How We Are Building Profitable Shopify Apps From Our Consulting Experience
Hello! Who are you and what business did you start?
Hey there! My name is Dan Pepin and I co-founded Bonify five years ago with my business partner, John Carbone. Bonify started out in life as a small web development agency focused on building amazing websites for clients. However, for the past three years, we’ve been slowly transitioning the business from client services to paid online app subscriptions, which has been no easy feat!
Our current major endeavor is growing our portfolio of Shopify apps and increasing customer acquisition. We currently have three apps in the Shopify app store and we’re quite happy that the apps are bringing in $15,000/mo, but our goal is to nearly double our app revenue by the end of this year.
The most popular app we have is the first one we launched about three years ago called Custom Fields. The app allows store owners to add extra structured data to anything in Shopify, which enhances a lot of the flexibility of what you can do with store customizations. We very recently launched Mr. Arigato - Task Automator, which we are very proud of! It’s a very sophisticated app which allows store owners and developers to automate their store tasks, such as subscribing users to their mailing list, adding data to Google Sheets, sending emails and text messages to customers, and a whole lot more.
The thing we are most proud of though, is that we have built the company from scratch with no outside funding and work 35 to 40 hours per week. Our primary goal from the beginning was to create a lifestyle company that would work for us. We didn’t start the company to get rich, famous, or become bosses. We simply wanted to provide for our families, build cool tech, and have fun doing it!
What's your backstory and how did you come up with the idea?
I fondly remember the idea of Bonify being hatched in a sandwich shop in downtown Manchester. I was talking with John about how we would both like to do things differently at our current company. He and I were both programmers at a digital agency and were quite frustrated at how things were being run. Given that we were both engineers, we had a lot of great ideas on how to architect a better solution, run a better company, and make more money in the process.
We didn’t start the company to get rich, famous, or become bosses. We simply wanted to provide for our families, build cool tech, and have fun doing it!
We left the company together and started Bonify out of Alpha Loft, a small startup incubator. We were initially focused 100% on client work but really wanted to dive into a SAAS product. Who doesn’t love recurring revenue? Our first real product was 135List, a todo list app that helps you stay organized by focusing on 1 big thing, 3 medium things, and 5 small things per day.
It’s fair to say that 135List hasn’t taken the world by storm. It technically makes enough money to pay for the cost of running it, but it really hasn’t been a valuable product for us. After that product essentially failed we decided to try a different route. We heard about an online store builder called Shopify and decided to try building an app for that.
Being Drupal developers ourselves we thought it would be great to have similar CMS-type capabilities in Shopify. Our app idea, Custom Fields, would allow users to add different types of structured data fields to anything in Shopify. We had no idea how people were going to use this app, but we had a feeling there was a need for it.
We launched Custom Fields in April 2016 to little fanfare. Some might say: very, very little fanfare. The first month it was released it made $152. The second month: $288. The third month: $486. Needless to say, we nearly forgot about the app because customers were quiet and happy and it wasn’t making enough money for us to pay much attention to it. At that point in time, we were working on multiple client projects that were worth $40-80k, so our tiny app making $500/mo was not a priority for us from a business standpoint.
We really struggled with marketing the app... We spent some money on ad campaigns but it was hard to find the right messaging and audience. For example, Google Ads would not allow us to use the “Shopify” trademarked keyword in our marketing which made it difficult to target the right people. Until recently, we’ve really only relied on word of mouth and organic search within the Shopify App Store itself. For the first year the app was out we didn’t have too much competition in the app store. There were probably only around 500 apps when we launched, and now there’s over 2500. We were lucky, in a sense, that we were able to get some traction before the app store became flooded, but now there are a lot more apps in the app store that we are directly competing against.
Our plan this year is to spend a lot more time and money on marketing through Facebook, YouTube, and other channels to try and see if we can increase our traffic.
Take us through the process of building the product.
We first created Custom Fields when we had some downtime from client work. For whatever reason, digital agencies seem to go through ebbs and flows where you’ll be absolutely slammed one month, unsure of how you’re going to get everything done, and the next month you’re sitting on your hands and scouring your network for more work.
John and I banged around a bunch of ideas of what to build and how to build it and we decided on building a Shopify app focused on configurable fields and data storage, and personally, I wanted to build it in Drupal 8, which was a fairly new technology at the time that I wasn’t familiar with but wanted to learn.
It was quite risky for us to focus so much time and energy on the product given that there was no quick return on our investment and we knew absolutely nothing about the Shopify ecosystem. Our first version took around 3 months from start to completion.
Like any product that has evolved over time it was only the very beginning of the journey for us. When we launched, we had only one plan for $19/mo, no import or export functionality, limited field types, very little documentation, no automatic installation, no Google Chrome extension, and no site home page. We have since added all of those features and have fixed a whole lot of bugs to create a feature-rich, stable app.
Most of the features that we’ve added since launch have been in response to customer feedback and researching other competitive apps. I don’t think we could have launched a much better app on day one, we simply didn’t know enough. We are not store owners, nor are we Shopify store developers, and so we’re not expertly positioned to fully understand all of the demands of running a store and understanding an owner’s typical problems. We were sort of flying blind. It’s taken years of listening to customer feedback to tweak the app and find the right direction for us.
Since launch, what has worked to attract and retain customers?
I think a lot of Shopify app developers deal with the same problem that we do, which is that typically 30-40% of customers uninstall within a few days of trying out an app.
One of the things we love most about Shopify apps is that customers who do use your app, and depend on your app, will keep it installed for the life of their store.
A large part of this is due to customers simply installing an app really quickly without understanding fully what the app does. They may just read the app tagline or first few sentences of the description and decide to try it out, when in fact, the app doesn’t do what they want it to do at all. So, it’s been a struggle to figure out if customers were uninstalling because of an issue with our app, missing features, or simply that they were “tire-kicking” and seeing if the app met their needs at all.
We tried a lot of different things to try and keep customers around and get feedback when they uninstall, including: Adding a free plan and other cheaper plans, a “Get Started” page with helpful information for beginners, refining the messaging on the app listing page and within our documentation, email campaigns when someone installs and uninstalls, and adding various tutorials and walkthroughs. We’ve seen retention increase over time as we’ve worked on these issues but are always trying to improve it!
One of the things we love most about Shopify apps is that customers who do use your app, and depend on your app, will keep it installed for the life of their store. We have customers who have been using the app for years and we’ve been able to regain lost customers by listening to their feedback and adding in the missing features they want.
We’re a tiny company, and we personally deal with all of the support requests that come in, which is typically around a dozen per day. We read and consider all of the feedback that we get regarding usability improvements and feature requests. We’re able to react very quickly. Oftentimes, John will forward me a support ticket that doesn’t have an existing solution and I’ll code something up and have it launched that day. We’ve had very positive feedback with our support and we’re super proud of that!
To improve the customer experience even more, we are considering integrating Intercom with our apps. We currently use Zendesk and find that their live chat capability isn’t as customizable or as personable as Intercom’s.
Our goal is always to help out the customer as much as possible, and as quickly as possible. Our apps are on the more complex side, and as such, we tend to get some very technical support requests. We are always looking for ways to improve the support side of the business, which we believe is one of the biggest reasons our customers stick around.
How are you doing today and what does the future look like?
We’re very happy that the app side of the business is bringing in $15,000/mo, but we would like to double that number this year. We’re going to accomplish that by finishing some great feature improvements across our apps and spending more time and energy on marketing using Facebook and YouTube. Shopify is also exploring adding advertisements within its own app store ecosystem which would be great for us.
We are also working on reducing costs. One of the mistakes we made when launching Custom Fields was using Amazon S3 and Cloudfront CDN for our file hosting and delivery. These products are wonderful and have served us well, but they become frustratingly expensive during the holiday shopping season. This past Christmas we had customers that were paying us $29/mo, but were costing us between $200 to $1,000 dollars per month in fees... Just to deliver their files. This year we have a plan in place to reduce file hosting costs dramatically.
We also hope to grow the user base of our two other apps this year. We are actively working on new features and reacting to customer feedback to try and deliver the best product possible.
Through starting the business, have you learned anything particularly helpful or advantageous?
The biggest thing that I’ve learned is that failure is always an option. I think that too many smart and capable individuals give up after one or two failures. People tend to self-deprecate and think that if they aren’t the next Zuckerberg or Musk there’s no point in continuing to try. Well, that’s bullshit. I believe that most entrepreneurs have endured epic failures. The most important quality that defines a successful business owner is that you keep going when you fail and don’t take those failures too personally.
You can’t stop when the going gets tough. You can’t talk down to yourself just because you failed, or your company failed, or a customer said your product was crap. You keep going, you keep trying, you keep failing, and you learn from your mistakes. Eventually, you will succeed, because you will be wiser and all of the failures that you’ve accrued will amass into a new and better you and eventually you will make it.
What platform/tools do you use for your business?
Bonify was founded on opensource technologies, so I have to give a huge shoutout to Drupal 8, which is the foundation of our apps. It’s been an extremely powerful and flexible framework.
I use PhpStorm for development and it’s been an absolutely amazing IDE to work with every day for the past 8 years.
We use a lot of online services to help us run, including:
- GSuite - for email, documents, and storage.
- Trello - for project management.
- Harvest - for time tracking and invoicing.
- Zendesk - for our help center documentation and chat support.
- Slack - for internal communications and Giphy sharing.
- Moqups - for wireframing and rough prototyping.
- Pantheon - for hosting.
- Mixpanel - for tracking app analytics.
What have been the most influential books, podcasts, or other resources?
A few books that come to mind are:
Advice for other entrepreneurs who want to get started or are just starting out?
Do what you love.
I think too many people focus on the monetary side of things and are sorely disappointed when they are earning the big bucks, but hate the job, the responsibilities, the stress, etc.
No amount of money can make you unmiserable if you hate waking up everyday to do your job.
Consider a co-founder.
Without my business partner, John, Bonify wouldn’t exist. Running a SAAS company is more than just building cool apps and hacking on new APIs.
There’s a lot of other fun stuff to deal with like: billing, taxes, support issues, quality assurance, marketing materials, copywriting, lawyers and privacy policies, customer acquisition, networking, etc... For a programmer like myself, those tasks are basically torture. It works out perfectly to have a co-founder who can keep the business running and successful while I can focus on building the most polished products possible.
For non-technical entrepreneurs looking to start an internet company you may want to seek out a technical co-founder!
Family first.
As stated before, our goal with Bonify was to create a lifestyle company that could be a part of our life, without consuming it. John and I are both married, have kids, and would like to focus on our families and hobbies during non-business hours. A job is just that, a job.
I think that some potential business owners are dissuaded by the potentially long hours and stress that lies ahead. While that is largely true, especially when first getting started, if you keep your goals focused on reducing stress, reducing hours, and creating systems to automate your business you’ll be able to spend more time not working than ever before. Your family will appreciate this!
Where can we go to learn more?
- Website: https://www.bonify.io/
- On Shopify: https://apps.shopify.com/partners/bonify
If you have any questions or comments, drop a comment below!
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