How Building to Earn Drove My Product to $7.3K MRR in One Year Hello! What's your background, and what are you working on? Hey, I’m Stas Kulesh. My roots are in the eastern regions of Siberia, where I pursued studies in computer science and nuclear physics. Along the way, I developed a passion for indie game creation and eventually shifted gears to become a digital designer. During the early 2000s, I embarked on remote work while exploring and blogging extensively, ultimately finding my way to New Zealand. Currently, I enjoy playing a variety of musical instruments and manage a development and design agency in Auckland. My personal investment is deeply focused on being the best father possible and nurturing my chatbot, Karma. Karma is a chatbot that collects and analyzes in-chat data to generate comprehensive performance reports and enhance workplace culture. It motivates team members and provides valuable insights for leaders. The bot is compatible with Slack, Microsoft Teams, and Telegram. Currently, Karma boasts over 6,000 weekly users, generating $7.6K in monthly recurring revenue from around 90 paying companies, along with 750 new teams signing up every week. What motivated you to get started with Karma? Initially, Karma was an internal tool developed for our digital studio, Sliday, which consists of over 24 primarily remote employees. After a fruitful launch on Product Hunt, we realized there was a demand from external users as well. For the first year, Karma's revenue hovered below $200 monthly, which led us to underestimate its potential for growth despite increasing feature requests from customers. We validated most new ideas internally among our Sliday team, which in retrospect was likely a misstep. In hindsight, we should have been more attentive to the feedback from real users instead of relying solely on biased opinions from our employees. Consequently, the app grew excessively complex and difficult to use, complicating its explanation and sales process. In 2017, we resumed development and participated in Y Combinator's free Startup School in 2018. My business partner, David Kravitz, has been dedicating his efforts to Karma nearly full-time since November 2018, focusing significantly on sales and marketing. The YC Startup School 2018 experience was transformative. We revamped our pricing model, streamlined the product, and introduced numerous enhancements. Most importantly, engaging with customers (with David conducting 5-10 demos every week) was crucial in reshaping the product to align with user needs. This combined effort resulted in a surge of monthly revenue from $156 in January 2018 to $13,361 by January 2019. Regularly monitoring important metrics such as active users, karma requests made, revenue, and the number of paying customers is crucial for maintaining focus and early identification of potential pitfalls. It's vital to be brutally honest with oneself—any dishonesty can lead to setbacks. How Building to Earn Drove My Product to $7.3K MRR in One Year Karma is a part-time project developed in-house at Sliday, where I handle both design and some coding, primarily on the front end, while David focuses on customer experience. Developing a prototype didn't take long as it was tailored for our team’s needs. For over a year, the Karma bot served primarily as an internal tool. To make our workspace more engaging, the team at Sliday frequently suggested features, and we collaboratively implemented them. Transitioning to Slack was tricky and spanned nearly a year. Although we listed it on the Slack store, we initially neglected its upkeep. Although it's difficult to determine the exact costs involved, our time tracking showed we dedicated 8,308.42 hours to Karma. If the ‘10,000 hour’ rule holds true, we anticipate becoming experts in chat appreciation and engagement by 2019. In November 2017, we rolled out a significant update and resumed product development. Identifying our customer base took almost a year, but once we nailed it, customer acquisition and visibility improved dramatically. In early 2018, Microsoft approached us and offered $100K to create the Karma bot for their newly launched Microsoft Teams platform, while we retained all IP rights. Our team at Sliday comprises 20 employees and we work as a digital studio offering design and development consultation services. Several developers have been part of our team for over five years. We mainly utilize Ruby on Rails, Angular.js, and Postgres as our tech stack, and are currently transitioning our front-end to Vue.js. The key members of our team include: David Kravitz oversees customer experience, quality assurance, project and product management, sales, and operational tasks. Collectively, we have created over 100 digital products, including web apps, browser extensions, and mobile apps. We were among the first developers in both the Slack app marketplace and the MS Teams bot store, gaining valuable insights as these platforms evolved. How have you attracted users and grown Karma? Our initial launch was quite successful. I was new to Product Hunt, and the chatbot market was rapidly expanding. We continuously introduced new features and launched each as a sub-product. Consequently, Karma was featured five times on the platform, accumulating around 2,500 upvotes that helped build our initial user base. While Product Hunt had its benefits, it didn't attract the desired customer base. Most early Slack users were startups or small non-profit communities that didn't find enough value in our product. The initial adopters were willing to pay $6 per month or $99 annually. How Building to Earn Drove My Product to $7.3K MRR in One Year Gathering feedback was integral to our journey, leading us to acquire nearly 100,000 registered users and generating just $126 in monthly recurring revenue, which might seem laughable at first glance. We explored Facebook ads and Google Adwords initially, but soon recognized that setting up effective marketing campaigns was quite labor-intensive. Ultimately, these paid channels ended up costing more than they returned. The pivotal moment for our user acquisition came with a partnership with Microsoft. Julian from their Seattle HQ guided us in developing bots for the Microsoft Teams platform, which led to the testing and launch of Karmat in their new marketplace. Even now, the team at Microsoft HQ continues to utilize the karma feature internally. While the development process for Microsoft Teams could use improvements, the user base presents a high potential for growth, primarily in the enterprise sector. We implemented various marketing strategies to effectively communicate our message. David and Vlad crafted several targeted email sequences utilizing MailerLite to ensure teams were well-informed about our essential features prior to conversion. David dedicated countless hours sending out cold emails, and today, he has 12,404 emails in his Sent folder. We chose Crisp for instant chat support and feedback, engaging in over 902 conversations, as our customers greatly appreciated quick and direct attention. Using Karma, we were fortunate to gain acceptance into the Y Combinator Startup School and take part in four Pioneer tournaments. Whenever feasible, I shared our progress on platforms like Reddit and Hacker News, in addition to maintaining a blog on Medium and a Twitter account. I am not a proponent of growth hacking or the belief that there is a universal solution for user acquisition. However, I firmly believe that if a product addresses a customer's problems and provides time-saving solutions, encouraging users to share their positive experiences with friends and colleagues, then it is destined for success. What's Your Business Model, and How Have You Grown Your Revenue? Karma operates on a subscription model. Initially, we set a rather low price of $6 per month per team (regardless of team size) and offered $48 lifetime licenses. After consulting mentors from the Startup School, we revised our pricing strategy, moving away from promises of 'forever' plans. In February 2018, we launched freemium accounts for the Karma bot on Slack. Currently, there are 1,288 teams utilizing the free version, while 73 teams have opted to pay. We find Stripe to be an exceptional tool for implementing billing, managing disputes, evaluating risks, and recovering revenue. As a lean startup, we strive to monitor expenses closely and eliminate unnecessary costs. Presently, we maintain payments for Digital Ocean hosting (thanks to free credits from Y Combinator Startup School), Readme, Crisp, Satismeter, MailerLite, Stripe fees, Abstract for design version control, and InVision. Stripe has been smooth and reliable for us since day one, and we can't recommend it highly enough. Through direct payments and careful management, we have successfully established our revenue streams. How Building to Earn Drove My Product to $7.3K MRR in One Year By utilizing recurring subscriptions on Stripe, we currently make approximately $5K on average, and at one point, reached a high of $13.3K when we secured a pilot project with one of our enterprise clients. The most challenging aspect was uncovering the value that users find in our karma-tracking tool. Surprisingly, the more frequently it is utilized, the more beneficial it becomes. Slack's acquisition of Atlassian’s HipChat, which led to the product being deprecated in February 2019, resulted in a notable spike in both searches for "karma bot" and new subscriptions at that time. Our most valued customers today are converts from HipChat Karma. The common advice about diligently listening to customer feedback and addressing the issues they raise is incredibly valuable. Additionally, karma sharing is a long-term habit, which we took time to fully embrace. For a closer look at our monthly revenue numbers, you can view my weekly revenue reports on the [Indie Hackers Karma page](https://www.indiehackers.com/product/karmabot). How Building to Earn Drove My Product to $7.3K MRR in One Year In the past year, focusing on revenue generation while building products has transformed my approach to development and user engagement. Revenue Data Future Goals A core focus moving forward is enhancing our current offerings with features that deliver real value. Recently, we launched Karma Rewards and are measuring its impact on user conversions. Additionally, attracting more resources may be necessary to expedite our growth. Challenges and Lessons Learned Understanding user needs was a key challenge. After engaging with over 100 users, it became clear that performance reports are most valuable to management rather than being purely entertaining for employees. Our primary users are the decision-makers: team leaders, founders, and management who rely on analysis and feedback to enhance team dynamics and performance. Advice for Indie Hackers Focus on creating value with your products. Every release should generate revenue while minimizing the time spent on development. Building products that earn — no matter how small the revenue initially appears — lays a foundation for future growth. The journey of learning to build for earning fosters skills that ultimately facilitate more freedom for personal growth and projects you're passionate about. How Building to Earn Drove My Product to $7.3K MRR in One Year Hello! What's your background, and what are you working on? Hey, I’m Stas Kulesh. I grew up in the far-eastern part of Siberia, studied computer science... At least I wish to believe — that the Indie Hackers community is not about getting rich fast, but about that elusive work-life balance. In New Zealand, a well-developed, beautiful, remote, and isolated country, finding balance is one of the core values of society. In that regard, I’m very much a follower of Jason Fried and David Heinemeier Hansson. It Doesn’t Have to Be Crazy at Work, Remote Work, and Rework, provocative as they are, are really good and practical materials. Surprisingly, I get inspired by big ideas books like Our Mathematical Universe, Life 3.0 by Max Tegmark, and Superintelligence by Nick Bostrom. Through the vastness of the universe or the unimaginable complexity of our minds, they show that most of the everyday things in most everyday situations don’t matter. One should do what’s right, stay calm, and carry on! Where Can We Go to Learn More? You can learn more about Karma at karmabot.chat . Follow us on Twitter @karmabot_chat and definitely subscribe to our Karmabot page at IH. We’re totally inviting you to ask any questions in the comment section below. Good karma to you all. Namaste!

chromabill

Finance

Personal Finance