Finding a Niche and Launching a Gay Video Chat Platform

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

Hi! My name is Edmund Mai, and I'm the co-founder of Potato Labs, a hybrid incubator/software consulting company. My partner Aaron Vasquez and I have several internet businesses, with Banana being one of our first and most interesting.

I originally studied economics at Syracuse University and was eventually laid off from an administrative job that I hated (and honestly sucked at) at a real estate company. At the time I had no idea what I was going to do, and it was Aaron who convinced me to learn programming at General Assembly.

Everyone around me thought I was nuts for going to school again right after I'd graduated. After four months of part-time web development (this was before coding bootcamps existed) and after asking hundreds of questions on StackOverflow, I mustered up the courage to apply for jobs as a developer. I sent out my resume to all the Ruby shops in NYC, and all but one web agency rejected me. I would work as a web developer for the four following years before finally embarking on my entrepreneurial adventure.

Banana is a random video chat app for gay men on Android and iOS. We shipped in late January/early February 2017, and it has already acquired almost 200,000 users with zero marketing in less than a year. It currently brings in $300 per month.

What motivated you to get started with Banana?

Actually, neither of us are gay.

At first we just wanted to explore WebRTC, a technology for peer-to-peer communication. We bounced around some ideas and settled upon a Chat Roulette/Omegle type video chat app on mobile.

As users of those successful web apps, we realized early on that all of them had one fundamental problem — the guy-to-girl ratio was always terrible. It's a two-sided marketplace that is hard to balance.

How could we solve this product issue? Maintaining a balance while trying to acquire new users would be a headache. We decided to simplify the equation: Well, what if everyone was looking for the same thing? We knew we were on to something.

By the way, this all happened after I quit my job. I broke all the rules and did everything in the wrong order. Normally, people come up with an idea they think has potential, then they work on it nights and weekends and validate the idea before they quit their jobs. I, on the other hand, was tired of working full time for someone else's company, so I decided to take the leap of faith and quit my job — all before even knowing what I was going to build. On top of that, we ended up building a product in a demographic I knew nothing about.

As a developer I've always liked creating things from scratch, because I knew that at some point in my life I would want to take control of my own future and start my own company. At work I would always be eager to create new projects because I wanted to go through the motion of going from zero to completion. By the time we started Banana, I was more than confident that we could create it from beginning to end because I had already accumulated a lot of technical knowledge through work experience.

What went into building the initial product?

The first version took a month to ship, and all the code was stuffed into a single 2000+ line file and a backend with 200+ lines stuffed into one main file. It was hideous, but allowed us to launch ASAP. Being self-funded from our savings, we wanted to validate the idea as quickly as possible.

Banana was initially built purely on curiosity. We honestly just wanted an excuse to play around with interesting technologies like WebRTC, websockets using Elixir/Phoenix, and React Native. After we settled on the technology, we decided on an idea and just started building it with little direction in mind. Luckily for us, we knew a really good designer who quickly helped us design an MVP.

We had so many ideas when we were brainstorming. We wanted to include texting, Snapchat-like face filters, demographic filtering, etc. However, we scoped it down to the bare minimum of just random video matches with a Facebook signup.

A month after we launched, we realized how much momentum we had and then added email signup, which doubled our daily signups instantly.

We spent only a hundred bucks (if that) to get the project up and running. The largest risk/commitment was time, which we minimized by literally just shipping as fast as we could. Only after we accumulated 10k+ users did we realize that v1 had major bugs that we quickly fixed!

How have you attracted users and grown Banana?

Honestly, we've been very surprised with our user growth so far.

It took only a few weeks for us to cross 10,000+ users, all without any marketing! And now we're at almost 200,000 and growing. I think we were lucky to pick an underserved niche, and now we're one of the biggest players in the space. Launching on both iOS and Android was a really good move since both markets were popular and helped us reach a critical mass of users, so that users were able to match almost instantly at any time of the day.

We've been acquiring 15,000 — 20,000 users consistently every month without spending a single dime because of our app store rankings. We've also been lucky enough to be featured on the Google App Store in India.

Aside from ASO, in-app marketing has had the largest impact on user acquisition by far. Having links to like and share our Facebook page has helped tremendously in getting the word across with no effort on our end. In general, it feels like the gay demographic is more willing to share on social media than the other markets that we've looked into.

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

Originally, Banana was just a free video chat platform. We've only recently integrated in-app texting along with in-app purchases. Users can now purchase gems that they use to start conversations with people they've matched with in the past. We have six different packages ranging from $4.99 all the way up to $199.99.

We briefly tested video advertisements as well, but decided that it took away too much from the experience with little reward. Since removing ads, our active users continues to increase week to week.

What are your goals for the future?

We have a ton of data on engagement that's just sitting there, so there is a lot of room to monetize that end of the business. There are so many metrics/events we should be tracking. This has all happened faster than expected, and we are just beginning to track more metrics so we can make more data driven decisions.

We are in the beginning stages of creating a web version, which would really help in not just acquiring more users, but also marketing since it would open doors to SEO, a blog, etc. Our web presence is lacking, and given the success of Omegle and Chat Roulette, we think there's a ton of opportunity for web. Given our technology stack, we can easily accomplish this (hooray for WebRTC!).

We've even had negotiations with a buyer of a renowned brand about licensing our software. Being engineers, we refactored our code in such a way that it has become almost like a template. From this we've been able to launch a lesbian and a meeting new friends version using the same code.

A potential buyer picked up on our ability to quickly launch different templates and reached out to us with an acquisition offer. Unfortunately we couldn't come to an agreement, but it was really exciting having an offer like that, and we hope to market well enough for more business deals in the future. We think a partnership with a marketing expert could really accelerate Banana's growth.

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

With our engineering background, marketing hasn't been our strong suit, and I think it is the key to taking Banana to the next level.

Neither of us are big social media users, but we are trying to push more social media content. We added a Facebook page and Instagram account, but neither have really been able to push the needle that far. I think this is where neither of us being too familiar with our target market is holding us back.

We're still on the fence as to whether we want to charge for the app at all, because we think engagement and retention would increase substantially if everything were free. Monetizing consumer apps is a volume game, and with the 30% cut that Apple and Google take from in-app purchases we think other revenue streams would be more lucrative.

We are considering partnering up with other companies for exclusive sponsorship deals. Something like "Sponsored by XXXXX" on the bottom corner of the video chat or match history screen. So if you're a sponsor and interested in collaborating, look for my contact info below!

Have you found anything particularly helpful or advantageous?

I'm really proud of the product decisions we've made thus far.

In terms of technology, we've chosen Elixir/Phoenix for our back end and WebRTC, a peer to peer video protocol, which helped scale to hundreds of thousands of concurrent users on a single server with almost no devops by leveraging Heroku and AWS. This has minimized our server and maintenance fees significantly. Also, using React Native has allowed us to build rapidly on both iOS and Android with ease.

For design, hiring a professional designer to design Banana has been one of the key factors in helping us create a polished product. There are only a few other apps in this space, and the majority of them are missing a clean look and feel. I don't think we would've been this successful if the two of us had just thrown something together. I attribute a lot of success of Banana to how well-designed it is.

In terms of general product direction, we've modeled ourselves after successful apps in the space like Azar and Holla, and tried to be as "dumb" as possible. We've used proven models to get to where we are and have minimized risk at every step of the way.

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

The common advice people give is to go into markets you know. However, sometimes it's okay to focus on your strengths. In our case, we were both engineers and loved playing with new technologies and ended up working backwards. We figured out the niche to go into by figuring out which market we could serve with the technologies we wanted to use.

Use your competition as research. What have they done successfully, and how can you apply those features to your own product? How can you make it better? They've taken the risk and you should use that to your advantage. Instead of being deterred by competition, you should embrace it.

I'd also recommend doing multiple projects at once when you're first starting out. A lot of things take time, and that's not something you can control. Refreshing your app store stats every hour isn't going to get you users any faster. Ship one thing, then ship another, then go back to your first thing and see if there's any traction. Rinse and repeat until you have something that looks promising.

Not all of your projects will be successful. Embrace failure as part of the process. Diversifying and experimenting in the early stages of your journey to being your own boss increases your chances of eventually hitting a home run.

Where can we go to learn more?

To learn more about Banana, check out the website.

If you're in need of mobile, web, or blockchain development you can find me here.

I'm happy to answer any questions in the comments below!