How I Bought A Shopify App And Grew It To A $1M/Year

Ryan Kulp
CEO, Fomo
$90K
revenue/mo
2
Founders
5
Employees
Fomo
from Austin, TX, USA
started March 2016
$90,000
revenue/mo
2
Founders
5
Employees
64.7K
alexa rank
1.66K
followers
1.83K
followers
65
subs
market size
$45.5B
avg revenue (monthly)
$45K
starting costs
$17K
gross margin
89%
time to build
360 days
average product price
$49
growth channels
Brand Authenticity
business model
Advertising
best tools
Covve Scan, Twitter, Fomo
time investment
Side project
pros & cons
38 Pros & Cons
tips
4 Tips
Discover what tools Ryan reccommends to grow your business!
social media
other
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Hello! Who are you and what business did you start?

I’m Ryan Kulp, a marketer and long-time musician turned self-taught developer and micro PE fund manager. I grew up in Atlanta and then lived in NYC and San Francisco for 8 years after finishing school. Throughout this time I worked for a bunch of venture-backed tech startups, learning what to do and more importantly what NOT to do in a founder or management role. I also started and failed a couple of startups, using a mix of personal and “friends and family” funds but losing it all.

Finally, in 2016 I found and bought a social proof Shopify app called Notify, which we rebuilt and rebranded to Fomo. Over the next few years, we established ourselves as the market’s first and (I think?) largest social proof tool for eCommerce stores, scaling the original business by 600%.

Eventually, I stepped down as CEO in September 2020. during this time I experienced dramatic changes in my finances, my skill set (learning to code), and most importantly my mindset. I spent 1000s of hours reading books, going to conferences, networking, and sharpening my leadership chops to make Fomo something I could be proud of. It was my first startup success after 8 years of trying.

Nowadays our revenue is > $1mm annually and last month we were acquired by Relay Commerce.

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What's your backstory and how did you come up with the idea?

First off, I never wanted to be in tech, much less the “tech bro” whose body I find myself in today.

As a teenager I went deep on music, performing 100s of shows with a handful of bands, even recording a couple of rock “EP” albums, and getting a couple of million views on YouTube music videos. So when high school graduation rolled around I thought: why would I go to college? I’m going to be a rockstar!

Long story short, the rockstar career didn’t work out and I started college a year later. But for some reason, I was more motivated than ever to do well in school. so I studied hard, got great grades, and had a lot of amazing internships and work opportunities including Red Bull, Microsoft, Teach For America, BlackBerry, and others.

Throughout all of these experiences, marketing and consumer psychology were always on my mind. Probably 90% of every book I’ve read since my college years (2009-2012) is either self-development or related to social sciences.

With all this in mind, finding a social proof tool in 2016 clicked for me on a lot of levels. These marketing ideas echoed by many people today, “your customer is the best salesman, it doesn’t matter what YOU say about you,” etc, were all being embodied by this app called Notify. So buying it, and turning it into Fomo, was sort of the manifestation of everything I knew about marketing, dating back to my college days of experiential marketing campaigns, like hiding cold cans of Red Bull in the library.

The toughest part about these first couple of years was figuring out how to scale me. Hint: you can’t.

Take us through the process of designing, prototyping, and manufacturing your first product.

Since Fomo began as an acquisition, luckily some of the hard work was done for us. But we did have to reimagine the product to achieve our business goals. so I’ll talk about that.

First, we knew that Fomo needed to expand beyond Shopify. but after looking at the code and interface, it was obvious that we couldn’t expand the existing infrastructure to handle new connections. Essentially it was built as a Shopify plugin, whereas we wanted to build a platform. We also wanted an API, and we wanted our tool to be embeddable on any website via a simple JavaScript snippet.

So we started by simply extending (see: monkey-patching) the v1 codebase to support BigCommerce and WooCommerce. these small tweaks helped us figure out the key elements to abstract from our backend logic to make Fomo extendable to the 103 native integrations we have today.

Tactically speaking, since I was only a beginner developer when we started Fomo, we re-invested every single dollar of revenue back into the app, by hiring a dev agency that included a designer, front-end developer, back-end developer, and project manager. I then filled in the gaps by learning best practices from these developers’ work and fixing small bugs while they slept to keep the product development running smoothly.

Here are screenshots of the first Notifyapp.io lander (March 2016) and one of the early Fomo landers (2017, sadly I couldn’t find 2016!):

fomo-9932ea85-02da-42a1-8d65-572754ebc81f
2016

fomo-9932ea85-02da-42a1-8d65-572754ebc81f
2017

I kept a full-time job until the Summer of 2017. this allowed us to be aggressive in product development, as well as IP. I think we filed at least 15 different trademarks and copyrights in the first couple of years of operations, which came in handy later as dozens of competitors flooded the market and tried to use our protected taglines.

Our #1 driver of growth was simply social proof itself. It never felt right to me that a social proof tool should grow by any other mechanism, which is why we put a lot of effort into receiving honest customer reviews in every format possible.

The toughest part about these first couple of years was figuring out how to scale me. Hint: you can’t. I was juggling support tickets, live chats, phone calls, fixing bugs, and 1:1 meetings with colleagues for at least a year before I started hiring business people to take over each of those rules and do it better than me.

Describe the process of launching the business.

Launching Fomo was lackluster at best. My co-founder Justin and I went to a cafe in San Francisco, on Market Street, on the morning of August 9, 2016. We queued up a post on Product Hunt, tweeted to our friends, and sent small email newsletters to our blog followers. Then, we waited.

In our first month in business as Fomo (vs Notify, the predecessor) I think we only picked up like $300 new MRR. In part, this is due to our generous free plan, which nearly everyone signed up for during launch week. A couple of months later we got rid of the free plan, but have kept those few ~hundred users grandfathered in ever since. It’s the right thing to do.

To cover expenses outside what our revenue could handle, we got a 0% APR (12 months) business credit card from Chase Bank. on this card we racked up around $50,000 in expenses, mostly software development related, and I think at one time made small personal loans of around $1,100 to cover a short payroll.

Thankfully we grew 2x+ in the first year and were able to pay off all the credit card debt interest-free before it was due the following year.

I think the biggest thing I learned from this Year 1 experience was that I’m effective under pressure. Whether that means deadlines, public commitments (made and kept), or simply having a small team of folks who depend on me to not miss their paycheck, I’ve continued to use all these tactics to “force” myself to ship projects in the years since. Even last weekend, for example, I tweeted that I would complete a free online course in 24 hours. And 24 hours later, it was done.

Since launch, what has worked to attract and retain customers?

Our best marketing strategy, one we’ve replicated with varying results dozens of times, is product-led growth by way of integrations.

Originally Fomo connected only with Shopify, but after rearchitecting the backend we had the infrastructure to build new integrations in just a couple of hours. so our strategy became (and still is):

  1. Receive a customer request for X integration
  2. Investigate the API docs for X
  3. Build an MVP integration and make the customer a beta tester
  4. Reach out to X and let them know one of our mutual customers is using the integration
  5. Negotiate guest posts, case studies, newsletter swaps, etc to get the word out

But it gets better. In some cases, each of these 5 steps went even deeper in a way that complimented our growth goals. For example, sometimes “customers” didn’t request anything at all. We got a lot of great recommendations by reviewing the (saved) search queries on our integration landing page’s search box. When I saw that 5 people in 1 week had searched for Squarespace, I knew we had to build it, even though nobody asked.

We also got creative with Step #3. For example, sometimes we built integrations for customers on the condition that they first upgrade to a Fomo annual plan. Practically speaking this meant that the few hundred dollars it may cost us for a developer to build the integration in 5-6 hours would be covered up-front. Thus, even if nobody else ever used the integration, we already broke even.

These are just a couple of the tactics we implemented to protect ourselves as a bootstrapped company, hungry to innovate.

Outside of integrations, we tried dozens of tactics, from advertising to attending (+ speaking at) conferences, to SEO. we even made small acquisitions of 2 competitors (Conversion Booster, Refurther) and microsites like Built With Shopify, Honest Marketer, and Orange.

But all of this aside, our #1 driver of growth was simply social proof itself. It never felt right to me that a social proof tool should grow by any other mechanism, which is why we put a lot of effort into receiving honest customer reviews in every format possible.

We made reviewable profiles on Shopify, Capterra, G2 Crowd, BigCommerce, InfusionSoft, and a bunch of other review marketplaces. We also kept a public ledger of reviews in a shareable spreadsheet, which serves as a live feed to our customer's page.

Thanks to this effort we now have 300+ customer reviews, and over 100 full-length case studies! If I had to choose one thing, our extensive case study library is what I’m most proud of in my tenure running Fomo.

How are you doing today and what does the future look like?

I stepped down from the day-to-day in September 2020, then last week we sold the whole company to Relay Commerce. For the next year, I’ll be consulting directly for the fund, helping with deal flow and marketing content. Fomo’s CEO, Hideko Tachibana, will continue running the company.

Fomo’s ARR is > $1mm, and for the last couple of years, we focused mostly on optimizing margins (65%+) and workflows. There’s a point in the operation of a startup where, at least for me, you don’t want to be a startup anymore. By that I mean, you don’t want the daily fire drills, the late-night bug fixes, or the drama. So a lot of our work in the past couple of years has been about improving internal processes and making Fomo a chill place to work.

Our CPA (in ads, anyway) is somewhere around $24, with an LTV between $400-700, pending which cohort of users you’re looking at. our JavaScript snippet traffic handles upwards of 1 billion requests in our busy months (Black Friday shopping), and we have over 40,000 email subscribers to our newsletter.

fomo-9932ea85-02da-42a1-8d65-572754ebc81f

Going forward, with Relay’s help, we plan to continue expanding our footprint in the social proof space with more offerings that help different types of businesses. For example, I’m personally excited about one of our side projects, Fomo Storefront, which lets brick & mortar stores leverage the power of Fomo at their physical locations.

I think all of us were made for a purpose, the tricky thing is finding out what that purpose is. So keep asking questions, keep reading, keep studying, and keep thinking. I know I will be.

Through starting the business, have you learned anything particularly helpful or advantageous?

I’ve learned that management and leadership are not the same. I’ve learned that you can’t always find people to do what “you do” (as a founder) better than you, but rather that you can learn to live with 70% as good enough. I’ve learned that a rising tide raises all ships – when one person gets a raise, expect a few other colleagues to come knocking.

I’ve also learned that remote work, works. Fomo has been remote since Day 1, to the point that I wouldn’t even call us a “remote company.” And I learned that to mitigate this lack of facetime hosting team retreats in different places around the world is an excellent compromise.

Finally, I’ve learned that Nietzsche was right: “If you know the why, you can live any how.” keep building.

What have been the most influential books, podcasts, or other resources?

I’m a sucker for self-development, business biography, and pseudo-science. You know, Malcolm Gladwell-type stuff. It’s mostly BS but at least it makes you think.

For me, thinking ⇒ ideas ⇒ campaigns ⇒ innovation ⇒ competitive advantage.

A few of my favorites:

As cliche as this sounds, these books taught me to think outside the box, to ”change the conversation” (PR maxim), compete with inferior resources, and to have an open mind about what consumers want. I’d like to think that after serving 10s of 1000s of businesses at Fomo, we internalized some of those lessons.

Advice for other entrepreneurs who want to get started or are just starting out?

As Elon Musk (or someone, who was it?) recently said: if you need motivation, don’t start. While not an original statement of mine, I can at least echo it. There are just too many challenges to running a business that it’s not worth trying if you need inspiration.

What you need is Drive. This comes from the inside, and it doesn’t run out as quickly. It doesn’t care if it’s raining outside or you only slept 4 hours. Drive is waking up and saying “this is my purpose, and nobody else can do what I do, but it needs to be done, so it must be me who does it.”

I think all of us were made for a purpose, the tricky thing is finding out what that purpose is. So keep asking questions, keep reading, keep studying, and keep thinking. I know I will be.

Where can we go to learn more?

If you have any questions or comments, drop a comment below!

-  
Ryan Kulp, CEO of Fomo
Pat Walls,  Founder of Starter Story
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