How I Started A $30K/Month Note-Taking App [$1M Raised And 2,500+ Customers]
Hello! Who are you and what business did you start?π
Hi, my name is Alex and I started a note-taking app called Reflect. Essentially, we sell a note-taking tool similar to Apple Notes, but when you get into it, with a ton more features that are designed to help you think and improve your quality of life.
I started the company about two years ago and it has been quite a long journey to get to this point. B2C is obviously a lot harder than B2B to make money and also the product bar is much higher. Especially in our space, note-taking is a highly complex thing to pull off, programmatically speaking, but it's been a lot of fun.
Today, we make just over $30k MRR. We have raised a crowdfunding round of just over a million dollars and we have four full-time people working at the company.
What's your backstory and how did you come up with the idea?π
I'm a serial entrepreneur. I've started a ton of different companies. And with Reflect I was looking for something quite different. My last company, Clearbit, was a B2B SaaS company in the data space. And I grew that to hundreds of people as CEO. But I struggled to lead a large organization. And ultimately decided that wasn't for me.
What I'm good at and what I love is the zero to one, creating something out of nothing. I find it a lot easier than most people. And I can program and design and wear all the different hats. So what some people might think of as impossible, I just live and breathe every day. What I really should be doing is just that. What I'm uniquely good at and what I love.
So let's talk about Reflect. So I just came out of running a B2B SaaS company. I was looking to start a new company, but I was also looking for something a little different than the last one.
I wanted to try my hand at B2C for a couple of reasons. First, I wanted a small team. And the nice thing about B2C is you can automate the sales. So you can keep the team small. In B2B, you need to have a lot of hungry sales reps who require managers. And those managers require HR and ops and accounting and it quickly balloons.
In B2C, or at least so my thinking went, you can keep your team pretty small. So the second reason was that I wanted to use the product myself. One of the drawbacks of B2B is that you typically aren't the customer.
So I wanted to build essentially a passion project that was also a legitimate business. Because if your business is not profitable, then it's not a business at all. I've been thinking about building a note-taking app for some time.
I love writing and I love thinking. And so for me, it was a natural extension of the things that I love to do. I also really wanted to remake one of the icons on my dock. If the app wasn't going to make my dock and essentially be something that I use every day, all day, then it wasn't worth building. And so I decided to remake the Notes app.
Honestly, I wish I could say that more market research went into it than that, but because it was partly a passion project, I just got stuck into it and started programming.
Take us through the process of building the first version of your product.π
The first thing you do when you are planning a new product, at least from an engineering perspective, is that you've got to plan out the stack. And so I did a bunch of hunting through the various options, especially since I was concerned about the database.
One of the things I learned at Clearbit was never to have a self-hosted database which you have to maintain. Essentially you want your database to scale without you having to think about it and scale essentially infinitely.
So I decided to make Reflect on a stack that would scale up and down without me even having to think about it. And then I ended up using Firebase and Firestore for the database and then Vercel and Next.js for the web app. And we've had no database downtime for Reflect which has just been amazing.
Also Reflect can double in users next month and I wouldn't notice other than looking at the analytics. We should be able to scale infinitely without existing architecture.
I then got to work picking an editor and building out some of the rest of the app. Quite frankly I made a lot of mistakes here. Initially, I picked the wrong editor. I didn't do enough research and I picked an editor that didn't have Android support or iOS support. That was a disaster. I had to rewrite a lot of the app.
And then the other thing I didn't plan out properly was the offline merging of data and sync and dealing with conflict resolution. This is something that I should have planned right from the start but I didn't get around to it until we were a year in. And there was a huge migration process and it cost us a lot of time.
So that is probably the biggest learning here and the thing I would go back in time to tell myself is just take your time, do your research from a product perspective and an engineering stack perspective. Really do your research. You'll save more time in the end.
Other than that, you know, it's very easy to start a company these days. I use Stripe Atlas. I use Stripe. I use Mercury. I use Bench.co for the accounting. And then like I said, I used Firebase and Vercel. It's all very, very straightforward and you can set up your company and do all the paperwork in a day or so.
focus on the side that gives you energy. Otherwise, you'll just get burnt out.
Describe the process of launching the business.π
I'm a full-stack software engineer. So, for me, I can pretty much make any of my ideas come to life. I programmed on Reflect for about a year before hiring a couple of engineers. And I hired them out of pocket.
The project took a lot longer to launch than I anticipated. And, quite frankly, I almost ran out of money. So I raised a crowdfund at that point of a million dollars. And I told all our investors that we were going to try and pay them a dividend. And the reason I did that was because I wanted to inline the incentives and make sure that they weren't pushing for growth and some kind of acquisition. We quickly filled out the round and raised a million bucks. We now have more than two years of runaway, but I fully expect us to be profitable this year.
I would say we had a product market fit straight away. I've built up a large following on Twitter over the years. I have about 30,000 people. And it was easy to see if products resonated with them.
I just send a tweet out and I can pretty much feel if there's some kind of product market fit there. We had thousands of people sign up for our mailing list before we launched. And then when we finally did launch, we got hundreds of paying customers.
Since launch, what has worked to attract and retain customers?π
Our approach to retaining customers, which is the most important part, has been to focus on the quality of the product, polish and polish and polish and iron out all the creases.
Listen to our customer base, put together a public roadmap, get input on it from our customers, create a Discord, create a community, and create a way where customers can submit feature requests and get upvotes on them.
And then we also improved our onboarding considerably. The vast amount of our churn happens in month one, so it's an onboarding issue. And we put a lot of time into making that flow well. We have a whole email drip campaign we send you when you sign up, showing you the different features, and then we'll dynamically change that campaign depending on which bits of the products you've used or which bits you haven't.
We have also focused on annual plans, and while we have a monthly plan, we heavily incentivize the annual plan. We make it the default and discount it heavily. This has worked remarkably well for us. It helps us with cash flow, and it also helps us reduce churn.
In terms of attracting customers, we haven't found sources that have worked yet. If you look at our inbound leads and which convert, the vast majority come from Google, essentially word of mouth. We have tried paid acquisition in terms of specific newsletters. We found a couple that have worked, but the vast majority haven't. Even when they do work, it's only temporary because you quickly saturate a newsletter's readers.
Our long-term goal is to set up some of our sustainable channels. This is centered around creating our content. Specifically, we've created these Toolshed interviews. Where we interview founders and creatives about their tools and doc and desk and work environment. This campaign in its infancy hasn't taken off yet, but we've done a couple of interviews. I've also had the podcast train and recorded a bunch of those.
The only thing that's worked for us is launching. We have about 30,000 people on our email list that have signed up for Reflect over the years. We blast that email list with new features once a month. That works, but what works is launching a significant feature on Product Hunt and Twitter. That is the only thing we have found so far, but we need some more sustainable channels for the future.
Lastly, we've been building up our YouTube channel. We have about a thousand subscribers to that now. And we've invested in content. We have someone full-time building out videos for that channel around note-taking practices.
How are you doing today and what does the future look like?π
Today, we're growing about 10% month on month, doing just over $30,000 MRR. Our burn is about 50k MRR. So, I expect us to just about turn a profit this year. We have no real gross margin costs other than our employees' salaries.
Our hosting costs are free for now because we have got a significant number of credits under Google Cloud after we did the crowdfunding race.
We have just reached 2,500 customers, which is a pretty mind-boggling amount for me given that my last company has less than 1,000 customers. We get a surprisingly little amount of support and we just round-rubbin' it between all of us.
What platform/tools do you use for your business?π
In terms of tools for our business, we are fairly typical in that we use GitHub, Google Cloud, Firebase, Vercel, TypeScript, Next.js, and Visual Studio Code. We love using Hite for our project management.
For communication, we just use a shared WhatsApp channel, which surprisingly works well for us. I don't like using the WhatsApp client though. I use a desktop app called Texts.
We use Discord, but only externally for our community. We use Canny for our public roadmap.
We use Bench.co for our accounting. We use ChartMogul for our analytics and Stripe for our payments. We use Atlas to incorporate and we use Google Apps for our Gmail.
What have been the most influential books, podcasts, or other resources?π
The best book on starting a company is one called From Founder to CEO, which is by my coach and mentor Matt Mashari. It contains all of his wisdom from coaching some of the top entrepreneurs in the world.
Another book that inspired me, The 15 Commitments of Conscious Leadership is a great one. It's about how to lead a more objective life where you take responsibility for your actions and feelings. Other than that, I tend to read science fiction and books on astronomy.
Advice for other entrepreneurs who want to get started or are just starting out?π
My top tip would be thinking before coding and planning out the product. And I don't mean just from a product marketing and marketplace perspective, but I mean from a technical perspective. Just taking an extra week, say, to plan everything out.
My other bit of advice is really to work on stuff that gives you energy. It can be really easy to focus on things that just make you money. But ultimately, if you're reasonably talented, you can make money in many different fashions and you will figure it out. So really focus on the side that gives you energy. Otherwise, you'll just get burnt out.
The other thing I didn't anticipate is obvious in retrospect, but it's how much time you spend with your customers. You need to make sure that you are building something for people that you like. It's obviously easier to do that if you're a business owner.
You need to make sure that you are building something for people that you like. It's easier to do that if you're building for people like you. But I would make sure that you're building for people that you like, you want to spend a lot of time with because you will.
And if you ultimately build a product for customers that you don't gel with, then you won't spend time with them and then your product will suffer for it
Where can we go to learn more?π
If you have any questions or comments, drop a comment below!
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