I bootstrapped a Shopify app to 78K CAD MRR in 3 years. Ask me anything.
I'm planning to write a big post about my experience bootstrapping my Shopify app, and I thought maybe the community would have questions that I can answer in my post.
The short story:
In June 2018, my friend and I started talking about dropshipping and how there was no high quality option on Shopify. Apps like Oberlo were there, but only offered low-quality overseas products with extremely long shipping times.
In July, I started emailing direct-to-consumer brands in the US to see if they would theoretically be interested in dropshipping through a platform that we were 'building' (it didn't exist at all yet).
The first 2 brands that responded said yes, and that was enough for me to start coding like a maniac.
After 3 months, we launched the DropCommerce app on Shopify app store and started getting 18 installs per day.
I was working full time as a junior software developer at the time, so I was hacking in my evenings and weekends to keep things going.
We got our first subscription revenue in December 2018, and by August 2019 we had hit about 3K MRR and I was able to go full time on the business.
In October 2019, I hired my first employee, a student subsidized by a hiring grant, to help with marketing and random tasks.
When COVID really hit in early 2020, our installs and revenue started going insane!
In February we were at 12K per month, and by May we were at 46K MRR.
At this point I was still the only developer on the project and my cofounder was just helping manage other random things and supplier onboarding calls, etc. I was also doing customer support and it was pretty brutal. I was working 15 hour days often and getting real burnt out.
This revenue boost was the most incredible feeling because for the first time ever, we could really afford to hire some employees. Within a year, we were a team of 10 with 8 full-time employees, and 6 months ago I stepped away from an active role to pursue my next startup.
The company is still operational and growing slowly, but providing me with passive income to focus on a new project, which was really my dream from the start.
There are so many subtleties and small decisions over this 3-year journey, and so if anyone is curious about what we did, how we did things, or anything else, please ask :)
18 installs right out of the gate, nice! I'm wondering about your main growth strategy. Was there something that worked particularly well?
In our experience, organic traffic from Shopify was everything. Maybe there was just a lot of demand for dropshipping apps, and we were one of the only 'US Dropshipping' apps, so I think there was an element of luck / good timing there.
In terms of marketing, we tried paid ads and direct email outreach to Shopify user lists, but really never saw any traction. Dropshipping is a saturation market for paid ads, so the cost per click was way too high and we were not getting reasonable conversions.
Our lesson for this business was just that providing great customer support and trying to build and maintain our Shopify app store user review rating was the most important thing. We saw our fair share of brutal 1-star reviews that would literally sometimes cut our daily installs in half, but overall we've managed to maintain in the 4-star range and lately 4.6.
Shopify is an amazing launchpad for free marketing :D
I think it's mostly likely related to the market demand. When the demand is strong, people are actively searching the app and you can get more installs. Reviews are also curcial to AppStore ranking imo
Yeah, absolutely. Right place at the right time, for sure. Our app was pretty rough when we first launched, but people loved the idea of 'quality US dropshipping', and over time we improved as much as possible. Big lesson learned from that market demand, compared to other endeavours fighting an uphill battle!
You mentioned that there were around 18 installs in the early days. Are they free users or paid users?
I was offering a free plan for my Shopify app, ie. Freemium model. The growth was good. But the problem is that the customization cost is too high for free users.
These were free users. At the time, we had a free plan that offered 3 unique suppliers and then $10 and $20 plans for more suppliers and some better features. Nowadays our prices are higher, but that model has generally stayed the same.
We do still offer a free plan, but you aren't able to process orders on that plan, so once you get a real sale then you need to start a paid trial to process it.
The free / cheap users do get overwhelming at times but we found that in dropshipping, most users are new and so the cheaper plans still make up around a third of our revenue.
Wow, sounds like a smashing success! Was this your first entrepreneurial venture?
Thank you :)
This was my second company. My first was an 'on-demand snack delivery service' that I started 7 years ago. Some of the food delivery companies of today were already operational, but not nearly to the scale they are now. I ran that one for 2 years before closing due to lack of growth.
DropCommerce was probably the 10th 'hobby app' I had built, but the first software project to ever generate revenue. Not surprisingly, also the first app that I launched in a marketplace like Shopify where organic traffic was somewhat handled. I think my failure in the past was in marketing, so this was my lucky break.
Haha, on-demand snack delivery! I like it. What kind of snacks did you offer?
I've been reading a lot of stories lately about people succeeding with add-on apps to platforms that draw the users for you. Seems like a great strategy. I'm glad it's working out for you!
It was basically 7-11-style junk food :) I just remembered I wrote a massive blog post about SnackEasy a few years ago on medium. If you're interested, I just posted it on IndieHackers - https://www.indiehackers.com/post/the-rise-and-fall-of-snackeasy-my-first-startup-df537fec38
Just read your post. Go you for just jumping in and making the business a reality! Even if it failed in the end, it sounds like it was an extremely valuable experience. 👏
Well first, thank you for reading that incredibly long post :D. Yes, I initially looked back on SnackEasy with regrets related to all the countless poor business moves I made, but as the years go on and I work on new projects I realize that all you can do is take action, hopefully learn some stuff, and move forward.
Cheers!
Great story !
Can you please share on which tech stack you build the app and where did you host it ?
Also how much % the hosting took from the total revenu?
Thanks
React JS front end. Django Rest Framework & Python Back-End.
Hosted on Heroku / Amazon RDS.
All hosting combined including servers and database I think maybe costs about 1K per month, and initially it was nearly free. We have solid traffic but lots of the business of our customers is still on Shopify, so they aren't often staying in our app for hours on end.
How did you find the idea? Like there were already many other bigger dropshipping app available, how did you compete with them? Did you research before finding the idea? I am researching a lot for a problem solving shopify app idea, but I am unable to find any one till yet, can you please guide a little about finding the idea?
Great questions! My view on assessing competition has changed a lot from this experience. I now believe that if the market is big enough and growing quickly, having competitors is not something to be discouraged by.
When I launched, I knew of at least 2 serious competitors. Oberlo did Aliexpress / overseas dropshipping exclusively, so they were a competitor and had already been acquired by Shopify, but they were our enemy and we were aiming to be the opposite of them, so I knew we had space there.
Spocket existed at the time as well, and they did offer some US products, but mostly Aliexpress products, so I still believed that our differentiation in exclusively US products was enough to warrant our existence.
We definitely still battle with Spocket, but our commitment to US has won us many customers who are sick of the low quality side.
My final thoughts being that obviously having some unique angle is important, but mostly important for your own motivation. Building an identical clone to a competitor may actually be a viable business option, but probably not very exciting as a founder who likely wants to do something new!
I would say that launching an app on Shopify is a great idea no matter what. It's growing so much! When we launched, there were 700K merchants and now I think there are almost 2 million!
Thank you so much for guiding,
How did you get products on your shopify app? Did you import products from Aliexpress which are for US or somewhere else?
Our business model was to actually contact real US-based ecommerce brands that we found through our own online research and convinced them to signup and import their products to offer through our system.
Definitely more work than importing via AliExpress, but the entire premise of our business was based on real high quality products from the US, so that's what we chose as our differentiator!