Turning a side hustle into a startup studio for best-in-class apps making $6k/mo

When Covid-19 hit, Matthias Neumayer and Dima Rubanov started coding together for the first time since they were teens.

What started as a side hustle soon became a full-time job. They launched a kid’s story generation app. Then a brand positioning app. Then a PDF chatbot. Now, they want to be the best in every niche they enter.

Here’s how they’re building their startup studio 👇.

Taking the leap

Dima: We’ve been best friends since high school. We coded as teenagers and ran an internet forum about filmmaking and politics when we were about 13. That was basically our first startup.

Then I studied economics and finance and worked in consulting for 7 years.

Matthias: I graduated in law and filmmaking at university. I spent eight months as a trainee lawyer before realizing I didn’t want to do it anymore.

I then worked in advertising and media production and had a successful agency for 8 years. 

We both suddenly had more time during the pandemic. So, we picked up coding again. After trying to build a product we never ended up launching, we both realized we’d have to go all in to make a business work.

We quit our jobs and started indie hacking full-time.

The first product

Dima: We created Oscar Stories, an app that generates bedtime stories for children. We made it in two months, launching a very raw MVP for on Product Hunt in March 2023. 

We got about 500 signups on the first day and we got a bunch of feedback. 

Matthias: The core tech stack is the same now as when it first launched. The front end is React Native and we have an Express server for the back end. 

We decided to build most things ourselves, which was a good decision for scaling. It started out pretty basic, but it’s way more complicated now. 

Rooting out bias in AI

Matthias: We are at 60k users, which is great. But we need to make sure we are ahead of the competition. 

We’re doing some finetuning to make sure our AI model uses language that’s accessible and appropriate for children.

Dima: With this new fine-tuning we are also launching a second storytelling app called LORA, for which we got a government grant. 

It’s going to try and reduce gender bias within children’s stories. The existing training data has a lot of bias, with boys always saving girls. 

Matthias: It’s important to talk to experts in the field you’re working in. We’ve spoken to people with an educational background here in Austria to help us get the app right.

A machine learning engineer, who's a great friend of ours, also helps us make sure we have a proper scientific background.

Playing with the business model

Dima: In the beginning, the app was free. We experimented with a points system, where you would buy points to exchange for stories.  

We then tried a regular subscription-only model, which didn’t work for us. Some people have subscription fatigue. 

So we’ve added a one-time purchase coin system to the subscription option, where you can buy a bunch of coins, or you can subscribe for unlimited stories.

We also introduced parity pricing which had a major impact on sales. 

It turns out the Portuguese we have in our app is closer to Brazilian Portuguese than Portuguese Portuguese. This, coupled with a lower-cost subscription, meant Brazil quickly became our number one market.

IRL Marketing

Matthias: It’s really hard to market children’s products. You can’t track users in the way you normally would, so we don’t have a lot of data. 

But we’ve been lucky with media coverage. We did a lot of press releases. I also had some PR contacts from my old work. 

We also featured in a Wired article, which was amazing. We have no idea how they found out about us.

After some local coverage, we got invited to startup fairs and other physical events.

We went to Game City in Austria, which is a huge event for video games and children. We had a booth and we spoke to about 500 potential customers daily. We got tons of feedback.

Dima: Seeing children use the app was particularly helpful. We had this stationary loading page after you generated a story. We only realised we needed to work on the time aspect because we saw children get disengaged during this window.

If you don’t have the chance to go to a live event, a service like Rapid User Tests, where a person is filmed using an app can be very helpful. 

Building a startup studio

Dima: We worked on Oscar Stories for the next nine or ten months before launching Branding5.

Matthias: I learnt about this concept of brand positioning in my old work. We did it for Oscar and realized we could productize it.

Brand positioning is about how you want your customers to perceive your brand emotionally. The attributes they’d use to describe it. 

We turned the established processes agencies would use — asking different questions and finding out the values a brand stands for — into a DIY tool, where AI takes you through that process.

Dimas: Five months after launching Branding5, we launched another app, FragDasPDF. 

Matthias: Our vision is to become a startup studio putting out bootstrapped products. Of course, you want to have a big MRR, but we also want to be number one, quality-wise, in our niches. 

Dima: FragDasPDF is a PDF chatbot for the German market. There is a lot of competition with these tools and it's easy for people to switch.

We quickly realized a chatbot wasn’t enough for our customers, who are largely students and researchers.

So we’re about to launch an add-on product with a word processing and formatting interface. It also has AI commands. You can select a paragraph, rephrase it, then save what you’ve produced to a Word doc or PDF. 

We want a student to be able to interact with his library of PDFs and write his whole thesis within our product.

Javascript people

Matthias: Most of our products are Next.js. We also use Firebase as a database and Supabase for vector storage.

We also use services like Gemini Flash, which is super fast and cheap, which is amazing. We're in the Microsoft for Startups and Google for Startups programs which give you AI credits.  

We are TypeScript and JavaScript people at heart. There’s some Python on the backend side, but that's just for AI finetuning.

Work with other people

Dima: We lived for a long time just off our savings because we had previous jobs. And luckily, we were careful with money back then. 

Now, we're reinvesting our revenues into paying a few developers. Building a small team will help you stay agile and implement ideas fast. 

We develop new products ourselves. Then we outsource things like bug fixing to others.

Matthias: It’s kind of cheesy, but for me, the fact I’m able to spend my whole week working with my best friend on these fun ideas is great. 

We’re also in startup and indie hacking communities. There are some pretty amazing people there who’ve helped us a lot.

Set your goals high

Matthias: We strive for freedom rather than money. We quit high-paying jobs when we started out and didn’t make any money for a year.

Dima: That’s why it’s really important to have a solid personal runway. A lot of people just have a few months and it can get you into a panic. Build on the side as long as you can, then go in full-time once you can support yourself.

And make sure you talk to users as soon as possible. Don’t build in the dark for ages.

Any kind of SaaS product, you're building for the user. Not that imaginary user you think of when you start. But a real user with different needs.  

Matthias: Our next step for Branding5 is creating a competitor analysis tool using some premium APIs. That idea came from a meeting with one of our existing clients.

Dima: With Oscar Stories, we thought it would just be kids using the app. But actually it’s a lot of parents. We thought Branding5 would be for companies. It ended up being for agencies. We thought FragDasPDF would be for consultants, but students are using it.

Matthias: I’d also say, don’t be held back by your own ambition. Make a product that stands out and it may have the potential to get much higher than $10,000 MRR. 

Have a big vision and set your goals high.