Six Years Ago, My Startup Made Its First 1$M. How Did We Do It?
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In April 2014, together with a friend, we quit our jobs and started our own software company. We didn’t have any clients and had virtually no capital (~10$K). But after just a few months, we become the leader in our niche, and the largest companies from Europe became our customers.
Examples of brands:
- OTIS —American company, elevators, escalators, moving walkways, and related equipment
- Pratt & Whitney — American aerospace manufacturer
- GKN Driveline — FTSE 100 company (London stock exchange)
- PLL LOT — the biggest Polish airlines
- Grupa LOTOS — the second largest oil company in Poland
- Polish Supreme Court
- PSE — Polish energy networks
- PSG — Polish gas company
- PKO BP — Polish national bank
- PANSA — Polish air navigation services agency
- KIR — Polish payment system infrastructure
How Did We Do It?
1. Professional website
We started with a professional website and landing pages. It was not cheap for a startup, as we hired an external agency, but I think it was one of the best moves we ever made. The agency did an amazing job; we definitely stood out from the old corporations and looked like a modern, trustworthy business.
I have repeatedly found that people buy with their eyes.
2. Tracking users’ behavior
We tracked and analyzed users’ behavior from the start (Google Analytics, Mouseflow) to make informed decisions.
Heatmaps and session recording, combined with A/B testing, allowed us to identify pain points and explore new opportunities quickly.
3. Narrow focus
We sacrificed many opportunities and focused on a narrow category (SharePoint applications) instead of competing with everyone in a broad software development market.
I would call it blue ocean vs. red ocean, but I didn’t know those terms then.
The key to a successful strategy is not being the best in everything but competing to be unique.
4. Social proof
We were very keen on building credibility. We realized the first small contracts for free to get references and testimonials.
I reached CIOs of several big companies on LinkedIn. They were happy to accept the offer.
Nobody ever asked how big these contracts were, but everyone recognized the logos.
5. Compelling tagline
People have to remember the brand. We used a compelling tagline: “SharePoint leader in Poland.”
That was enough. Nobody has questioned this term. At the same time, I doubt anyone would believe it if we used “Europe” or “World.”
6. Eliminate what others take for granted
We lowered the costs by creating reusable products against a “dedicated software” trend in B2B internal document workflows.
We lost many opportunities, but we’re able to scale, reduce costs, improve quality, and deliver faster. In my opinion, eliminating what others take for granted is key to building unique value.
7. Product discovery
We tested our ideas and mitigated the risks before the implementation by:
- Prototyping — After customer interviews, w would first create low-fidelity prototypes in Balsamic, then high-fidelity prototypes in InVision. Both prototypes were tested with the customers.
- Running feasibility experiments — We emphasized testing technology, algorithms, performance, integration with other systems, etc. Everything that might involve risk.
Sometimes Product Discovery took many iterations, but it was much cheaper than learning by coding.
8. Differentiation
For big players, signing a new agreement took ages. As a small company, we differentiated with the speed of decisions.
We also heavily invested in the UX, which was much better than expected in the internal applications.
We were not the largest and not the most experienced, but we were extremely fast, focused on our area of competence (SharePoint), “tried harder,” and leveraged those attributes to the extreme.
9. Paid ads engine of growth
There were no sales. We used specific, paid ads and tracked CPA (cost per acquisition) and LTV (lifetime value) metrics like crazy.
Each invested 1$ paid 20–30 times.
At a later stage, “word of mouth” worked perfectly.
More about the engines of growth:
Conclusions
From today’s perspective, I think I was ignorant and could have done better. The primary source of information for me were Brian Tracy’s videos, like this one (it’s not bad!):
I only started learning and ignored many PM and leadership practices.
My advice to a younger me would be to read or listen to audiobooks for at least 30 min/day: product management, marketing, leadership, and strategy.
Here is my recommended reading:
- Crossing the Chasm by Geoffrey A. Moore
- The 22 Immutable Laws of Marketing by Al Ries, Jack Trout
- Understanding Michael Porter by Joan Magretta
- Blue Ocean Strategy by W. Chan Kim, Reneé Mauborgne
And the 12-Month MBA for PMs series (book list):
After 5 years, I decided to sell my shares and focused on product management. Many of my experiences are embedded in my posts and articles, so make sure you check them.
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