Bootstrapping a Marketplace to $1.3M by Talking to Customers

Hello! What's your background, and what are you working on?

Hello, I'm Varun Aggarwal. I'm a computer science engineer, and in my early days I used to be a freelance graphic designer. I'm also the founder of Designhill, my first "true" product. I started it with my brother, Rahul Aggarwal, in October 2014.

Designhill is a complete online graphic design platform for small businesses, including SMEs, doctors, lawyers, photographers, real estate companies, technology businesses startups, mom & pop shops, etc. We help them out at an affordable price with whatever graphic design needs they have such as a logo design, complete brand identity for their businesses, website design, brochure designs, and many more options.

We bootstrapped the business and hit the magic $1M ARR number in a short span of 14 months. We are currently growing at 21% MoM, and we aim to grow 10x within the next year.

As of today we have an awesome community of 38,000+ graphic designers from 52 countries, and we've helped thousands of business owners fulfill their graphic design needs.

How'd you come up with the idea for Designhill? What motivated you to start?

I got started because of the personal challenges I had with freelance design, as well as an awareness of the problems my customers were having. As a freelance designer, I worked on many platforms to find good freelancing opportunities, but I faced many problems:

• Exposure — It was very difficult to find new clients.
• Genuineness — It was a challenge to find clients who would pay me on time and pay according to the effort I put in.
• Security — How would I secure my payments and ensure that I received them on time?

I also noticed that most of my clients faced many similar problems:

• Quality designers were hard to come by.
• Delivery often didn't happen on time.
• Affordability was an issue for many clients.
• Limited numbers of designs and revisions were available.
• Versatility in the designs was also limited.
• Professionalism was hard to verify in advance.
• Discovery of new designers was difficult.

In order to address all of these issues faced by freelance designers and design seekers, we decided to build an open and innovative crowdsourcing marketplace.

Because I had been a freelancer for few years, I already knew the pain points on the designer side. To validate on the buyers end, I asked many of my past clients if they would be interested in this approach to design services, and the response was very positive. We even tested out the platform with a few designers and friends (as clients), and everyone loved the idea!

It was clear there was a need for what we were planning to build, and the next step was to figure out how to build the product and target our potential customers. We launched the beta in April 2015, and we went fully live around October 2015.

What did it take to build the initial product? (time, money, tech, etc.)

As Designhill is a bootstrapped business, our funding came through our personal savings and family support. We had to charge our clients from day one, because we had to pay the designers for their work.

We started with a small team of four developers, but our first hires were not the best choices, to be honest. We soon realized that hiring is a challenge. But in the meantime we wrote the code in PHP, and it took us around 4-5 months to get the first beta out.

On the server side of things, we're using many AWS services, including EC2, RDS, CDN, SES, and Elasticache. I highly recommend moving to AWS to get the best performance, as it's easily scalable and very affordable.

We also rely on many tools to function smoothly, like Customer.io (segment emails), Hotjar (analytics), Ahrefs and Moz (SEO and competitor research), Zopim Chat (support), Trello, Google Apps, and many more.

What marketing strategies have you used to grow your business?

At Designhill we've tried and experimented with every possible marketing strategy in the book. Some have worked really well and some haven't. Every business is different, and each strategy may have a different outcome for a business.

Native advertising is probably the most fruitful and influential form of advertising we've used. No one wants to hear you talking about your business, and paying for ads all the time is just too expensive. However, creating share-worthy content that's rich in research and facts is the best and the most effective way of reaching out to potential customers. Also, it helps greatly with your SEO, so we focus 60-70% of our time on this marketing channel.

Getting the SEO right was actually a big challenge for us. Ranking organically is very tough. To be honest, we didn't understand how SEO worked initially, and nobody really knows how the algorithms work. However, we did know that a business like ours needed to rank on Google to do well. We eventually figured out that we had to create content that was unique, high quality, and extremely shareable. It ended being a huge success for us, helping to boost our rankings on Google and improve our branding, too:

• Our microsite Interactive Guide to Famous Logos and Their Hidden Meanings has been featured on more than 100 websites, like Creativebloq and DesignTaxi. It's generated more than 18,000 social shares and 100,000+ pageviews.
• Another of our microsites, Factors that Influence Startup Success, has been featured on more than 35 sites, including Forbes and Business.com. It's generated more than 5,000 social shares and over 50,000 pageviews.
• We also made an interactive quiz called What Type of Entrepreneur Are You? It's been in Forbes, DesignTaxi, and 50+ other websites, and has gotten over 80,000 pageviews.
• We've even created interactive guides for businesses on how to use Twitter, Facebook, and LinkedIn that have been shared and used by many.

These microsites, guides, and the quiz helped us rank organically and get lots of traffic. As a result, we've avoided the high costs of hiring a PR agency (I personally feel that the PR system is broken) while getting lots of coverage and boost to our branding regardless.

We use all forms of social media channels, and each of them serves a different purpose: Facebook is great for community-building and attracting designers. Twitter is great for outreach and content marketing. Google Plus is great for getting your content indexed and finding connects. LinkedIn is more of a professional network, and we use it to promote our content through LinkedIn Pulse.

Another thing we use extensively are posts on forums and Q&A sites. These are a great medium for attracting clients and driving business, as they attract a lot of actual customers with real intent to purchase.

Sending follow-up emails (based on customer profiles and segmentation) goes a long way in converting leads and getting repeat clients. It's definitely something that everyone should focus on.

Finally, partnerships sound great, but in my experience very few of them drive real value. In a partnership, you need both of the companies to play a proactive role in promoting the other to its users, which rarely happens. Simply having a link on a partner's website isn't much help.

Indie Hackers community member channingallen asks: How were you able to grow both sides of your two-sided marketplace?

Like any other marketplace, we faced the chicken-and-egg problem. We had to get the right number of designers on the supply side who could fulfill all the design needs for our clients. Simultaneously, we had to ensure they were providing quality, on-time delivery and were able to rely on Designhill as a regular source of income.

On the buyer side, we had to convince our prospective clients that we were a credible business, as we're an Indian startup, and most of our clients were from the US, Australia, the UK, and Canada. It took time, but today if you check out any of the review sites like TrustedCompany, TrustPilot, etc., you'll see what our past clients have to say about us.

We started out by building a small community of designers. Without designers we wouldn't be able to solve any problem at all, so it was vital for our business to find at least a few good designers before approaching prospective clients. On the client end, we started out with our friends and families. They were our early adopters, and they were happy to try our service and give us some real feedback.

Showcase of design content winners.

How does your business model work? What's the story behind your revenue?

To date, we provide three different types of services. The first type is crowdsourcing via contests. Clients can post a contest, and multiple designers participate by submitting designs as per the brief provided. Here's how it works:

1. As a client, submit your design brief through our intuitive onboarding process.
2. Pick a package and launch your contest.
3. You'll get 50+ designs in under 7 days.
4. Provide feedback through star ratings, comments, and private messages.
5. Pick your favorite design and you'll receive the original files.

Our second service is one-to-one freelancing projects. Clients can search through our directory of designer portfolios, handpick the one they like, and start a one-to-one project with them on their own terms.

Finally, we have a ready-made logo store, where you can buy from a curated selection of logos. Clients on a time constraint who are looking for a design immediately can buy from a highly curated list of logos from our logo store.

Last month (January 2017) we crossed the $1M ARR mark. Our revenue has been increasing at a high rate every month (21%), and we're hoping to hit the $10M ARR mark 12 months from now.

I've found that acquiring even a single customer is a very long process. If your prospective client is going to spend a penny on your product, they have to be 100% convinced and confident that your product can solve their problem. They will compare you with your competitors, look into reviews to see what past clients have to say, weigh the pros and cons, and then they'll make a decision.

If anything goes wrong in between their first interaction with your website and actually purchasing your product, you'll end up losing a customer. Thus, apart from building a product, we've also been creating a brand value and perfecting our funnels. Our revenue has grown as a result of reducing our churn rate, improving the onboarding process, and performing lots of A/B testing.

Every time you perform an action it has an impact. It could be a positive impact or a negative one. It may increase your conversions by 1% or 10%, or it may decrease them by 50%. To attain an incremental gain, you have to analyze your actions and monitor the effects. Either you stick with the change, or you revert back, or you might modify the new change as per your analysis. And then you do it all over again. Keep doing that again, and again, and again, and again, and never stop.

The client onboarding process today.

What are your goals for the future, and how will you accomplish them?

Our end goal is that, when someone thinks about sourcing a graphic design (no matter what kind), Designhill is the name that pops into their heads. The online graphic design industry is growing at a very rapid pace, much faster than the offline graphic design industry, and there's still no "Google" or "Amazon" in this space. We want to own the design space.

We plan to roll out a multi-lingual/multi-currency website some time this year, and that should be a game-changer. Although we're based out of India, we're a global platform, so we need to have a presence in every country in their local language and currency. Once we've successfully achieved that, we should have a much wider footprint and presence.

If you had to start over from the beginning, what would you do differently?

Designhill is the first actual product we've built, and we've faced lots of challenges over the years. From hiring the wrong people, to hiring too many, to losing out on clients because our initial product was buggy. We waited too long to launch the product, and we even had to totally rewrite it at some point. We paid for these mistakes with time moreso than money, but I think it's been a great experience and has taught us many things.

If I had to start over, I would launch faster, get the right people on our team, and concentrate more on the core values of the business. By "core values" I mean the factors that drive business, like the onboarding process for clients, and other tools/functionalities that make it easy for people to use the website.

For example, we invested a lot of time into building things like designer levels, subscriptions, etc. We could have easily avoided doing these things for quite some time, as they weren't that important. It's crucial to know what's important and what's not, so you can channel your time, energy, and funds in the right direction.

What were your biggest advantages? What helped the most?

I think one of our biggest advantages has been our geographic location. We are based out of India and, because of that, we've been able to provide 24x7 customer support via live chat and email. As we are not a traditional digital agency, but a tech/digital company, we knew that providing round-the-clock support to our clients would make a difference, and it did.

That extra human interaction helped us grow faster and differentiated us from our competitors. Not only that, but it gave us lots of real-time feedback from our users that we could learn from. Any business that can provide excellent customer service will see a very positive impact in the long run.

What's your advice for indie hackers who are just starting out?

This was our first actual product, so our learning curve has been long, and yes we committed a lot of mistakes on our way:

• Hire Intelligently — I think it's very critical to spend time finding the right team before you take the dive and start building a product. We made the mistake of not hiring well, and we paid with our time. Perhaps if we'd spent more time on putting the right team together, we would've been able to launch our product sooner.
• Launch Soon — Don't wait to create a perfect product, because that doesn't exist. Launch your MVP as soon as possible, and gather as much feedback as you can. The more you iterate and experiment, the faster you will learn and progress.

• Solve a Real Problem — Create a product that actually solves a problem for the masses, not just a problem that exists in your head. Build a product for your customers, not for yourself.
• Speak to your Customers — Talk. Talk. Talk. Don't ever stop doing that. The more you speak to your customers, the better you will understand their problems.
• Validate your Product — Create an MVP, launch your product as soon as possible, and validate that it's needed by your early adopters.
• Build a Scalable Product — You don't want to spend years building something that only serves a few where you'll quickly reach a point have trouble finding new customers.

As for reading, I'd recommend The Lean Startup by Eric Ries and Zero to One by Peter Thiel. But most importantly, get out there and start doing something!

Where can we go to learn more?

• Website: http://www.designhill.com
• Blog: http://www.designhill.com/blog
• Twitter: @designhilldh
• Facebook: DesignHillDH
• Inquiries: support@designhill.com
• Partnerships: partnerships@designhill.com

If you want to get in touch with me, you can email me or follow me on Twitter (@varun3). You can also leave a comment below, and I'll try to get back to you!