Public update #5
Hello hello, I'm excited to share another update. I'm writing this one from my childhood home in Pune, India.
Reflecting on the past few months, I'm really glad to have decided to DesignBake build without expectations, since October and November were both heavy months where I had to prioritize other personal work and events.
Since my last update, I've been experimenting with scaling email outreach, re-doing the DesignBake website, streamlining operations, updating pricing, and doing some research on financial & legal implications as I scale DesignBake.
Wins
- DesignBake is currently at $2,000 MRR. In a way, it doesn't feel real since this was a milestone I hoped I would be able to reach when I first started back in July 2021.
- After payouts (80% of revenue) and expenses (~$150/mo) for software; the remaining profit is $250/mo. Super exciting since we're now in the green for the first time! I can now reinvest some of this to continue scaling further and automating sales channels.
- Since my last post in October, I've emailed a total of 144 startups.
- From this email outreach, a big win was during the last couple weeks of the year — I closed a customer for a $599/month plan. They'll be starting in January so this hasn't been added to MRR yet.
- The past couple of months have just been a lot of really small changes at a time. I do believe that this is adding up to help get each new customer.
Challenges
- I realized that with a Canadian Stripe Platform account (DesignBake), I can't make payouts to U.S. Stripe Connect Accounts (advisors' accounts). This was a pretty big roadblock since many of the new advisors joining DesignBake are based in the U.S.
- I spoke to a lawyer about opening a U.S. Stripe account, and the recommendation I got was to only do so once the project is making over $5K in revenue. I also need to speak to a CPA to understand the best way to scale this forward.
- The reply & conversion rate on the last batch of 70 startups I emailed is lower than it's ever been before. While it's hard to pin-point, I believe this could be the result of me trying to remove the 'free critique' sessions that I pointed out in the last point, since I'm in India and scheduling is more challenging here. It might also just be holiday season. Hard to tell.
- I was definitely feeling a bit disappointed after emailing 100 startups and only getting about 2-3 direct conversions from it. Will have to keep trying out different value props & positioning to make sure I can find a 'hair on fire' problem within the design function for startups. Although one of them later ended up becoming the biggest DesignBake customer so it was all worth the outreach.
Reaching $2K MRR via email outreach
So far, I've been finding my first customers through YC's Startup Directory. I've been emailing relevant startup founders through this list, and I've learned that most are pretty receptive to short, sweet emails with a clear ask. I think this channel could likely get me to my first 10-15 customers (currently at 7), but I'll soon have to explore some other ways to reach startups.
This is what I had written in my previous post:
...100 emails could potentially increase DesignBake's revenue to $2,750 MRR.
After executing the email campaigns, I did get pretty close — I emailed 144 startups and got to $2.6K MRR! Pretty exciting that the estimate was almost accurate.
Other ideas I still need to explore:
- One of the ideas I've been thinking about is to find startups that have recently raised and announced a Series A or above and email the designer(s) on their teams. So far, I've been emailing only the founders, but from speaking to some of my current customers, my gut says that designers might be far more likely to understand & resonate with the problem DesignBake solves than founders themselves will.
- I also want to launch the public 'Design Roasts' I've been noodling on, but it feels like a much more time-intensive approach. The big blocker here is that I need to consistently carve out 30 minutes every week to record a 10-minute video. I'm going to continue trying to gather the energy & time to do this.
- I'm also planning to invest more time into sharing more design insights on social media to grow a larger audience within the startup and design community. Starting with a 30-day experiment to post regularly on Twitter to see how it goes.
Customer Conversations
Sometimes, the founders I email are not looking for design advisors, but instead either want some guidance on where to start with design or want help hiring a freelancer or full-time designer. In this case, I've still been taking calls or exchanging emails, because I want to collect as much information as I can about my target customer. I want to learn about what their priorities are, how they think about design, if they think DesignBake solves a problem for them, how much they might pay for it, and so on.
Pricing experiments
I also decided to do some pricing experiments! Based on feedback from advisors that 1hr/month of advising might be too little to have a meaningful impact startups, I updated DesignBake's pricing to start at $599/month. A few weeks later, I got my first customer that signed up for it just after a few email exchanges and an intro call with one of our advisors.
Launched a new landing page
Over the past month, I launched a new landing page for DesignBake — designed and developed on Webflow over a few days. I gathered some testimonials to showcase, added a 'How It Works' section, and a detailed explanation for the benefits that each pricing tier provides. It's a simple start, but I'm hoping I can eventually build on top of this through more written content, guides, and possibly videos related to design + startups.
Ending the year with gratitude
It's been an incredible journey so far on this side project and I wanted to wrap up this year with a note of gratitude. I started in July 2021, not knowing where this will go, if it will work, if startups will find it valuable, if I'll be able to reach design advisors, if I'll be able to make revenue, or if a side-project is even doable in 1 day/week.
I'm so grateful for all the support and encouragement from each of you — those reading the blog, advisors who joined me on the journey, startups/founders that have been sharing valuable feedback along the way, and friends that have been guiding me through the process.
Knowing that we got so far with an initial goal of $2K MRR, I've now set a goal to bring DesignBake to $20K MRR in 2022. It's a lofty goal, but I'm sure it'll be an exciting journey regardless of how far we can get along the way. I'll continue to build in public so you'll be able to keep a tab on the story too.
Thank you again for following along. It means the world! As always, if there are any topics you want me to write about or cover, feel free to DM me.