Baremetrics: The Side Project that Sold for $4 Million
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Sometimes the best business ideas come from solving our own problems. That's what happened when Josh Pigford started Baremetrics, an analytic solution for SaaS companies with recurring revenue.
In the beginning, Josh was looking for an analytics solution to break down key revenue metrics from his business. Eventually, Josh realized that this was a common issue amongst founders, and Baremetrics quickly became Josh's biggest project.
After seven years, Josh eventually sold his side project for $4 million in cash! Here's the story👇
Finding the idea and building the MVP
Back in 2013, Josh was working on a few different SaaS products. He wanted to dive deeper into his Stripe Analytics to figure out MRR, Churn, LTV, and other key metrics for his business.
But Stripe was fairly new at this time. There weren't any pre-existing solutions to this and most people would make these calculations by hand which was prone to human error.
So like a true engineer, Josh decided to build a solution. He only spent 7 working days, spread over the course of a month, building out the MVP as a side project. On top of that, he only built the features he needed and not a general solution.
After all, Josh didn't have any expectations that this would become a huge business. But while building out Baremetrics, he would tweet about his progress. Founders began to tell Josh that they had similar issues and expressed interest!
Stripe analytics app. From idea to execution TONIGHT!!!!!! Coffee brewed. Game on.
— Josh Pigford (@Shpigford)
Oct 15, 2013
By the time he launched Baremetrics, founders immediately began to sign up. Within the first month of launch, Josh already reached $1k MRR.
Word-of-mouth growth was great for Baremetrics. After all, it was helping real businesses with real revenue solve pain points. Founders continued to sign up and shared the app with other founders.
At the same time, Josh began doing a lot of content marketing. He blogged about strategies Baremetrics used to generate revenue, common mistakes and tips for first-time founders, and successful strategies he used himself.
The content was relatable for a lot of founders, but the lessons were actionable and could help businesses immediately generate value. One of his most popular posts was how his FB Retargeting Ad Campaign added $650 of LTV for a $6 lead. After posting that on HackerNews, Baremetrics immediately added $1,500 MRR over the next few weeks.
Josh played the long game for content marketing, and over the course of a few years, it became one of the main acquisition channels for Baremetrics. They moved over to content to help all times of businesses and founders such as the best tools for newsletters, Shopify apps to help your business, understanding SaaS metrics, etc.
Open Startup Initiative
One of the fundamental turning points for Baremetrics actually came from a meeting with Hiten Shah at MicroConf. Hiten loved Baremetrics and was an advisor for Buffer. Buffer was looking to publicize their revenue dashboards and partnered with Baremetrics to do so.
The whole "build in public" trend was starting to become popular, and after Buffer and Baremetrics both started embracing it, many other companies followed such as ConvertKit, Grokability, Ecologi, and more!
The partnership immediately added $2,000 MRR, which was really good considering it happened only a few months after launch!
After 12 months, Buffer reached $25k MRR.
One thing that Baremetrics does really well is pricing. Their average customer generates $450/mo in revenue, and Josh intentionally wanted to build a product that he could charge at least $100/mo for.
He knew his product could solve real pain points and was focused on targeting businesses that already generated a lot of revenue, after all, what's the point of using analytics if you don't have enough data points? This convinced him that aggressive pricing would work. He even signed on a $250/mo client in the first few weeks of launch, who stayed with Baremetrics for years!
He also launched features such as Recover, which automates collecting failed charges. This feature is an add-on to an existing subscription and the pricing is dynamic based on MRR for the customer, which really adheres to customers paying for what value the feature brings. Add-ons also ensured that Baremetrics wasn't undercharging for a high-value feature and that only customers who want the feature need to pay for it.
After 7 years of working on Baremetrics, Josh eventually sold the company for $4 million and pocketed $3.7 million. There were a few key factors in his decision that you can read about here.
What's the most important lesson from Josh? Start by building something that solves problems.
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