Sumo

Sumo

16-05-2022

16:35

On a more positive note, here's how I turned $15k into $15 million. A ๐Ÿงต.... (Part 1. Part 2 to come later)

In graduated from university in the late 2000's and went to work for an investment holding company that owned about 10 manufacturing and distribution businesses. First year comp = $60k salary + $20k bonus It was a great experience but I wanted to "eat what I killed"

After a few years at the above firm, I made the decision to quit working at that firm to start doing consulting in a niche industry where my family had a business. Business owners here needed help with commodity risk management and capital purchase decisions. $0 salary

I told myself, I needed at least $40k of income in Year 1 or else I was going to go back and get another job. I ended the year with $42k. After three years, my average net was $150k but I was linearly trading time for money. During this time, I started dabbling with software

My goal was to build a software product that would allow my to scale my consulting business 2-3x. I attempted to hire a firm off of Upwork and my lack of experience caused me to lose that $10k of funds (they built shitty software). What did I do next?

I hired another developer off of Upwork and blew another $10k. I had $15k left to my name. My key takeaway was that I had no idea how to manage software products or any clue about good software development code/testing/tools.

I spent about a year learning how to code. HTML/CSS/Ruby/Rails. I started building my app but realized that it was going to take me forever to do it myself. I found a great local Rails developer to help me build the MVP. But....I spent all $15k with him. What next?

If I rewind the clock about a year, I started an email newsletter for my industry niche. A year later, it had 1,000 subs acquired mostly for free from Twitter. Out of money with an unfinished software project, I threw a hail mary to my email list.....

I told them I was going to launch a web-based course. But I hadn't actually spent any time on the course. I had a goal.... $2,000. If I could get that level of pre-sales, I'd build the course. Here's part of that email. Sent on Dec 9, 2015.

I ended up generating a little over $20,000 of income from this course and used that to fund the MVP of my software. I was thrilled, I gave access to the software to all of my consulting clients. I was damn near already spending the $500k in extra income that I thought I'd make

But....another huge disappointment. Very few of them actually used it. "WTF!!", I thought In reality, they hired me for advice not for a free software tool. Two years and $40k down the drain!!

But in the ashes of this, I realized I really enjoyed building software... I hadn't spent all of the $20k from the course. With the remainder, I started sharing progress on the software with my list and on Twitter. I kept making improvements to it.

I DM'd two people links to the software for them to use. Both of them paid for one-year subscriptions. Hmm....people that paid for it, liked it. Those that got it for free, didn't. But traction was still really slow...

I decided to shut it down and relaunch it a few months later. I teased the launch to my email list and I launched it at 8:00 AM on a Thursday in December 2016. By 11 AM, I felt tremendously shitty. Zero sign-ups. Fuck me, I thought.

The key here....there were no sign-ups in Stripe but I had 11 sign-ups in our database. There was an issue with the Stripe key and we quickly got it fixed. By the end of the launch period, 50+ people signed up generating almost $100k of annual recurring revenue.

Slowly but surely, we kept growing and I was able to bring the software development in-house. But we were competing against three companies with 50+ people who had raised an average of $50+ million each. Headwinds where abound..... <End of Part 1>



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