Let me walk you through how I set up my own startup thanks to the experience I gained making MVPs for others. I’ll show you the steps you need to follow to successfully develop your startup. We’ll go over each step from conceptualizing to positioning, from MVP to CusDev, and from budgets to investments.
Boomerangme is an e-loyalty program that digitizes all small business print promotions. Thanks to our service, businesses set up their own loyalty programs, with the added benefits of integrating to CRMs, avoiding accounting problems, and adding analytics.
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My name is Mike Inishev. I first founded a digital agency when I was 18 years old, which I managed for 12 years. My experience there led me to notice the opportunity for a whole new product in that sphere. We’d acted as an outsourcing team and as a product team. We’d conducted research. We’d built hypotheses. We’d developed prototypes and a total of 12 MVPs. We’d even piloted sales. I got very good at CustDev, conducting in-depth interviews, and I re-read all the literature on startups. With each new project, we got better and better.
I felt confident I was going to succeed. From my experience, creating a startup was pretty much a ready-made framework nowadays. If you stick to it, you are going to get results. Whether these results are good or bad is another question.
In 2019, I allocated a small budget and a person from the team, and that’s how the idea for digital loyalty cards took off.
The 2 main reasons “why a startup does not take off”
Of the 12 projects we worked on then at my digital agency, only 1 is more or less active now. All the other inactive startups made two major mistakes:
- The most common one being a lack of product-market-fit (product compliance with the expectations of the target audience). Not everyone thinks the client’s brilliant idea is brilliant.
- The second reason being a lack of funding at one of the stages. For instance a marketing budget was not planned because of the assumption that it would fly by itself. That just doesn’t happen.
The audience must be ready
How do you know the audience is ready? For me, it was a personal experience. While shopping over two months, I observed how inconvenient it was. I simply noticed how elderly ladies shopped by showing loyalty cards on their phones, and then paying with their Apple or Google Pay. It dawned on me that it was time for Boomerangme.
It was clear to me that people had adopted the technology of paying by smartphones, but it could still be improved. Perfect! We set off to make an MVP with a developer. The first six months were dedicated to learning how to issue cards on Apple and Android. Once we succeeded, we followed the classic “start-up construction” and brought it to the client.
The 3 cherished words of every startup: Minimum Viable Product
A startup needs to adjust and adapt to the circumstances. And at the beginning, they’re pretty basic. We didn’t really have a proper personal profile system in our service to start with. We began to promote our acquaintances through the platform, mainly clients whom we promoted at that moment in our agency. We were basically introducing people we knew to our service by showing them direct value. That resulted in about 120 registrations over the last 3 months of 2019.
Then, out of the blue, the pandemic and lockdown struck. I made good use of that time by calling all our clients, conducting a bunch of in-depth interviews, and trying to find a product-market-fit. It seemed like we had found something in the end. Most registered customers were beauty salons, nail studios, spas. I wanted to clearly outline that similar “pain” they all experienced and that drew them to us. This gave us a clear direction for business development in our local market. We focused particularly on the beauty industry.
By the end of 2020, the product already had 1,000 user registrations, 128 of which were paying customers. We then focused on sales over a 4-6 months of sales focus and grew by 10 times.
There’s no question that Yclient integration in our solution did wonders. It translated to almost automatic sales to any customer using that CRM.
Constantly learning and making connections
At that stage of development, Boomerangme went viral through word of mouth. That’s when we decided to go to accelerators. We were shortlisted by the first, but didn’t reach the investment stage. Our product was still too raw. We also hadn’t prepared a normal Pitch Deck, essential when going international.
It struck us relatively quickly that we needed to go to global markets and grow there. Again, short-listed by the second one. This time though, our product turned out to be irrelevant for that particular accelerator. They obviously selected products that could be piloted according to their client base. We were out of that context. Nevertheless, we’d perfected the product, found a product-market-fit, and finally made a competent presentation, our first Pitch Deck. Our success finally came in April 2021. We prepared thoroughly this time round. We came, we saw and we conquered as one might say. We were included in the list of 5 projects that that fund decided to invest in.
We were delighted! That first investment feels really good. But something didn’t stick right when I looked at the funding documents. The fund proposed 5 million for 10%. It didn’t seem enough to us. And besides, they still took a third of that for the acceleration program. It turned out that we’d outgrown this offer and had to abandon this investment.
We then made the decision to raise the money ourselves. We’d set up a Delaware company by that time. That round lasted from May to September 2021, 5 months of fundraising led by a fund and several private investors.
Having raised $3 million in investments, we gave away about 13% of interest in this round
After that round, we hired a team and set ourselves a goal: to go international.
We entered the GoGlobal program from the IIDF Accelerator with zero international sales. I already had my own plan of action and overseas advisers. Two reasons why we still decided to go to the program:
- One of our investors and mentor personally recommended I join this program. I value and trust his opinion. In many ways, I trust him more than myself.
- Another reason was that we were a bit unfocused at the time. I understood that the accelerator would help us focus on certain OKRs, and the whole team would be able to focus on one market and produce clear results. That was crucial. After all, the team did not report to me, but to the trackers who control the work and progress. All this environment helps to assemble a team to achieve one big goal. We carried out CustDev and found our product-market-fit in the international market.
By the way, try promoting on AppSumo if, like us, you work in B2B MarTech with a SaaS solution. Our solution is sold there at a large discount because it produces results. The maximum tariff in the USA can be $1500 per year. But on AppSumo, we sell our service for $99 forever. Currently, we are not concerned by revenue as much as growth. It is more important for us to recruit new customers, capture market share and make ourselves known.
Do not be afraid of “pivots” and look for new product opportunities
Pivots come along the way and might surprise you. One of our pivots came at some point at GoGlobal. Analytics showed that more than half of our customers were buying our solution for resale. Basically, different digital marketing agencies from different countries seeing an advantage to our service.
We introduced a White Label system (the use of products or services by a third party company under its own brand). Those kind of customers can now put their own logo, put their senders on our service, twist their Stripe Connect Account and share the proceeds with us 50/50. It’s even possible to set their own prices and their own currencies on their branded page. We pivoted by helping resellers create sub-accounts and get their own customers.
This pivot solved 2 key problems:
- No need to strengthen the sales team. Selling to one reseller, they bring in their own new 15 customers. It’s very profitable.
- Sharing 50% of the proceeds also means we transfer all questions about customer success, customer support and billing to a partner. No need to develop our own support team.
By the end of the program, we had made approximately 160 sales, of which 10-20 were from channels that could be scaled up in the future. Now the main task of the company is to set up the economics of the project and raise the round for scaling sales.
We have sold franchises to 11 countries: Ireland, Czech Republic, Latvia, Switzerland, Germany, France, Turkey, Kazakhstan, Belarus and so on.
Don’t be afraid to set big goals
My goal is to create the world’s best digital wallet card service that integrates with everything and gives the ability to create any kind of promotion.
Now we are leaning towards e-commerce. Our solution is suitable for any repeatable sales cycle type business. But we don’t have anything for e-commerce yet. We’re working on making integrations for Shopify and WooCommerce. That would also help us enter those marketplaces.
We made a special widget for the site. Once integrated, loyalty cards can be issued and installed, and bonus balances work. Through Shopify, we will open up an e-commerce market for ourselves. “Loyalty” is done by the hundreds, but no one is doing loyalty cards yet. We make the physical connection of the client to the store and set up a closer relationship between the buyer and the seller.
If you are interested in my project, would like to become a partner or you have any questions – write me!