How I Kept My MVP Lean and Reached $15K/Month
Hello! What's your background, and what are you working on?
Hello! I'm Nate Ritter. I am a technical entrepreneur located in Austin, TX, the CTO for Hotels for Hope, founder of Perfect Space, and popularizer of the hashtag.
At Perfect Space, we build fintech products like PingBid which is a two-sided network between lenders and marketers. The platform automatically optimizes the revenue a marketer makes by running real-time "reverse auctions" for each loan applicant with lenders who would like to service the loan.
PingBid currently generates about $15K/mo in revenue and is closing in on $3M total revenue since its inception.
What motivated you to get started with PingBid?
After years of participating in the affiliate marketing industry, freelancing, and eventually building a web development agency, we were fortunate enough to have a client come to us with the idea. They didn't want to pay for it up front, but were willing to pay a commission for each lead sold through the platform. A few weeks later the first version was launched and we started making revenue on the very first lead.
At the time my co-founder and I were building out our agency, supporting each of our families while living in San Diego, CA. While we enjoyed building the agency (with clients like Microsoft, LandRover, Activision/Blizzard; we were doing well), we both had a desire to build SaaS products.
What went into building the initial product?
In the agency world we were very good at scoping out products and working with clients to get down to the absolute minimum product someone would pay for and a person would use. So we pushed the client as far as we could.
With an extremely simple scope, we decided to build using a popular PHP framework and the LAMP stack I knew well, because of how quick it would be to prop something up and get validation.
It ended up being just a single API endpoint, database, and a few pings to lender APIs which the client brought to the table for us. No branding. No business cards. No user interface. No login. No accounts. No reporting. No billing connections.
(To this day I enjoy challenging potential entrepreneurs, coders, and clients as to what they think is really "minimum viable" when they describe their MVP.)
Thankfully, since we had contractors working on our other agency projects, we were able to invest spare time between projects on building it. Since the scope was so small to start with, I was able to push out the first version in a matter of a couple weeks.
How have you attracted users and grown PingBid?
My business partner was a former channel developer at a national cable company, so he knew how to cultivate B2B relationships. We also had a lucky strike where a former colleague of mine at a previous startup somehow heard through the grapevine what we were building. He reached out and put us in touch with our next client who we still have to this day.
With the fact that we had a two-sided B2B network, we knew to grow using the relationships we were generating — the lenders and marketers we already had as clients.
This was one thing I had learned from the original "Perfect Space" concept. Long before it was an agency (and before Craigslist had been so far-reaching) Perfect Space was a search engine for rental properties. I learned while building that business that networks need to be seeded on one side or the other. The best way to grow a network is to try to monopolize a single node. In other words, try very hard to get one single person's/client's entire network on-boarded. That is the most potent action you can take to grow. It starts the snowball rolling downhill.
Those first two clients intimately knew the lenders in the space already, so they made introductions for us which was to their benefit as well (the more lenders, the more likely a higher price would be paid for their leads). Those introductions led to more marketer introductions. And the gears kept turning in that way for years.
At the highest point, we were running over 100K leads through PingBid per day with room to scale. The system was built with hardware as the chokepoint, so all we had to do was add load balancers and replicated database servers as load grew and leads kept pouring in.
What's your business model, and how have you grown your revenue?
We make money simply by charging the marketer/seller a percentage commission of all leads sold to a lender/buyer.
One unique value we offer to our clients is the use of our relationships with the lenders so that they can start selling immediately. We also offer payments (and receipt of payments) via ACH or wire transfer after a reconciliation period, because the payments are so large and generally happen monthly. To this day we still don't have a payment system like PayPal or Stripe in place to keep our costs low. Since we're working with lenders and marketers (whose biggest worry is cash flow), it's optimal for everyone involved and charges less in fees than current payment systems.
Today we make about $15K per month. This number is substantially less than we were doing at its height. The fintech space, being as profitable as it is, also has its share of bad actors. We grew so quickly we didn't have time to vet all our clients properly, so we had some issues there. We eventually stopped onboarding new clients who didn't come with personal referrals from clients we already trusted. This slowed our growth but reduced the time it took to track down fraud. It's a balance we're happy to have regained where we enjoy cultivating relationships and providing quality service.
That said, we eventually did build everything out and it has been pretty much a self-service platform (with logins, reporting, etc).
Eventually we decided to shut the agency down but keep PingBid running. It happily continues to run well and our clients are still very happy with the value it provides. In fact, in the past year or so we've had lenders decide to sell leads that they get from other sources to other lenders.
| Year | Revenue |
| '13 | 5509 |
| '14 | 439824 |
| '15 | 387946 |
| '16 | 625905 |
| '17 | 194540 |
| '18 | 149601 |
What are your goals for the future?
PingBid's future for now is to live in maintenance mode. My business partner and I enjoy the fruits of our labor, keeping a scaleable platform like this running and the relationships we've built over the years that continue to give us new ideas for improvement.
While we've been entertaining acquisition offers, we've also continued to add on other services which can connect but are not required, like an SMS and/or email follow-up system for applicants who end up not committing to the lender to be used by their call centers.
What are the biggest challenges you've faced and obstacles you've overcome? If you had to start over, what would you do differently?
There were two things I'd probably do differently if given the opportunity.
The first is to spend more time and effort on finding ways to reduce fraud in the network. That was a killer – both to our revenue as well as our motivation and emotions. If we had done that we would definitely be sitting on a beach somewhere today.
I'd also spend more time marketing at conferences to get additional clients.
The combination of those two would increase revenue significantly again. There is still opportunity to do both, with a little work on the platform to bring it up to speed with a more current UI and a few additional features.
The other thing that probably hurt us more than anything was the fact we lived in San Diego; although it is one of the most fabulous places in the world to live in, it is also prohibitively expensive. If we'd had a lower cost of living, we likely would still be running it today as our primary source of income.
Have you found anything particularly helpful or advantageous?
The best decisions we made with PingBid were starting with a smaller product than anyone thought an MVP could be and taking money from the moment the doors opened. Although it's now a cliché, following the Lean Startup methodologies and books are what made this product successful from the beginning.
We also would have had a much more difficult time without already having an income. I still suggest entrepreneurship to everyone, but if you're in the corporate world making big bucks it's difficult to walk away from the money. Hacking away at something with an income already feeding you means you now have to (get to) make a new choice.
Today I have distilled my effectiveness down to a few habits: being thankful, spending time on the most important thing that will get me closer to my goal, meditation, exercise, and giving explicit praise to others. In fact, I use an app called "Done" to help me focus on doing those activities each week.
What's your advice for indie hackers who are just starting out?
Read Blue Ocean Strategy and Lean Startup, and learn about customer development.
Stop talking. Listen. If the pain is strong enough, someone will pay you for it. If they won't pay you, it's not that big of a pain.
I'm a better B2B person than I am about understanding a typical consumer, but one thing I learned recently is to think about the "when" as it relates to marketing.
What I mean is that we so often get caught up with "who" will want the products we build, but we don't give enough thought to when they will want them.
A 30-year-old woman doesn't want diapers. A 30-year-old woman who just had a baby definitely does. And so does the father probably. Targeting the "who" at the moment of their "when" is incredibly important.
To distill that down I ask myself this question now: When is the moment in which my target person will absolutely need my product?
Most of my mistakes with other products happened when I didn't think about the "when," but instead focused purely on the "who" (or worse, focused on my own product instead of my client's words/pain).
Where can we go to learn more?
If you're a marketer in the lending industries and are interested in learning more you can visit PingBid.com or Perfect Space and connect with me personally.
I love talking business, philosophy, and hashtags on Twitter, so please feel free join me there too.
And last but not least, I love Indie Hackers, so leave me a thought, question, personal musing, or delightful limerick in the comments below!
Did you launch MVP of your pruduct?
Yes. No UI was the MVP. I built it only after I had a commitment from the client. And then only gave them the bare minimum to prove it worked. We took a commission of that MVP. Only after we proved it did we build a UI for it.
Got it. Did you test it with end-users?
Did we test the MVP with our users? Yes. We made sure it was what they needed it to be before we turned on the service and sent live leads.
Did we test the UI with our end users? No. Once the MVP worked, we just replicated the MVP (spreadsheet) into the UI and then added functionality that made sense (filters, searching, exporting, showing basic info and allowing for clicking thru to see more detailed info per lead). And then we started building things that we were doing for the clients via their requests.
For example, if they asked us to send to one buyer before another, we knew to build a way to allow them to re-sort the buyers themselves.
If they asked to change certain fields, keys, or amounts, we built a feature that allowed them to do that themselves as well.
Eventually we stopped getting requests to do stuff for them (other than add a buyer they didn't know we already had integrated, which we kept close to the chest for competitive reasons). From that point forward, I've spent an average of 2 hours max per month on the product and it still pays out every day.
Would you include "some way to reduce fraud" in the scope of the MVP if you were doing this again, or does that belong in something like the MVP+1 scope?
Definitely a later thing and not MVP unless what you're building has to do with security or reducing fraud as a primary part of your offering. Even if I were to start over I wouldn't necessarily build something in to prevent it. Figuring out whether I had someone who wanted to use it is first - getting the "yes" and the payment. After that, figuring out how to do it profitably and without issues is a function of the systems and procedures you put into place around your business. If you can't get money in your bank because of your product, you'll definitely not have to deal with fraud for very long since you'll be out of business.
Thank you for sharing your story @nateritter ! It's awesome to see that an MVP could start without a user experience at all. Really opens up the realm of MVP possibilities :)
Thank you for writing this. I'm excited to focus on building very simple MVPs.
Your revenue dropped significantly from 2016 to 2017. Is fraud the main reason for that?
Did the increase in fraud came once you found success in 2016, or it grew over time until it blew in your face?
And, if you allow me one more question, how are you going to prevent that from happening in the future?
Thank you so much for a great interview and I wish you both find success in the upcoming years!
Thanks for the question @vlatoshi. The primary reason was because we kicked out folks we had found were fraudulent or doing things with customer data that we didn't approve of (spamming customers even though they sold the data to a lender, etc).
The fraud came once we found success. It happened with just a few bad actors all at once. And we thought we just had to to figure out how to filter out those bad actors. That proved harder than it sounds.
Right now, we're working on relationships only. If people come to us, we try to vet them by looking at their longstanding relationships and get personal validation. It's a long process, but it's proven to work so far. We hope to find a way to do this systematically and find a way to scale that portion of the business, but until then, we'd rather protect ourselves and our relationships from those bad actors than go after profit at all cost.
Thank you for your questions!
What are you working on now that PingBid is a side project?
Thanks for the question @joshdance.
I have a wide variety of things I've been working on, and actually this interview has renewed my interest in pushing it again. There are things to improve and opportunities to leverage with a working profit engine like this. So, my business partner and I are renewing our focus on it.
That said, I've worked on all kinds of things since: an automated algorithmic trading bot for crypto currencies, a bunch of things in the travel space, some personal finance tools like a personal SaaS budget program based on the envelopes budget method (yet to be released), and so many more.
This topic touches on a point of interest though... A problem with interviews like this is that it makes it sound like I tried one thing and voila, we have a profitable business that makes money. It's so rare to ever see someone who created one thing and they are set for life because of it. Being an "indie hacker" means you're in it for the journey and the process, not only the results. That means we're all likely failing more than we are succeeding. And that's ok. I've failed many many more times than this interview makes it sound like. But it's not a win ratio that matters in this line of work. And that gives me comfort when I'm struggling with so many failures with other projects. It's also the exciting part when you find that nugget of gold that works well.
What are you working on @joshdance (and just as important, why)?
That's a really great answer. Thanks for sharing that with us. I just released my first chrome extension, it's super simple and I just needed to get it out there to get my indie hacker side a push. I'm learning a lot and I'm going to be experimenting with another idea while I keep the other one alive as well.
I have one question, do you find that it's better to solve other people's problems or to solve your own problems? Because I've spent some time trying to find out what other people want but that's tricky because you can get a lot of false information, but if I focus on things that I would pay for, maybe others als will. What do you think?
Thanks for sharing a little about what you're building. "Super simple" is key. Just ship it, and then iterate as you learn.
I find it's much easier (and more fun) to solve your own problems than someone else's. You get to be opinionated and solve your issue the way you want to, because you're using it too. That makes you the expert and the customer all at the same time. Many times it also makes it easy to find other people who have that same problem who want it solved because you know the language they speak when they complain about it. You know what words they use, what alternatives they've probably tried (and hopefully failed) with, etc. And, if you're the only person who uses it, who cares whether you're profitable or not? It works for you, so you can spend as much or as little time on it as you want without worrying about making it into a business. You gain value out of your solution existing. That's much more satisfying to me.
That all said, solving a mountain of other people's issues will usually give you a mountain of money.
I guess it depends on your own perspective and what you need to focus on to serve yourself, your family, etc. If you need the money, don't build just for yourself unless you have already found the community of people who want what you have to offer. If you don't need the money, build what you want because you want it.
Freedom is what I hear most entrepreneurs want. And if you already have enough money to live off of, working on your own thing is exactly that - freedom.
You just might happily find that you working on your own thing because you have the freedom to do so also helps a bunch of other people like you. And if/when that lucky day comes, good for you! You get both!
Thanks a lot for the reply. Currently I have a very nice job but my goal is to be able to give myself and the people close to me that financial freedom and in order to do that I think I have to focus on things that will help others as well.
I try to put my new ideas through filters(scalability, possible target audience, etc ) so that I can check if they could get bigger(even though I doubt one can ever be 100% sure), but recently I found that it's helpful to ask myself the question "which problem do I have that I would gladly pay someone to fix?", then I write those down and take a pick.
I just got started with that so I'll test the ideas I have right now, see if someone cares enough to pay for it and get back here to share what I'll learn.
Again, thanks a lot for your advice, it might seem like a small thing but I really appreciate the fact that you took the time and good luck with your own journey.
It's been my pleasure. Please don't hesitate to keep in touch. I'm glad I could help in some small way. Good luck with your journey as well!
In simple term, I don't understand what PingBid does
Let me see if I can explain the process a bit more in bullet point format.
Does that help?
This helped me.
Cool product but the website is stuck in 2010 :-)
It's a good thing our customers care more about our service and technology than our marketing website I guess, which pretty much sums up what I mentioned in the interview re: how we started. :-)
Of course the service and technology are both very important, but you can't really ignore the importance of a well designed app/website/landing page. You are probably losing some potential customers or just not giving an optimal user experience for your customers.
I think the fact that we're profitable and doing just fine means I actually can ignore that.
Look, I appreciate your point of view, and I don't disagree with your opinion that the site looks outdated. But, please don't digress into bashing something that doesn't have an effect on our revenue at all.
I may be losing some potential customers, and I'm likely not giving an optimal user experience. But as I mentioned, I launched without a user experience at all. There was zero UI. And we still made money.
So, would you like to tell me what I should be focusing on again? Is it making money, or working on keeping my site up to date with the trends? What's more important given we all have only 24 hours in the day?
Hi Nate, I'm sorry if I'm stepping on some toes here, I'm just trying to provide a constructive feedback that could potentially (or not at all) help you increase your revenues or make your business better in any other aspect.
Let's say for the sake of the example you run a restaurant. You don't do any advertising/marketing but your business is booming and people love your food. With that being said, your front looks like a mess and there's no AC inside. Customers are still coming in for the great, one-of-a-kind food, but how about walk-ins? You're probably missing that.
Nowadays, you cannot ignore your online presence, not matter in which type of business you're involved. It's not something that costs more than a fraction of your revenues so I think it's a must-have.
I don't know the market well enough, I can't tell you if a new website brings a 10% increase in revenues, 1000% increase, or no increase whatsoever, but I think it's worth a shot. At the worst case scenario, you lost a couple of days of work and a few hundred bucks. The best case can be more than a few new customers, who converted in part because it was easy to see and understand the product on your landing page.