I Bootstrapped My Marketing SaaS For Shopify Stores to $1M ARR
Hello! Who are you and what business did you start?
Hey, my name is Kyle Bigley and I am the Founder of TxtCart, AKA the AI-Powered SMS Marketing company for Shopify stores. We’re a unique SMS Marketing company pioneering conversational commerce with AI agents generating sales and resolving customers questions via text messages.
Our flagship product and what we’re best known for over these last 4 years is our Conversational Checkout Recovery flow. In 5 mins or less of onboarding, we deploy an AI Agent to your store, capture phone numbers at checkout, and automatically follow up and recover lost sales.
This has led to us generating over $50M+ in revenue for our clients and tens millions of conversations with online shoppers. Our unique process allows our clients to achieve above average results with SMS marketing, oftentimes seeing 45% reply rates, 30% conversion rates and over 20X ROI with SMS.
I launched this product/company in Dec of 2019 and we grew to over $30K MRR in 12 months while bootstrapped and part time. Now, we’re over $1M ARR while still bootstrapped and are setting our sights on $3M ARR by 2026 (whilst still bootstrapped).
What's your backstory and how did you come up with the idea?
I was always entrepreneurial at heart. My first “business” started when I was 10 years old, I would buy, customize and mod nerf guns and sell them on eBay.
My business story really started though when I went to college. I attended Penn State University to get my Bachelors in Finance & Economics with the intent of landing an Investment Banking Analyst role in NYC. I always had a passion for business and finance, and viewed that as the best way to get both experience and money to catapult me into a position to start a business by 30.
In reality it actually looks a little different. I was introduced via YouTube to ecommerce and dropshipping and was instantly hooked and fascinated. I started a small dropshipping brand selling men's jewelry and accessories online while in college, and ultimately ended up selling that store and exiting the company.
From my time running that store, I knew that I rather work with other businesses in a B2B capacity and would prefer something that had recurring revenue. At the end of the day, fighting for every sale and not knowing where the next dollar is coming from, is very stressful and I felt there had to be a better model - I wanted something that would enable me to make $ while I sleep.
I had done a ton of research and realized that SMS Marketing was severely underutilized and very new at the time (this was 2018-2019) and felt I was onto something. So after 5 super days on Wall Street and no offers, I knew I wasn’t going to be an Investment Banker (also wasn’t convinced I wanted to do that any longer).
So I started TxtCart right before graduating, and took a Project Management job out of college. I still remember the conversation with my early partners “guys, it would be sick if we could just hit $10K MRR and have a nice little side hustle to pay us dividends while we work full time”...
Well - we’re long past that point now, and boy has it been a ride.
Take us through the process of building the first version of your product.
I was lucky enough to find a stellar CTO and co-founder - literally the luckiest way possible. I had made a post on my IG story that I was looking for a developer for a project, and had a few people reach out. I cold called a referral and pitched him the idea, he loved it but told me candidly, he wasn’t sure he could do it alone and would like to get his college roommate involved.
I’m honestly not sure if the company would be here, or where it would be today without that happening. Still kind of shocked it went down like that, not to mention I certainly was not one to cold call and pitch an idea to a stranger, but hey, get outside your comfort zone!
The initial process started with building our MVP product for SMS cart recovery in 90 days or less. I think all in it was closer to 4 months + submission time to Shopify (4-6 weeks), but we did it. I was so proud and excited, and for context, I’m going to drop a picture of our OG dashboard alongside the Fiverr receipts (I paid $1,260) because to this day it gives me a good laugh.
But - it was good enough, and that’s the lesson here, just ship it, and the rest will fall into place.
This product did one thing, did it really well and the UI/UX was secondary. We actually grew to about $35K MRR before updating our dashboard or our first website. We also acquired some of our biggest clients during this time, many of which are still with us today - which is crazy to me.
Describe the process of launching the business.
I still remember the day we launched and were approved on Shopify. I was out at one of my favorite Hibachi restaurants with my family celebrating my birthday. The euphoric high of seeing something go from dream to reality is tough to describe.
For me, the early days though were a lot of work. Thankfully I had a great Co-Founder and CTO who’s still with us today as I am a non technical founder, but I was responsible for literally everything business. Design, pricing, financials, customer support, marketing, legal, you name it, I had to do it, because if I didn’t no one else would.
My days often started at 530am, I would drive 1 hour to NYC to work. Work from 7:30 am to 4pm, drive sometimes 2 hours in traffic home (I still lived with my parents) and would eat dinner, before heading to the basement (yes, my mom’s basement) to build TxtCart from about 7pm to 11pm every night.
It was grueling, but some of the most transformative times of my life looking back at it. I learned a lot through action, I would run our ads on Facebook, I would work closely with freelance designers to make compelling creative (which sucked looking back at it, but hey, it was the best I could do at the time).
I would provide customer support literally around the clock for our customers, this was big for me as I felt CS for many companies was a secondary focus and oftentimes, it was a pain point. I believed and still do today, that focusing on superior customer support is probably one of the most important things you can do for your success, and word of mouth / longevity of your brand. It was certainly stressful at times, everything rides on you and there’s only so many hours in the day, but it was incredibly fulfilling.
Reflecting back on it, sometimes it feels like we had a lot of “easy” if I dare to call it that, success. And I think a lot of that had to do with timing. I really do believe, if I tried to launch the company today, I couldn’t get to the same level in the same fashion as I once did. SO much has changed, so much more competition, and things have gotten far more expensive.
The barrier to entry is much higher today than it was in late 2019 and the competition is stiff. I often wonder what things would’ve looked like if I was able to start it back in early 2018 when I had the idea, but not the resources, but I can’t change the past.
At the end of the day, it’s really just about making sure what you create really solves a problem for a specific group of people or businesses. People have to want and need what you offer, you’ll figure everything else out as you go.
The biggest two pieces of advice I can give is 1) just start and 2) once you start, don’t quit. You cannot lose if you don’t give up.
Since launch, what has worked to attract and retain customers?
I’ve tried it all with marketing, and what I’ve learned is the importance of adapting to which marketing channels are working at the moment. Today it might be Meta ads, but 4 months from now it might be incredibly difficult or expensive, so we pivot to say UGC and influencers. Being omnichannel focused and not solely tied to one channel for distribution is SO important.
When I first started the company, I tried to do a producthunt campaign and it failed miserably, I’m still not convinced it’s a viable channel (that’s probably a hot take, but oh well). What worked well for my company was two fold (keep in mind our audience of SMB businesses and dropshippers) - FB ads and Shopify App Store ads.
With FB Ads, (Meta ads now) I still think it’s one of the most powerful marketing channels. Their algorithm, deliverability, retargeting and the wide range of creative types you can test and use is unmatched. There’s also an abundance of agencies you can work with to supplement your skill gap on the platform.
Though, the audience from that channel is typically not our ideal ICP, usually folks who are very very new in their online business/dropshipping journey and either don’t have a lot of marketing budget, or education around SMS Marketing.
With Shopify App Store ads, this is a unique channel for Shopify Partners who have apps on the app store. It was a very new channel when TxtCart was in the early days, I think app store ads actually launched about 4 months after TxtCart was listed. We got in early and had a LOT of success.
However, like all great things, they come to an end. App Store ads specifically for SMS got very crowded and very expensive, very quick. CPCs and CPIs raised to an unsustainable level for a bootstrapped company going up against companies that had raised MILLIONS.
To put it into perspective, we used to be able to bid on the “SMS” keyword, for sub $10 a click, that is now $50-75 a click, CRAZY. So we pivoted and focused on influencers, Youtube and PLG through word of mouth + affiliates.
Regardless of what channel you test and ultimately end up rolling with, I will drop some free game here: In order to make money, you have to spend money. Yes, I know it’s cliche, but it’s true. And you likely have to spend more than you expect. At least in SaaS, many companies embody a growth at any cost mindset, this is easy when you have $5M backing you from VCs, not so much when you are bootstrapped with bills to pay.
Embodying a growth at break even mindset is probably the best thing you can do in this case. For us, that means spending about 30-50% of our MRR on marketing. It’s a long game, and a big investment but over time, it will pay off with a product that is great and more importantly, one that either makes people money or saves them time, but ideally, people care more about making money.
I can still remember telling my dad about my first $50K AMEX bill in November which was crazy to think about at the time, but we did about $85K that Nov so it’s all relative. It is a tough mindset to break if you are coming from a 9-5 type background, or have a saver mentality around finances, but it is imperative to your success in business. You need to detach your emotional connection to money, and look at it purely as a tool to multiply your desired outcome to succeed in business.
You can’t change the past, and everything that happened has brought you to this moment in the present. Every decision, up and down has played a part in where I and the company are today, and for that I’m grateful.
How are you doing today and what does the future look like?
2024 has been a transformative year for us. We are reinvesting into every aspect of the company. Launched a new website, launched a new dashboard to the product, hired talent, product development, partnerships, marketing, you name it, we’re investing in it. It’s very much a race to where we are headed, and a lot of this year has been setting the foundation for the next level we are aiming to achieve.
The truth is, as you grow, the company evolves and what you did to get to say $25K MRR won’t get you to $60K MRR, and won’t get you to $150K MRR. There’s definitely levels.
We’ve been honing in on our pricing, marketing and GTM strategy while building out the internal company and product to make TxtCart a full-service SMS Marketing platform with AI ingrained at every step. It’s our core differentiator and why we are able to consistently generate better revenue and experiences for Shopify Brands. We’ve peaked at $96K revenue in July and are super excited for what the future holds.
Our gross margins are about 80% on average, this is after the main SG&A expenses are deducted. For a SaaS, we have some real hard costs in SMS and our provider which is more challenging than a “traditional SaaS”. To put it into perspective, our SMS costs are about half of the total SG&A expenses…
Currently I am managing a team of about 15 with only about 6 full time folks. Most everyone is part time and contractors or agencies. It’s definitely a hack nowadays for bootstrapped founders to use freelance/contractors and fractional talent! Our entire team has been remote since day 1, all over the world and I am a firm believer (long before COVID hit) that in person work and offices are a thing of the past.
Plans for the future - we have SO much in store (no pun intended), it’s both incredibly exciting and overwhelming. We are building TxtCart 4.0 right now and it’s actually crazy what it will be able to do. We’re adding 20 flows/automations, all powered by our AI, rebuilding our campaigns product, adding in one of the sickest Popups products for merchants to acquire new subscribers, refining our Generative AI agent and so much more.
What started out as a cart/checkout recovery tool, has expanded into a full SMS platform for ecommerce brands that are just starting out and all the way to $25M+ in GMV! It’s really something special.
Through starting the business, have you learned anything particularly helpful or advantageous?
Of course! Almost everyday in business is some form of lesson learned or mistakes made. I think for me personally, one of the most challenging things has been being both part time and bootstrapped. Holding out on external investment from either Angels, VCs or crowdfunding makes building a SaaS in an ultra competitive environment like SMS Marketing incredibly difficult.
I wanted to be bootstrapped and maintain a majority of the company ownership since day 1, and in hindsight, staying part time without any outside funding definitely slowed down the company's growth.
When this first started, I worked full time in NYC as a project manager. I was new in my career right out of college, and my “side hustle” was growing toward $25-$30K MRR within 12 months and I was comfortable. I coasted for almost 2 years taking distributions with my partners, but deep down, I knew I wasn’t happy.
I didn’t want to pursue the career path I was taking, and I knew that TxtCart had much much more potential. So I decided to focus on growth, yet again and once we hit about $60K MRR, I took the leap of faith to go full time. That’s right, I walked away from a $150K salary and benefits to pursue the American Dream and turn this micro SaaS into a $25M+ company.
Now we’re over $1M ARR, and can see the path forward to $2M ARR in 12 months or less. I’m also much more open to considering funding to help accelerate our growth, as I realize we can go further, faster with investment.
The lesson here is that it’s important to remember you can’t change the past, and everything that happened has brought you to this moment in the present. Every decision, up and down has played a part in where I and the company are today, and for that I’m grateful.
It’s important to remember where you started and the vision you have for the company years ago, will likely drastically change over the years, and you couldn’t have foreseen that back then. Keep going, adapt and pivot and everything will work out as intended.
What platform/tools do you use for your business?
I use a ton of platforms and tools that are integral to our success as a business and organization internally.
- CRMs: Salesforce, Hubspot, HeyMantle
- Customer Support: Intercom
- Insights: MixPanel
- Database: MongoDB
- Hosting: AWS
- Internal Communications: Slack
- Creative Design: Figma + Canva
- Video recording: Loom
- Video meetings: Zoom
- Affiliates: Shoffi
- Accounting/Bookkeeping: Quickbooks
- Product Management: Atlassian/Jira
- Email: Gsuite + Hubspot
- SMS: TxtCart
- AI: Claude
- Calendar: Calendly
I’m sure I am missing plenty but that’s what comes to mind. They all play an important role in the success of the business.
What have been the most influential books, podcasts, or other resources?
Admittedly, I am not a huge reader. It’s something I only recently got back into. Some of the recent books I’ve read include Hormozi’s $100M Offers & $100M Leads, AMP it up and the 2-hour cocktail party. I have a ton of books on my shelf that I still need to get to, and while books are great, you will still learn more by just taking action and starting the thing. You’ll be surprised how much you learn in 12 months of starting and running a business.
Outside of books, I do love listening to podcasts, and my favorite right now is definitely The Joe Rogan Experience. It’s a way for me to learn about things unrelated to business, wind down, hear other perspectives & I’d be lying if I wasn’t a sucker for a good DMT trip story or Extraterrestrial life theories.
Advice for other entrepreneurs who want to get started or are just starting out?
The biggest two pieces of advice I can give is 1) just start and 2) once you start, don’t quit. You cannot lose if you don’t give up. Entrepreneurs have a lot of innate qualities and personality traits, one of the common traits in successful entrepreneurs is that they have a winners mindset, and cannot quit.
It’s literally ingrained into us, so if you’re someone that struggles to get started, work hard or quits easily, you should probably reconsider entrepreneurship.
The truth is, it’s NOT easy. Regardless of what the coaches, gurus and social media makes it out to be, it’s simply not. From someone that’s been in the trenches for 5 years, worked in corporate America with a cushy job, and ran a successful startup, I can confidently say for 95% of people or more, the salaried job is easier, less stressful and may even result in more money.
If you do decide to jump in, I would say, don’t go full time on your business or side project until it can replace your main income. This may be unconventional advice, but I believe it’s the right answer. Too many people get caught up in the euphoria of starting something and dreaming of the possibilities, they quit their job and then get punched in the mouth by reality. They quickly realize, oh shit, I made a mistake, this is hard, I’m struggling in xyz, and may have to go back to work if I can’t make this work in X time because they’re running out of runway.
If you can manage your time effectively, you can both build your company on the side while working a fulltime job. Yes it's tough, and yes you will have to make sacrifices, but if you really want it, you can do it. If you do this, you literally cannot fail, and it’s exactly what I did. I worked as a Project Manager in NYC for highrise construction and development.
It was hard work, long commutes, and 60 hour weeks. However, it paid great, and I still had enough time/energy to work 2-4 hours each night on my business. It also allowed me discretionary income to INVEST into my business. I did this for years, until we hit about $60K MRR and I could replace my salary.
Since going full time we’ve grown revenue to $96K peak and avg $85K currently with a path forward to our next goal of $2M ARR.
Are you looking to hire for certain positions right now?
We are definitely expanding right now and actively looking to hire. Granted, we are still bootstrapped and haven’t raised funding yet so that process will look a little different once we complete a Seed round if we go that route. We’re also always open to working with young, ambitious college kids who are looking to gain some real life/business experience through an unpaid internship.
Couple of roles we are actively looking for include full stack developer, front end engineer, fractional CMO, VP of sales, Account Executive, Head of Customer Success, and Head of Agency Partnerships. If you have experience working with SaaS, ideally in the DTC ecommerce Shopify space in any of these roles, you can certainly reach out to me via email: [email protected] and we’ll see if you may be a good fit!
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.
