Channeling Our Love of Social Media Into a Profitable Business

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

Hi! I'm Julia, and I'm a 24-year-old web developer and first-time entrepreneur living in San Fransisco. My co-founder Eric and I are building an online video editor called Kapwing.

Kapwing is an online toolbox for short-form video. Right now, it has three features: a modern meme maker, a trendy sound effects editor, and an online video resizer.

From both desktop and mobile, users can upload their video, add text and effects, and download the output. Kapwing is free to use, but customers pay to remove a small watermark that appears in the corner.

We launched Kapwing about two months ago and added a paywall a month later. Now, Kapwing has more than 20 subscribed customers and brings in over $240/month in revenue. Our customers include marketing agencies, brands like Chubbies, social media influencers, small business owners, and casual creators, and we have hundreds of free users and thousands of memes on the platform.

Eric and I met as associate product managers at Google. He was one year above me in Google's APM program and left after two years to build his own projects from scratch. We stayed in touch, and in July I decided to leave Google to join him. We are bootstrapping, living off of our savings, and building everything ourselves from a couple of spare desks in a friend's office.

What motivated you to get started with Kapwing?

We're both heavy Facebook, Instagram, and Twitter users. This year, we noticed that video memes — with black or white caption bars around the video — seem to be eating our news feeds and surging in popularity.

Eric got the idea for Kapwing when he tried making a video meme in iMovie and discovered that, despite the trend, making it on his computer was a huge pain. Several months ago, he built a website that let users make these memes for free. But just a couple months later, he had to shut it down because it was losing him money.

When he took the meme maker offline this summer, several users wrote us urgently asking for us to bring it back. These raving fans said that they loved the site and used it every day, some for work and some for personal channels.

At the time, I had just left Google, and the two of us were working on other ideas. But eventually these users' encouragement and enthusiasm pulled us back to Kapwing.

From research on Google Trends, we found that the query volume for "video meme maker", "meme generator", etc. was pretty high, despite there being very few web apps to help people make them. So we rebuilt the old site from scratch, and Kapwing was born.

What went into building the initial product?

Kapwing is a pretty simple React web app, and it took us about three weeks to build. We bought the domain on Namecheap, paid someone on Fiverr to make the logo, and put up a landing page while we were developing to product to get a few email addresses from interested early adopters. (We ended up with ~100 initial addresses from our "email subscribe" box.)

We launched the bare-bones product online by emailing these subscribers and the initial site's power users. Users could upload a video, add text, and download a meme. The MVP cost about $50/month, including costs to buy the domain, rent the server, and host the website.

Our first few users loved the meme maker. Based on their feedback (which we solicited over email), we iterated and added features like a font selector, watermark editor, and trimmer. We added a Drift chatbot to the website to help us catch usability holes and bugs.

Once we felt good about the product, we built a paywall with Stripe and started charging users to remove the "Kapwing.com" watermark in the corner of videos.

How have you attracted users and grown Kapwing?

After we launched the paywall, we shifted from development to growth mode and brainstormed ways that we could grow our traffic and revenue. We tried cold outreach, paid advertising, social media, getting press, leveraging our networks, and offering discounts. Most things didn't work.

Even though Eric and I both used to work on Google Search, we were basically clueless about the importance of SEO until we started promoting our own startup. Organic discovery on Google was definitely our most powerful acquisition channel, and all ten of our first customers found us after searching for "meme maker" or the like. To win customers, we need Kapwing to show up at the top of Google results for queries like this:

Things that definitely worked:

• We started a blog about our startup learnings on the Kapwing domain and shared new posts on relevant internet forums. One post about our payment flow went semi-viral on Hacker News, and hundreds of random bloggers and news sites linked to it. Almost 75% of the links on the internet to Kapwing.com point to this article, which has given us a serious boost on Google.
• We built irrelevant cool stuff: Even though they had nothing to do with meme making, we built a couple of things that were newsworthy enough to get some initial links from bloggers or media sites. When fires threatened Eric's parents' home in Santa Rosa, he made an interactive firemap that helped evacuees get information about their property, and the tool got featured in a couple of local news outlets. We also built a Bladerunner poster generator and launched it on reddit. Surprisingly, these first several links helped our Google organic rankings significantly.

Things that sort of worked:

• Registered Kapwing on startup sites: Hacker News, AngelList, Crunchbase, AlternativeTo, Beta Page, StartupRanking, NextBigWhat, GetWorm, BetaList, F6S, and several other sites allow founders to post a free profile on their startup (with a link!). Because we authored the descriptions ourselves, the links were all highly relevant to the queries we were targeting.
• Left comments on relevant questions on Quora and reddit
• Made how-to guides and videos on Medium, YouTube, and Snapguide.
• Did some cold outreach to bloggers and journalists: We searched for articles about meme makers and contacted the relevant writers. I tried dropping a "tip" on hundreds of news sites and experimented with a lot of different email tactics to see if reporters would cover or mention Kapwing. But I got almost no response :( Early on, one blogger from Try Modern wrote about Kapwing, and that helped a lot. We learned that when one news site blogs or writes about a product, other websites will re-publish the content on their own feeds, meaning even one post echoes across the internet and gets you tens or hundreds of links.

Things that didn't work:

• Viral posts on Facebook: We shared some of the video memes that were made on Kapwing. We had one video go viral with over 5M engagements! But sadly it didn't convert to any Kapwing customers… Our takeaway from this is that it's important to make sure that the audience you target consists of people likely to become customers.
• AdWords: I started a campaign to target adjacent queries like "GIF meme maker", "how to make a video meme", and others. For about $3.30, we get about 50 clicks to the website daily. To be honest, I think the Adwords product/user experience sucks for a small business owner. Advertising on Google was expensive, confusing, boring, and less fun than trying to rank organically. We didn't convert any customers through AdWords. On the bright side, Google gives you $100 in ads after your first $25, which is a great deal.
• Duplicating our landing page: Once we supported GIFs, we copied our "video meme maker" landing page, tweaked the text to optimize instead for GIFs, then relaunched on Hacker News. Although Kapwing got a few retweets and upvotes, the new landing page didn't rank for "GIF meme maker". It didn't have any "link juice" for that query.
• Asking our free users to add us to their websites/blogs: Since our users are content creators, we emailed our non-premium users asking them to help us out by linking to Kapwing.com. The email included a code snippet. But no one linked to Kapwing; there was no incentive behind our request.
• Cold outreach to potential customers: Despite hundreds of emails to video content creators, we didn't convince anyone to subscribe to the service. The outreach took way more time and emotional energy than our SEO efforts. Tweets and Instagram DMs seem spammy, and we found that popular creators are jaded to messages and emails due to bot spam. We mined email addresses from the internet and posted a fake Craigslist ad to get more social media manager emails, but since Kapwing serves a specific purpose, getting a random email is both spammy and out of context. We got a couple of lukewarm responses (with maybe a 2% response rate), but no conversions. Had similar results in Facebook Groups; posting a link to Kapwing wasn't helpful unless it was specifically related to a question someone asked.

Our takeaway was that you don't need Kapwing until you need it, meaning that building useful tools and trying to rank organically was our best growth strategy. We shifted back to development mode and launched the Trendy Sound Effects Editor and Online Video Resizer on Product Hunt, which helped us get some coverage from bloggers and news outlets.

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

Kapwing users can make a video for free, but the output videos have a small watermark in the bottom corner. Users can pay $1 to remove the watermark for their video, or they can pay $10/month for unlimited un-watermarked videos.

The business model is nice because our recurring revenue grows slowly over time as we add new valuable features and increase our website traffic. Kapwing is a pure software business, meaning there is essentially no marginal cost and every dollar is profit.

About a month after launching the paywall, we have 22 subscribed clients. We've gotten them slowly and steadily, about 1 per day, even as our traffic spiked and waned.

One surprising learning about payment processing: Stripe takes a big slice of the pie on microtransactions! It's hard to make money charging $1 because the fee that Stripe takes is so high, more than 33 cents.

More than a couple visitors to our site visitors have said they'd pay if PayPal was available, so we're considering adding PayPal support.

What are your goals for the future?

Keep growing Kapwing! The next milestone is paying the rent. We split our time between new feature development and trying to publish cool new content.

We're working to expand Kapwing's product offering to satisfy more video editing queries on Google, but we're also trying to build things that are newsworthy, or deserving of coverage from bloggers and news outlets. Our dream is to get covered in a major news outlet so that the website can rank higher on Google and get discovered by more people that need it.

Eventually, we want Kapwing to be the web's best video editor so that casual creators and people with space constraints don't need to download and learn to use an app to make awesome video. From the professional video editors and social media managers we've talked to, we've learned about dozens of tedious and frustrating video editing tasks that should be way simpler and faster.

If you search for "video editor" on Google, many of the top websites are spammy, non-functional, or require you to install heavy software on your machine. We also learned that Microsoft discontinued Windows Movie Maker and Google shut down the YouTube editor earlier this year.

Kapwing will displace these bad options with fast, fun, cheap tools that people trust. If we can build a brand around Kapwing and an expertise in cloud video editing technology, we will build light native apps as well.

Our dream is to distinguish ourselves from the iMovies and Adobes in our field. So we've got big plans for Kapwing, including online storytelling and creative video tools beyond meme making.

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

Since Kapwing is still so small, we've been slowed down by our own self-doubt. (You can read more about this in a blog post I wrote.) We can't yet rely on the money or many users to keep us motivated; we're the idea's only champions. Often, it's not clear that we will be able to build Kapwing into the online video editor that we dream about.

This doubt sometimes distracts us from making progress. We have wasted time and mental energy talking about why Kapwing could be a bad idea and debating whether we should work on something else.

My advice to other founders is that you don't learn much from these conversations. Doing led us to learning more and generating revenue, and if I could do it over I would spend less time analyzing and more time making and trying things. There's no perfect idea.

Have you found anything particularly helpful or advantageous?

We've benefited from launching and building things for our own community. We're techies, and we create content with the techie audience in mind when launching on Product Hunt, Hacker News, and reddit. We add emojis to our Product Hunt comments, and we read tech news to improve our tone in blog articles.

In the time since my departure from Google, I've gained a new appreciation for how important it is to target content towards a particular community.

Of course, we've also benefited from having a great partnership. Eric builds me up and helps be develop new ideas. We keep each other entertained, optimistic, and motivated. I think it would be too lonely to go at it alone.

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

MAKE.

Don't overthink it: We've been doing a lot of things and building and launching as frequently as possible. Building and launching new things, whether it's a blog article or Bladerunner poster generator, helps you develop and learn.

Try to keep a fast tempo for doing things. It sounds cheesy, but I've found that not losing confidence in yourself is one of hardest and most important aspects of growing a company.

Where can we go to learn more?

Come make or resize a video with Kapwing! And please let me know what you think by connecting with me on Twitter or sending me an email at julia@kapwing.com. I love chatting with content creators about new ideas and getting feedback on the product.

You can also check out our blog where we're posting about the startup journey.

Thanks for reading! Would love to hear your thoughts in the comments below.