October 11, 2022Startup

GrowSurf - Moments From Calling It Quits To 400K ARR

Note: This post is from September 10, 2021

What would you do if you were working on your startup without any results for a year, then rebuilt your product from scratch and were 2 years in with nothing to show for it?

Most people would shut everything down.

Not Kevin Yun.

Well, he was close to asking his co-founder to shut it all down, but perseverance and a change of direction finally started paying off.

Kevin Yun and his co-founder Derek Melvin founded GrowSurf - a referral software for tech companies. I interviewed Kevin to understand his and Derek's journey and came away in awe of their resilience.

Top takeaways from this interview:

  1. Hyper-target your audience. Know exactly who you are building for or try to figure it out as soon as possible.
  2. Talk to your ideal customer (sales calls, interviews) to understand their circumstances, needs and obstacles.
  3. UX matters - let UX guide your product, not the technical limitations.
  4. Don't give up - it can get very tough, but sometimes the right path is just around the corner (combine with talking to your ideal customer).
  5. Start on SEO early - give yourself an advantage and get the SEO ball rolling by creating content. You'll be glad you did, later.

Here is the full interview in Kevin's own words:

What is your product?

GrowSurf is referral software for tech companies. We help B2C/B2B tech companies automate customer acquisition at the lowest possible cost through referrals. We are around $32k MRR right now.

Tell us a bit about your product and your background:

GrowSurf is a B2B SaaS in the marketing automation space. We are two technical founders who built the product -- Derek and myself. I handle design, product, and front-end development. Derek handles server-side architecture and back-end development. We have built web apps together in the past.

Before GrowSurf, I started a UX/UI design bootcamp that was later acquired by WeWork’s Flatiron School. Other than that exit, I have worked on quite a few projects. Actually, a lot. To give a number, it’s probably somewhere between 15-25. Some gain traction then fizzle out, others never stood a chance. I’ve always looked at it like a numbers game (I won’t get it right the first time).

How did you get the idea for your product?

Our product was born out of the idea that there needed to be a go-to referral tool for startups to use. We were used to using tools like Heroku, Stripe, Firebase, Mailchimp, and SendGrid to easily deploy web apps and launch quickly with the core services we needed, from marketing to PaaS. It was odd that no one was the standard for a referral marketing tool, as many were outdated, overpriced, or just lacked the core feature set necessary to be a good fit.

How did you launch your product? Can you describe it a bit, how well it was received, your overall state at the time?

We didn’t have any existing audiences nor did we have connections to ideal customers that would have used an early version of our product. It was more of a mindset of “referral marketing is so mainstream, every business could use this!”

We launched on ProductHunt and went through the whole gamut of launch directories and to-do lists that startups should do when launching. It was a ripple in the ocean, barely making any splashes. Years of hard work were ahead of us in finding the path to get across the right eyeballs of customers.

How long did it take you to make the first $1k MRR, what was it like leading up to that?

It took a very, very, very long time. Extremely brutal. After launching, we spent one year floundering around with nothing to show -- no real customers, no signs of product-market fit. We then spent another year or less building the product again from the ground up because it wasn’t good enough to get any customers. Once we had version #2 of GrowSurf, it was still incredibly hard to reach $1k MRR and it felt like being on stilts at that level then. I’ve also written more about it here.

Gene's side note: When I followed up with Kevin about why it took so long to find product-market-fit, he explained that they were targeting too broad of an audience. When you try to speak to everyone, you are actually speaking to no one. It wasn't until Kevin started doing many sales call with the ideal customers, that GrowSurf was finally able to pick up some steam.

To the best of your memory, how did you get your first 10 customers?

Just by blasting through. The first year we launched, I thought we would get self-service signups from every startup that wanted to leverage referral marketing. Huge mistake. That’s when I started hopping on sales calls -- but these were all unfruitful because none of these prospects were ideal customers. Only after launching version #2 did we have something that was remotely sellable. We didn’t have social proof, testimonials, or quotes so it was still extremely difficult to get those initial 10 customers. We were also competing with an existing, saturated market of competitors. I recall that getting our first 10 customers was a journey in and of itself. Perhaps perseverance is the best word to describe it.

Gene's side note: many founders find it difficult to keep going when things are not looking up. The shiny object syndrome makes it appealing to jump onto the next thing. This is why you see so many people with numerous "side projects", with few ever turning into a real business. The ones who make it are those who persevere.

What marketing and distribution strategies have you tried and what were the results?

We have tried a lot of strategies, but the main ones that seem to be working for us are SEO and word-of-mouth. Our customers will bring us up with their colleagues or friends. When people search for our type of software, they’ll go down the list of Google results to compare and see what’s best for them. Although we explore other channels, these are the primary acquisition channels that work well for our SaaS.

Gene's side note: As I research which acquisition channels are most successful for indie founders, SEO comes up often. Consider this in your own marketing efforts and think about the time it requires to get the ball rolling so you can enjoy the benefits as early as possible by delaying initial gratification.

What acquisition strategy is working best for you?

Definitely Google.

Gene's side note: I did a bit of digging around and saw that GrowSurf did a lot of things well when it came to creating content. For example, instead of just listing their integrations, they created a page for each one. This way when anyone typed in {some tool referral program integration}, GrowSurf would pop up.

The usage of Capterra's review schema also makes the listing stand out with 5 stars right in the search results.

Pro Tip: If you want to see what your competitors are ranking for without paying for any SEO software, just do a google search for site:competitor.com (substitute competitor.com for your competitor's site and see what pages are being indexed. In about an hour you can uncover most of their on-page SEO and content strategies without spending a penny.)

How did you decide the pricing of your product?

We first launched with a freemium model with pricing targeted to tiny one-man startups. We realized that churn was inevitable with these types of customers, and over time as we got acquainted with our ideal customers and spoke with them, we increased prices to reflect that. We understood more of what customers needed and the results they got with our software. Because we talked with people, we learned what they were looking for and the value that GrowSurf provided to them.

What is the best advice you have for someone two steps behind you in their SaaS journey?

Choose a target customer profile, understand their motivations and problems, and solve a streamlined issue for them. If you make their life better, even if it’s just saving them just a few clicks in a manual process, they will pay the value that they see in your product.

Gene's side note: Kevin told me he conducted many sales calls and tried to identify the people who were his ideal customers. I signed up for GrowSurf, and sure enough, a call scheduling button is right there in the onboarding process!

Not only does this help the founders set up the customer, it also gives them valuable insights into their needs and pain points.

If you could go back and do it all over again, what would you do differently?

Looking back, I wish we hyper-targeted ideal customer profiles much earlier than we had.

Gene's side note: Initially, the product was built with everyone in mind. Kevin also told me that UX was not a priority at first, but after focusing on the ideal customer and putting UX first, things started to turn around. I went through their onboarding and can tell a lot of work was put into it. Not only do they segment the users, they guide the user all the way.

What is your plan going forward? How will you keep growing your business?

Right now, reducing churn has been our primary target. We’re around a 7-8% churn rate and by decreasing that we can grow faster. Besides that, we’re exploring channels that will help revenue growth.

Anything else I should have asked, or you want to share that might be helpful for someone who is one or two steps behind you?

If you can get through the hardest part of the journey, which is building something from nothing, then you have something there, my friend. Once you have some kindling, just keep stoking that fire. Times are going to be tough. You’ll be doubting yourself so many times.

GrowSurf is an open startupKevin documents his journey in public on Twitter. I would highly recommend following him and asking him questions if you have any. He was a pleasure to speak to and seems like a very open and down to earth type of person.

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