How We Developed A $8.5K/Month Reporting Tool For Influencers
Hello! Who are you and what business did you start?
My name is Bruno Bornsztein - I’m a web developer and entrepreneur. I started InfluenceKit to help content creators prove their value and make more money. The tool makes it easy to generate accurate, always-updated reports so influencers can show brands the real value of the sponsored content they’re creating.
Our customers are bloggers, Instagrammers, YouTubers and podcasters who want to increase their sponsored content revenue and better understand how their content performs on every digital channel. We currently have about 180 paying customers, including some of the top creators in the food and lifestyle content niches.
What's your backstory and how did you come up with the idea?
I started building web applications in Ruby on Rails in 2005, after several years of hacking together things in PHP, HTML, and Wordpress. In 2006, I launched Curbly.com, which was meant to become a social network for people interested in interior design and DIY (sort of what Houzz is today).
Over time, Curbly evolved into a pure blogging business - we hired writers, created content, and sold advertising and sponsored posts. InfluenceKit was really the result of an internal tool I developed to manage our entire blogging process at Curbly. It worked so well for us that eventually, I decided to turn it into a product.
My background in running a blogging business for more than ten years gave me a deep understanding of many of the needs of our potential customers. I knew most of their pain points and could speak about them in terms that resonated right away.
However, it took a while before I had enough confidence to take the whole thing really seriously. At first, I did the typical developer thing: create something cool, show it to a few people, be disappointed when it doesn’t turn into a viable business overnight. It took a lot more work than that! I had to be persistent, talking to everybody I could think of about InfluenceKit, showing them how it worked, explaining and refining the value proposition.
Fortunately, my primary business at the time (Curbly) was able to support my lifestyle and gave me the flexibility to work on InfluenceKit. So although I call InfluenceKit ‘bootstrapped’, it was really funded (or at least incubated) by my previous business.
Take us through the process of designing, prototyping, and manufacturing your first product.
I wrote the first lines of code for InfluenceKit in 2010! So it’s a little hard to remember. But basically, I fired up a new Rails application and started building just the minimum features that we needed at the time. It started with a calendar to plan our editorial content, and then went from there.
People are super busy! They have short attention spans. You might be terrible at describing your product ‘s value proposition to them. You have to be willing to do a lot of talking. Be relentlessly outward-facing with your project.
At the time I started building it, I had tried a bunch of other project management tools and didn’t think any of them worked really well for my use case. The truth is, I probably could have gone with something off the shelf and made it work, but I like building stuff! And this was a chance to build something I needed, with direct feedback from a business that would actually use it on a day to day basis.
Here’s what it looked like back then:
It wasn’t until I added automated reporting (a feature suggested to me be one of the dozens of people I set of coffee dates with to chat about InfluenceKit), that the value proposition really started making sense to people. By letting content creators easily and automatically generate performance reports on any content, from any online channel, we had found a solution to a problem that was really hurting people and costing them a lot of time.
Describe the process of launching the business.
We never officially ‘launched’ InfluenceKit. We weren’t looking to make a big splash. In fact, we did a lot of things to try to limit our early growth, so that we could keep up with customer support and product development without going crazy.
Our early growth (actually, still the case today) came from word of mouth. Just bloggers telling other bloggers about us. We decided to require an application process (basically, invitation-only) to make sure that those early users were more likely to be a good customer.
I think about it like starting a restaurant: if you’re just starting out, you might only be good at making a couple of dishes, and even those, you’re probably not super fast or consistent at. So you really only want people walking through the door if they know what to expect, and really want what you’re selling. If you’re a taco stand, you don’t want customers coming in and being disappointed because you don’t sell pizza! You want everyone who leaves your shop to say “Man, those were the best tacos! And the service was awesome! I’m going to tell my friends”. We felt like if we opened the doors too wide, too soon, we’d have people leaving our taco shop saying “Man, that was the worst pizza I’ve ever had. I’m never going back there.”
We worked very hard on our initial messaging and public-facing landing page. We went through the entire business model canvas process, refining our thoughts about who our customer is, what their problems are, and how we address them. This was a very long process (around two months, most of the long phone calls and note-taking), but I’d highly recommend it. It helped set our company values and messaging in clearly defined terms.
If you’re someone who’s thinking about making the leap, I’d say don’t underestimate the risks of not starting your own business. Yes, starting something has risks. But so does the status quo.
InfluenceKit was lucky because our greatest cost, software development, was me! And my time (though not free) was discounted because I could rely on another business for my salary. Other costs (hosting, design, marketing) were (and still are) minimal relative to the cost of product development.
Below are some stats about my time spent developing InfluenceKit.
These are rough approximations based on my time tracked automatically via git commits - so they only represent pure coding time (not all my time spent in email, phone calls, photoshop, etc., etc.).
Now, keeping in mind that the basics of the application were already built prior to 2017 (my time tracking only goes back that far), and my hourly rate for web development is $150, you can figure about $145,000 just in development costs over the last two years to take the product from a functional internal tool to a real SaaS with paying customers. (Obviously, that number could change a lot depending on how much your web developer costs)
Our hosting costs over the last two years are in the $20,000 range. I’d estimate $10,000 or so for outsourced design work, and maybe another $20,000 for travel, lodging, and a few conferences we’ve attended. Legal and professional fees (taxes) would add another $10k or so. That comes out to a little over $200,000 in costs to this point.
Since launch, what has worked to attract and retain customers?
Word of mouth has been our strongest marketing channel. We focus on providing ridiculously good customer support, and I think that goes a long way toward reinforcing people’s positive feelings about us. A couple of podcast appearances and conferences have helped spread awareness, but really, we’re still relying on people to tell their peers about us.
Fortunately, InfluenceKit also has a ‘viral’ customer acquisition feature built-in. The main thing our users want to do with InfluenceKit is to generate and then share a report. And who are they sharing those reports with? Usually, brands and agencies that are doing influencer marketing. So when those brands and agencies see InfluenceKit reports coming in from one of their influencers, they pretty quickly decide that they want to get them from all of their influencers. Then they either contact us to talk about how to make that happen or just tell their influencer partners to check out InfluenceKit for their sponsored content reporting.
How are you doing today and what does the future look like?
We’re profitable-ish (if the founders had to take real salaries, we wouldn’t be, but we make more than we spend each month). Our challenge for 2020 is to figure out how to scale up our growth in a sane, sustainable way. We think we know what our strong customer acquisition channels are, but we haven’t developed those competencies yet, and we still have lots of work to do on the product, and the company itself.
Our MRR is around $8,500, but our MRR growth rate is pretty low and flat (around 1% - again, primarily by choice). Customer lifetime value is $940, and revenue churn is 4-5%. We’ll need to work hard next year to flip some of those numbers around by increasing customer growth and figuring out the right pricing strategy.
Through starting the business, have you learned anything particularly helpful or advantageous?
It’s easy to underestimate how much effort it will take to persist in getting your idea/product out into the world. I think developers (or maybe it’s just me?) have this idea that they’ll build something and then people will go crazy about it and start banging down their door to buy it from them.
People are super busy! They have short attention spans. You might be terrible at describing your product ‘s value proposition to them. Chances are, the first many, many people that you show it to will be lukewarm about it. You have to be willing to do a lot of talking, and as a coder, it’s always easier to do a lot of coding. Get out there with your product, shitty as it may currently be, and tell people about it. Be relentlessly outward-facing with your project.
What platform/tools do you use for your business?
InfluenceKit is a Rails app, hosted on Heroku, with the database and file storage in AWS (RDS, S3). We use Vue and FomanticUI for the frontend and Sidekiq for job processing.
Intercom is the third-party tool we use most often (and pay the most for). We do project management in Asana (which works, but I’m not crazy about it), and design mockups/review in InVision.
What have been the most influential books, podcasts, or other resources?
Getting Real - An old one, but still a great reference, and inspired a lot of people to think about software development in a new way.
Mindfulness in Plain English - Easy to read, no-nonsense way to learn about becoming mindful.
Advice for other entrepreneurs who want to get started or are just starting out?
If you’re someone who’s thinking about making the leap, I’d say don’t underestimate the risks of not starting your own business. Yes, starting something has risks. But so does the status quo. The company you’re working for could fail, or you could be laid off, or get put on a team you hate working with. It’s important to keep that in perspective.
They say something like 8 of 10 startups fail (the stat is disputed, but still, no one disputes the overall concept). But, of the people I know who started building their own businesses 10 or 15 years ago, almost all of them and have succeeded in some way, large or small (actually, mostly large).
I think part of the trick to being an entrepreneur is simply to persevere, and understand that it can take a long time to find your big success. So, in some ways, the sooner you start, the better.
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
InfluenceKit has provided an update on their business!
About 2 years ago, we followed up with InfluenceKit to see how they've been doing since we published this article.
Hey! 👋 I'm Pat Walls, the founder of Starter Story.
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