I profiled 80 companies for Indie Hackers. Here’s what I learned.

Like many, I was sad to see that the Indie Hackers podcast was ending. However, it turns out that Courtland and Channing are just shifting focus to written content. As part of that, they hired a team of writers, including me. I worked on the Ideas Reports, which is a big database of profiles of companies, almost all of them bootstrapped. The Ideas Reports are intended to help you get inspiration for your own projects:

I profiled 80 companies, which not only helped pay the bills as we grow Arno, but also taught me a ton about the strategies and tactics that bootstrapped companies have used to become successful. In this post, I’ll summarize what I learned.

#1) Solve your own problems.

This one was so common that it was a challenge to find new ways to describe it in each report: “scratch your own itch,” “build for yourself,” “fix what you know,” etc.

Often, the initial solution wasn’t even software and the founder wasn’t even thinking about making a company when they created it. They were just trying to make their lives a little easier. For example, Jen Yip of Lunch Money created a spreadsheet to track her expenses. It wasn’t until her sisters-in-law started using it that she realized she could turn it into a bonafide product.

A mistake that I’ve made a lot — and I think many other founders have made too — is not focusing enough on the problem. The more deeply you understand the problem you are trying to solve and who is experiencing it, the easier everything becomes because you know how to market the product and what features you need and don’t need. Experiencing the problem yourself is the fastest way to get that deep knowledge.

However, a savvy thing that many founders did was to validate that their problems were shared by others. Perhaps your problem is just a result of your own quirky workflow or preferences unique to you. With Makoto’s and my first startup, we assumed that if we built something our financial analyst co-founders loved, other analysts would love it too. It turns out that our co-founders built financial models in a way unique not just to their company but to their specific office. We had an amazing product, for a market of about 5 people, which meant that the business failed.

#2) Find a niche.

Have you ever wondered how there can be so many CRMs or product analytics tools? The answer is that within these categories, there are many niches. For example, Aleem Mawani of Streak built a CRM that is integrated deeply with Gmail, which makes it easy to update data in the CRM as you are doing emails. That one differentiating feature was enough to capture a sliver of the market and now Streak is doing $10m ARR.

In fact — and this is a point Courtland always liked to make in the Indie Hackers podcast — the existence of huge companies like Salesforce proves that there is a large market for something like a CRM. In contrast, if you are trying to build something in a new category, there is a lot more uncertainty about whether people even want that kind of product at all.

Many of the companies I profiled found specific, neglected segments of an existing market. In order to serve a ton of customers, companies like Salesforce have to compromise the user experience for some users for the sake of everyone else. The result is that dominant tools like Salesforce are good enough for a lot of people but perfect for very few. Building the perfect product for a small niche of users is a common way to build a successful indie company.

There were also a number of companies that started out broad but then niched down later. Aiming to build a product that serves everyone is a classic startup mistake. On the face of it, it makes sense: The more people that use your product, the more money you can make, right? The big problem is that it becomes really hard to market it. Who do you target? Even if you get customers, you end up with a mixed bag of users, each with different ways of using the product, which complicates product development.

This is what happened to Nick Swan at SEOTesting.com. The product was previously called Sanity Check, and it was a platform that helped you analyze your SEO data. After revenue began to stall, Nick decided to take a step back and evaluate the business. He learned that customers put Sanity Check in the same bucket as tools like Ahrefs and Semrush, which shocked him because in his mind, Sanity Check was categorically different. He came to see that his best customers used Sanity Check to analyze their SEO experiments. He rebranded, which required virtually no changes to the product itself, and within a year, growth had picked up again. By niching down, it got a lot easier for Nick to communicate what SEOTesting.com is all about (it was right there in the company name!), which meant it was much easier to acquire users.

A useful rule of thumb when thinking about marketing is that someone should read your landing page’s H1 and say, “This was built for me.” In the words of April Dunford, your product needs to be “obviously awesome” to a specific segment of users. This is especially true the younger your company is. Companies like Notion can afford the luxury of vague marketing copy, because so many people already know who they are. (However, they also have tons of marketing that is still tailored to specific user personas.)

As a bootstrapped founder, if you can’t come up with a concise, crisp H1, then this is a sign that you haven’t found your niche.

#3) Harness word-of-mouth growth.

Every single company I researched grew through word-of-mouth. The shrewdest companies understood its importance and harnessed it, which meant providing an incredible experience to their users. They strived to make the product the best it could be, but they also provided great support. I was stunned by how much time founders spent on support, even once the company was generating significant amounts of revenue. Going out of your way to help customers doesn’t scale, but it allows you to learn so much about your users, which is why “doing things that don’t scale” is one of Paul Graham’s most famous pieces of advice.

Many of the companies I profiled also gave away a lot of value for free. Some companies had a freemium model, but many more intentionally did not, the main reason being that it would result in too much support work so they wouldn’t be able to provide a great experience to those free users. Rather, companies would do things like publish a lot of useful content that ranks well for SEO. Some also created free tools. By providing value for free, this meant that a lot more people could learn about them, trust them, and then tell other people about them.

Having a generous free tier has been one of the best decisions we’ve made at Arno. Half of our users come through word-of-mouth, which is especially great because our users speak so many different languages, so it would be very challenging to reach them with other kinds of marketing. Also, it simply feels good to be able to help students who don’t have a lot of money.

#4) If you build it, they will not come.

Among the 80 companies I profiled, there was only one that did no marketing in order to reach a decent scale: Going (formerly Scott Cheap’s Flights). Scott simply started sending out his email newsletter to friends and family and from there it went viral. Every other company had to grind to get their users.

This grind can take different forms. For some, like Marie Martens of Tally, it meant spending pretty much all day, every day for months manually reaching out to creators. For others, it means being active on Twitter or creating a bunch of SEO content.

#5) The “Big Launch” is a myth.

There seems to be this belief that if you get Product of the Day on Product Hunt, your company is going to succeed, and many startups put a lot of effort into having a big launch.

What happened with the companies I profiled was that even if they had a successful launch, this was a temporary spike in sign ups and subscribers, but then it subsided within a week or two. At that point, founders had to do the hard work of building out durable acquisition channels and improving the product in order to convert customers and keep them from churning. This is what happened to Michele and Mathias Hansen of Geocodio. Despite being at the top of Hacker News for a whole day, they only made $31 in their first month.

I’ve learned that a successful launch is good validation of your idea, but it doesn’t mean that you have reached zero gravity and that the momentum from the launch will carry you indefinitely.

#6) Startups grow exponentially.

All the companies I profiled followed exponential growth curves (the green line) as opposed to linear growth curves (the red line).

This meant that typically for several years, their growth was slow, perhaps even non-existent some months — look at how long that green line is basically at 0! But they kept plugging away, and eventually growth started to take off. For Lane Wagner of Boot.dev, the growth in the early days was so painfully slow that he even tried to sell the company. It’s now pulling in over $100,000 per month.

For some companies, the inflection point is sharp. For others, it’s more gentle. In almost none of them was there a specific factor that caused the big acceleration in growth. Rather, it just seemed to be the steady accumulation of improvements across different areas of the business combined with word-of-mouth which grows at an exponential rate. (However, I plan to write a blog post in which I try to pin down why startups grow exponentially as opposed to linearly. If you have any thoughts, please send me an email: otto.nagengast [at] gmail.com 🙂)

#7) It takes years.

Seeing the growth rates and timelines of so many companies really drove the point home to me that building a successful company takes years, not weeks or months. These days, I pretend like I’m getting a PhD. It takes around 5 years to get one, become an expert in a field, and get a job that pays you decent money. That’s the timeline that I assume I’m on as a bootstrapped founder.

To underscore some advice I heard so many times on the Indie Hackers podcast: Just don’t quit. If you can stay in the game long enough, and continue improving your company a little bit each day, the experience of the 80 companies I profiled suggests that eventually, growth will accelerate.

#8) Target agencies.

Unfortunately, I didn’t find any hacks for building a successful company. But, targeting agencies is perhaps the one exception. Agencies have multiple clients. If you can sell your tool to one agency, they likely will want to use it with each of their clients. This means that just by selling to that one agency, you can end up effectively selling to tons of companies, but with none of the sales work.

Agencies are also great targets because they are eager to find ways to save time so that they can can take on more clients.

#9) You don’t have to go full-time right away.

Around half the companies I profiled were built for many years while their founders held down other work, typically freelance or consulting work but sometimes even full-time jobs. You don’t need to risk all your money and live off ramen to be a successful startup founder. You can grow it slowly as a side project. You can transition to it part-time. Once you’re making enough revenue, then you can go full-time on it.

#10) Talk to customers.

This advice has become so common that it feels almost silly to say once more. Yet, founders of company after company I profiled talked about the importance of speaking with customers and using their feedback to improve the product.

I’ve realized that the advice “talk to customers” is good but not particularly useful because it doesn’t tell you how to go about doing it. For this, The Mom Test is essential reading.

With Arno, we’ve discovered that there’s a big difference between talking to a lot of users one time and talking to the same users many times. When you have a bunch of one-off conversations, you end up covering the same ground over and over. But, if you talk to the same users repeatedly, you will learn a lot more about how they are using the product and what things they’re doing around your product. Plus, you develop a real relationship with them, which motivates me to work harder on Arno so that I can help these people who have become friends.