Reaching Ramen Profitability by Doing One Tiny Thing Well

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

Hello! I'm Matt Kandler. I'm a Brooklyn-based software developer, occasional interface designer, and the founder of Happyfeed, a gratitude journaling app for iOS and Android.

There's a good chance you've heard of gratitude journaling from the growing world of mental wellness blogging and podcast interviews (looking at you, Justin Kan). If you haven't, here's a quick overview. Positive psychologists have found that recording three things you are grateful for each day can help rewire your brain to focus more on the positive. I wrote a post summarizing some of the research for my blog. In short, the glass is half full. 😄

80% of Happyfeed's users are women, the majority of whom are between the ages of 25-34. Women are roughly twice as likely as men to suffer from depression which might explain these demographics. Happyfeed currently has about 1,500 daily active users and just over 150 paying subscribers. Taking into account the split between annual and monthly subscriptions, we're netting about $350/month from the App Store.

What motivated you to get started with Happyfeed?

Before Happyfeed, I was the designer and co-founder of an event sharing platform (let's call it "Twitter for events"). When it became clear that we would need to wind down the company, I started to worry about what I was going to do next. My co-founder was an engineer — Google had wanted to hire him before we started our company and it seemed he'd be in even higher demand with a little entrepreneurship under his belt. However, I'd only been a "designer" for the one-and-a-half years or so that we worked on our site. I didn't have a broad portfolio and my one project failed completely. I wanted to be a product manager but my lack of experience couldn't even get me past a phone screen at Uber.

I needed to fill in some gaps in my portfolio. In 2013, the mobile web still felt new. Instagram had just been acquired by Facebook and responsive design was not yet a given. I decided to design and build a simple app for a habit I'd picked up during the darker days as a startup founder — gratitude journaling. Positive Psychology was gaining popularity and I'd been following a couple blogs for tips and tricks to be happier. Eric Barker's blog was a favorite of mine and gratitude journaling was a recurring topic.

Fun fact: the original idea for Happyfeed was to build a filtered Twitter stream with only positive news (something we all would have enjoyed after the 2016 election).

What went into building the initial product?

I would not have considered myself a "coder" when I started Happyfeed. I studied mechanical engineering in college and always enjoyed programming projects — how hard could apps be in comparison? We'd just shut down our startup and my co-founder had moved off to New York. I was still in Palo Alto and had the itch to build something. Happyfeed was that thing. My life consisted of writing cover letters, tweaking my online portfolio, and hacking on my new idea.

After a short search, I found a free Stanford course online about how to build iPhone apps taught by Paul Hegarty. The course had ten lectures. I decided to watch two lectures each week, do the homework assignments on my own, and begin scheming on how I'd build my app. The schedule was rigid but comfortable and kept me focused.

Version 1.0 of Happyfeed was simple. I wanted everything to be cloud-based so I used Parse for the backend and all the app code was in Objective C. There were no photos, no deleting, no editing, no reminders, no streaks. You could make an account, enter three gratitudes each day, and go back if you skipped a day.

Those were some of the best months of my life: learning how to do something completely new, working toward a clear goal, and bicycling to Philz in Palo Alto each day. I was super broke (like three-digit-bank-account, borrowing-money-from-my-brother broke), but it was exciting!

I landed a product job at a startup by the end of summer and had to shift Happyfeed to nights and weekends while living in New York. From start to finish, I think it was about four months of work to get Happyfeed live in the App Store.

How have you attracted users and grown Happyfeed?

I think that the best way to grow is simply to put products out as soon as they can fully accomplish their main goal. What does that mean exactly? Version 1.0 of Happyfeed didn't have notifications, deleting, editing, photos, or any bells and whistles. It worked and it didn't crash (okay, maybe the first few versions did).

I may have posted the launch on my Facebook account, but I think that was it. My friend Karen posted something on Instagram (thanks, Karen).

For years after the launch, Happyfeed was mostly neglected and in maintenance mode. I'd update the code for new iOS versions and occasionally add a big feature like photo uploading, reminders, and streak tracking. Usually this was triggered by a user reaching out concerning a bug or feature request. Happyfeed was my side project: a little app that made me feel good. It was helping people be a little bit happier and that's all I needed.

There was a turning point in 2016 when I realized I only had about 40 daily active users. With almost 10,000 registered users, 40 was embarrassing! But I still received emails from happy users each week. Maybe the terrible retention was a fixable product issue? I decided to try to fix it.

To start, I added analytics to every key action in the app using Mixpanel and brainstormed ways to increase my DAUs. Two simple features saved the day here and boosted my DAUs by hundreds over the following months:

• Daily Notifications: For years Happyfeed had reminders, but it was the same thing everyday. I was inspired by fun daily reminders sent by The League (yes, I was single at the time) and decided to send out unique reminders each day. The idea of social currency was a big part of this: what could I share that might be reusable in conversation? Like a pun or fun fact.
• Throwbacks: I always enjoyed using Timehop, but I realized I had something even better than old social media posts. Happyfeed had all the things you specifically marked as positive each day. So I coded up a simple "memories" feature and shipped it to users. It was a huge hit! The first version of this was just white boxes saying "one year ago," "six months ago," etc.

This was a wonderful little period of growth, and it highlights the impact of the right features. You'll notice a huge drop off from the New Year's resolution crew (happens every year) and a big slow down into 2018 (from experiments and freemium introduction). I also released a few things that never really took off:

• Web App: Oh boy, I thought this would be huge. I built the whole thing in React/Redux and made it super mobile friendly so Android people could use it. The problem is that Happyfeed just isn't something that people associate with their desktop. It's a nice compliment to the app, fun to use (when I remember it exists), and it taught me some new coding languages. However, the web app gets only a few dozen active users a day.
• Monthly Reviews: Wouldn't it be cool if Happyfeed could summarize each of your past months? I thought so. So I made an email that pulled together a user's top ten words and top five emojis with options to tweet them out. It was generally received with crickets and often was a cause for huge email issues when sending (like spamming everyone 12 times each 😫).
• App Redesign (2.0): I wanted to update the look of the app when I released version 2.0 (freemium) so the free users would feel a little love. Honestly, this didn't affect usage numbers at all. I do like the look a lot better myself now, though!

Most recently I've released the Android version of Happyfeed and made some major updates to the reminder sending system. It's on Firebase Cloud Messaging now and I'm assured that the messages are actually being delivered. The growth is starting to look exciting again — up 8% week over week the past two weeks since launch. (The Product Hunt launch was a huge flop, though.)

What's your business model, and how have you grown your revenue?

May 2018 was when Happyfeed finally made its first dollar in subscription revenue. We have a freemium business model. The main app is 100% free and always will be, but there's a "Plus" version that offers a few additional features like a calendar view, more posts per day, and offline mode.

Pricing: I agonized over pricing for months. For the year leading up to the launch of "Plus," I would add a sentence about pricing to all my customer responses to try and get a feel for what they'd be willing to pay. I landed on $2.99/mo and now wonder if I could have done just as well at $4.99. Worth testing!

Features: For months after launching Plus, I would announce new paid features every few weeks. Offline mode, for example, gave me a nice bump in paid conversions. These announcements were also a nice excuse to get stale users back into the habit.

Converting to paid: I feel like I've done fairly well finding the right times to get users to try out the paid version. For example, after completing their 10th day, I ping them in the app to let them know about paid features, like more posts per day. My philosophy here is to try to present these when the feature is most useful. Letting them know there's a trial period helps too. I started at three days and moved up to a full week. Also, it's important to measure conversion rates and A/B test copy on the pop-ups. ✌️

In January, Happyfeed finally became profitable. How? We hit 100 paying subscribers, but it was mostly because I cut the costs by $130/mo by moving the database over to MongoDB.

One bit of advice: many software tools offer "startup" pricing or pseudo-accelerators where you can get free access for a year or so. I found out that our database software, MongoDB, has a startup accelerator and so Happyfeed got accepted for free access for a year. Google has a similar offering for Firebase, Google Cloud for Startups.

Cutting costs is one of the easiest ways to become profitable! 🔪

What are your goals for the future?

Like most indie hackers, my ultimate goal is to reach the point where I can sustain myself working solely on Happyfeed. This means I'll need about 5,000 paying subscribers — only 40x what I have now. 😅

I'm seriously considering raising a seed round of financing for Happyfeed this fall. It's become clear to me that (at least in the consumer software world) you need some initial capital to grow rapidly. I'd love to be able to hire on talented designers, marketers, and developers. To make that happen, Happyfeed needs to show a few months of strong growth. Ideally I'll be able to increase DAUs to 5,000 by the end of summer and have subscriptions scale proportionately (maybe to 750).

How am I going to get there? Lots of experiments and learning to shift from product to marketing. Most people find Happyfeed through word of mouth or searching the App Store, so there's a huge missed opportunity for...every other channel.

I've had some success with blogging and writing about positive psychology and habits in general. That's the next step, as well as reaching out more often to reporters and anyone interested in the subject. A guest post or two would really help.

Overall, I think I've made an app that now retains very well and delights users. I just need to increase the top of the funnel.

What are the biggest challenges you've faced and obstacles you've overcome? If you had to start over, what would you do differently?

Running a consumer internet company on your own is incredibly difficult. It feels like you are either a Hockey Stick Growth success or a massive failure. There's also a lot of luck (good and bad) involved and your users will be much flakier and more unpredictable than with other businesses.

I've made plenty of mistakes, but these are some of the biggest ones to date:

• Session tokens: If there's one thing users really don't want, it's to show up in your app one day without any access to their account. Well, I once attempted to limit the session token length and forgot to build something in the app to log the user out — so it would just crash on them whenever they opened it. Sure they could reinstall the app, but churning was a heck of a lot easier. Don't forget to handle errors gracefully!
• Emails: They say you should measure twice and cut once. I say measure 100 times, try breaking it anyway you can imagine, and DO NOT make any last minute edits before sending anything out. Once I sent out an email to 20,000 users that was missing an </a> tag so the whole second half rendered as a link. Oof.
• Launches: I've never had much luck with launches. My posts on Product Hunt are generally met with crickets, I don't put in the effort to get press from the appropriate sources, and I still haven't really figured out Facebook Groups or Reddit. There's a lot for me to learn here.
• Talk to users. I spent the majority of last fall working on a "thanking" feature. Unfortunately it was mostly in my head and I didn't get enough feedback from users. I launched it on Thanksgiving (a day NO ONE is online) and it got such low use that I removed it the following month. A few hard conversations would've saved me months of work.

Have you found anything particularly helpful or advantageous?

Something that's kept Happyfeed moving forward has been pure luck. Every now and then an influencer in the mental health space learns about the app and shares it with his or her followers. This usually leads to a 10x week and more excitement than I can handle. I'm trying to figure out a way to generate more of these moments.

Reading has always been an enormous help for me. A few books I've found particularly useful:

• The Lean Startup: Might seem outdated these days but it was one of the first books I read about starting a company. Most of us know the advice regarding MVPs but few people actually follow it.
• Influence: Can't recommend this one enough. It's more of a psychology read but covers some important concepts for selling and convincing others.
• Positioning: Another old but great one.

I also listen to startup podcasts almost obsessively. Here are a few of my favorites:

• This Week in Startups: I've been listening to Jason since I started my first startup. He's approaching 1,000 episodes so there's something in there for everyone. He's opinionated, but it leads to much more interesting interviews.
• Indie Hackers Podcast: Not just because we're here on Indie Hackers. I like the variety of guests and range of topics covered. Courtland excels at helping guests tell their story.
• YC Podcast: Craig is a master interviewer and tends to find interesting people to chat with. Some of my favorites are the pseudo post-mortems of YC companies.
• Startups for the Rest of Us: I just really enjoy the dynamic between Mike and Rob. It's easy to listen to and they both have a practical approach to common problems.
• 20 Minute VC: It's nice to get a sense of how VCs think and they've literally all been on this one, as well as a bunch of great founders. Feels a bit scripted at times but good nonetheless.

And of course, communities like Indie Hackers. Especially around the time I was launching version 2.0 of Happyfeed, the community was a perfect escape and resource for me. Thanks so much to everyone trying to make this a positive and productive group!

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

Make it a learning experience. No matter what you chose to work on, make sure that you're learning something new along the way. After I built out Happyfeed's web app in React/Redux, I was able to find contract work using those technologies. The app itself wasn't a huge success but the skills have made it worth the effort. Occasionally you'll learn new things and the product will take off. 🚀

Don't be embarrassed by your initial product. I'll say it a thousand times, but I don't believe in big launches. To me, an MVP just needs to do one tiny thing and do it well (without crashing or significant bugs). The fact that Happyfeed has grown slowly over time with users' needs is a really special feeling.

Persistence really is key. I can't tell you how often I've dismissed Happyfeed as a dumb idea that would never go anywhere. Who would pay for a glorified note-taking app? How would something so private ever scale? Is gratitude just going to be some weird trend? You have to ignore those thoughts and just keep going.

Where can we go to learn more?

If you’d like to try a new healthy habit, definitely check out the Happyfeed app. Feel free to email me directly with any product feedback or ideas at matt [at] happyfeed.co.

Occasionally, I write about product and startups on Medium, and you can find me on Twitter @mattkandler.

I hope you found this interview helpful! If anything resonates, or you've been dealing with similar issues at your own startup, I'd be more than happy to help out where I can. There's not a ton of consumer apps on here and it's certainly a unique struggle.