Acquiring my first 20 customers
Key Metrics
- One-line pitch: A subscription for startups to get monthly design advice.
- MRR: $750 USD 🎉
- Customers: 3
- Design Advisors: 9
- Startups: 5
Public update #4 🌊
September has been a challenging month in different ways personally, but I'm excited to get back into sharing weekly updates. Thank you to those of you that encouraged me to keep these going! :)
Big wins:
- I have 3 customers — aka 3 startups matched to design advisors for 1hr/month of advice! 🎉
- DesignBake is at $750 MRR. Operational costs are $600 (advisor payments), and $150 is profit. Expenses are around $100/mo so I'm just covering the basic fees for all the tools I'm using so far.
- Test out some cold email campaigns — average open rates of 83% across 3 campaigns and 24 companies. 😱 I'm working on scaling this with the help of a VA (Virtual Assistant).
- For now, my target market is 100% focused on early-stage funded companies (YC, Tech Stars, etc).
Operational Puzzle
Operationally, it was quite a challenge to figure out how to go through the entire process as a 1-person show including → finding startups, finding design leaders, matching them based on preferences, setting them up on recurring advisor calls, tracking if the calls are done, and then paying out advisors at the end of each month. On top of this, there are one-off discrepencies such as rescheduled sessions, no-shows, advisor unavailability, and more — that all needed to be accounted for.
I iterated through 3-4 different Airtable setups to find a setup with the least amount of friction and possibilities for breakage, and found some nifty ways to track these in a way that I can automate with the help of a VA or Zapier in the future.
How I'm marketing DesignBake to reach $5k MRR
As my initial hypothesis is being validated through the first few customers and the operational setup is falling into place for me to scale, all my time and effort (some evenings and every Friday) has been focused on acquiring new users — on both sides of my marketplace:
- Startups: that value design and are open to design advisors
- Design Advisors: that are open to sharing their experiences to guide startups.
In most marketplace models, there's always a 'chicken & egg' problem — what comes first? Which one should I focus on?
I've decided to build out the demand-first (startups), and then the supply (design advisors). I also believe that as more design advisors come on board, I'll be able to reach other industry leaders faster through referrals. 🙌
Here are my main go-to-market ideas so far to find and acquire startups:
Cold Emails
Cold emails are one of my favourite things to work on. Here's how I'm going about it:
- Make a list of thoroughly researched startups that I think would value design
- Gather emails of the founders (use Hunter.io or guess them). I've found that at most early-stage companies, it's usually just firstname@company.com
- Draft a compelling cold email with a clear value-add
- Launch an email sequence with a follow-up.
I've tested 3 different cold email campaigns and emailed 24 companies so far. One of the campaigns actually had a 100% open rate (albeit with a small sample), with an average of 83% open rates across all 3 campaigns.
Out of the 24 companies I emailed, 5 of them booked 'Design Office Hours' with me, and 3 of those are highly likely to convert into DesignBake customers. Out of the 3, 1 is on track to be a customer and another is likely to convert. Based on these numbers, let's do some napkin math:
- 1 customer = $250 MRR (monthly recurring revenue)
- 24 companies emailed → 2 paying customers → $500 MRR (~8.3% overall conversion rate)
- 50 companies emailed → 4 customers → $1k MRR
- 100 companies emailed → 8 customers → $2k MRR
So 100 emails could potentially increase DesignBake's revenue to $2,750 MRR.
In order to scale this, I've templatized my outreach process, email templates & steps to source leads and hired a VA to help me execute. My goal is to email 100 companies in the next 30 days; so I'll keep you all posted on how this works out. :)
Free Design Advice for Startups (Office Hours)
In parallel, I've also been testing out the idea of Design Office Hours — where I volunteer 30 minutes of my time to help a startup experience what it's like to receive a design critique. I decided to try it because I though that most startup founders may not have experienced a design critique. The 'magic moment' with DesignBake is when a founder experiences their first critique and learns of an idea that they hadn't thought of before. Thus I wanted to see if selling the experience is a faster way to get startups to the magic moment than trying to sell them with words, then finding a design advisor, and then waiting for them to schedule their first session.
So far, I've completed 5 Office Hours for YC startups. 3 of them found it super valuable, 1 of them kinda found it helpful, and 1 didn't find it helpful at all. Out of these, 1 startup signed up to be a customer, and the other 2 seem like they will convert (hopeful based on their feedback).
So 60% of the Design Office Hours so far have been effective in helping startups experience the 'magic moment' in their first interaction with DesignBake.
This does eat up into my time quite quickly @30mins per session — but I plan to keep this going as it doubles as user research as well.
Public, friendly Design Roasts
Another exciting idea that I'll be testing out is doing 'Friendly Design Roasts' (maybe each week?). I'll take a random startup and record a 10-minute video to share actionable feedback for them to improve the product through design. I think this could be valuable in a few different ways:
- Provide value to the startup indirectly before I even email them.
- Provide value to other startup founders, designers and tech folks that are interested in learning about how they can better leverage design in their work.
- Generate awareness about DesignBake
If there is a startup that you'd like me to roast and provide actionable feedback for, DM me and I'll definitely put it on my list! :)
Building in public on Twitter & Linkedin
Lastly, I'll be continuing to post updates on LinkedIn and Twitter. It does take intentional effort to do this, but it also helps a ton with accountability and building relationships (with both existing and new people)!
That's it for today. I hope you enjoyed the read! Let me know if there are any topics you'd like me to dive deeper into for the next update. :)