I was a lawyer, taught myself to code, bootstrapped Wavve to $150,000 MRR, and we just sold it. AMA!

Haha, the hardest question first 😂

A few reasons:

1. Our decision to sell ultimately came down to what would be best for the business. By the fall of 2020, we were tired of running the day to day operations at Wavve and needed some fresh blood and new ideas. We were also starting a new business, Churnkey.co, and wanted more time to focus on it.

2. Growing families. We've got infants and toddlers at home and our children demand more of our time/ attention these days. COVID was a true test of this as we were without childcare frequently.

3. After 5 years, it felt like time to take some risk off the table. While it's true we could've hired someone else to manage the day-to-day operations of Wavve, we were also very aware of how much personal net worth we had tied up in the business.

I had the same question in mind Courtland :) Plus are you allowed to share your growth and retention rates?

Welcome to the party!

It kind of depends on how you learn. If you're someone with a tendency to teach yourself new things, then one of the best things you can do is just decide on a project to build and google your way to building it.

When I started, there was an app idea I'd wanted to build for a long time and I couldn't afford to hire anyone so I set out to teach myself.

I used a few free tools like codecademy for some super basic stuff, and would just google the rest with each step of the way. It might be helpful to pick a language beforehand (choose JavaScript) and then pick a simple website or tool you have in mind to start. This helped me to internalize everything I learned and commit it to memory bc I knew I'd need to use it later. If I had decided that my goal was “learning to code” it would've taken me much longer.

I wouldn’t have known what to learn, when to learn it, or why it was necessary to learn a given topic. I've got a more thorough explainer and video if you'd like to go further into this https://bootstacker.substack.com/p/bootstacker-volume-1-is-ready.

Also, I really believe that your legal training can give you an edge. So much of code is taking separate pieces of language/syntax and figuring out how they work together, what could go wrong, etc... I wrote a short post on why I think learning to code is more like learning language (and doesn't require you to be mathematically minded). more here: https://nickfogle.com/code-is-just-language/

We actually got that advice from an old advisor when we were first starting out. "Oh, you have to incorporate as a Delaware C-Corp if you want VCs to take you seriously."

Turned out to be waste of money, time consuming, and totally unnecessary. We dissolved the C-Corp and went back to being a vanilla LLC once we realized we weren't interested in fundraising.

The Wavve transaction took the form of an asset sale, and I imagine the mechanics are easier if you're doing this through an LLC compared to C-Corp. I think (it varies by jurisdiction) there are fewer statutory and corporate formalities required with this approach.

I have to jump in here after seeing this post in the IndieHackers newsletter and engaging with Nick on Twitter. A few things here - there is a HUGE reason to be a C Corp and it doesn't relate to taking in money from investors (although this will be a hurdle if you aren't one and will likely have to reincorporate). If you think you will ever sell your startup then you should be a C Corp because of Section 1202 and 1045 of the tax code. What you want (and likely have) is QSBS (qualified small business stock) if your company is a C Corp (there are a few other rules to follow to make sure you have QSBS). If you hold that stock for 5+ years before an exit then you can exempt $10 million or 10 times your basis from your taxes - meaning zero federal taxes and zero state taxes in most states (California is a huge exception here with a clawback that they have).

I talk to founders about this ALL the time because time on the clock as an LLC DOES NOT COUNT towards that 5 year timer. I'm happy to talk to any founders here, one-on-one or as a group, to walk through this. You should do your own research and understanding because I am NOT a tax attorney but I have used the Section 1202 exemption a number of times to achieve 50% and 75% exclusion (it was those levels before it was raised to 100% - thanks Obama!).

BTW, Nick argued on Twitter that an LLC makes more sense because most startups will fail. Well, if you're optimizing for failure then you probably shouldn't be doing a startup anyways. Me? I optimize for success. What Nick proposes here is, in my opinion, a very bad take and I caution all of you from following this advice. That said, you should double check me too.

And you hit the nail on the head. It would take weeks or months of engineering time for a company to build their own, and after spending so much time building it for Wavve, we decided to start a company and make this super simple for other SaaS companies. Shoot me a DM if I can give you a demo or help at all. I'd love to hook you up with Churnkey!

As far as Wavve, I'll share some of how we hit each key milestone $1k, $10k, and $100k

The first $1k came Baird directly reaching out to podcasters and asking about the tool. I created an RSS scraper that would let us grab emails for any podcast and he was able to just sort of run with that.

The first $10k was more network effect. We had a nice first-mover advantage as the first company to commercialize audiograms, so any time someone saw one on Twitter or Instagram, they'd ask the person sharing how they made it (eventually we added a watermark). Then we'd get another customer. This was a sort of viral loop.

Getting from there to $100k was mostly due to years of organic content. While it takes forever to payoff, but eventually you'll start dominating the rankings for certain search terms. I'd say we released a new blog post 1-2x per month like clockwork for years.

Haha, we actually spent 18 months building something that sort of failed. We built this really cool product called uTalk -- it was likely an early version of Clubhouse and tried to raise venture money. The only problem, VC wasn't interested and we couldn't find a way to get our existing users to pay us.

The silver lining of this experience was we learned a TON about podcasters, content creators, and were in close proximity to what would become Wavve's market. Wavve started as an internal tool to help us promote our users content, and people were actually willing to pay us to use the internal tool if we let them.

IF you'd like to read more about how this happened and how we approached validation after wasting 18 months on something that failed, I've written a more detailed account here https://nickfogle.com/lessons-building-wavve/

Thanks!!!

We were first approached in January of 2019 by a broker (on behalf of an interested buyer). That sale didn't work out, but we were aware that this was an option for a few years before deciding to go forward. We stayed in touch with this broker over the years, and met once or twice a year to check in. When we made plans to sell at the beginning of 2021, we expected to take the broker route.

To our surprise, we received quite a few cold inbounds in December about buying Wavve. Those inbounds turned into calls and we eventually received letters of intent to buy Wavve from quite a few.

We've always been pretty transparent about running Wavve. I've written about it on my blog, Baird and I have written about it here on IH, and we've also shared some of our business metrics publicly. I think this helped to get us on the radar of those looking to acquire businesses.

Thanks Chris!

I can totally sympathize with this position. When you have no financial safety net and all that debt, it can feel even more intimidating to take additional risk. It's a very lonely experience and very few of your friends and colleagues will have any idea what it's like to shoulder this kind of burden.

At the peak of my student debt hole, I had $250,000 in loans accruing $52 per day in interest. It was absolutely soul crushing. I'm probably going to get some hate for this, but what worked for me was one thing. Getting angry. I realized no one was coming to rescue me, and I decided to do something about my situation. I worked like a maniac and placed a bunch of different bets.

I wrote a quick thread on how to think about this here:

Thanks Rich!!!

Haha, I'd get back 3 years of my life and $300k by skipping law school and going straight for something I was passionate about -- working in technology. Hell, I might even have skipped out on undergrad.

When I was in undergrad (2005-2008), I didn't realize this was an option for me. It seemed like the best thing I could strive to be was a doctor or a lawyer. I was young, naive, and didn't realize I was letting other people's standards define my own.

Thanks Carlos!

My best advice would be to think of something you want to build and just start! In 2012 I was fed up with the antiquated legal system and wanted to build a technology product for lawyers. It turned out that no one wanted to work with an unknown founder with just an idea so I taught myself to build out the idea.

It started with learning some basic no-code prototyping tools so I could design what was in my head. Then I found an interactive no-code builder called Hype by Tumult. As I started understanding the logic more, I started dipping my toes into JavaScript. Within a few weeks I realized I needed to focus more around learning code bc of the no-code tool's limitations.

Here's a better explanation of the strategy I'd recommend for anyone new: https://www.youtube.com/watch?v=fJo8Y_uQqw0

100% agree.

This quote defines me.

"Most people overestimate what they can accomplish in a year and underestimate what they can achieve in a decade."

haha, small world! David and Marty have been awesome.

Great idea for having both buyer and seller on for an episode. Happy to join and share more from our point of view. Feel free to DM me on twitter @nickfogle and we can get something scheduled.

Happy to share! Thanks!

Hey Mike! We're definitely planning to expand to other providers like Paypal's Braintree soon, but I haven't looked into what's required for "Payments Pro." I'll add it to my list.

It’s going to vary based on the transaction. If you’re looking for a simple way to structure it, I’d recommend and asset sale instead of transferring ownership of the entire business entity.

Also, if you’re in the position to buy a company, I’d definitely earmark a few thousand dollars to consult with a transactional attorney in your area. Even as an attorney myself, I was sure to hire outside counsel for help.

Thanks! Its evolved over time. At first it was mostly all direct outreach. As we grew, so did the viral impact of others seeing Wavve videos shared on social. We added a watermark to all 'free' user videos which really helped. Later on, much of our consistent, heavy growth came from organic content that was laid diligently years before. We also introduced an affiliate program which helped (but maybe not as significant as one might think). We didn't start spending heavily on paid ad channels until 2020.

My co-founder Baird joined Courtland on the IH Podcast last year and went into it in depth if you want to go deeper.

Lots of IH'ers (and engineers for that matter) think technical complexity or exotic features can give you a moat. I used to assume this as well. Given today's pace of innovation, I think it's fair to assume any technical edge will be commoditized over time, so it's crucial to stay focused on building a great product that customers love (your customers should be your moat).

Back in 2016, we were the first ones to commercialize this product because it was extremely difficult to do this at scale. So I guess we had a bit of a moat at first, but technical moats are hard to hold on to. I remember being so worried when our first competitors came online a year later (one was VC funded with like 10 people), but the best thing we ever did was ignore the noise and keep executing on the best product we could build for our customers.

As far as the idea... it's a long story but basically we worked within the space (social audio) for 18 months on the wrong product. After that failed, we learned what not to do and how important it was to validate before building a crazy complicated product. Here's the full Wavve origin story if you'd like to read it.

https://nickfogle.com/lessons-building-wavve/

Haha, people thought I was crazy. We were broke and I had six figures of law school debt to pay off, so any sort of paid program wasn't an option for me.

I posted a housing wanted ad on craigslist, we moved to a cheap part of my area, I drove a shuttle bus for about 9 months, and used every idle moment I had to teach myself to code. Back in 2012, I think Codecademy was probably the only tool I used that's still around today.

Yes, yes, and yes. 🤣

Early on we had some free AWS credits which helped as we experimented and started up. The problem with these credits is you don't do anything to optimize costs, and then you suddenly realize they're gone and you have ton of unexpected costs for things you're no longer using. Plus you get complacent with your actual service. Video rendering was still pretty complicated in 2016 and 2017. I had about 12 large instances running at one point in order to handle the load.

Our old infrastructure got us to about 1,000 customers before we hit scaling issues: servers started running out of memory, the job queue would get backed up, and customers were waiting longer and longer for videos to finish. This was something we put off for as long as we could.

Then in 2018 (I think?), we spent two months rewriting our entire backend and immediately started to see the benefits. Our AWS bill decreased by more than 50%, video wait times dropped by several minutes, and the system became much more robust with increased logging visibility and retry logic.

Charleston, SC is pretty small so I knew some of the others from the tech scene here. There were about 5 of us who made it our full time gig back in January 2016. The other partners have kept running things when I transitioned away to help launch Casa a while later.

This turned into a long rant and should probably be a separate post... so I'll just lead with my advice.

It's annoying to have companies come in and take some of your market share, and it's easy to be angry or feel defeated when this happens. Instead of wasting energy on negative, unproductive emotions, think of this as a good thing. Capitalism is working and competitors probably mean you've found an actual market to serve (something many never find). Instead of worrying about competitors, talk to your customers and learn what you can do build the project people actually want. Whatever you do, don't become a feature factory to chase product parity with competitors.

I'll share a personal anecdote and attempt to answer your other questions below:

We were the first company to commercialize audiograms, and I think we had a 5-6 month head start before competitors came online. Funny enough, my co-founder actually chatted with Sparemin's founder (product before they pivoted to Headliner) in the spring of 2017. I was shocked when they dropped Headliner a few months later.

There we were just sort of grinding along, growing through organic word of mouth and thinking we were operating in this tiny little market. Suddenly Sparemin/Headliner came rolling in like a steam engine. They seemed to be a well-funded company, with multiple employees and several engineers (we were just two people who were contracting on the side to survive). The worst part, they were happy to give away their service for free.

We were freaked out because as bootstrappers, we didn't have venture money to just throw away to support free plans for the sake of growth (i imagine they were burning cash to offer free subtitles and all that video generation). At the time, Wavve's free plan was only a minute and we'd been really focused on growing our paid users rather than just going after total user count.

Eventually we learned to just ignore the competition and focus on what we could control: listening to our customers, delivering on what they wanted, and continuing to improve our products in the areas where the potential for ROI aligned with what our customers wanted. As video technology became more ubiquitous and audio to video became more commoditized, we built our own custom runtime to make video generation faster, more reliable, and most of all, cheaper.

By 2019 we started to see new services pop up much more regularly. Since we were very public about what we'd built, I fear that we may have influenced many of these copycats to enter the market. I don't think we were ever really worried about competing against the type of founders who copy an existing business. If you think about the type of person who copies a product with the hope of making money, it's unlikely that they're hardworking and creative enough to sustain that business in the long run.

I'd guess that 90% of these businesses will fade away as people realize how hard it is to turn a product into a business. Our product was a very small part of what made the business successful. For years we talked to customers, built what they were asking for, invested in tutorials, social marketing, went to podcast conferences, built an affiliate program, and wrote well over 100 industry-specific blog posts.

In hindsight we were fortunate to have the first mover advantage. We were also smart to set very low time preferences when it came to growth strategy. The blog alone represents over one thousand hours of time spent writing content, and while this investment can take years to pay off, it helped us optimize the business for longer term, sustainable growth (and cheaper).

Thanks!

Yeah, organic content and SEO was the most critical part of our growth engine. My co-founder shares some stats from a while back here:

Other channels/ strategies that played a role to a lesser extent:

• affiliate program
• early viral growth
• paid ads (later stages)

Thanks!!

Haha, I hope it works out. We've only been public with Churnkey for a few months and it's already clear that B2B is totally different beast that the market we went after for Wavve. We're still hunting for a repeatable acquisition channel and have been doing direct sales too. I'll probably write a Churnkey update soon to explain these recent learnings.

At first I was so naive, I just assumed it would work out. By the time we'd sunk 18 months into a failing product, I was much more deliberate with how I invested my time and I think this forced us to find better market fit.

It wasn't easy balancing a full time job and startup. I pretty much gave up my twenties and early thirties working 60-80 hours per week. I used nights, weekends, and even my vacation weeks to work on building Wavve.

For student loan debt, I wrote a short, free ebook to help others in the situation. https://www.indiehackers.com/post/i-wrote-an-ebook-to-help-you-tackle-debt-it-s-free-b850bf9054

Funny story.

Our wives were friends and introduced us.

To be fair, I'd had a few years of professional software experience under my belt before I started hacking on what became Wavve. After learning to code in 2012-2013, I landed an internship at an enterprise software company, Blackbaud. I busted my tail through the internship and landed a full time job and gradually moved up through the ranks over the next few years. I worked under some really senior engineers and learned a ton from my time there (particularly how to deal with sensitive data).

As far as tech stack - I need to remain somewhat vague on the technical / server side, but I can share that we use AWS heavily and on the front-end we use Vue.js. Web app is pretty standard Vue + Static S3 + CloudFront.

haha, I guess financial security is kind of a moving target. While I got out of the paycheck to paycheck routine a few years ago, I didn't actually leave my 9-5 salaried job until last summer... mostly due to how long it took me to get rid of my massive student loan debt.

https://www.indiehackers.com/post/quitting-my-day-job-during-a-pandemic-d236cd27b8

While I can't give exact details about the transaction, I can say we sold to an awesome buyer, Calm Capital, and it was for a very healthy multiple of TTM EBITDA. I talk about the whole sale in detail here

https://nickfogle.com/selling-wavve/