Studio Ninja is a project management software for photographers created by Chris Garbacz, wedding photographer and owner of Epic Photography and Yuan Wang, designer and founder of Yump digital agency.
Mike: Hello, guys, my name is Michel Pihosh and this is the first Sombra podcast. Today we have one of our customers who built CRM for the photographers. It started about two years ago with one founder, completely bootstrapped. Now they have MMR around 35k with the goal of 50k by the end of the year. Welcome, Chris Garbacz, the founder of Studio Ninja.
Cris: Hi, Michel, how is it going?
Mike: Good. Thank you for your time. Tell us about Studio Ninja. What are you doing? And how do you generate revenue?
Cris: We built a client relationship management software or, so to say, project management software, specifically for photographers. I have a long history is in the photographic business. I’ve been shooting for ten – eleven years now. So, this nice little niche was perfect to start the business in.
Regarding revenue, we are generating it by a subscription model, where everyone pays either a monthly or annual fee to use a software.
Mike: So, is it basically a SaaS model? When did you start your business and how?
Cris: Right, it is a SaaS model. The idea started in July 2015. I took a co-founder on board who is a very good designer and together we started designing an MVP for the software. We decided to pre-sale a software to seventeen different photographers before we had a product. When we had enough designs ready I found you guys. We launched an MVP to our beta-testers in four months later, in November. Four months after that we launched software to the public.
Mike: As we heard before, you have only one co-founder, right?
Cris: Yeah, one co-founder.
Mike: It is always embarrassing to answer, but do you remember what was your first-year revenue?
Cris: We launched in February, so our first year was partial, we then made hardly 20 grand. So, now is our finished first whole year and it is a lot better than the previous one.
Mike: How did you set pricing?
Cris: We chose our prices based on competition, thereby we are very similar to our competitors. The process looks like that, firstly, the users will sign up for thirty days free trial, if they decide to subscribe within fifteen days, they get 20% off for the first twelve months. We want to introduce some urgency, just to push people along a little bit. It is working very well actually. We found that about 90% of our users come through the promotion.
Mike: What are customers paying you per month?
Cris: It is thirty dollars per month or 29.95 Australian dollars.
Mike: Is it what businesses paying you as well?
Cris: All businesses will pay us that. We charge per company. One business buys the subscription for 29.95 per month and then it can connect as many users using the software as they want. We haven’t set up permission levels yet for different users, so we are not very comfortable charging for additional users or for additional functionality.
Mike: How many current customers in September 2017 do you work with? And how many of them are paying you actually?
Cris: We currently have 1195 users, using the software for money. Also, there are another 2-3 thousand customers who are trailing the system.
Mike: The next question is from the marketing field. What are you paying for acquired new customers? And how? Do you leverage any paid media? What is your secret?
Cris: Unfortunately, there is no secret. Our marketing is a combination of nearly fifty things. The only paid advertising we do is on Facebook. We just target photographers through paid ads on Facebook. We use retargeting ads for only ten dollars per day. Also, we pay for Google remarketing ads. So, obviously, after coming to our website, visitors will be constantly remarketed as they browse the Internet. As well we have quite a lot of other things, which I can go through if you want.
Mike: So, is this your general formula, firstly Facebook ads and then retargeting?
Cris: Yeah, but we don’t get that many through them. That is more for branding. The first thing we work with is SEO. We paid a lot of attention to rank from the very beginning and now we take high positions in Google. We ranked first, second or third on page one with keywords like “studio management software” or “photography CRM”.
Besides, we use “refer friend model” within the software. It means that when one of our users refers another user they both gonna get a discount off the software. This tool is working pretty well, probably the best one we are doing so far.
Mike: What about content? Who does produce it?
Cris: I produce the content and post it on the blog.
Mike: Don’t you have a content manager?
Cris: No, I am doing all the marketing. It consists of lots of different things. Our support is also a good marketing tool because it helps to convert users. We have 35% conversion from trial to paid. Which is a big help from our support team. We also have “Ambassador program”. We choose a selected amount of photographers and upgrade them to Ambassador status, which gives them a free account. It also gives them the power to give their followers or communities 50% discount to the software. We got a lot of the user through that program as well.
Mike: What is one action you want people to take when they hit your site? Do you want them to sign up first or, maybe, to know a story behind the project?
Cris: We’ve got short 3 min. video which you can watch on the main page. It is a quick video of me explaining the software and how it works. So, pretty much everyone watches this video, and then they set up a trial. Once they are on trial, they get a series of in-app messages. Also, they receive ten emails that invite them back constantly. Those messages ask them to set up an account, check if their settings are done, and set up a test job. At the same time, we have customer support people talking to users in-app while using it to help them on board. In addition, we provide a couple of discounts during this process to push them along a little bit faster.
Mike: You just mentioned 35%. Could you walk me through again what a conversion is from new users to trial and to paid users?
Cris: I don’t know the exact numbers of new people to our marketing website, but from there, we get roughly 250-300 trials per month and 100-120 – convert into paid users. Between 1-5 users unsubscribe every month.
Mike: Where are you on a monthly growth churn?
Cris: Ok, if we lose between 1-5 people out of 120, it’s between 1 – 5%.
Mike: A lot of people think about starting a software business, but they don’t know how to find a first developer. Please, tell us the story of how you found Sombra and hired your first developer.
Cris: I found you through Upwork. I posted a job post, we had some mockups and designs ready. So the document was well researched and has a lot of information about what we wanted. So, it went to Upwork, and Sombra applied for a job. I had a few Skype discussions with your team. You had experience in doing similar software in the past, so I thought I’ll give you guys a go. At the start, we used money made from pre-selling the software, so we had little funds to get started. We started with one developer, which grew to two, then to three and now we are eight. We grew as a company, we took more developers to speed up the process.
Originally, I thought we would be finished at some point. But as we grew this company and got more user feedback, I understood that there are endless lists of ways to improve the product. We found it as good marketing. As we continuously upgrade and update and release new features, it just makes our users so happy that they tell friends about us constantly.
Mike: What do you want to do with the business in future? What is your strategy and plans in the long run?
Cris: At this stage, we just want to continue growing as it is, as fast as possible. We will steak with our niche of a CRM for photographers specifically. I feel the software will be extremely solid by the end of next year. It is pretty close to having everything it should have for that market. Then we may consider continuing growing with more users. Also, we may consider growing a different market in a different industry because the software is basically can be applied in different spheres.
Cris: We may think about redesigning some part of it and targeting on different industries and then start again.
Mike: You already have a profitable business. Are you planning to raise capital?
Cris: We thought about that, but in the last couple of months, we have grown quite a lot. This is made us sustainable and we are making a lot of money ourselves. We are happy to be so funded from the beginning and there was the talk of getting funding, but we don’t a need it now and probably won’t need in the future.
Mike: Let’s assume that Mike Denial invites you and say: Cris, we would like to buy your business for $5 million. Would you sell?
Mike: $10 million, would you sell?
Mike: Ok, so what is your number?
Cris: Well, at this stage, maybe fifteen. I mean, numbers currently don’t show that kind of value, but the growth is there… I can see the graph going up, and it is only a matter of time. It would be fifteen next year if it is not worth fifteen today.
Mike: What is your goal for 2017? Do you have a customer revenue goal?
Cris: We would like to hit 2000 users by the end of the year or 15 000 in monthly revenue. That is a goal. It is quite ambitious but possible.
Mike: And the last section of rapid questions. Are you ready?
Mike: Is there a CEO you are following now?
Cris: Not really. I am just following a lot of marketing books. For example, “Growth Hacker Marketing”. It is an amazing book, just talking about the weight of marketing, where you are not using much money but finding ways of going viral. Another great book is “Rework” by the guys of 37 signals. That is an awesome software company. The “Google story” is an incredible book. “The everything store”, Elon Musk is also a must. Definitely, worth to check him out.
Mike: Is there a favourite online tool that you have?
Mike: Do you get eight hours of sleep every night?
Mike: What is the marital situation? Married, single? Do you have kids? How old are you?
Cris: I am 34 years old, married with the second kid coming next month.
Mike: Take us back 15 years ago. What would you wish for yourself now?
Cris: I wish I had known or invested more time on the Internet. I would like to study software one time ago, but I feel I am ready now. I was not ready to study all that stuff. If I had studied these books in my early twenties, I would start software a long time ago. That is probably one thing I would have done. Or invest in the Internet more heavily, for example, in Google or Amazon.
Mike: Okay, this is it. Thank you, Cris, for your time.