How My Passion Side Project Became A VC-Backed Startup In Just 24 Hours

Paul Richards

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Published: October 19th, 2023

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Paul Richards

Founder, Recall

$9K

revenue/mo

Founders

Employees

Recall

recall.wiki

from Amsterdam, Netherlands

started March 2023

$9,000

revenue/mo

Founders

Employees

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Hello! Who are you and what business did you start?

Hi, I'm Paul, the founder of Recall, an AI-powered browser extension used to build your personal knowledge base from the content you consume online.

I started Recall because we're in an era defined by unprecedented content creation. Platforms focus on empowering creators to generate content, leading to an overwhelming influx of information. My goal with Recall is to help people fully leverage this wealth of content.

Existing tools allow users to save and categorize content, but the problem is that users seldom revisit it, which defeats the purpose of saving it in the first place. Recall solves this by storing your content in a knowledge graph and automatically finding connections in the content that you add. This way, past content is resurfaced when something related comes up.

While building Recall, I’ve had my fair share of ups and downs, but we are starting to see more ups than downs as we move closer to achieving product-market fit. Today we have just hit 9k USD MMR and have a 10% MoM growth rate but we are only just getting started.

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

I was an early employee at Maltego, a link analysis company that produces software used to map out relationships in information. Working at Maltego I had the idea to use the same technology to map out connections in the content I consumed online. My problem was I would save a lot of content from YouTube or blog posts but quickly forget about it and never really come back to it.

My idea was to store the content in a knowledge graph which would resurface past content when new related content comes up. I tried manually implementing this with existing tools like Notion and Evernote but was not happy with the result as it was very tedious. This is why I decided to start building Recall.

I started experimenting with a few ideas related to Recall at the start of 2022. At this stage, it was just a side project, I was still doing freelance software development full-time to pay the bills.

After a couple of months of coding, I had an MVP ready to show the world. It was fairly simple compared to my vision for the product, but it was a start. Basically, it would allow you to build up your database of anything that you come across that you found interesting and wanted to remember. These things could be people, places, books, movies, etc.

Recall would create a card for each thing that you added, automatically categorize it, and find connections with other cards that you have saved in the past. The idea was to help you resurface cards you had saved in the past when something related came up. It was solving a problem I think a lot of people have: they save a lot of notes, content, and bookmarks thinking they will revisit them but seldom do. My solution ensured that you had the opportunity to come back to past content when it was most relevant.

First version of Recall

Before I launched Product Hunt, I read everything I could find on strategies to make a successful launch. I spent hours preparing a list of where I could post about my launch and who and where I could ask for “support”.

After the launch, I got some initial traction and interest in the product, but the retention was really bad. People liked the idea and would try it out but very few would continue to become active users. I spent more time improving the product but I was not finding the hockey stick growth I was hoping for. I had a couple thousand signups from Product Hunt but the retention was not getting better regardless of what I tried.

I found myself stuck in the predicament that many founders find themselves in whether to pivot or persevere. Listening to advice from VCs and startup gurus, there seems to be a lot of consensus that if there isn’t much traction with your MVP, you should probably pivot as quickly as possible. This, however, is easier said than done when I had been pouring so much of myself into the project for months.

Many founders fall into the trap of trying to do too much too soon, which can dilute their primary mission and spread their resources thin.

I decided to park the project for a couple of months and focus more on my freelance software development work while I decided what to do next with Recall. I couldn’t bring myself to abandon it just yet.

During this time, there was one user who kept bugging me about adding a Dark Mode to Recall. They said they liked the product but they could not use it unless it had Dark Mode. At first, I ignored them, but after they persisted with a couple of emails, I decided one weekend to just implement it.

After releasing Dark Mode, I decided to post about my predicament on HackerNews (HN). My previous posts on HN did not get much traction but I thought: why not do an honest post asking the community for advice on what they thought of the product and if it was worth continuing? At the time, I didn’t think much about the post but little did I know it would change everything.

The Post that Changed Everything:

It was late in the evening when I made my HN post and the first time I checked on it was when I was getting ready to go to bed. I was surprised to see that I had about 30 upvotes and a couple of comments already. I quickly replied to the comments but each time I refreshed the page there would be another comment and more upvotes. This was the beginning of the ride which lasted about 24 hours.

I was seeing a huge spike in traffic to the Recall site and signups and I continued to get a lot of comments. The comments were very mixed, with some people saying they loved it and it was brilliant and some people bashing the idea saying that it was dumb and I was wasting my time.

Then I received an email from someone expressing their interest in investing in Recall. It seemed way too good to be true, especially considering it was November 2022 and the VC market had drastically crashed since the highs of 2021. I replied to their email with a lot of skepticism but after a quick Google, I realized that they were serious.

After a couple of emails back and forth, screenshots from Google Analytics, and one 40-minute phone call, we signed a SAFE (simple agreement for future equity) and they wired me a 120,000 USD investment.

I was in shock, in 24 hours I went from considering giving up on my passion side-project to having a VC-backed startup.

So here is the post that made it all happen. It got close to 500 upvotes on HackerNews and trended as the #1 post for about 13 hours.

I think what worked with it was the catchy title with the curse words and the fact that it was just honest about my situation.

As your business grows and the core problem is effectively addressed, you can then consider branching out and diversifying your offerings.

Describe the process of launching the business.

After receiving the funding for Recall, I found myself at a pivotal juncture. I now had a runway and could work on Recall full-time and even hire some people to help, but that still didn’t solve the problem of user retention.

My first move was to get someone to help with development to free up my time so I could focus on everything else that goes into building a business. I did a lot of interviews as I knew finding the right person was critical to the success of the product. After a handful of unsuccessful trial projects with developers I found on UpWork, I was introduced to Igor Gligorevic, a freelance software developer from Serbia. After my first call with him, I knew he was the one and after a month of working with him, I wanted him as a cofounder. I asked him to join Recall full-time as a cofounder and he agreed.

With Igor onboard we were moving 10x faster and I could focus on speaking with users. I set out on a mission to understand my users better and find out what was causing them to churn. My first attempt at this was to send out emails asking churned users if they could complete a feedback form on why they didn’t continue using the product. I quickly found out that no one fills these out. I had better success sending another form to my more active users, but I still wasn’t obtaining concrete data on which I could base a decision.

Next, I got some friends to use the tool for the first time in front of me. The trick was, they were not allowed to ask any questions and I was not allowed to say anything. This was truly an eye-opening experience. Things that I had thought were obvious did not make sense to the user. Barely anyone I did this with was getting through the onboarding process and seeing the real value of the product.

If someone sitting in front of me could not figure out how to use my product, it’s no wonder retention had been so bad. I had been so fixated on building the product I had not realized that it had become complicated to get started with. In my mind, it was just obvious - but that was because I had been staring at it every day for months.

I knew I needed to drastically simplify the product and improve the onboarding experience. I started the iterative process of watching someone use the product to find where they get stuck, fixing that issue, and doing it again with someone new. I did this two-step process over and over again until every user I watched could get onboarded and create their first summary without any hiccups.

The biggest takeaway from this is that asking users to give feedback is far less valuable than just sitting down and watching them use the product. In written feedback, people often just tell you what they think you want to hear, or they give you their ideas for different solutions (which can sometimes be useful). If you want to understand how users use your product, I recommend this strategy.

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

I have always tried to keep marketing costs as low as possible and focus on product-led growth. The goal is to have a product so good that people tell their friends about it. In reality, this is quite challenging, and some marketing effort is required.

Launching on Product Hunt was a great way to get our first batch of paying users, Recall came 2nd product of the day which resulted in our first 20 or so paying users. With so many new products being launched every day, there is a lot of competition on the Product Hunt and it has become a bit of a popularity contest. To do well it helps to have a large community that you can reach out to for support.

After Product Hunt, another way Recall has attracted a lot of its paid users is by posting on all the popular AI tool directories. Recall has benefited from all the hype and attention around AI in the last year. We have even done some paid advertising on a few of these AI tool directories.

In my effort to find low-cost marketing channels, I have been experimenting with a lot of growth hacks, trying to automate marketing as much as possible. One successful growth hack was that I built a bot that monitored Twitter for trending Tweets that had links to articles. My bot would then automatically create a summary for the article and post an image of the summary and link in the comments.

When people clicked my link, it would open the summary in Recall and they would be encouraged to sign up to save the summary in their knowledge base. This strategy worked well for a couple of days bringing in almost as much traffic as we had on our Product Hunt launch.

Unfortunately, this occurred just after Elon Musk had taken over Twitter, leading to a significant increase in the pricing of the Twitter API, which rendered the strategy unprofitable.

Writing useful content is another great, low-cost way to attract users to your product. Not only does it help with your SEO, but also allows you to go into detail about different use-cases of your product. This is what I have done with my post on how to summarize YouTube videos with Recall and how to use Recall for Active Recall and Spaced Repetition. I have just gotten going with the Recall blog but it's something I wish I had started earlier.

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

After a long period of low-paid subscriptions, we are now finally starting to reliably acquire new customers. We’re not quite profitable yet but we are just getting started.

We have 3 full-time employees and our MRR is just under 10k USD. Salaries are by far our biggest expense but we should be able to cover them by the end of the year.

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

One lesson I learned the hard way is the importance of getting your product in front of users as quickly as possible. Engineers often believe that if they build a superior product, people will discover it and it will naturally go viral. This way of thinking gets you stuck never wanting to launch your product as you want it to be perfect, you will keep finding reasons not to launch. In reality, when you launch your product to real users you learn so much about what users want it helps shape what you build.

You do not want to find yourself in the all too common scenario where you have spent 8 months diligently building a product that no one wants.

A far better approach is to build a simple MVP that illustrates your idea and then show it to potential customers and iterate on it from there.

Another lesson I wish I learned a lot earlier is to start charging users as soon as possible. This might not apply to all businesses but for SaaS products, it is the best way to validate that you are building something that can become a business. For a long time, I didn’t charge anything for Recall. I planned to build up a large user base with as little friction as possible.

Once I had the user base, I would introduce pricing. But when I finally had a decent-sized user base (about 3000 users) I kept postponing charging as I was afraid to upset existing users and that they would stop using the product. But this is exactly what I needed to find out: how many people are willing to pay for my product. It is the only way to find product market fit.

What platform/tools do you use for your business?

I initially did not pay much attention to SEO optimization, I thought it was a bit of a gimmick and that SEO would grow organically over time. My co-founder suggested I give SemRush a try for keyword research.

This experience shifted my perspective on its value. Now, I not only use it for SEO optimization but also find it incredibly useful for researching user search behavior and analyzing search traffic for various keywords to discern what interests people.

Another tool that has saved a lot of time for me is Stripe Atlas. It made the process of registering a company in the US remarkably straightforward and hassle-free and it's tightly integrated with Stripe which we were already using for payments.

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

While building Recall, I've been influenced the most by the following three business books:

"The Lean Startup" by Eric Ries introduced me to a systematic approach to innovation, emphasizing the Build-Measure-Learn feedback loop, ensuring I'm focused on creating products that truly resonate with customers.

"The Mom Test" by Rob Fitzpatrick changed how I interact with potential users, teaching me to elicit genuine feedback by asking the right questions, saving invaluable time and resources.

Lastly, "Zero to One" by Peter Thiel emphasized the significance of unique innovation, pushing me to think beyond competition and aim for a distinctive niche.

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

In the early stages of starting your company, it's crucial to keep focussed on solving one specific problem. Many founders fall into the trap of trying to do too much too soon, which can dilute their primary mission and spread their resources thin. By zeroing in on a specific problem, you not only establish a clear value proposition for your potential customers but also create a guiding principle for your business decisions.

As your business grows and the core problem is effectively addressed, you can then consider branching out and diversifying your offerings. But remember, a strong foundation is key to long-term success.