Christopher Gimmer on Bootstrapping to $20k MRR in One Year
Chris has only been in the startup world since 2014, but in that time he built a Bootstrap theme store up to $10k/mo in sales before selling it and bootstrapped his current startup to $20k MRR in the first year while only charging customers $10 to $15 a month.
In our chat, we cover everything from how Christopher made the decision to go all-in with entrepreneurship to how he validated the idea for Snappa, but where we really dive in is discussing the exact steps he followed to achieve such fast growth in the first year of the business, and the unexpected challenge he and his team faced along the way.
You don’t want to miss this one because Christopher holds nothing back.
- Deciding to go “all in” (4:20-5:05)
- Knowing when to transition to the next project (5:19-7:36))
- Validating the idea for Snappa (10:13-13:03)
- What is Snappa? (13:12-13:46)
- The hardest part of building the business (17:24-18:04)
- One of the best things about a SaaS business. (23:48-24:19)
- Thought process behind the “freemium” (25:52-27:53)
- Challenges going forward (28:20-29:11)
- What’s in the future for Snappa? (38:16-39:02)
Where to learn more:
Christopher Gimmer realized that many marketers were facing the same problem of creating high quality, engaging graphics for their blog posts, online ads and other social media, so he co-founded Snappa, an easy graphic design tool that anyone can use.
Andy: Christopher, thanks so much for coming on the show today.
Christopher: It’s my pleasure, thanks for having me.
Andy: You have a really interesting story of building Snappa to $20k MRR in one year. And we’ll get to that. But when I was doing some research I saw that you had first built another product called Bootstrap Bay, which you used to make the dive into full-time entrepreneurship. Can you share with us how that all happened?
Christopher: Yeah, so basically I was working my day job at the time. I was a financial analyst for the government and I kind of wanted to get into the whole online entrepreneurship thing. I started reading a lot about SEO, keyword research and that kind of stuff, and I think at the time I was actually looking into drop shipping because it seemed like a good model that you can build something on the side.
So my co-founder and I – Marc – we were kind of just trying to brainstorm what kind of keywords would be good to start a business around, thinking kind of small time, and somehow we kind of stumbled across bootstrap themes and bootstrap templates. So Marc was a developer and so we realized that Bootstrap was a framework that was getting a lot of traction, but it was still really early at this stage. We noticed that there was a lot of search volume around bootstrap templates and bootstrap themes.
When we looked at the competition, Themeforest was the big site at the time and they weren’t even ranking on the first page because they weren’t really targeting those keywords. And there was only one other marketplace that was pretty established and we naively thought that we could compete with them. So we were essentially half successful, we ended up launching the Marketplace, and the way we grew it was purely through content marketing.
So I would just write about anything related to the bootstrap framework and we ended up being able to drive a lot of traffic to it. And so over time through doing that we managed to make enough money to see that we run kind of raw and profitable. And I took the leap of faith and quit my job at one point.
Andy: Wow. So when you were building Bootstrap Bay, was the idea to build something as a launching platform for other things, was this business at the time your main focus?
Christopher: Basically my main goal at that point was to be able to support myself full-time so that I could quit my day job. So at the time I didn’t care too much about what the business was, what we were doing. Basically my only criteria was something online and something where we weren’t trading our time for dollars. So any sort of online product business is what we were trying to build, and Bootstrap Bay is kind of what we came up with.
Andy: When you were at raw and profitably, roughly what MRR were you at where you decided to say this was enough for me to go all in?
Christopher: I can’t remember exactly when that was, at the height of the site we were doing $10k a month in revenue, so profit was probably around $4,000/month USD. And because we were in Canada the exchange rate is quite favorable to us. So I think at that time, on a personal level I was probably bringing in $2,500 CAN per month, or something like that.
So obviously I wasn’t driving around in fancy cars, but it was enough to barely scrape by, I guess. And my thinking at the time was if we’re making this much money now, I’m sure we could do better if we were both focused full time on it, so to speak.
Andy: At what point then, when you’re working on Bootstrap Bay – you’ve gone all in, you’ve quit your job – at what point did you say I’m going to start working on the next project, which ended up being Snappa, and when did you make that transition?
Christopher: So while we were building up Bootstrap Bay, like I said, we grew it primarily through content marketing. And so I identified the problem that we then tried to solve with Snappa which was I’m not a designer and we certainly didn’t have money to hire a designer, but it was a pain in the ass to create these images and Marc was too busy building the site, so I didn’t want to bother him with a graph for a blog or social media. So that’s kind of when I had the first seed of it would be really nice if there was a software that was a lot easier to use than Photoshop to create these graphics.
So what ended up happening was we essentially got to about #3 in Google if you typed in “bootstrap templates”, and #1 was our main competitor at the time – which was WrapBootstrap – and then there was 1 or 2 other websites that had free bootstrap templates. So what ended up happening is we almost capped out our traffic in terms of SEO from those keywords, so we kind of said to ourselves from here on out it’s really going to be an uphill battle to try to dethrone WrapBootstrap and be a ton of work to build this up even more. And the biggest issue we faced was that we’re selling these themes for $10-20 and there’s few repeat purchases.
So we were just kind of looking ahead at this point and saying should we bust our ass with this, and we also weren’t super passionate about selling bootstrap templates, if we’re being perfectly honest. So that’s when we started thinking about taking it to the next level. We really wanted our own products, we didn’t want to just sell other people’s products. And we were also really interested in the SaaS model, so that’s when we started looking at building that next thing.
Andy: And so when you then transition to the next thing, are you letting Bootstrap Bay go on autopilot, what did you do with this original project?
Christopher: Yeah, we totally put it on autopilot, and that’s the beauty of getting traffic from content and SEO. For the first 2 months or so that we put on autopilot, I think it was still growing or at least flat. We were making at least the same amount of money but we weren’t working on the site at all really. And obviously over time it started to decline a little bit, but there was a good while where I don’t think the code was touched on that site for about a year before we sold it.
Andy: So you did eventually end up selling it?
Christopher: Yeah, we just sold it in December. Not life changing money by any means, but it was a good exit for us and more so just so that we don’t have to focus on it. Even though we weren’t working on the site anymore, just the mental energy to check the inbox and do the support and that kind of stuff.
Andy: Yeah, I think that is similar to what Nathan Barry has talked about, the transition of when he decided to go all in on ConvertKit, he said when he was focusing on his books and info products, even just having ConvertKit kind of on life support doing its own thing still occupied brain space and still took some of his focus away from the day to day even if he wasn’t spending that much time with it.
So that’s when you have to make a choice, do I go all in or do I shut down entirely. And it seems like you had good options by ultimately deciding to sell it and give yourself a little bit of a cushion to then take over with Snappa.
One of the things I was looking over, you had a big Reddit post about how you originally launched Bootstrap Bay and you talk a lot about validating the idea for the launch using the Google keyword tool and that sort of thing. How did you validate the idea for Snappa?
Christopher: So this is a bit of a long answer. So one of the blog posts I had written on Bootstrap Bay was where to find free stock photos. Within the last few years there’s been this amazing trend of really talented photographers releasing their photos under creative comment. So typically when you want a stock photo your options were pretty limited. So I ended up finding on Reddit someone had posted links to these stock photo websites. And I thought they were amazing and the photos were just so nice. So I put that together in a blog post and it ended up going viral.
So that’s when I thought there’s obviously a huge need for these stock photos that don’t look cheesy. And so we kind of had the idea of making our own because we saw just how much value there was, and the sites we were linking didn’t have search functionality so it was really hard to find what you were looking for.
So after a month or two we ended up building a website called StockSnap.io, so it’s curated free stock photos released under creative comments. So when we built up that site I had this idea for Snappa, but we weren’t really acting on it because we knew that we needed a lot of traffic to make that model work where you’re selling software for $10/month. So before we started building Snappa, what I did was I started sending out surveys to the people that were opting in for our email list on StockSnap.
And so I kind of did it in phases where the first one I kind of figured out who were the people who were downloading these photos. And I found out that a lot of them were in fact marketers, business owners, those types of people. And then what I did was I hopped on Skype calls with about 20 people just to figure out how they were going about creating graphics for blog posts and social media and that kind of stuff.
It basically kind of validated what I initially thought, which was either they were struggling using complicated tools like Photoshop, or they were tired of dealing with designers who would take 2-3 days and not giving them what they look for. And a lot of these people really didn’t want a tool that was much easier to use to create these graphics. And so that kind of gave me the comfort to start writing code and actually invest time into building this product.
Andy: And then ultimately – I realize I didn’t do a very good job of setting this up – so ultimately what is the tool that you created, what is Snappa?
Christopher: Snappa is essentially a really easy to use graphic design tool for creating marketing graphics like social media posts, Facebook ads, blog graphics, e-book covers, that kind of stuff. So the idea is really to empower the content marketers and social media managers themselves to be able to whip up these graphics in a few minutes, rather than wasting a bunch of time in Photoshop or going back and forth with a bunch of expensive graphic designers.
Andy: One thing you had said earlier – and also in your Reddit post – was that you wouldn’t recommend taking another competitor head on. You said, “I wouldn’t advise going up against a marketplace that is already established and has both the supply and demand figured out, unless you truly have a unique angle.” And in your space you have Canva, they are a behemoth in terms of fundraising and market penetration. So what made you confident that you would be able to enter the market and compete against someone who’s so well-funded?
Christopher: So with Canva – I don’t want to bash them or anything, they have a good product – with a loss of funding and a huge user base, you end up having to try to do a lot of things. And so if you go on Canva you can make birthday cards and business cards and wedding invitations and all that kind of stuff. What they’re trying to do is empower anyone to be a designer. So with that you have a lot of features and a lot of extra stuff.
So what we’re doing at Snappa is we’re really focusing on our target audience, which is an entrepreneur or a marketer that needs graphics for a business use case, and making it as easy and as fast to do that as possible. So we actually get quite a lot of people that sign up for Snappa and they think it’s so much easier to use and quicker than Canva, and we get people saying Canva was a little too slow and clunky and trying to do too many things.
So essentially without going into a feature to feature comparison between us and them, I would say that we’re really focused on our niche and our audience, and making our tool as best as possible for those people.
Andy: That makes perfect sense. And we talked before this episode about MicroConf, and a lot of what you’re talking about is preached very strongly by a lot of the MicroConf crowd, where it’s don’t just go wide make sure you claim a niche and have a strong position so people know who your tool is for and whether it’s a good fit or not. But also so you can solve the problem better with those specific people rather than go really wide like Canva and trying to be anything and everything to everybody who could potentially have a use for this.
It’s really smart in the way you went about doing that. I’m curious, have you gone after any terms like “Canva alternative” or any SEO terms like that?
Christopher: That’s funny. I think that’s somewhere on our “to do” list. I think last time I checked what the search volume was for that it wasn’t too huge. But yeah, that’s one of those things like we were talking about for the podcast. I’m finally bringing on some marketing help so these are the kind of things that have piled up on my “to do” list that we’ll probably be able to start executing.
Andy: So to back up, a little bit ago we talked about why you wanted to enter this space, how you were going to position yourself so that you wouldn’t be just competing against established, you’d have your own corner of the market. But going in to it, what did you actually think would be the hardest part of building this business?
Christopher: My biggest worry was really, are we going to be able to get enough customers to support a product that’s only $10-15 a month. As much as you validate something and people say it’s a great idea and they’ll pay for it, until you actually release the product and people put in their credit card, you just never know.
And with SaaS it’s extra scary because – as you know – it takes time to build these things and you always have to get better to prove it. So that was my main concern, are we going to be able to get enough customers.
Andy: Then when you had StockSnap, I think you said at its peak StockSnap was getting 3,000 page views a month, is that accurate?
Christopher: Yup, that’s accurate.
Andy: So when you have that. That really acted as kind of a machine to drive out essentially where you were needed to get your customer to support the business at a low price point. Is that fair to say?
Christopher: Yeah, it’s definitely fair to say, and we did that really deliberately. If we didn’t have StockSnap in the beginning I would have been very, very scared to launch Snappa, because it would have been impossible to acquire customers with pay traffic. And so we would have had to have been super scrappy and super creative in how we marketed the product. So it was super beneficial to have that existing audience of people that we can cross promote to.
As we started sending traffic to Snappa from StockSnap, and then more people started using the tool, we’d get more word of mouth, we’d get more mentions from bloggers, and it starts to get a bit easier to spread your tool. But in the beginning, as you know, it’s always hard.
Andy: Sure. So you said it would have been harder for you to go all in on Snappa without having StockSnap. Do you think you would have done it, or would you have pursued something different?
Christopher: That’s a really good question. When you’re at a $50 or $100 a month price point, I think it pays to be really scrappy in the beginning. I think Nathan Barry’s talk for MicroConf last year, he talked about direct sales. And what ConvertKit is, the beauty of email marketing is the bigger your customer grows, the more revenue you can charge them. So that’s one of the biggest limitations with our product is that we don’t really have expansion revenue right. So I probably still would have gone ahead and done it because I was naïve, and the more experience I gained as a business owner the more I realized how naive I was 2-5 years ago.
So it’s kind of one of those things where I probably would have done it anyways, but I definitely would have been a bit more hesitant and not as confident, that’s for sure.
Andy: At least you’re honest about it.
Christopher: Yeah, for sure.
Andy: So what I do want to ask, the acquisition was going to be what you though it would be the major challenge and it turned out not to be, what was the hardest part, what did challenge you guys?
Christopher: So in the beginning the biggest challenge was really just the technology itself. And because there was only two of us – and I’m not a developer – so Marc literally built the entire app himself, we didn’t have any development hiring. And Marc is self-taught, and the both of us have just been learning along as we go, so it was just a matter of keeping up with the feature requests, just keep making the product better. We ended up building it initially on one framework, and then after a couple months we almost had to scrap it and rewrite part of the code.
Christopher: So without getting too technical, we were kind if using a fabric GS framework in the beginning. One of the bigger features that we were being asked for was image resizing. So for example if you were to create a graphic with the dimensions for Facebook, being able to easily resize that into a graphic for Twitter, let’s say. So to do that using the technology that we were currently using would have been a nightmare.
And there’s a whole bunch of other stuff that when we’re basically looking at what the biggest feature requests were and the direction that we wanted to take the product, we kind of came to the realization that if we were actually going to go and build those things, it would be a lot easier to rebuild part of the app now and fill those features, then to keep working with what we have now and piling on tons and tons of technical debt that eventually we’re going to have to address.
So basically that’s the reason why we kind of made the decision as early as possible to rewrite some of it so that future development would go a lot smoother.
Andy: Because, yeah, technical debt is actual debt, it has to be paid back at some point. You need to make the changes you need to factor that in somewhere down the road. That is a smart investment to pay that up front when you can and make that switch when you’re much younger and you don’t have dozens and dozens of features built on top of it. So that’s interesting to hear that.
And you said you hired a full-time developer half way through the year which really helps. At what point were you comfortable making that hire? In terms of MRR, when did you think you were able to support this?
Christopher: Yeah, so that’s one of the best things about a SaaS business is that forecasting and revenue is a lot clearer than some other business models. It’s a lot easier to predict even if you’re acquisition rate stays the same and your return is x percent, you can reasonably estimate that 3 months from now – unless something goes catastrophically wrong – will probably be around this MRR.
So we essentially hired that developer when we were kind of a month or two away from being profitable with his salary included. We had a bit of cash built up – we still had BootStap Bay running, which was bringing a little bit of money, nothing crazy – so we really recognized that we needed that next developer as soon as we could. So we tried to hire as early as we could without being super scared about it.
Andy: Right, without really pushing the limit and getting the credit cards out and all of that.
Christopher: Yeah. Because we’re self-funded, so the absolute last thing I wanted to do was hire someone and then three months later say we actually can’t pay for your salary. That would have been devastating. So it was basically a point at which we were reasonably assured that we can still be profitable with a salary or break even.
Andy: Right. So speaking to that predictability and the cash flows in general and how you had talked about the difficulties of being at the lower price point. I wanted to ask you, right from the gate were you planning on doing a freemium model? Do you see that as necessary when you need a ton of customers to have an easy way to get in the door? What was your thought process behind adopting the freemium?
Christopher: So initially the thought process of the premium model was that we kind of did it out of necessity simply because a lot of our competitors were also kind of using that freemium model. So the interesting thing was we actually did switch a couple months ago – as a test – we went and actually got rid of our free plan and we went to a 7 day free trial only. And believe it or not, the freemium actually outperformed even paid only. Which was really surprising because as you know there are always blog posts all over the internet saying we dropped our free model.
So we thought maybe we’ll see if this works for us. And so what I found was that with the freemium you do lower so many barriers when it comes to people signing up because it’s a free product. And I think because it’s only $10/month, what ends up happening is someone signs up because it’s free, and then they realize that it’s a great product and $10/month is not a huge cost. And so they go ahead and upgrade when they kind of reach the limits of that free plan. That’s just my theory, I have no idea if it’s right.
The other problem that we had with going to a free trial is that people would sign up and then I would have an email that would go out if they didn’t convert asking them why. And they’d say they ran out of time. So the nice thing about freemium is you can kind of keep nudging them to come back and they don’t necessarily need to worry about just using it within the first 7 days.
So I think the whole free and freemium is a whole other discussion. I’m glad that we tested it and so now we know that freemium is what works best for us, so let’s try to optimize for that.
Andy: And now that you’ve figured out and tested and done a lot of experimenting and seen what works best for you at this point, what do you see as your main challenges going forward?
Christopher: Having a low price point is definitely going to be a challenge going forward. To support a low price point you need to keep ramping up the acquisition. So that will start to become a problem at some point. One thing that we are doing is we’re going to be releasing a “team plan”, so that’s going to come in at a higher price point, so we hope that will be able to increase our average revenue per user and be able to diversify our traffic sources a bit more. Up until this point it’s been mainly the traffic that we’re getting from StockSnap, we see a lot of word of mouth and referrals, so building out those other marketing channels that will enable us to scale further.
Andy: I know you said you just made your first real marketing hire, do you have any idea of what other channels you are going to be looking at, or what do you see on the horizon for scalable channels?
Christopher: We’ve done a couple promotions with some companies like LeadPages, we just did one with SumoMe, and they’ve actually gone really well. And so with this new marketing hire coming on, basically they’re going to be essentially taking over all the inbound stuff, and so I’m hoping that I’ll be able to explore these partnerships and business development type stuff.
And what I realize, too, is when an influencer recommends your product the conversion rate from that is really high because people trust these influencers, they trust their opinion. And so I think building these relationships with these influencers doing cross promotion is definitely something I want to focus on a bit more going forward.
Andy: So the marketer you hired it going to primarily handle the inbound things, expanding on what you already know works. And then that will change your responsibilities to be so that you’re trying new things and trying to set the vision and working on more experiments. Is that a fair assessment?
Christopher: Yeah, that’s totally right. I mean, right now my time is kind of divvied up between what I’d call higher level strategy and coming up with new growth initiatives and stuff like that. But then I’m also the only one who’s really executing right now, so it will be great to have another person to kind of handle a lot of that execution of it so that I can focus even more on some of the higher level strategic stuff and building out some of these other channels that we can focus on.
Andy: I think that makes perfect sense. Talking to you right now and reading a little bit of your story before this, it seems like you learned a ton with BootStrap Bay. I’m sure that since you’ve launched Snappa you’ve learned a lot, even more so. So other than making sure that you had StockSnap in play and a real acquisition channel in play before launching to make those price points work, are there any other things that you would kind of warn yourself about to either make sure you did place extra importance on so you could speak to yourself right at launch?
Christopher: That’s a really good question. In terms of SaaS itself, I didn’t really fully understand plateaus as much as I do now. So if your return rate is x% and you’re only bringing x amount of customers, like when we first started the business in the first month I think we grew $2,000 MRR, and then the next month we grew another $2,000 MRR. And I thought this was great, this was easy, we’re just going to scale to infinity.
But then what happened is month 3 or 4 when you start getting some cancellations, you realize this isn’t going to go to the moon, it’s going to plateau at some point. And there’s not much I know I would have done differently, but just having that understanding of that there is a lot more to this SaaS business than just acquisition. You also have to worry about expansion revenue, your churn rate, and that kind of stuff. There’s more levers at play than just sign ups.
Andy: That’s a really, really smart way of putting it. Because where I’m more math oriented just by nature, a lot of times I’ll think with these acquisition channels that it’s an easy game to play, just show up and build the product and put this money into building the business. But it’s like, yeah, but if you’re growing by 10% and you’re churning at 10% or higher – especially if you’re in the early stages – you’re not growing, you need to balance out both ends of the equation and that is not always simple to do.
And like you said, until you see and intuitively understand how the math works out, you don’t get the plateaus and how those work out and how easily they can turn from a plateau into a downward dive. So I think that’s really good advice.
Christopher: It’s funny because I actually went to school for finance, I have an accounting and finance background. I don’t know why, but it was just something I didn’t think about when you first start. And then when the numbers start presenting – or when the pictures start painting themselves – I kind of had this “oh, shit!” moment where I realized we need to do something here. And it’s not like we were going to plateau like in the next month or two, but if you look ahead a year or two out, you realize either we have to charge more money, you have to lower your churn, or you have to really have to ramp up the acquisition to keep rolling.
Andy: Yeah. I was talking to Pat Bhava earlier today actually – we had him on the podcast a while back – it was about something completely different but the idea was sometimes you can mentally intellectually understand a concept, but still not truly get it until something clicks. And I think a lot of times the SaaS metrics and math is the same way. You need your growth rate to be x and you need to watch the churn rate, but until you actually figure it all out and see it right in front of you and experience it, you can avoid that “oh shit!” moment and you don’t fully really get it and live it until you’re actually there, I think.
Christopher: Yeah. Baremetrics actually has a really cool feature where they’ll take your current rate of new revenue coming in with your churn rate, and they’ll kind of actually give you where you’ll be a year from now and you can really see quite easily where those plateaus are. If you get churned to this and you get acquisition of this, then you can see what it will do to your business. I wasn’t fully aware of truly how the SaaS model worked when we first started, whereas now it’s definitely a lot clearer to me.
Andy: I think that’s a great lesson, I definitely will link up Baremetrics in case listeners aren’t aware of it, that is a really good tool to dive down deep into some of these metrics and do some forecasting and do some really interesting things to get a better idea of that.
You’ve shared a ton of stuff with us, your story is really cool, and I’m excited to meet up at MicroConf. Before we say goodbye, I like to ask everyone some rapid fire questions. I’m going to rattle through them but don’t worry about the length of your answer. Whatever you’re feeling is good with me.
So the first one is, what do you currently spend too much time doing?
Christopher: So I guess the last section was a good segue into this, I feel like I spend too much time looking at numbers and our analytics. Some things I could only look at once a week, but for whatever reason I end up just looking every day or every second day.
Andy: What are you not spending enough time doing?
Christopher: Like I said also, I don’t feel up to this point that I’ve been spending enough time building relationships with the right people in my space. And not even just for promoting my product. I’ve had relationships that I’ve built with people where either I learned something new that I applied to my business, which worked really well, or just having that person to bounce ideas off of.
So I think one thing that I really want to try to spend more time on this year is expanding my network a little bit, and I think it’ll pay off in multiple ways.
Andy: So this is not part of the question, but what do you consider your “space”? I’m assuming it’s not design, it’s more so entrepreneurship. Is that accurate?
Christopher: Yeah, I would definitely say essentially entrepreneurship, marketing, basically anyone who’s trying to grow a business online, essentially.
Andy: Ok, that makes perfect sense. And for the next question, what are you hoping to accomplish in the next quarter with Snappa?
Christopher: We’re actually releasing a pretty major update. People are going to be able to import their own custom fonts into the tool, which is a big feature. And again, we’ve written some of the backend in OJS, which will really help us. And this will probably be the last code we write for a long time. But it’s actually going to significantly improve the product even more.
So releasing that new update, and basically just onboarding our new marketing hire and getting him up to speed and just looking forward to having another person to talk marketing with on the team other than just myself.
Andy: I guess that’s one way to expand your network, just hire people you can talk to.
Christopher: Yeah, for sure.
Andy: The last one is what are your long-term plans for Snappa?
Christopher: Long-term plans for Snappa, we essentially just really want to be that “go to” tool that any online marketer or business owner uses to create their online graphics. So that’s really what we’re striving for and what we’re hoping to accomplish long-term.
Andy: Awesome. Before we say goodbye I want to ask, if people are curious about using Snappa for their own business and they’re curious about hearing what you’re up to, where are the best places for them to go?
Christopher: So you can go to Snapp.io and we have a free plan, so you can check it out and try it out.
Andy: Awesome, and I’ll make sure to get all of that linked up in the show notes, I also won’t put your email address in there, I don’t want to get you spammed all over the place. So only listeners will have access to that. Christopher, thanks so much for the time today, it was a lot of fun chatting with you.
Christopher: Yeah it was great, thanks for having me.