A ship in harbor is safe, but that is not what ships are built for.
My friend Dan and I celebrated hitting 10 years this year with our software development company, 521 Dimensions. It’s a huge milestone — especially when you consider average American careers last about 40 years. I’ll never forget the early days of being in Dan’s dorm room drawing up different business models on how we could creatively make this world a better place.
We would stay up until 3 AM, drawing on a whiteboard while you could hear fans spinning and lights blinking from all of the computers that we re-purposed in a full-size server rack that we found on Craigslist.
10 years later, I still feel that creative energy, but the results are much different than I originally thought.
The last 10 years
Let’s be real: They have been amazing and we’ve been very blessed.
99% of income comes from “client-agency” relationships. This means people find us and pay us to build software for them. They own 100% of the code after the completion of payment.
It’s wild to see how fast word of mouth can travel and how limitless it is with the Internet. For two Midwestern dudes with a laptop, we’ve worked on projects that I would have never guessed to have the privilege to work on.
We’re very blessed and grateful for the projects we’ve accomplished.
But after 10 years of repeating the client workflow, you start to realize a toxic and unmaintainable pattern.
The reality of a bootstrapped agency
Dan and I are very passionate about being bootstrapped — meaning we do not take any outside funding. We use our constraints to build creativity.
Like anything else, our biggest constraint is time. Clients only call in external teams when they are in a tough spot. This means they need solutions quickly.
Being a two-person team, there are only so many hours in a day that we can work. Time only becomes more complicated as we advance in our adult years (being a spouse, dealing with grief after losing a family member, having kids, etc.)
There’s a lot more demand for our time to be elsewhere. This complicates things when you’re only paid by time (aka. having your butt in a chair pushing buttons).
Hiring is the obvious answer, but now our product problems will only become people problems. It will still require time to solve both problems. Also, the competition of heavily funded agency teams will still be a tough sell.
Although the market for software agencies is large, it’s exhausting that we’re only trading hours for dollars. We’re in a world where we work 240 hours in one month, only needing to work 240 hours the next month.
This is a mental recipe for disaster for two guys who have the end goal of starting a school. We cannot be married to our work and we will not be able to pull in enough revenue to start a dream that requires substantial capital.
So how do you do this with two people?
Circling back to our roots: We’re a bootstrapped business. Use constraints to build creativity.
Rather than hiring people, we’re investing our time into building an asset — a Software as a Service (SaaS).
Building a SaaS has multiple advantages:
- We can solve a problem for our own business, but then resell this solution to many other businesses
- After we write the code, we still own it
- There is an opportunity where we could take a day off and still have our revenues increase (as long as the systems stay online 😅)
- When it comes to retirement, SaaS products sell at much higher multipliers (as much as 2-4 times more) than usual businesses
As lucrative as this sounds, building a SaaS product is not a land of roses and daisies. SaaS products have a high failure rate like any other business. Most of the time this is because people do not properly execute the product or understand the market.
We’re 4-time veterans of this mistake too.
We’ve attempted to build:
- Musi(q): A social music app for sharing songs with friends. It failed because it was in a “business-to-consumer” (B2C) market. Nobody personally pays for apps and we’re too ethical to mine data from people.
- ConquerEd: An educational app that visualized growth-mindset learning. This failed because we understood the problem, but didn’t understand the market. Selling in the education market is very bureaucratic and is very slow-moving. We also don’t have a Ph.D. where people would listen to us.
- Covalent: A WordPress release management system for premium themes and plugins. We were excited at the beginning to solve this problem but then realized how dated the WordPress stack was. Since most WordPress site owners are still rocking their PHP 5.2 on Bluehost, that means we would need a lot of support people to manage crappy code and outdated versions of WordPress.
- Airstudio: A video editor that ran completely in the web, targeted towards podcast creators. Dan and I partnered with a friend who had a once-in-a-lifetime opportunity to start something else in the middle of the project. After we lost our partner, Dan and I had no idea how to solve problems for podcasters because we have never created a podcast in our life.
All of these failures had one major thing in common: We never talked about the product while we built it.
We always focused on perfecting the product first, then releasing it. This was a huge mistake because we put so many hours into perfecting the dumbest details without ever having customers join along the journey.
This essentially was building a ship in a harbor, only for it to stay in the harbor.
Our best success was when we wrote a book for software developers. Although this wasn’t a life-changing revenue stream, it was just enough for us to have a taste of income flowing in while being away from the keyboard.
It’s time for us to roll the dice again and level up.
What today brings
So here we are. 10 years later, we’re still a two-person company with a majority of our income coming from client work. We’ve had 4 SaaS products fail and today we are attempting our 5th.
Bugflow is a tool that greatly helps software developers build better products in less time by capturing visual feedback with automated workflows.
Bugflow is a tool that scratches our own itch. We’re constantly building products but we can only be successful if we are shipping the product. With having a tool like Bugflow, we can ship often with the ability of people to report visual feedback to replicate problems (including all the nerdy details like console errors, screen-size, device, browser, etc).
Aren’t there tools like this that already do this? Yes, there’s a handful of them but they all have one major flaw: They want you to move your entire project management process in their own tool.
We use Notion and Gitlab/Github to manage all our projects. It works very well for us. We do not want our actions items scattered between different tools.
Not only can Bugflow integrate with your existing tools, but you can also configure automated workflows. For example, if you have a project manager who reports a bug on your app, you probably want that to go straight into your project management tool like Notion or Github. If a customer reports a bug, you can route it to Zendesk for your support team to investigate further.
Even if you use multiple tools, we can keep everything instantly updated with two-way syncing. This means if you make a change in Github, it will instantly update in Notion. Other tools have integrations, but they require a third-party subscription from Zapier and it only works with “one-way” syncing.
Why this market
Dan and I are very excited about this market. Not only is it a “Business-to-Business” (B2B) market, where businesses are willing to pay for solving a valuable problem, but we experience this problem every day.
We’re using our 32 years of combined experience and our 10 years of being a bootstrapped business to creatively solve this problem.
Our constraints will be valuable experiences to help other teams solve problems efficiently.
The big picture
We do not plan to stop here. We’re two determined dudes to bootstrap a product so we can start a school (targeted towards makers, people in tech, and possibly even aviation). Even if Bugflow is a flop, we’re excited it will scratch our own itch to build the next attempted product.
“You miss 100% of the shots you don’t take.” – Wayne Gretsky– Michael Scott
Where we’re off to next
Although it’s great to have the experience, starting this SaaS product feels like day one on the job again. It’s a perspective that feels like a fresh reboot of a computer. It’s quite uncomfortable to take a temporary decline in revenue while we invest time into building a SaaS, but we’re hopeful this will turn into larger opportunities in the long run.
We have a lot to learn ahead of us and we understand the light bulb was not invented on the first try. The best feeling is we’re trying this with a totally different approach from the failures we learned before.
It’s time to build the ship, but get it out of the harbor.
If you’re in a similar situation or have had similar experiences, please hit me up on Twitter to chat more. I’d love to hear your story and I will promise to share our journey as well.
Also, if you have any words of encouragement, I would highly appreciate that too. After 4 failures, I know what’s ahead of us. 😅