How BannerBear grew to a $50k MRR business
Another million-dollar idea. #11
Welcome to Rich mindset a new series where we go over 1-2 micro-businesses that make a lot of money! The goal? Give you an idea of how you can start your next Million Dollar side hustle.
Another RICH MINDSET newsletter, another million-dollar idea. Here is today's Story:🎁
In September 2018, Jon Yongfook embarked on a challenge to create 12 startups in 12 months, inspired by Pieter Levels' similar endeavor in 2014. After successfully launching seven products, with two of them being acquired, Jon shifted his focus to a remote video collaboration tool. However, he soon realized that he lacked passion for the project, and it was not generating the desired revenue.
Motivated by his interest in image generation and drawing from his past experiences, Jon decided to pivot to a new project that would address a common challenge faced by many companies—creating eye-catching social media banners. This marked the beginning of BannerBear.
BannerBear is a REST API that empowers developers to effortlessly generate well-designed social images. The platform scans websites and utilizes pre-designed templates to create Open Graph images for various social media platforms, including Instagram stories and Facebook posts.
Over the course of three years, BannerBear achieved significant milestones:
1. Impressive Growth:The platform's Monthly Recurring Revenue (MRR) soared to $50,000, attaining substantial financial success.
2. Profitability: Despite its rapid growth, BannerBear maintained high profitability, showcasing the effectiveness of Jon's business strategy.
3. Bootstrapped Success: BannerBear stands out as a bootstrapped success story, with Jon Yongfook as the solo founder. This means the company was built and sustained without external funding.
4. Low Churn Rate:BannerBear boasted a low churn rate of 6%, indicating that customers were satisfied with the product and likely to continue their subscriptions.
In essence, BannerBear's success can be attributed to Jon's strategic decision-making, his ability to identify a market need, and his dedication to building a product that aligns with his passion and expertise. The journey from a 12-startup challenge to a profitable and thriving venture exemplifies the Indie Hacker dream—freedom from corporate constraints, a focus on meaningful work, and the satisfaction of building and shipping a product that makes a difference.
📲 Finding Product Market Fit
After working on BannerBear for a few months, Yongfook encountered some challenges. Customers were making a lot of custom requests, and since Jon had personally designed all the templates, fulfilling these requests was becoming incredibly time-consuming.
Moreover, the product was originally tailored for non-technical users, but Jon didn't feel as passionate about that. His real interest lay in talking to developers and solving their problems.
In a classic founder move, Jon decided to pivot. Instead of manually designing templates for every possible use, he transformed BannerBear into a REST API. This shift allowed developers to have more flexibility and simplicity in customizing designs. With this move, Jon also narrowed down his target audience to developers.
Although this made the product more niche, Jon found himself happier working on it. He had discovered his product-market fit.
👷♀️ Build in Public
BannerBear's initial marketing success can be attributed to a straightforward approach. Jon Yongfook, the founder, openly shared his entire journey of building and growing BannerBear. Even before the product was fully developed, he blogged about his experiences, including the initial Shopify App phase, acquiring the first 25 customers, and the path to reaching $36k MRR.
Jon adopted a two-week cycle: one week for coding and the next for marketing. He diligently shared updates on features, created demos, answered questions, and actively engaged with communities on platforms like Indie Hacker, Product Hunt, and Twitter. Through this transparent and iterative process, he not only built a substantial Twitter following of 60,000 but also attracted initial customers from the communities he interacted with. The key was sharing the journey openly, inspiring others, and building a supportive audience along the way.
📝 Content Marketing
Most API services would simply explain what you could do with their service. BannerBear builds demos, tutorials, and blogs to show you what you can do. Remember that old saying from school "Show, don't tell".
I have responded quickly to users who needed a feature by building that feature
Jon Yongfook
Whether it's generating images to Webflow, turning Instagram posts to NFTs, or using BannerBear's API to convert Tweets to LinkedIn posts, the team at BannerBear is constantly marketing their product.
💰 Pricing
When Jon first tried pricing his early BannerBear SaaS app at $9 per month, he quickly realized it wouldn't be enough. To reach his current monthly recurring revenue (MMR), he'd have to acquire over 5000 customers. Considering the high demand for customer support in the initial stages, the few bucks he'd make weren't worth the effort.
However, Jon pivoted by adjusting the pricing and focusing on targeting other businesses. This shift meant that BannerBear now only needs around 500 customers to achieve the same MMR.
His explanation about why many indie hackers tend to set their SaaS prices too low is genuinely inspiring!
Conclusion
Jon Yongfook founded BannerBear from the ground up a few years ago. His path to success, reaching around $50,000 in Monthly Recurring Revenue (MMR), involved the following key strategies:
Passion-Driven Work: Jon focused on a field and product that he is passionate about, navigating through various ideas until finding the right fit.
Transparent Development: He built BannerBear in public, sharing the journey on platforms like Twitter, Product Hunt, and Indie Hackers. This not only attracted a significant audience but also fostered a sense of community.
Educational Content: Jon leveraged content marketing by providing tutorials, blogs, and other resources showcasing how BannerBear could address specific challenges. This not only demonstrated the product's capabilities but also positioned it as a valuable solution.
Strategic Pricing: When targeting niche audiences, Jon adopted an aggressive pricing strategy. This approach helped capture the value offered to a specific customer segment.
Rapid Feature Development: Jon accelerated BannerBear's growth by consistently shipping a multitude of features quickly. This not only kept the product dynamic and competitive but also responded promptly to user needs and market demands.
Thanks for reading, and I hope this helped you or you found it interesting!