Why expanding my product catalog helped me reach $40k MRR

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

I'm Colin, CEO of Stencil Stop. I used to work in the packaging industry, initially as a structural designer and later an estimator, for companies that made paperboard and corrugated boxes. I definitely wasn't the best employee, but what I learned from real-life manufacturing organizations has been incredibly valuable in my attempt to build one from scratch.

Stencil Stop makes custom and ready-made stencils. Our products are used by hobbyists, artists, and marketers to paint walls, decorate sidewalks, etch glass, make custom shoes, customize cornhole boards, sprinkle cinnamon on coffee, promote events, and almost everything in between. (It's actually pretty mind-blowing how people use these things. We're surprised every day.)

Currently, our website generates over $40,000 in revenue per month.

What motivated you to get started with Stencil Stop?

I started Stencil Stop with a friend in 2015 shortly after we graduated from Clemson. Within a few months of graduation, I already knew that the nine to five life wasn't for me, so I was working hard every night on new ideas that fell somewhere between "Pablo Sanchez bobblehead" and "a sock that holds three beers."

I had been making all kinds of Clemson-themed signs out of cardboard on my cutting machine at work (the one I was supposed to use to do my actual packaging design job.) One night, my friend said, "What about Clemson stencils?" I was sure that a quick search would yield plenty of product results. But the hallowed stencil of Clemson's logo did not exist!

I had some decent design skills because of my packaging major and because my mom was an art teacher, so I figured I could get started. I made some samples, took some pictures, and made a super rough website. The first night the Clemson stencil was listed on the site, someone bought it! I don't even know how they found it. It was probably on the 37th page of Google. In any case, this was all the validation I needed to know people were willing to go out of their way to find stencils online.

Although Stencil Stop has emerged as the idea now that it's a full-fledged company, plenty of other ideas were born and have perished since that first stencil sale. And I certainly started the company without any stencil expertise whatsoever. But today, I'm proud to say we're all in on stencils.

What went into building the initial product?

I used Adobe Illustrator to design the stencils and a Kongsberg, the cutting machine I mentioned, to make them. The more time-intensive part was doing the research on what ready-made designs we wanted to sell, and how we could get the collegiate licensing to actually legally continue to sell the Clemson logo stencil.

Without having a clue what I was doing, I got a meeting with the head licensing guy at Clemson, showed him the product, and asked him what I needed to do to get it approved. He had a few thoughts, basically just a couple tweaks that I needed to make to get his authorization. That was actually a great learning experience, because I was able to bring the idea straight to the gatekeeper before even spending a dollar on licensing applications, filling out forms and all that, which ended up being a very involved process.

I had recently read both Four Hour Workweek and The Lean Startup, so those books likely facilitated this concept of cheaply validating ideas.

I worked on nights and weekends to make this happen. If I needed money for something, I spent my own. I was in my first job out of college in an unfamiliar town, so I kept working my ass off. Let's be real, I spent a lot of time working on this at work too. Like I said, I wasn't the best employee.

How have you attracted users and grown Stencil Stop?

Our launch was essentially that one dude, buying a stencil in the middle of the night. I initially built the site on Squarespace, though I switched to Shopify quickly because it had more e-commerce templates. The site has grown slowly and organically since 2015 because we essentially had no physical location to create quality content. I always felt like the idea of stencils was so visual, you couldn't write a blog post without supplemental photos and videos. In any case, our content strategy has really just gotten started since we moved into our new workspace in Downtown Sacramento in November 2019.

I never did any of the cold email and PR type stuff in the beginning. I always had some kind of nagging feeling that we weren't "legit" enough. Today, you can Google Stencil Stop and the whole first page is basically us. It looks like a real-life online brand. My sales process has always been to "be an option in every online stencil transaction," so I thought if I cold emailed people, I'd be shoving stencils down their throats when they weren't necessarily looking for them. In hindsight, this, too, was probably a bit timid. If you're starting and running a business, put your product out there! The worst thing a person can say is no. (Well, they can say "f*ck you" but they probably won't.)

Today, we have two of our own stencil-making laser cutters. After making stencils at work for a couple years, my friend and I had saved enough to purchase the first machine and rented out an old, 900 square foot airplane hangar in a retired airport for $100/month. We rented it from a friend's father, and that friend is now also a part-owner of the company. We toughed it out in that old hangar for over two years until we moved into our 3500 square foot warehouse in November. Our second machine literally arrived two days before I wrote this!

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

About 80% of our sales are for custom stencils. Our revenue really started to increase after adding custom stencils to our product mix, and the whole business has been built around the principle that customers typically don't find the stencil design they're looking for online.

We started selling them initially because customers actually started asking for them specifically. I had the ability to design them in Illustrator, so I always said yes if a customer was willing to purchase. By investing in contentand webpages built around custom stencils, we've been able to find a solid niche and become the go-to custom stencil company on the internet.

However, I recently learned something new and valuable. We sell on Amazon and upped our quantity of ready-made listings by 10x. I had always hypothesized that if we diluted our ready-made offerings from the original 30 or so designs that sold well, we'd give our customers too many options and sales would decrease.

But basically, the opposite ended up being true. When we looked at the data, our sales increased predictably and in a linear fashion proportional to the quantity of listings. And it makes sense logically, too. If you're looking for a dog stencil, and you only see one dog stencil on a website, it's probably not the EXACT dog stencil you want. But if you see 100 different dog stencils of different breeds, styles, and sizes, there's likely something for you.

All this is to say, we're still very small and very flexible. I've built the company in a lean fashion so we can pivot quickly with new data and new information. If I tested my assumption in 2016, though, maybe we'd be 10x bigger right now.

Today, we're at about $40,000 MRR in revenue. We reinvest almost all profits back into the business, but (at the expense of growth) we could likely slash costs and put our margins at something like 20%. Looking back, it seems like we hit sales plateaus for months at a time, followed by short bursts of explosive growth. During the plateaus we're simply trying to catch up and fix all the issues and processes that broke during the growth period. As we grow, we'll eliminate the plateau periods, primarily because I have many more people helping me now than I ever have before.

What are your goals for the future?

I want Stencil Stop to be the top stencil company on the internet. That comes with a few things, like appearing on the first page of Google for the search "stencils," getting different machines that allow us to make stencils from new materials... all of which will come in time.

I'm a big fan of Inc. Magazine and I want our company to make it onto the Inc. 500 list next year, which I've calculated would require us to make $2M in revenue in 2021, so that's probably the closest thing to a revenue goal that I currently have.

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

The lack of articles and content creation is one of the main things I would change if I could go back. I used to feel like every piece of content we produced had to be beyond reproach and absolutely perfect. I only recently realized that if I only just started creating content back in 2015, I would have figured it out along the way, and our organic traffic numbers would be so much higher than they are today. But, we're looking at the positives, right? We're creating lots of content now. And we'll still be around in five years.

I'm still making mistakes. In February of this year, we temporarily switched our site from Shopify to Wordpress in what ended up being a disaster of a website migration. We ended up switching back to Shopify after about two weeks. I had a friend who ran a small digital marketing company that took on the migration. He totally blew it, and by proxy, so did I. My team was counting on me to lead the migration internally and provide an improved website that increased our sales and expanded our reach. Therefore, I can't blame anyone but myself. I trusted what was told to me, not what I saw. Even though the pre-launch versions of the site didn't work, I was promised that all would be fixed upon launch. I erred in replacing proof with hope. Our traffic and sales tanked for about a month. It was a terrible experience.

What are the biggest challenges you've faced and obstacles you've overcome?

Working with other people, especially in reference to ownership of the company, has been one of the most perpetually difficult parts of running this business. My original "friend" that came up with the idea for stencils in the early brainstorming days turned out to be anything but.

Our situation followed almost exactly the cliché "start a business with a friend" story, and you know how it ends. Tyler, the Creator said it best: "I wanna help, but what you want for some / Some really don't want for themself."

So, you no longer work with your original co-founder, and that happens to a fair number of startup founders. Do you have any advice for others who might be in a similar situation?

If you're unsure about going into business with someone, don't. Especially a friend. Many people can clearly communicate their thoughts, desires, and emotions, but most can't. If you or your partner or friend isn't 100% able to communicate their feelings, it will cause problems which will percolate throughout every aspect of the work and the friendship.

I currently still work with a couple of my best friends, but we argue a lot. Not every relationship can stand up to that kind of strain. I certainly would not want to argue constantly with most of my friends or members of my family. It takes a seriously confident and focused person to take the emotion out of a heated debate. I love that stuff, but not everyone does.

Have you found anything particularly helpful or advantageous?

In bootstrapping a company, I've found that by doing a task or job yourself, you're able to optimize it to be the best version of itself before that task or job is outsourced.

The most stable parts of Stencil Stop, fulfillment, customer service, and design, were all originally managed 100% by me a few years ago. By doing each job, I was able to build robust process foundations. The parts of the business that are weakest, SEO and marketing, were outsourced from the beginning and have just recently been brought in-house to grow some muscle. I still handle most of the accounting, product development, and social media.

You started out doing very little marketing. Do you think you might have hit success sooner if you'd done that initially, or do you think it was better that you waited?

The quicker you do something, the quicker you learn about that thing, so yes, I should have started sooner. The faster you learn, the faster you can digest the information and improve your actions.

So I definitely think if I did things like run Google AdWords sooner, even to a website I thought looked shitty with a budget of $1/day, I would have gathered data that I could have used to learn faster, which would have allowed for more growth earlier.

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

Never think that something's going to be easy. It's tempting to see people blow up on Instagram, or have their website sales skyrocket. Sure, that could be you. But there's a 99.9% chance it won't be. Understand that if you want to grow something big and great and sustained, you'll have to put in extra work and sacrifices over days, months, and years. Plus, if it ends up actually being easy, no harm done (and congrats, you're in the .1%, and I'm jealous.)

Additionally, never take something a person who doesn't have a stake in the outcome of the situation tells you at face value. A light example is a customer service rep who tells you over the phone to simply navigate to a webpage to solve your problem. You may take him at his word only to find out the webpage doesn't exist. Not a huge deal. But there are plenty more super important situations you'll encounter with people like bankers, investors, and consultants, where you'll want to understand the full scope of what they're telling you and why trusting them affects you.

In addition to the books I referenced above, I recommend some books:

• 5 Dysfunctions of a Team by Patrick Lencioni for great team building principles
• Good to Great by Jim Collins - to understand the approaches of truly great companies
• The Goal by Eliyahu Goldratt - to inherently understand manufacturing practices
• Principles by Ray Dalio - to get your mind right
• Think and Grow Rich by Napoleon Hill - to really really get your mind right

Also check out Nielsen Norman Group for great principles on UX/UI design and the early days of Sticker Mule's blog when they were written by the CEO.

There are a lot of books that helped you, but did you encounter any books or advice along the way that you disagree with, or strongly wouldn't recommend?

I'm cautious of catch-all articles or recommendations. Obviously anyone reading this knows that tons of research and learning is required when running a business.

Simple tips like "the best Instagram posting time is 11 AM on Tuesdays" are quite tempting because they appear to eliminate hours of trial-and-error testing. Posting at 11 AM could be perfect for your account. But why trust that article? The article writer doesn't suffer the consequences if that stat is wrong, you do. So you have to do the work yourself.

"Don't go into business with friends" is another great example of broad advice that doesn't come with any specificity. Working with friends has worked for me, and it hasn't worked for me. It certainly depends on the parties involved. By itself, it's not great advice. Therefore, it's not worth paying much attention to, in my opinion.

Where can we go to learn more?

All you gotta do is follow Stencil Stop on Instagram. Most of the time you'll probably see my hand in the day's video. The text blocks of our posts are how I typically provide small insights and updates to what we have going on.

Holler with questions in the comments! I'll answer anything.