Scaling our Bootstrapped SaaS to 10k Monthly Revenue

Hi there reader!

Today, I want to show you the behind-the-scenes of growing our in-house Betterpic software from 1,5$ to over 10k$ monthly, entirely bootstrapped.

The good, the bad, and the ugly with our real metrics.

In case you missed it, here is why we bought the business 7 months ago and what challenges we faced in the first months.

So, let’s start with what we call our Monthly Performance Bingo of June 2024:

The Good:

• We hit a milestone of 10k (+47% increase vs LM)

• Increased Average Spend per Customer (read on how we did it).

• Hitting a Visit to Purchase Rate in the USA of 4% (vs 2,1% LM)

• Hiring our Head of Product, Frederic Linfjard, to drive product growth with over 12+ years of experience (he has been working with us at Saasmic as a client for over 1 year and has now come over to the dark side).

The Bad:

• NPS score dropped due to large-scale testing of our model, which impacted our refund rate. (solved now)

• Still not OPEX profitable with 2,4k in loss yet improving month to month (6,5k loss LM).

Let’s dive deep into our 3 challenges as a bootstrapped start-up and push towards our journey to 50k monthly by the end of the year.

• Challenge 1: Increase our Average Order Value through upsells & pricing changes

• Challenge 2: Increase organic revenue to drive profitability

• Challenge 3: Should we raise or stay bootstrapped?

Challenge 1: Increase our Average Order Value through upsells & pricing changes

Running growth is not just about changing your bidding model on Google or adapting your targeting strategy on Facebook.

Across the years, I have learned that most of your impact is not improving marginal gains in the channels but affecting the product, which impacts the channels you distribute it on.

One of the product questions we started asking ourselves is: ‘Why are over 50% of our users buying the cheapest plan (25$)?’.

Here is a quick overview of our package pricing:

This is a pain point I highlighted during a presentation I gave on an entrepreneurship talk last month:

As you can see from the purple circle (in our mixpanel account), the largest amount of packages we are selling is our 25$ package, which, according to my ‘awesome financial plan’, would never bring us into profitability. Pretty important as a bootstrapped business if you ask me.

So, we decided to run an experiment with the following hypothesis.

Hypothesis:

Most people choose our $25 plan over our $35 plan because we believe the difference of $10$ is too big. As most people don’t fully understand the differences between packages, they rather go with the cheapest package to ‘test it out’.

Experiment:

Increasing the price of our basic from 25$ to 29$ without changing anything within the package will make the 35$ package seem more reasonable and, therefore, increase our Average Order Value.

So here is what happened.

Our middle package (35$) saw a 400% sales increase, making it our best-selling package, even more so than the 25$ or, in this case, 29$ package.

Increasing our average order value to drive our company to profitability.

But you might think, what about our conversion ratio from visit to purchase?

Luckily, that has increased monthly, surpassing a 5% conversion ratio in the USA (our key market).

But that’s not all of it.

We realize very well that we are not in the SaaS recurring space, where people pay us every month.

We are in the Digital Dropshipping space, where people come for a headshot and might only need one again in one year.

This means that we need to be able to provide every single customer with the perfect experience at the highest Average Order Value possible, and the lowest possible cost (topic for later).

This is where our AI Studio came in—allowing people to purchase extra credits (upsell) to modify and adapt their created headshots. Letting people adapt their clothing style, change backgrounds, correct their skin, and more.

The crazy part is that almost 50% of users use our AI Studio to customize their look and feel further, giving us a competitive edge over our competition.

This allows us to upsell over 4% of our users into buying extra credits, increasing our average order value even further month over month.

Challenge 2: Increase organic revenue to drive profitability

One of the most inspiring and life-changing blog posts I read as a young marketer was the concept of ARPU (Average Revenue Per Account) vs CAC (Cost Per Acquisition) Spectrum.

Simply, it explains that your average revenue per account dictates which channels you must pick to grow your company profitably. Facebook wouldn’t be able to be what it is today if it had to rely on expensive sales teams to go knocking on each university to convince its students to get an account as shown on this spectrum below:

The same goes for Betterpic, which has an average order value of around 35$ (yet increasing month over month).

With the order value, we had to decide to get into the organic marketing (SEO) game early on to drive profitable growth in the long term, and Apoorv from Saasmic has been leading the team in increasing our organic keywords month over month. Here is a quick snapshot from our Semrush account showing our ranking for 1,4k keywords (starting from 537 when we started).

We are pushing our position from important keywords like ‘studio AI headshots’ from position 43 to the first page of Google (8). We all know that the second page of Google is where SEO people hide bodies.

Need some headshots in Bordeaux or München? No worries, you’ll find us in the number 1 spot to get your headshots.

All efforts are slowly helping us to increase our monthly organic revenue, and this is while we are still catching up at lightning speed.

Yet not all efforts went very smoothly, as with everything in life when you experiment. As you can see from the screenshot below, we were ranking for an important keyword, ‘Ai headshot generator’, in April.

But then Apoorv decided to make some changes to our website to better align our content efforts towards this keyword, which ended up in almost drama as we lost our ranking in May for one of our critical keywords.

We decided as a team to trust the process and not adapt anything, which is also when, in June 2024, we suddenly pushed our position from nowhere to find to the 25th position. Not 1st place yet, but it's a good direction already.

What is Apoorv's goal for SEO?

Hit 10k or organic revenue by the end of the year by using a smart combination of blog posts, programmatic SEO through our near me pages, Linkedin Articles, and cool free tools we are giving away.

For example, we recently launched our LinkedIn AI Picture Analyzer Tool or Free Profile Picture Editor, allowing users to upload their current profile pictures and get a detailed overview of how to improve them.

Want to support Apoorv to achieve his goal?

Go search for Betterpic in your browser and make a purchase (don’t click on our ad 😛 )

But hey. That’s not all on the organic side.

I believe in stacking your odds, where multiple channels support each other for your growth story.

This is why we’ve been driving organic visits from Pinterest through our automated system, which we started early on in our journey to publish over 100+ headshot pictures of men and women on Pinterest.

So far, we have driven over 750k+ impressions on our Pinterest page, allowing people to discover us monthly without paying a cent.

Allowing our pictures to be saved and lead to our website to drive sales.

Funny enough, none of us has ever done Pinterest marketing. We just decided to trust our gut, exploit a system, and deploy our marketing knowledge. Sometimes that’s all you need.

Challenge 3: Should we raise or stay bootstrapped?

I am proud to say that we have been able to bootstrap this business with our amazing team, which has allowed us to grow month over month. At the moment of writing this piece, we’ve already surpassed last month’s revenue, with a projected revenue in July 2024 to be around 20k, a nice jump from the previous 10,5k.

On top of that, we’ve been accepted at Microsoft, AWS, and Invidia accelerators to get up to 300k credits for free to extend our runway and drive our cost to create our headshots to 0$ for the coming year. So, while we are driving up revenue, we can even decrease our costs to drive up margins to accelerate our growth and invest even further.

Oh, did I mention we are on our way to starting a renowned accelerator named Founders Institute? We have been accepted to join their cohort on October 1, 2024.

While all these things sound cool, one thing is still on my mind.

Should we raise capital or remain bootstrapped? 

On the one hand, we have the cash in the bank to bootstrap our way to at least 50k per month revenue by the end of the year (our goal).

On the other hand, we also want to become the best AI Headshot Generator in the world. And let’s be honest: the headshot market is huge (over 1M+ people getting headshots per month), and we are just getting started. And we are not even talking about the 1B+ LinkedIn users who need a new headshot. 🙂 

Our ambitions are big. We have the team in place to scale, understand the channels to grow the business, and know precisely what to build to become the leader in the space.

So, if you are reading this line and have some insights, let’s connect. I’ll even throw in a free headshot.