A year ago, I was researching side projects to build and discovered that Shopify store mangers were spending 5-10 hours per month on reporting, which resulted in a cost of a few hundreds to a few thousand dollars based on people's hourly wages. I decided to build Shoppy (https://apps.shopify.com/shoppy-a-better-shopify-slack-app-by-emerald-io) to save these store managers time and money with instant new order notification alerts to Slack channels for free and users could upgrade to a paid tier ($14.99/mo) to get daily/weekly/monthly reporting as well.
A year later, I thought it might be helpful for fellow entrepreneurs to see what the first year of a side project looks like — from launch to profitability. So, this Imgur link shows active shops and net earnings (Shopify takes a 20% cut of my gross app earnings) to show that profitability takes time: https://i.imgur.com/ItvvNTx.png.
A few key metrics not covered in the graph:
💸- Heroku costs have remained consistent at $14/mo
🏦 – 217 active shops by end of 2019
💬 – Over 123,000 order notifications sent
💰 – 11 paying customers (8 elite, 2 premium) as of writing this
💵 – $135.90 in gross monthly recurring revenue (MRR) / $108.72 in net MRR
⭐️⭐️⭐️⭐️⭐️ – the average rating for Shoppy
A few takeaways:
- It takes longer than you think, but you can–in fact–build a money printing machine with a good MRR product that tackles a real pain
- I've spent $0 on marketing so the Shopify app store discovery is very important. This means reviews matter, which means delivering exceptional customer experience to get a good review matters. For paying customers, I respond as soon as possible, try and solve their bug ASAP, and then ask for a review once their issue is resolved. This increases the likelihood of a favorable review
- Because of the $14.99/mo price point, this product will have a hard time getting to the $1K in MRR, but that's okay since it's very hands off now.
- Because product features are consistent from store to store, any feature I build is valuable to current and new users, and I only prioritize features those kinds of feature requests. That means with each new feature add I increase the value to current users, which will likely increase their retention, and increases the chance of acquiring a new paying user, since they now get more value at $14.99/mo.
I hope this is valuable for those of you either trying to figure out what products to build OR those of you who have an idea but haven't started yet. And if I had to boil this down to a few bullets for someone trying to build a profitable side project it's…
1) Find a real problem that people feel
2) Quantify the $s people spend on that problem per month
3) Build a product that addresses that pain at a cost that's less than what they're currently spending per month
4) Deliver exceptional customer service and keep iterating on the product until you deliver the right value for the right price
Happy to answer any questions you might have and best of luck on your entrepreneurial journeys!
submitted by /u/darksh1nobi
A 1-year graph of my Shopify app’s journey from launch to profitability