs to be perfect. And so, the founders are very likely to make mistake number one.
And when it comes to mistake number two, well, both the freemium business model and the free trial model trigger sales resistance. Why? Because, in order to fully benefit from the product, customers know that they need to pay money. So, their sales resistance is triggered, leading to the abysmal conversion rates that we see in freemium or free trial models.
Check out the BLUNT method for more on avoiding this lie!
Thomas Varekamp says that free trials and freemium are absolutely still worth it:
Having a free trial or freemium model gives the business valuable customer data on how it can improve the product to make it worth the price.
For example, usage data can be analyzed to see what kind of customers interact with the product the most, and how.
If the free trial user doesn't convert to paid, you can ask them why. This is extremely valuable information that you can use to improve your product.
Chris agrees, adding that it's mostly about the timing:
We've been running a freemium model since launch. While I do agree that it's not right long-term, it helped us get enough eyeballs on the product at the start to get the feedback that we needed to improve.
Dengagess believes that freemium and free trials are bad for companies across the board:
Free trial models are a great way to get users engaged with your product and start using it right away. However, they often don't work out well for businesses. Why? Because you're giving away something valuable (your time) for free, and if you don't have a good enough value proposition, people won't stick around long enough to convert them into paying customers.
Freemium models aren't just bad for startups; they're also bad for established companies. When you give away something valuable for free, you're essentially asking someone to pay for it later. That's not how business works. You need to make sure that what you're offering is worth the cost before you ask anyone to pay for it.
How do you solve this conundrum? By addressing these elements:
Pricing isn't about getting rich quick. It's about figuring out what your product costs, then setting a fair price based on that. If you set your prices too low, you'll never make any money. Conversely, if you charge too much, you'll alienate potential customers.
What are your thoughts on free trials and freemium? Share below!
Discuss this story.
from the Volv newsletter by Priyanka Vazirani
📸 TikTok is now copying Instagram with "Photo Mode."
🎁 Consumers want to purchase holiday gifts earlier this year due to inflation.
🎥 Streaming service mergers are coming.
🛑 Making employees turn on webcams may be a human rights violation.
🌲 Your body will turn into a tree at these new green cemeteries.
Check out Volv for more 9-second news digests.
Many indie hackers have multiple products, and most of the benefits that they share are pretty obvious: More income, diversification, learning, etc. But one less obvious thing is that each product can serve as an acquisition channel for the others.
Cross-promotion usually refers to different companies promoting each other for mutual benefit, but who says that the companies can't be owned by the same person?
Here are a few tips and tactics:
2\. Cross-promote:
Long story short, if you're already going through the trouble of building multiple products, let those products work for you as much as they can. Cross-promote and get creative to make the most of the time you spent building them.
Have you tried this tactic for customer acquisition? Let's chat below!
Discuss this story.
from the Marketing Examples newsletter by Harry Dry
“The role of your first line is to get me to read the second one.”
—Jo Sugarman
Go here for more short, sweet, practical marketing tips.
Subscribe to Marketing Examples for more.
by Omar Farook
Hi, indie hackers! I'm Omar Farook, founder of Glorify, an e-commerce design agency.
In 2013, I started buying and selling white label products through Amazon FBA. I sold out in my first month, and the Amazon seller community took notice. Glorify was born soon thereafter! By 2016, we had a small team, and demand for our work grew. We realized that there was a gap in the market: There was no e-commerce focused design tool that could help founders quickly drop a simple product photo onto a template, remove the background, and showcase features through beautiful graphics.
We started working part-time on a basic MVP, and launched on Product Hunt in September 2019. Our deal leaked into many early adopter communities, and I wrote a detailed article about it here.
On day one, we hit over $10K in sales! By month one, we had crossed six figures in total revenue. By the end of the Black Friday deal period, we had crossed $300K in sales!
I had never seen or made so much money this quickly before. But what followed was a series of huge mistakes that I would regret. I'm diving into those mistakes below, and hopefully that will help other founders avoid making the same errors!
After Black Friday, we thought that an aggressive amount of activity on social media would create engagement and drive sales. But we realized that the frequency of posts and content was not what truly drove sales. It was a combination of pay-per-click (PPC) to drive leads and sales, customer success to help users troubleshoot, and founder-led activity on community channels to build trust and reduce refunds.
Always determine the minimum that you need to sustain existing growth. We hired three marketing leaders and a marketing-led IT expert. In truth, we only needed our PPC and customer success team members.
I had a huge gut feeling that we were not ready for MRR growth, but in January 2020, we gave it a shot anyway. We still had a few organic hits coming to the site from various sources, so we closed our lifetime deal (LTD) and switched on MRR. All we heard was crickets.
We were able to acquire tons of free signups, but hardly any paid users. MRR users are fundamentally different from LTD users. MRR users need a specific problem to be solved really efficiently before they decide to pay. They have various layers of objections while considering a new tool. LTD users, on the other hand, do not care about any of this. All they care about is getting a great deal for an attractive alternative tool with an ambitious roadmap.
With such little MRR growth, we tried our best to scale using ads. They worked well for LTDs, so we figured that they would also translate to MRR growth. We spent around $50K, but only secured $2K MRR. At the time, there was a lack of accountability and direction between myself, my cofounder, and our head of marketing. We've recouped that money now, but at such an early stage, I wish we had been more careful.
As the face of the company and visionary for our product, I was torn between community activities, marketing, product-building, and team management. I was spread way too thin! This hindered my critical thinking on product innovation, and limited my time to learn new skills. It also made me slip on making sure that my cofounder and I stayed accountable about how we were spending money.
In February 2020, we decided to build another SaaS product. Although it made sense at the time, it was the worst decision we ever made. What we thought was only going cost us $10K ended up becoming a long-term project that ultimately cost us close to $70K over two years.
We tried to recoup the costs by launching a separate LTD, but such a utility product was never going to even come close to the revenue of a full suite design tool. In total, we probably generated $20K. In the end, this product turned out to be completely redundant technology, as so many different versions of it started making an appearance.
We brought on a UI/UX designer who had great ideas and clean design, but it turned out that none of it was scalable. He was not utilizing Figma's full capacity.
Since we didn't know any better, we worked with this designer for a year to get our second version out. Afterwards, we switched to a new UI/UX team that cleaned up our entire design ecosystem on Figma, and helped deliver our new features faster.
With a strong UI/UX design system and execution process, you can skip months of complicated dev handoff documents and ship a better product much faster!
UI/UX is everything for a tech startup. Your product philosophy is what will help you win. What makes you different and unique is mostly your user experience. To get your product right, it's about identifying your unique value and leaning into it. User feedback is important, but remember that users are prone to shiny object syndrome. If you solely go by their demands, you will end up designing a Frankenstein product.
We wasted so much time and money on dead-end user experiences. Don't reinvent the wheel; just improve it, and only when it makes sense!
Discuss this story.
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Special thanks to Jay Avery for editing this issue, to Gabriella Federico for the illustrations, and to Chris Monk, Priyanka Vazirani, James Fleischmann, Harry Dry, and Omar Farook for contributing posts. —Channing