Creating A 6-Figure Side Business As A Non-Technical Founder
I’m Wilson Hung and I’m the Director of Growth at Kettle & Fire. On the side, my partners and I created getARPU.com. It’s an app that helps Shopify merchants make more money with “pre-shipping” notification emails by allowing customers to add items to their next order without going through a checkout process. ARPU is used by high growth brands such as Kopari, Perfect Keto, and many others.
I do not know how to code, invested only $10k into the app, and it now generates over 6-figures in annual profits. In some ways, side projects require a better strategy than regular businesses, and this is my story of how we created ARPU even though we all had FT jobs.
What's your backstory and how did you come up with the idea?
I graduated with a Chemical Engineering degree and worked in the Oil & Gas industry for 3 years after school. Throughout my life, I’ve always had side businesses (selling shot glasses, creating HR videos, and a group dating website).
Work under someone, work hard and use it as a learning opportunity. Once you’ve worked in an industry for a few years, you’ll come up with better business ideas, know how to execute better, and you’ll have a more established network to help you achieve your goals.
At first, it was just a hobby. But when I wanted to switch careers into tech, I turned my side businesses into a portfolio where I was then hired on by Sumo.
From there, I became employee #2 at a bone broth company called Kettle & Fire in 2016. This entire experience taught me that having a portfolio of mini-side projects, even if they were unsuccessful, was a shortcut to switching careers into a startup.
Fast forward to 2019, and I now have plenty of industry experience in the Direct-To-Consumer (DTC) industry. Prior to Kettle & Fire, all my business ideas were scattered and low quality (dating apps) due to my lack of experience.
But by growing a DTC brand, I was able to build my professional network, but most importantly, I experienced many problems and inconveniences. I would then write down the solution as a potential business idea.
This was important because I believe side businesses require a better strategy than regular businesses due to resource constraints. You’ll only be able to work on it on weeknights and weekends. And cash will be limited because you’ll likely have to self-fund and bootstrap it.
What this means is the ideal side business should have:
- High Margins & LTV: This helped me rule out most of my agency, consulting, and physical business ideas that I had. This meant the remaining ideas I filtered were related to the education or SaaS space.
- Organic Customer Acquisition: This for me meant that I needed either a strong SEO opportunity or an arbitrage opportunity in a marketplace/app store.
- Low Starting Costs: This for me meant that I’d prefer to partner with co-founders that would be fine with upfront equity rather than cash payments
After those 3 filtering criteria, I ended up having 2-3 business ideas. Of which, one of them was inspired by seeing how Dollar Shave Club (DSC) sends “pre-shipping” notification emails that allow customers to add products to their next order.
I reached out to my contacts at Dollar Shave Club and they were able to confirm to me how effective these types of emails were to increase revenues. At this point, I knew there was a solid business opportunity here. All I had to do was build it.
Take us through the process of designing, prototyping, and manufacturing your first product.
Now that I had the idea, the next step was to convince developers to partner up with me. I knew I wanted to keep starting costs low which meant I preferred my developer partners to be co-founders and accept equity instead of upfront cash payments.
The problem? Quality developers are extremely busy and it’s hard to convince them to take equity as the main form of compensation. So before I approached them, I wanted to have three things figured out:
#1 - Initial Distribution
Since this would be a side hustle for me, I wanted to identify an organic lead generation source. For me, it was the ReCharge app store.
The Shopify app store is crowded and very competitive. However, the vast majority of Shopify brands with a recurring business model use an app called “ReCharge Payments” to power their subscription business.
This is important because the ReCharge app store is not as competitive. ReCharge has over 10,000 users, and many of them are Shopify Plus merchants. This was my trojan horse into the Shopify ecosystem and the source of my organic traffic.
Fortunately, because of my FT job (Kettle & Fire), I knew the team at ReCharge. So I set up a meeting with them with one objective, to get their commitment to accept me on their app store if I created an app that met their standards.
During the meeting, I went over:
SLIDE #1 (WHY ME): I wanted to communicate to the ReCharge team why I was in a unique position to help their customers with my app idea.
SLIDE #2 (THE OPPORTUNITY): For DTC subscription businesses, I knew that the main reasons for cancellation are “too much volume”, and that subscription customers are the most profitable type of customers. These are the opportunities that my app would solve.
SLIDE #3 (THE SOLUTION): I just created some Photoshop mockups to show what it would look like, and the user flow.
After the meeting, I got an email and written proof that they would place my SaaS idea into their app store if it passed their QA/QC requirements. This would come in handy to convince developers to partner with me.
#2 - Quantifying The Business Opportunity
Now that I had a good initial distribution plan, I needed to research what the business opportunity was.
To do this, I found out how many users ReCharge has from their website (the Total Addressable Market). To get the Serviceable Obtainable Market, I used a tool “BuiltWith” to quantify all the merchants on the ReCharge platform who would be our ideal target customer (ie: food/bev, personal care). I then overlaid the pricing from similar companies to understand how big of an opportunity this was.
#3 - Providing an initial product mockup
The last thing before approaching developers was to provide an initial mockup and product journey of the idea. My goal was to make it as easy as possible for my target co-founders to understand the product roadmap. So I mapped out the entire customer journey, what each button would do, and the MVP features.
Only once I had all the major pieces and my homework completed, did I reach out to developers to partner with me.
Most people only have the idea, and then they pitch it to developers to try to convince them to partner with them. The problem with this approach is that quality developers get approached all the time with business ideas.
The partners I wanted to be James & John Erck from Above Market. I worked with them in the past with a project for Kettle & Fire and was extremely impressed by the quality.
I knew they were busy because they owned an agency with many clients, but by having all my homework completed before talking with them, they were willing to partner with me by taking an equity stake in lieu of cash payment.
To recap, I provided not just the idea, but also: what it would look like (the mockups), how we would sell it (the ReCharge app store), and the market opportunity (market sizing).
Once my co-founders were in, the next step was to get on the same page of the areas of responsibility. I found it useful to list out all the key functions, and make sure everyone is aligned on what the scopes and areas of responsibility were. This is important to reduce any risk of miscommunication or expectations further down the road.
Describe the process of launching the business.
Once the product was ready, it was easy to create a website. For our logo. I used Looka ($50), and used Typeform as our registration flow. I then did the design and copy for our landing page.
When we launched in May of 2019, we were able to achieve $2000 in MRR within the first month.
Due to my FT job at Kettle & Fire, I owned a mastermind slack group that consisted of Director/VP/CMOs of many DTC merchants.
This provided me direct access to the decision-makers of many of our target brands. And since I had a good relationship with many of them, I was able to close our first batch of customers without having to do any marketing.
Since launch, what has worked to attract and retain customers?
Beyond the first $2k in MRR, the next step was to get on the ReCharge app store. This was easy because the key decision-makers at ReCharge were involved from the start.
The only thing worth noting is that we found out that their app store is organized alphabetically, which is why we decided to name our product ARPU. Guess who ranks 1st on the app store!
From there, we also hosted webinars with ReCharge and did some guest posting.
However, I learned these aren’t the most impactful marketing channels. The type of merchants that attend webinars or read blog articles are typically smaller businesses. These smaller businesses are typically the ones that require the most customer support or give me the most headaches to deal with.
So since I preferred to close bigger merchants, there had to be another organic marketing channel outside of the app store. What could it be?
I learned that there was an account manager at ReCharge who would refer customers our way. So I figured out whenever ReCharge closes a large customer, an account manager would be assigned to them to help new users get onboarded. And part of this onboarding process was to provide recommended apps.
This was important because all the big Shopify merchants that transition to ReCharge are assigned their own account manager to help with onboarding.
So I decided to host lunch & learn where I would send UberEats gift cards to account managers at ReCharge. All they would have to do is eat lunch, and sit in on a virtual webinar to learn more about my app.
And the response was really good and well-received.
The results? Many of our biggest customers come directly from recommendations/referrals straight from the ReCharge account managers.
How are you doing today and what does the future look like?
Fast forward to today, we’re profitable, achieved net negative churn, and are growing quickly every month. Our margins are very high because it’s a software business, and most of our customer acquisition is organic.
In fact, it’s doing so well, I’ll be resigning from Kettle & Fire so I can focus on scaling ARPU.
Through starting the business, have you learned anything particularly helpful or advantageous?
The most important thing I’ve learned from creating ARPU was how useful it is to gain some industry experience. I see many students trying to jump into entrepreneurship straight out of school. I think there’s nothing wrong with this approach, but I do think there’s a lot of value to work at a company and to gain some industry experience.
Work under someone, work hard and use it as a learning opportunity. Once you’ve worked in an industry for a few years, you’ll come up with better business ideas, know how to execute better, and you’ll have a more established network to help you achieve your goals.
Lastly, as a non-technical founder, it’s important to do all your homework prior to approaching developers. Once you have a solid plan for sales, marketing, pricing, and mockups, it’s much easier to work with the best developers.
What platform/tools do you use for your business?
Our tech stack is extremely simple. We use Typeform for our registration flow, SendGrid for our email server, Google Suite, Trello, and a few other small apps.
What have been the most influential books, podcasts, or other resources?
To be honest, I don’t read many business books or podcasts. The most useful resources for me are:
- Following & interacting with smart people on Twitter
- Build your own Slack Group with experts in your industry
- Create original thought leadership content to improve your personal brand so it’s easier for you to cold email to people who are “more experienced” than you
- Jumping on the phone to chat with smart people and to share learnings
Advice for other entrepreneurs who want to get started or are just starting out?
Use your free time to build and create. Once you have an established portfolio, it makes it much easier for you to network and work with talented people.
With your portfolio, it’ll increase the probability of you being able to work at a company where you’re surrounded by smart people, and solving interesting problems. By doing so, you’ll get more insights into the industry which will result in better business ideas.
As you get more experienced in your day-to-day job, train yourself to keep a note of all the problem solving that you get to do. It’s likely many of the problems and nuisances you encounter are also being experienced by other businesses.
Make note of these ideas often. As you gather ideas, start improving your ability to think strategically to start filtering your ideas. Try to approach your ideas as a thought experiment on what the product would look like, how you would grow it, and what your first version would look like.
Try to identify the business opportunities where you have a competitive advantage. Do you have a network & relationship advantage? Do you know something that most people don’t?
And finally, start getting to work! The more you do this, the better you’ll get.
Where can we go to learn more?
If you’re a Shopify Merchant on the ReCharge platform, check out ARPU. You’ll be able to upsell products straight from the upcoming order emails.
Also check out our other product that my partners created, ReBuy, which helps subscription businesses reactivate their churned customers with 1-click reactivations.
If you’re looking for amazing developers for Shopify, I highly recommend Above Market which are owned by my co-founders James Erck, and John Erck. Also big thanks to Kevin Lee, who has helped us with some freelance development.
You can also follow me on twitter @WilsonGHung, connect with me on LinkedIn, or visit me on my personal blog.
If you have any questions or comments, drop a comment below!
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