At Pluggd.in, we keep sharing inspirational, unpluggd (i.e. minus hype/pretense) stories from entrepreneurs that inspires fellow entrepreneurs to not give up and instead go for the big kill.
And we are quite glad to share a great story of Nirav Mehta, founder of AppsMagnet,a Mumbai based startup. Nirav has been through a typical ups and down of entrepreneurial life – he was asked to resign from a company he started 11 years ago, scratched his own itch, launched couple of products, a lot of them failed and here he is – a six figure $$ revenue in 2 years.
Watch the entire video
I was utterly confused as I started working on this video. You see this video contains material I have never disclosed before. I was not sure if I should bring it out in public. But after three days of struggle, I favored transparency. Let’s start with the piece I was most uncomfortable sharing.
That’s Apps Magnet’s revenue for last year. Almost three times the previous year.
Number of customers grew by another 2306.
95.48% of our customers are happy with our products. And 31% returned to make another purchase during the year. Our refund rate is 3.43%.
We added six more products this year, taking the total to 15.
I am actually amazed by these numbers. Especially when I look back at last two years.
You see, in July 2009, I was asked to resign from the company I started 11 years ago. We had big losses and partners blamed each other for the mess. Our hearts were bitter and financial situation of the company was sour. No one wanted to hold this fireball.
Then I took charge. I started Magnet Technologies 11 years ago. It was my second identity. I committed to saving the sinking ship.
My company provided web design and programming services to customers across the globe. We were known for our quality and work culture. We had 120 people across two locations. The services business generated cash flows for the company and we were stuck in a loop. Finding projects, hiring team, training people, delivering on projects and getting cash flows. That’s what we kept doing month after month after month for over a decade. I wanted to develop products to get out of this rut. We developed 22 products over 11 years and almost everything flopped. Cash flow pressures would bring me back to chase the next project and pay our bills.
I knew services business will not make us big. It had to be products. I was inspired from the success of Balsamiq Studios. I was looking for the next big thing for Magnet. Deep down, I wanted to take away the “cheap outsourced IT labor” label from India and prove that we can build innovative products.
On the other side, we used activeCollab for managing our projects at Magnet. We could tweak it to our needs. So on my spare time, I built a reporting dashboard, an illegal hack to Balsamiq Mockups that allowed creating mockups from activeCollab and a planning tool that let me easily create milestones, tickets and tasks. I wanted to share this work with others but in a way we could sustain for years.
activeCollab was a small market though. I wasn’t sure if it will make enough money to pay the bills. iPhone apps market seemed very lucrative and I felt it would be the next big thing.
I also did not want Magnet to shoulder the risk. So we formed a new entity called Apps Magnet and commissioned Magnet for some development work.
In February 2009 Apps Magnet launched Reports module for activeCollab. We released three iPhone apps soon after.
Interestingly, activeCollab business did much better than iPhone.
I subsequently built PlannerX for Basecamp. I always admired Basecamp and 37Signal’s project management ideals. Basecamp’s huge user base also meant bigger revenue potential.
This is also the time when we came to a split end for Magnet. This is when other shareholders asked me to resign.
But I did not give up. I took responsibility of saving Magnet.
I started cleaning up the mess at Magnet in my day time and worked late nights on Apps Magnet. I was curating an old tree in the day and nurturing a young plant during night.
By 20th July 2009, Apps Magnet’s total sales reached $4074.
In August, we released Planning module. And I know I remember this.. Sales hit $7541 for August alone.
This felt like hitting a jackpot. The amount was multiple times my salary at Magnet. I was thrilled by success.
Over next few months, Apps Magnet kept growing. We had steady monthly cash flows. I was making passive income. And most importantly, my work made a difference to hundreds of people world wide. Customers kept appreciating our work. When we completed our first year, we had 850 customers, 9 products and over $60,000 in sales.
In the second year, business saw steady growth. We hired Malay full time, launched 6 new products and improved existing offerings. And as you saw at the beginning, our revenue tripled in the year.
Yet the fact is that we still have a long way to go. Many of our products are under development for long and some have incurred losses. I will share more about my product development experiences in a separate video, but I have observed three key principles.
One, people buy only what solves real problems for them. Your products have to be pain killers, not vitamin pills.
Two, you need strong passion to improve if you want to build products. You need an itch to scratch.
And third, deep compassion for end users is the key to deliver “wow” products.
I can share more about them some other time, so let’s come back to the present.
As it stands, Apps Magnet has created a new market for commercial extensions for activeCollab. We are known for building finely crafted products and prompt customer service. My wife takes care of finances, while I and Malay take care of development and support. We also contracted Magnet team to get more work done.
Yes, Magnet is still alive. We have cleared a lot of emotional and financial burden. And I am steering Magnet towards product development as well. Magnet launched its new brand “Store Apps” last month. Our first product – Smart Manager for WP e-Commerce – delivers breakthrough productivity improvement for WP e-Commerce store owners, much like our Planning module. Magnet team has also worked on Putler – our business intelligence tool for web entrepreneurs.
Day to day business at Apps Magnet hasn’t changed though. We have lots of updates coming. We are launching Communications module for activeCollab in a few days. Communications module is like Twitter + Campfire Chat + Public Announcement system. And I think it will be useful to you. We also have acGarage’s next version coming. acGarage 2 will be like WordPress auto update for activeCollab. There’s a lot going on…
So you’ve heard a lot about us in this video. But the next video is going to be all about you.
Look, setting up your web based project management system is one thing and getting your team to use it is another. Managing projects successfully is yet another. In the next video, I’m going to tell you why your team does not use activeCollab, why you never complete projects on time and what you can do about it. It’s packed with unnerving truths and some more of my secrets!
In the meanwhile, I have created a separate “Entrepreneurs’ List”. I plan to share more business insights with people who are entrepreneurs or are planning to start on their own. Sign up if you are interested.
I would also love to hear your comments. Would you like to share your own experiences? What do you think we should be doing next? Post your comments below and join the conversation.