Lesley Sim

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Issue #48

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Monday, 14 Dec 2020

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Reading time:

16 mins

Hey there, I’m Lesley. Welcome to the latest issue of Failing Forward — A weekly newsletter where I share my experiences as a bootstrapped co-founder.

There’s no bravado here, I hate the sting of failure. I write this newsletter as a reminder that failure is not just okay, it’s often the best way forward.

The case for building yet another CMS, note-taking app and project management tool (if you’re a bootstrapper).

It seems like new CMS-es [1], note-taking apps [2] and project management tools pop up every day. Yet, I still think there’s opportunity in all of these spaces if you’re a bootstrapper.

Here’s why…

First, let’s talk about why you shouldn’t build one of these tools

1. Insanely competitive

These tools are easy to build. As a result, many developers build them in a week as side projects.

Hence they’re also insanely competitive. Just head to One Page Love or Product Hunt to see the thousands of products in each of these categories.

It’s worth noting that many of them are now dead, or not actively maintained. This sounds bad, but it’s actually just a numbers game. Lots of people building = lots of people dropping out.

2. High quality bar

Now, lots of competition isn’t a concern if your competition is lousy, and you’re not.

Unfortunately, there are many talented developers building in these spaces too.

Here are some examples of good-looking bootstrapped apps in these spaces:

1. CMS: Typehut, Bloggi, Telescope, Blot
2. Note-taking: Claro, Notepin, Thoughttrain, Pine
3. Project management: Minimaps, Claritask, ProductBeat, Thrive

As you can see, these aren’t just beginner developers building a no-code app for the first time. These apps are beautifully designed and thoughtfully engineered.

So you’re not just fighting against quantity, but also quality.

3. It’s hard to charge a lot for these apps.

Let’s take Notion as an example. Many people and companies (myself included) rely entirely on Notion. Yet it only costs $4/month. In fact, the free plan is so generous, you can run your entire life on it without ever having to upgrade.

Just think – If you operate at $4/month, you’d need a thousand customers just to earn $4,000.

There are two discouraging hurdles here: Firstly, it’s not easy to get a thousand customers. Secondly, you probably earn more than that at your day job.

Why does Notion charge so little? Well, they’re a funded company aiming for unicorn status. So growth, not profitability, is their goal for the next couple of years.

This leads us to our last reason why you shouldn’t build in one of these categories…

4. It’s hard to compete with venture-backed startups in these spaces.

Funded companies can charge $5/month because they can afford to compete on price. They also have dozens of engineers and marketers, in comparison to you and your co-founder (if they exist).

Hence they are likely to beat you on price, speed of execution, and breadth of distribution. If you compete head on, you will lose.

But it’s not all doom and gloom. Let’s turn the tables and look at the ways in which you have an edge as a bootstrapper and why these categories are ideal for you.

Why I’m bullish on bootstrapped CMSes, note-taking apps and project management tools anyway.

0. There’s a limit to what you can build as a bootstrapper. These products are viable.

I don’t want to dwell here, but there are some things you just can’t build by bootstrapping. And you have to be realistic about this.

For example, you probably can’t build an app like Uber. And, as Derrick Reimer found out, you can’t build a Slack competitor either.

In addition, now that Tempo has shut down and Newton has changed hands twice now, I personally believe email clients are also a poor fit for bootstrapping.

Ambition is great for VC-funded startups. Ironically, too much ambition hurts bootstrappers.

CMSes, note-taking apps, project management tools are the right size for bootstrappers.

You can actually build it yourself and earn a decent living doing so. Importantly, the market is large enough, there’s a demonstrated willingness to pay, and acquisition costs aren’t prohibitive.

This point simply exists to say that products in these categories are eligible for bootstrappers, because not all are. Hence why it’s point zero.

1. Lots of people, already paying.

If you’ve read Rob Fitzpatrick’s The Mom Test, you’ll already know that it’s not enough for someone to like your idea and say they will use it.

Instead, the best validation for your idea is if there are lots of people already paying for similar products.

For example, the reason you know people are willing to buy a CMS is the fact that millions of people are already paying for CMSes right now. Likewise note-taking apps.

In contrast, if there aren’t already people buying your new invention, an alarm clock-movie projector combo, then you should not be thinking, “Hoho! I’m a genius! All I need to do is create this product and I’ll be RICH!”

Instead, you should be suspicious about why you can’t find such a product on the market. Is it really the case that nobody else came up with that idea? Or is it more likely that people have already tried and failed at this for reasons you don’t yet know.

While you might be tempted to think that this product will take-off if you simply educated consumers on the benefits of alarming projectors, this is actually a hard no for bootstrappers.

You see, this is called “category creation” and the amount of time, resources and money it requires means that it’s only possible for VC-backed companies. As an example, Airbnb and Uber had to lobby governments in order to make themselves legal. And Uber’s main go to market strategy was to stand on street corners and physically give out coupons to try their app.

Let’s be real… As a bootstrapper, you simply don’t have the resources to lobby governments or hire hundreds of interns to stand on street corners to give out money-losing coupon codes!

Instead, CMSes and note-taking apps are product categories and markets that already exist, that lots of people already happily pay for. Check and check.

This means your job is much easier. All you need to do is figure out how you can get a piece of the pie.

And in order to do that, we need to talk about niches.

2. There’s opportunity in the niches.

Everybody takes notes, manages projects and publishes on the internet. They might do that via moleskine, excel and instagram respectively. Or something else.

The point is, everybody needs these tools. Yet everybody works differently and hence wants different tools.

You can leverage this insight.

You see, VC-backed companies must aim for a million customers and a zillion-dollar IPO in order to pay back their investors. And in order to have a million customers, they must have something for everyone.

Put differently — they’re forced to be generic.

As a bootstrapper, you’re not.

Companies like Less Annoying CRM and FreeAgent are successful because they niched down. They both target a small customer segment and keep features specific and simple.

You can do the same by looking for your own goldilocks niche:

Not too big (or VC-backed startups will want to compete),
Not too small (so you can earn a living), and
Willing to pay.

Remember, most people are stuck using generalist apps and require annoying workarounds to do what they need. They’ll be happy to use your product if it’s specifically suited to their needs.

3. The economics make sense for the right niche

If you recall, VC-backed companies aren’t trying to be profitable, they’re trying to grow. Hence, they price for growth.

You, on the other hand, can price for profit.

So while it might not make sense to start another VC-backed note-taking app unless you’re confident of winning the whole market, the economics make sense for bootstrappers who just want to win in a tiny pond and make a happy, healthy living.

Let’s go back to the concept of a goldilocks niche. Remember, it’s a niche that’s perfectly-sized and willing to pay.

Assuming you’ve done the work, your target users will happily open their wallets for something that feels custom made for them.

Here’s some quick math for 100 customers:

$5/month * 100 customers = $500/month
If you tried to compete with Notion’s pricing, you won’t make enough to live. So you’re likely to give up.

$50/month * 100 customers = $5k/month
Oooh, this suddenly looks viable. You’re encouraged to keep working on this business, and growing steadily and profitably.

Honestly, if you can find 100 eager customers, with some effort, you can get 1,000. By which point, you’re suddenly making $50k/month. Woah!

But wait a minute… Other bootstrappers can also take advantage of niches, and the thousands out there are evidence of this. So is this still a good idea?

4. Many launch, most are not willing to grind.

Since building a CMS, note-taking app or project management tool is relatively easy, you shouldn’t worry about the insane number out there.

When looking for product examples, I came across many that launched on Product Hunt, but no longer exist. After all, if it only takes a week to build a beautiful note-taking app, you won’t feel too guilty if you abandon it.

You see, while VC-backed companies are forced to aggressively grow, bootstrappers usually have alternate sources of income and therefore have less pressure to succeed.

Hence, surprisingly few bootstrappers are prepared to spend the next year of their lives talking to customers, adjusting positioning, building their brand, optimising their site, testing pricing, launching, pivoting then launching again, marketing, writing documentation, updating screenshots, and building new features.

And after they’ve done all that, they’re also not prepared for the fact that that’s just the beginning.

So if you’re willing to grind, you’ve immediately separated yourself from 95% of bootstrappers.

Personally, I find it quite empowering that the key differentiator isn’t luck or skill, it’s something I have control over: work ethic.

Final thoughts

Bootstrapping excels in the niches — the market sizes that are too small for funded companies to serve because it doesn’t make economic sense. So if you can find the right niche and are willing to grind, there’s definitely room for you to build a great business.

It’s unlikely you’ll become a billionaire, but if you’re bootstrapping, that’s probably not your goal anyway.

Lastly, if you think differently, or have spotted an error in my logic, please don’t hesitate to reach out. I enjoy having nerdy and constructive discussions around such things.

I’m building Newsletter Glue — an email newsletter platform on WordPress with a Gutenberg-first approach.

Here’s what I got up to this week…

🔥 Highlights from this week

• Had some awesome calls with awesome people, who gave me feedback, encouragement and advice. Thanks Birgit, Ben, Christie and Jason.

💔 Lowlights from this week

• I was hoping to get the blog completed. I did not.

✅ Completed this week

Ahmed kicked ass this week.

The plugin now uses in-line CSS instead. This means more email platforms can display our emails, and forwarded emails retain their design.

He also built a preview email in browser feature, which lets you see the email in a new tab, rather than having to send test emails out each time.

I spent most of my time managing, testing, designing stuff. And also tinkering with the blog.

🎯 Goals for next week

Finish the damn blog!

Finish article embeds block. This is going to be really cool, and you’ll get to see it in action next week!

Worth a thousand words

Worth your while: Here are my favourite links from this week

Read: My three week hobby project eventually mushroomed into a domain portfolio worth over $1M.

Adam Doppelt runs a web development agency by day, but sells a huge portfolio of domains by night. He did this with some clever code that lets him figure out what domains are available, which are valuable and sell them… at scale. He has some pretty cool domain names. My favourites are: admin.ai, jumpy.io, and lobster.io. Read article →

Read: Tony Hsieh’s self-destructive final months

Argh. This was a tragedy. Learn how this charismatic entrepreneur, who did so much good, spiralled out of control in 2020 and the events that led to his untimely death. The impact of COVID-19 extends far beyond death via infection. Tony didn’t handle the pandemic well, and yet this is just one example of second or third order effects of the pandemic. Be kind to each other, and if you know someone who needs help, help them unquestioningly. Read article →

Read: Going back in time for some unconventional stock image choices

Mel Choyce (who designed the new 2021 WordPress theme) details how she struggled to find free and open licensed stock images for the new 2021 theme. And how she finally found appropriate ones from pictures of artwork and paintings. Handy to know the next time I need classy stock images, I can just use a picture of Van Gough. Read article →