I Left My Job At Facebook To Go Full-Time On My Budgeting App [$600K/Year]
Hello! Who are you and what business did you start?
Hello! My name is Shashank Pandit, I am the Founder and CEO of Buxfer.
The main product I work on is Buxfer. It’s a powerful budgeting app that lets you see all your financial accounts in one place, so you can understand where your money goes, and plan for future goals. Our customers typically are those who are very proactive with their finances (I like to call them “finance power users”). They want to engage in a very hands-on manner with their finances so they feel they are in control of their financial life.
We are a bootstrapped company with no outside funding. We have organically grown to the point where we are profitable with a 15-person team.
What's your backstory and how did you come up with the idea?
Buxfer originally started when I was back in grad school. A group of friends and I were going to school at Carnegie Mellon in Pittsburgh.
We used to love computer programming and always built some side projects just for fun. One of those projects was what eventually turned into Buxfer. Almost all students on campus (including me) had this pain point where they split expenses with their roommates and needed to tally up who owes whom how much. We built an innovative way to track this to minimize the amount of money that needs to change hands when settling the dues.
It gained a lot of popularity on campus and even got funded by YCombinator. But it didn’t quite get the hockey stick growth curve that VCs look for. So I landed a job at Facebook and was maintaining Buxfer on the side for a while. However, Buxfer had a very loyal customer base who helped generate decent revenue right from the very beginning.
The first thing to remember is that, no matter how hardworking you are, how many skills you have, or how many hours you work, you can’t do everything yourself. It is necessary to hire and have others to grow your business
Sometime in 2016, after spending 5 years working at Facebook I noticed Buxfer had grown pretty sizably over that time. So much so that it could be considered a full-time job with a solid income (which is saying something about living in California). It was at this time I decided to go all-in with Buxfer. Revamping it, turning it into an app, and modernizing it to fit the times and needs of the people.
So to summarize, I would say I started by scratching my itch, then my technical background helped us get things off the ground and the validation was initially fellow students using the product, and then eventually it was simply people paying good money for the product. Can’t get any better validation than that!
Take us through the process of designing, prototyping, and launching your first product.
The first version of Buxfer was very much an MVP. It was a very basic prototype meant only to be used by students on campus. The product development process wasn't very methodic, as we were a bunch of engineers and this was a side project meant to be used by our friend. We took inspiration from projects like Basecamp to use the then cutting edge technologies like AJAX to build a fast, responsive website. A lot of the product was shaped by our intuition and desire to scratch our itch. Once launched, quick iterative feedback from our early customers helped us refine the product.
In hindsight, it was a great way to validate demand, although we weren’t thinking about it in those terms at the time. As the product matured, and we had revenue, we spent more time hiring professional designers and developers to build out various aspects of the product.
Describe the process of launching the business.
Buxfer has multiple launches, and each of them represents a very unique way to launch a product.
The initial launch was a purely “organic launch”. It happened on the campus of Carnegie Mellon. We had a couple of our friends using it and before we knew it, it went viral on the campus and was quite popular. We barely did much marketing at all, a theme that has been true all through Buxfer’s life.
The second launch was a “startup launch” -- more official and the typical way a Silicon Valley startup would launch. We went through YCombinator, launched Buxfer at YC’s now-famous demo day, and received a small round of angel funding. Back then, YC was just starting and it was a startup itself, not the powerhouse it is today.
The third launch was a “bootstrapped launch”. In 2016, after I went back all-in to Buxfer when it had bootstrapped to a sizable revenue. At this point, the launch was more about refreshing the product and bringing it into the modern world with mobile apps, fresh designs, and all those kinds of things. The focus was more on growing sustainably at a steady rate, not chasing a hockey stick growth curve and flaming out, and keeping costs at a bare minimum.
Of all the three launches, I’ve enjoyed the bootstrapped one the most. It’s a hard route, but if you can make it work, it comes with incredible power to make choices that align very strongly with your principles. Something which is often a struggle with VC-funded startups.
Since launch, what has worked to attract and retain customers?
Amazingly, we had not spent a single dollar on marketing up until 2020. We had a pure organic word-of-mouth growth. So for us, just understanding the target customer very clearly, and nailing the product-market fit is what drove our growth over the years.
We have a very clear focus on who we are building this product for -- power users like I described earlier. Focusing on a niche is very powerful in finding and retaining new customers.
While in my market of finance and budgeting, many apps are for general users, and quite honestly, it doesn’t matter who you choose, it depends on your preference. However, when you are looking for something very specific, it is hard to find that which is where Buxfer comes in. The focus on a niche helps us differentiate from other players and helps us target customers in a very efficient way.
Recently, we have started putting more effort into PR & marketing. It’s a little early for us to even know what channels are working well. But so far, we have some promising results from SEO and Google Ads.
For SEO, our primary channel is our blog. We try to put out weekly content that we genuinely want users to find useful, whether they convert to be a Buxfer customers or not. We do not try to do any SEO tricks, I think most search engines these days are smart enough for these tricks to not be very effective either. Some other tactics we have used on this front are creating landing pages for users in specific countries or advertising as an alternative to competitors.
As I reflect on my journey over the years building Buxfer, the most important thing I think I’ve learned is you can choose to build a business in a way that aligns with your goals and gives you control.
Some other reasons why we are loved by users are specific to our product segment. We focus very heavily on having really solid connections with banks all across the world. We spend a lot of time making sure these connections work robustly all the time, and that’s a non-trivial task, but we do it because we understand it’s the most critical foundation for the rest of the product to work and deliver value to the user.
It goes back to understanding your user and their needs extremely well.
How are you doing today and what does the future look like?
Today Buxfer has grown to be a team of about 15 people in different positions, ranging from PR, copywriting, marketing, software development, and so on.
Buxfer is a profitable business with a very clear business model. We make a product people love, and they pay for it. We do not resell or harvest anyone’s data, and will never do so. As a customer myself, I hate when other products do it. So we will never do it. Whatever else changes with Buxfer, I’m dead sure this will never change.
Somewhat related is the bootstrapped profile of our business. We are not looking to “go big or go home” as Silicon Valley typically likes it. We are here to stay. We want to build upon the strong foundation we have to become a company that has a lasting impact, not just be another unicorn that flames out.
On the product side, we have grown from a small tool used by grad students to a full-fledged budgeting app. We want to keep expanding on that path and seek ways to incorporate more ways to improve our users’ financial lives.
One of the things that are super exciting on our roadmap is to add aspects of automated financial advice, that would replace a traditional financial advisor for a fraction of the cost and without any conflicts of interest. The key here is our business model where we have not and will never sell products. The trust users have in our brand is what sets us up for doing bigger and better things in the future.
Through starting the business, have you learned anything particularly helpful or advantageous?
As I reflect on my journey over the years building Buxfer, the most important thing I think I’ve learned is you can choose to build a business in a way that aligns with your goals and gives you control. More often than not, young people (I included, 10 years ago) think there’s only one way to go about it -- pitch to a VC, raise a ton of money, then flame out chasing nonsensical growth targets.
What I’ve learned is that there is a much better alternative, especially today when the costs for marketing and product development have been going down to the point where one can imagine bootstrapping their business. Of course, it is by no means an easy route, but it is just starting to be possible and even fairly common. Look at things like Indie Hackers, Micro Conf, Tiny Seed. There’s growing momentum behind this way of building businesses, and with new things on the horizon like the No Code movement, this path is only going to become more mainstream.
Entrepreneurship is all about being creative, nimble, analytical, and rebellious. It often involves periods of hard struggle and going through excruciating pains to get something working and growing
Another unique aspect of the way we built our company was the fully remote nature of our team. Now with the pandemic, it’s the fashionable thing to do, but we were always set up to be like that right from day one.
Very often it’s the only choice for bootstrapped companies like ours. However, it’s been an incredible way to find great talent at affordable costs. Often, we all live in our bubbles, especially in Silicon Valley, where we think the best can only be found around us and near us. That’s not true at all, and being forced to go down the remote path has opened me to a wide variety of experiences and exposure to different kinds of people and cultures. Not to mention, when the pandemic hit, we didn’t blip. It didn’t affect us one bit from the business point of view. If anything, it helped us as people became more focused on their finances.
As with any business, there are always mistakes to be made and lessons learned, but with that comes experience and knowledge that will help you make the right decisions later on that will help your business grow and thrive. I have made plenty of those myself!
The first thing to remember is that, no matter how hardworking you are, how many skills you have, or how many hours you work, you can’t do everything yourself. It is necessary to hire and have others to grow your business. It is one of the best investments you can do for yourself and your business. This will allow you to get the rest, family time, and clarity to focus on other areas of work.
What platform/tools do you use for your business?
Every company uses various tools to fit its needs, and something important to remember is that oftentimes it comes down to what best resonates and works best for you. You may need to experiment until you find what works best for you!
For marketing, we use:
- Google ads
For productivity, we use:
For payroll and HR we use Gusto.
For 401K benefits, we use Guideline. These have been simple but powerful tools that have helped us build one of the leading budgeting apps in the world while keeping costs low.
We use UpWork a lot for hiring. Whether we are looking for team members, or simple jobs to be completed, UpWork has been a great tool for us and has helped us grow. Freelancers are paving the way for the future and should not be overlooked!
On the technical side, we use various tools for hosting (AWS, Wordpress), software development (PHP, MySQL, React), design (Figma, Adobe), analytics (Google Analytics, MixPanel, Heap Analytics).
As we have talent spread out all over the world, we (as I am sure many businesses do now after the pandemic) use Zoom for remote employees to collaborate.
What have been the most influential books, podcasts, or other resources?
One of the major things that helped motivate me to first get the idea of Buxfer was reading Paul Graham essays. At the time, everything was about building a startup, and even though it hadn’t crossed my mind at the time to make Buxfer what it would become and what it is today, it was still the catalyst to get me going!
My favorite book is The Foundation Trilogy. Books I’ve learnt a lot from are Quiet, Scarcity, Upstream, Predictably Irrational among many others.
My list of podcasts includes Indie Hackers, Startups for the rest of us, Hidden Brain, Planet Money, among many others.
Advice for other entrepreneurs who want to get started or are just starting out?
I feel entrepreneurship is a very personal choice. Very often it’s made out to be very glamorous. But that’s because we only focus on success stories. And even those need lots of grinds and luck to make it through.
So the first bit of advice I would give is to ask yourself if you want to do it for yourself or are you doing it due to external pressure. It’s absolutely important, to be honest about that and if it’s not for you, that’s fine! Here in Silicon Valley, everyone I meet wants to be an entrepreneur and everyone asks me for tips. The first tip I give is to make them question if they really want it for themselves or if they are caving into peer pressure.
Once you decide you want to go down this path, the next thing I suggest is to pick up some marketing books or talk to a marketing expert if you know one. The goal is not to be an expert on the topic, but to have some basic appreciation for the importance of knowing your market and the need you are going to address with your product. This is particularly important for engineers (like me!) because we tend to have lots of ideas and get very carried away imagining worlds where they are going to be super successful. Instead of being too attached to your idea, you should be playing devil’s advocate and think of ways why it won’t work. If you can’t think of any, maybe you are onto something. I feel like having some basic exposure to marketing and market validation goes a long way, and might not be something on top of your mind, especially if it’s your first time doing it.
It’s very important to remember that entrepreneurship is not about becoming a billionaire, which is what unfortunately draws many people down this path. Entrepreneurship is all about being creative, nimble, analytical and rebellious. It often involves periods of hard struggle and going through excruciating pains to get something working and growing. Do not expect to get a dime out of it, just do it for the fun of it. And it might all just work out. Or not.
Lastly, do not forget your family and relationships. I don’t know anyone who on their deathbed regretted that they didn’t do a startup. I know plenty who regretted not spending more time with their family. Have a good work-life balance. Focus on your friends, family, kids, and most importantly, yourself! Take the time to exercise, have a variety of other hobbies, and not take your startup too seriously. Life is too beautiful and varied to make it all about one thing. Live it to the fullest, and use entrepreneurship as a way to make it richer, not to drain the energy out of it.
Are you looking to hire for certain positions right now?
Yes, we are always looking to hire great talent all across the globe. Currently, we are looking for experienced technical customer support agents, customer support managers, and frontend website developers among others. We routinely post jobs on Upwork, you can find us there.
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
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