Growing a Sustainable Business Despite a Tough User Market

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

Hi IH! I’m Thomas Ketchell, one of the co-founders at Sutori. I studied History and Chinese at university but always wanted to start my own businesses.

My first was a pub crawl around Brussels for tourists; thankfully I ended up doing something more worthwhile. I started Sutori, an educational platform used by over one million educators and students. It’s a collaborative platform and an alternative to Powerpoint or Google Slides. The business is self-sufficient at around $10K/mo and three of us are making a living from it.

What motivated you to get started with Sutori?

It’s quite a long story. I was living in Beijing, China at the time and working on environmental projects while doing some social media work for organizations like Greenpeace. We were growing tired of the air pollution in China at the time so we came up with a simple idea. We would relive the Great Smog of London in 1952 on Twitter as if someone had a smartphone and was live-tweeting the event as it unfolded while comparing it to air pollution today. It got picked up by a lot of UK media and we had thousands of followers and tons of impressions. We weren’t sure how it was going to evolve, and at first we thought it was just a one-off lucky event.

We thought about creating an agency that would offer these one-off projects but we really did not want to be consultants. We wanted to build our own product and move away from Twitter. I teamed up with my friend from school, Yoran Brondsema, a full-stack developer and my brother Jonathan Ketchell, a teacher. The three of us started HSTRY together.

Working on a history-focused product in China where many things are still censored did not make much sense. We moved back to Europe and tried our Great Smog event with students in the UK. They really took to the content, which we packaged in a vertical timeline format with videos, quizzes and tons of great images. After some validation from schools in the UK and the Netherlands, we thought we'd be able to gather up enough interest to raise some money. Unfortunately we got rejected by all Belgian angel investors and had run out of money from a grant we received from the government. We put all remaining money we had into a [promo video of kids using HSTRY in The Netherlands.

At that moment, we had a decision to make: stop building the product or find a more EdTech-receptive market.

A few business angels in the US took interest in our product, and we were able to secure enough funding and move to the States. After a few pilot schools began using the tool, we quickly realized that students wanted to create their own presentations and timelines. We also concluded that we weren’t going to rewrite the whole history curriculum with just the three of us.

So we made our first pivot in order to focus on building out a creation tool, which would allow teachers and students create interactive timelines. The early feedback that resulted from the product's use in the classroom helped us realize that we had to let the users create content. This would shape the company’s growth and further success.

Since we raised angel funding, we haven't taken in any more capital in the last three years as we've just grown organically and focused on revenue through our users. We're now fully sustainable from revenue and have a payment plan set up to pay back our investors.

What went into building the initial product?

Our first version was all hard coded as a static timeline. It was manual work — we recorded ideas on a spreadsheet and then Yoran would add it to the website. The frontend was an Ember single page app and the backend was Ruby.

We had some basic interactive elements, like commenting on or liking a post. We also paid a designer to come up with some sketches for the first version. It took around three months to get the initial product built and it cost us around $5K in total. We had an experienced developer to help Yoran but that ended up being too costly. We had to quickly drop him due to finances.

At the time we weren’t getting paid, and were living off the small investment we received in Boston. We had no revenue and our platform was entirely free. It became our full-time job to try to make a living with HSTRY but our early plans to monetize weren’t successful. We couldn't figure out a model that would work, because the majority of our users were telling us they didn’t have the budget (and they still don’t!).

How have you attracted users and grown Sutori?

Since we started Sutori, we’ve focused on word-of-mouth and organic growth:

1. Cold outreach by email and Twitter
When we first started out, we had just a beta for teachers and struggled to get those first users. We used a combination of emails and tweets to get the first users to try our product. But once they started using it with their students, our numbers grew exponentially. One teacher brought in around 20 to 25 students, and the numbers kept going up. Those tweets and emails were very casual and we did our best to assure them that we were looking to assist them in their teaching.

2. Finding EdTech influencers
We started to figure out who were the most influential bloggers in the EdTech space, and we reached out to many of them to ask for a product review. We were fortunate to get some early coverage and a subsequent snowball effect. More users were reviewing and talking about our product. If you scroll down this timeline on Sutori you can see all the blog articles about us in the early days: https://www.sutori.com/press. This definitely helped us a lot and that helped us grow to a few thousand teachers.

3. Getting listed as a "top tool for timelines"
Once we had some initial traction, we were featured in an article that ranked high on Google — it still drives around 100 signups every day to Sutori. This has been a huge factor for growth.

4. SEO and user generated content
When you create a timeline on Sutori everything is private by default, but there are some teachers and users who make their work "public" to share with the community. If they do so, the content is indexed by Google. And since we have thousands of original pieces of content, we get a lot of traffic from random searches. We also allow users to "embed" their Sutori presentations in their websites, which then provides backlinks back to Sutori.

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

Sutori operates a freemium model. We sell annual subscriptions to individual teachers ($99), schools ($650), and businesses ($399).

During the first three years of launching, our paid offering was not well tailored to our audience. Teachers are already struggling with budgets and many do not receive any money from their schools for tech tools. So we decided to upsell any features that many of our teachers weren’t interested in purchasing alone.

Originally we did try a monthly model; but we soon found out that there were many teachers who were paying for a month, completing a project with their students, and then canceling (and never coming back). We removed the monthly pricing option and focused on the annual plan.

When we decided to limit Sutori’s creation tool (the core of what we offer), we slapped on a free 30-day trial and limited the free version to a basic creation experience. Our numbers went up significantly after that and put us in a better and more sustainable position. It took tons of iterations and customer conversations to get us to this particular paywall.

Education is a very difficult market to sell in. When we first started out after moving to the US, we didn't realize that schools and districts still use archaic buying processes. We continue to receive the bulk of our school sales by purchase orders and checks. It’s a lot of manual work to be approved as a vendor in the school or district system and get all the correct documentation in place. The sales cycle can be long, on average between three to six months.

Even with a versatile EdTech product like ours, we've struggled to identify a particular budgetary bucket to fit into. Since we do not provide any content, we're often allocated to a "digital tool" budget. As it stands we've sold to Library, Social Studies, ELA, Science, and Math departments. We have seen a lot more success with charter schools than public schools.

We have changed our value-add numerous times for schools, going from a simple timeline tool to a project-based learning tool focused on the 4Cs for 21st-century learning. I think we need to do a better job in figuring out our true value for the admin. We serve the teachers' needs well which is a clear value, but the buyer is a different beast — they're an admin that doesn't have much time. We're currently more of a vitamin rather than a direct painkiller for those who are looking to buy tools.

Churn is a problem we continue to face and haven’t been able to significantly tackle it. Many of our schools are renewing their subscriptions (70%), but individual teachers continue to cancel their subscription after a year. Unfortunately, many teachers have to pay out of pocket and unless they are using Sutori in their classroom at least a couple of times a month, they are unable to justify the price tag.

We’ve tried to keep costs low when operating Sutori. Focusing on receiving startup discounts helped us a lot for products like AWS & Stripe. We also used Intercom and Mailchimp but as we scaled in users, these services became too pricey; eventually we had to switch to cheaper alternatives such as Crisp and SES.

I recommend trying to live within your means when you’re bootstrapping, and unless the service you’re using is a true necessity for your sales or productivity, you can probably live without it.

What are your goals for the future?

We’re in a strange place at the moment. We have recurring and organic growth that is fueling our MRR and users, yet we feel a sense of stagnation. This is due to the fact that we’ve tried out many different experiments for growth and reaching new segments of users which have proven unsuccessful. We tried our hand with running some paid acquisition experiments but that didn’t lead us anywhere.

Our primary goal for the future is to continue growing and try to double our subscribed teachers which will lead to us be in a better position. We’ll most likely have to run some more experiments to figure out the correct channels.

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

If we had to start over again, we would definitely focus on monetization from day one. We spent far too long trying to grow but without really thinking about how we’d make money. Our early monetization offerings weren’t suitable and we wasted a lot of time. We also focused on fundraising as a goal when we should have been focused on growing revenue instead. It’s been a great learning experience to build this company from scratch but we should have been more focused on revenue and creating the right product for the right market.

Have you found anything particularly helpful or advantageous?

It’s been advantageous to have two fellow co-founders in building Sutori; our varied skill set has allowed us to really grow the product. One thing that has helped us as a remote team is having a proper structure in place — we worked in short sprints (two weeks) for development projects as well as some long-term plans. This early habit has enabled us to stay disciplined and focused on building out the product in a consistent manner.

We were also fortunate to ride the wave of Google Chromebooks hitting digital classrooms at the right time. Considering we focused on building out a web app (and not native like most companies were doing at the time), this was a good call — over 70% of our users are on a Chromebook!

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

The advice gets shared a lot I’m sure, but focus early on what problem you’re solving. We first created a product, realized it wasn’t solving much, and then managed to pivot; but not without wasting a lot of time. It’s vital to start talking to your customers as soon as possible. Don’t worry about having a polished or well-designed MVP — just having a paper MVP goes a long way. Create a newsletter and email marketing campaign from the very first day. This provides transparency to your followers and potential customers.

Where can we go to learn more?

Head on over to www.sutori.com and read our story here in full. Feel free to drop me an email at thomas@sutori.com or else you can find me on Twitter @tomketch — always happy to talk about EdTech and growing a business in the education market.