Why We Shut Down A Product Making $250K/Year To Start Over!
Hello there! My name is Colleen Schnettler, and I am the co-founder of HelloQuery, an embeddable report builder for your customers.
So, what does that mean? Essentially, our software frees businesses from the need to create custom reports for their clients. Instead, they can use our tool to allow their customers to build their reports. HelloQuery sits inside existing applications and allows users to filter, format, and export their data. We are a bridge between database data and Excel.
Our primary customers are sometimes labeled as "boring" businesses – those dealing with significant amounts of data, such as inventory tracking, swag management, CRMs, and tax compliance.
Sometimes in the startup world, we're so focused on the next big thing we forget that a large part of our economy is driven by these traditional, less flashy businesses. Recognizing this was crucial to our decision-making process when selecting our target market.
Our journey has a unique twist because HelloQuery is our second product in the data space.
We grew our first product to $20,000 MRR before deciding to shut it down.
You may wonder why we shut down a product that was doing so well. Stay tuned - I’ll explain soon!
What's your backstory and how did you come up with the idea?
I'm a Ruby on Rails developer, and my co-founder, Aaron Francis, is a Laravel developer. Aaron previously worked at a tax property company and found himself constantly swamped with requests for reports. These demands were coming from every direction - customers, the C-suite, management, finance, and numerous other departments.
He felt this was a massive waste of his time and something people should be able to do themselves.
Build their reports? Seems easy!
Nope. All the necessary information was stored in a database, and he was the only person with access to it. Not only that but in order to pull data out of the database, the user needed to know SQL. The data was not accessible to non-technical people.
To solve this problem, he designed and built a Laravel software package that allowed people to generate their reports from database data.
Aaron joined forces with a front-end developer, and they began trying to sell his productized reporting package. Around the same time, a large enterprise customer approached them and asked for the reporting package written in Ruby on Rails. Not only that, but this customer offered to fund the development of such a package. Neither Aaron nor his colleague were Rails developers, so they were in a bind.
Meanwhile, I was consulting full-time as a Ruby on Rails developer. Here’s a video of me in my early days as a consultant;
In addition to my consulting, I started a side project called Simple File Upload and grew it to $1,500 in monthly recurring revenue (MRR). I was also the co-host of a popular podcast and frequently spoke at prominent conferences.
Despite these signs of external success, I was experiencing the loneliness of being a solo founder and struggling to balance my full-time consulting work with my side projects and family obligations. In an interesting twist, I took a full-time job to lighten my load. That’s right - working full-time as an employee was less stressful and time-consuming than consulting.
I’d be remiss if I didn’t tell you that my dream has always been to build a Software as a Service (SaaS) business. It’s what powered me through late nights and many weekends learning to code on my own when I couldn’t afford a boot camp and what kept me going when I was barely making any money as a software developer.
If you’re interested in my journey, I spoke about it at Codeland in 2018;
Back to the main story.
Aaron and I were part of the same startup community but didn’t know each other well. Still, he knew about my Rails expertise and my knack for product development. One day, he pitched the idea of me joining his team.
The offer took me by surprise. The prospect of quitting my job and diving headfirst into the startup world was intimidating. Yet, the thrill of joining an early-stage company, one with the significant advantage of customer-funded development, was incredibly appealing. We hashed out the details, and before long, I joined the business as a co-founder.
Take us through the process of building the first version of your product.
Building the initial version of our product was a labor of love. We spent over a year on software development and our early journey was marked by several unexpected detours and challenges.
Our initial product was technically not a SaaS, even though we tried to convince ourselves it was.
This was a mistake - we were so confident in our product and business model because we had landed such a prominent early customer that we never questioned the basic principles of what we were doing. Our product was sold as a software package, which meant that once a customer had purchased the software, they owned it.
In theory, our customers would continue to pay us an annual licensing fee. We weren’t sure how that would play out in practice. Also, the nature of our software packaging narrowed our target market to only customers building with Ruby on Rails or Laravel — a tremendous limitation!
But that's not all. Because the software lived natively in our customers' applications, they wanted the styling, formatting, and user experience to perfectly match their application. This caused additional headaches as integration became a time-consuming challenge.
Despite all of this, we confidently brought our software package to market. We thought our most significant challenges were technical and were behind us. We quickly realized we were wrong…
I taught myself how to code on nights and weekends to enable me to build my products. I couldn't afford a boot camp, so I cobbled together free resources on the internet.
Describe the process of launching the business.
We pre-sold about $5,000 of this product and believed that was an early validation signal. "This is it!" we thought. "We've done it! This business is going to work!!”
As soon as we got the product into our customers' hands, we hit a snag. The customization each customer needed was more than we could deliver as a two-person team. We hired contractors to help, but as the business grew, it became clear: we weren't building a SaaS business; we were building a productized consulting business. More customers meant more developer hours. This wasn't necessarily bad, but it wasn't our goal. We wanted to create a scalable business, not a consultancy.
We wanted to be all in on SaaS.
So what now?
Fortunately, around this time we were accepted into an accelerator called Tiny Seed. The accelerator is designed explicitly for bootstrapped businesses and provides both funding and mentorship. With the confidence and funding from Tiny Seed, we took a long hard look at our options. We realized that to build a scalable software business, we would have to make some drastic changes.
We made the hard decision to let go of our team, shut down the existing product, and start over. I knew that this would either be the worst decision we had ever made for the business or the best.
Walking away from a growing business making $250K/year is very, very scary. But sometimes, as entrepreneurs, we have to take big risks.
This was our big risk.
By now, we had nearly 2 years of learning and experience in the data access space. We decided to take what we had learned and try again. This time, we deliberately selected our market and business model. We were determined to build the kind of business that we wanted to own - a scalable, low-cost SaaS.
We began an extensive round of customer interviews. After many, many conversations and late-night brainstorming sessions, we felt we had a solution.
Excited but cautious, we unveiled our new product - an embeddable report builder that allows non-technical people to build their reports.
This product solves the same problem but approaches it from a different angle. Instead of a software package, it's now a hosted service that resides on our domain and can be embedded into our customers' applications via a secure link. A similar product, with a completely different packaging. This gives us creative control and removes integration hurdles. Plus, it's now compatible with any language or framework, broadening our customer base.
We're taking a measured and purposeful approach to our pivot and new product launch. Instead of rushing to go to market, we're introducing the product at a gradual pace. This allows us to maintain close connections with our early customers and gain insight into the product's performance. This way, we can better understand its value to our customers and make necessary adjustments as we move forward.
We’re not yet back to what we walked away from, but things look promising!
Since launch, what has worked to attract and retain customers?
We’ve leaned heavily on our existing social media networks to spread the word about our product. Our “build in public” strategy is working very well. When we add features to the product, we share it on Twitter. Here is an example tweet that led to many customer interviews:
The value our product delivers is our primary retention strategy. We also take a personalized approach to sales, onboarding, and customer success.
I talk to each customer and place importance on every interaction. I'm focused on building long-term, sustainable relationships with our customers so we can constantly keep our pulse on the product's value.
Putting myself out there in an honest and vulnerable way helped me widen my network, and opportunities came my way.
Outside of social media, I’ve also run cold outreach campaigns on Linkedin. I built a lead list using SalesNavigator and used an automated tool to send connection requests to potential leads. If they accept my connection request, I send a follow-up request with one question. This has led to many Linkedin DMs and at least one cold video interview.
We’ve also run Google ads. These have performed pretty well but also had some unexpected results - for example, our ad was showing for the search - “hackerrank SQL challenge”- which was not our target market.
Marketing is an ongoing game - I describe it as trying to do a puzzle without all the pieces.
We run experiments, see if something is working, and adjust accordingly. Wash, rinse, repeat.
How are you doing today and what does the future look like?
We’re very early in our pivot and focused heavily on product and high-touch sales. Early signs look good, and we’re incredibly optimistic about the future of HelloQuery.
Still, we must remember this is a small software business with unpredictable outcomes. Will it turn into the next unicorn? Will we run out of money? It’s too soon to know.
Our burn rate is low and we have funding, so the future looks bright!
This is a very exciting time in the growth of the business as we figure things out and make big decisions that will impact the future of our company.
Through starting the business, have you learned anything particularly helpful or advantageous?
The last few years have been quite a tumultuous journey to find product/market fit. I’ve learned and grown tremendously as a leader, decision maker, and CEO.
A few lessons I've learned along the way.....
- Managing people is a skill: Don’t take management for granted. It’s an art that must be studied, learned, and practiced.
- Sometimes you have to ignore everyone and follow your gut. Survivorship bias is real, and for every decision you have to make, there will be successful people arguing opposite sides. Every person who has succeeded in business has done it differently. You can learn a lot from those who have traveled the path before you, but take all advice with a grain of salt.
- Talk to customers. Then talk to them again. Not enough can be said about the importance of customer discovery and interviews. This is another critical skill that requires practice. Does the potential customer have the budget and urgency to solve the problem you're trying to solve?
- Have a co-founder (if possible). Having someone to ride the emotional roller coaster of starting a business with you is so helpful. No one else can truly understand the immense highs and low lows of your journey like a partner who's going through the same thing.
- Founder burnout is real. As a founder, I think it’s essential to be aware of your physical and mental health. We work a lot. We think about our business constantly. This is a marathon, not a sprint. Commit to your physical, mental, and relationship health early and often.
What platform/tools do you use for your business?
We're a software business so we use a lot of tools!
Here are a few:
Accounting -> Quickbooks for accounting, I use Spark for email, Mercury for banking,
Email -> Spark
SaleCRM -> Close.io
Hosted Forms -> Reform
API integration -> Zapier
Email Marketing -> Mailchimp
Sales -> Linkedin SaleNavigator
Cold Emails -> Lavender.ai
SEO -> AHREFS
CMS -> ButterCMS
I'm sure there's more that I'm forgetting, but that's a good start!
What have been the most influential books, podcasts, or other resources?
I’m a podcast junkie and could probably list 10 here. If I had to pick one it would be “Startups For the Rest of Us”. It has a friendly, informal tone and features interesting, actionable content.
I am also a prolific reader, so I have many book recommendations. Here’s the honor’s list:
- “Can’t Hurt Me” by David Goggins. It’s not startup specific, but it is an inspirational story of grit and tenacity.
- “Deploy Empathy” by Michelle Hanson (a fantastic book on conducting customer interviews).
- Never Split the Difference (a book about communication and negotiations).
- Crucial Conversations (about how to have hard talks with people - especially useful if you have co-founders)
- Obviously Awesome by April Dunforth (a great read on positioning for startups).
- Lean Startup (the OG of startup books)
Advice for other entrepreneurs who want to get started or are just starting out?
In a word: start. Just start. Stop reading blogs or books or Twitter, and just start. What do you want to do? Start a Shopify store? Build a SaaS? Sell a course? It doesn’t matter what you do, it just matters that you do something.
Figure out what you want, then take the first step.
I keep this quote on my wall:
“Discipline is remembering what you want.”
It is not easy. But it’s worth it.
My journey has been long and deliberate. Every step I took was intentionally aimed at my goal of running a SaaS. This unwavering focus drove me for years and still drives me today.
I taught myself how to code on nights and weekends to enable me to build my products. I couldn't afford a boot camp, so I cobbled together free resources on the internet. I then embarked on a consulting career to give myself the flexibility to launch a side project. I started a podcast before I was ready, not knowing what I was doing or what I'd be talking about. For two years, I recorded SoftwareSocial every week and shared my journey trying to build and sell a product.
Putting myself out there in an honest and vulnerable way helped me widen my network, and opportunities came my way. Eventually, I was in a position to join HelloQuery and we raised accelerator funding. All of these steps were designed to put me where I am today. They didn't happen overnight. They happened over years of consistent effort and dedication.
And the scary thing is - it STILL might not work. But I’ll never stop trying. The goal isn’t to win, it’s to keep playing the game.
“Success is a journey, not a destination. The doing is often more important than the outcome.” — Arthur Ashe.
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
