"Bullet is a 100% free fully automated online accounting and payroll product for digital creative."
Hi Pete and welcome to our inspiring startup talks with entrepreneurs! Firstly, tell us a bit about yourself and how you ended up being an entrepreneur.
Me? Well I'm short, balding and grumpy, and in that order.
I could start off by saying I loved ideas. But, the real thing I love is problem solving and to truly fix the route of a problem you need autonomy.
Ultimately it's about finding a problem that people want fixed enough that they will pay money so you can continue to fix that problem.
At the moment I'm focusing on product position. It's a very intangible problem to fix. How do I get a creative person I've never meet to see an accounting product different to anything they've seen or expected to see in a couple of seconds?
Bullet HQ has been around for almost five years now. How far has the company come and how successful have you been in expanding globally? Any tips you would like to share?
We started building Bullet about four and a half years ago. There are no MVP's in automated accounting, so it took about two years to get the base product up and running.
Then we answered the call of our market research: "Simple to use accounting product please." So we built a Tumblr esque product. What I mean by that is big text fields and buttons.
It turns out people are so used to poor accounting products they didn't believe Bullet was a real accounting product. So we had to make it more 'grown up'. That as a great learning curve in UI/UX.
We also made a terrible mistake of focusing the product on the Irish market, tax etc. That closed us to the international market and the traffic we were starting to get.
What we should have done was not listen to any mentor (bar one) and build a product for the Californian/New York City market . That was great learning curve in mentoring.
We've spent about six to eight months removing Irish tax rules, and are now getting ready to focus on the US market.
When we start targeting the US we're going to launch a very open blog about that experience, numbers, conversions, marketing strategies, and failures. That should go towards fixing the mentorship issue in Ireland.
We just topped 3,000 customers last month. We also switched on the billing engine for our app store, so revenue is doubling month on month, so far.
The only tip worth giving is know your customer, and give them what they want in both marketing and product.
How do you continue to grow your customer-base?
We've spent the past two years testing all kinds of channels to see what marketing channel works best for us. I could probably write a book on that.
A simple case study:
I wrote an ebook for the Irish Times and got a three or four page write up which resulted in three customers. That kind of media would have cost a lot to purchase as paid media. We then posted a cheeky heads up in the Broadsheet website and got over 400 signups in the first day.
So knowing your customer is key here.
Word of mouth is probably our strongest growth channel in Ireland. We recently did a Net Promoter Score survey. The NPS is a simple question: "How likely are you to recommend Bullet to someone?" They mark the likelihood from 1-10, anything below nine is a negative so it's hard to score in.
We scored 75 for the first couple of weeks which now hovers around 68. That's a higher recommendation than Apple's iPhone, and we're an accounting product!
But, we're building some internal tools for marketing into US as well as some other strategies that we'll explain in detail in our blog once we get the results.
I like the idea of amplifying word of mouth. Although I see the benefits of display media I kind of feel it's for the lazy marketer and ends when the dollars run out.
Do you find people think that when something is cheap or free it isn't as good as what they might pay a lot of money for?
Of course, high costs can create a sense of scarcity, superiority. Just look at the history of black pearls, or fashion brands etc. So the question is: Do they value what your product delivers?
In the case of Bullet we deliver accounts usually to new companies. They hate accounts and accountants usually don't deliver any value outside of compliance so the industry has a low value.
Therefore, people don't see accounts as a pair of Gucci loafers but a pair of work boots to get the job done.
Obviously we're working to deliver higher value, but at the moment that's trying to change a mindset and that's a hard thing to do with marketing.
So we provide a product a price point that suits the current thinking.
When a user looks at Bullet and Xero they think: "I don't really understand what they deliver differently so my mind has to work hard." Free is a concept they understand, and therefore an easy choice to make.
Startups also use Excel, and that's free.
You also have to take into account the kind of product you're selling and how expensive it is to run.
What were the main obstacles you faced when setting up a freemium product?
Well there is nothing stopping anyone doing it, but this was our approach:
We looked at Wave (a US freemium product) and re-engineered their growth from blog posts and interviews, to see where they were lying. It's a bit linear to be fully organic. Linear is a classed tell tail for paid media. You also plot funding spikes soon after usually indicating paid media.
We also looked at parallel industries like MailChimp, Tictail.
We then looked at our own data to see what people were using a lot and what they weren't.
Then we created an app store and moved the premium feature sets into that. It's not a real app store just a collection of UI's grouped to look like an app.
This makes it easier for the user to understand. It compared features and offers. It's easy to see what's free and what's not and avoids anxiety about limits and reduces the cognitive leaks needed to understand your pricing.
It also makes it easier for us to sell the value prop of that app.
Then we just switched it on. Four months into it we're making more revenue per month than we were when we were premium! So I guess that means it worked, for us anyway.
So find out do people really value your product, and remember value can sometimes just be about perception, "we retweet automatically", or "we get your customers automatically".
Do you find a set number of people will only stick around if they don't have to pay anything?
I suppose that could be true, but that's the idea right? You're turning your product into an acquisition tool. It's only a problem if the cost associated with keeping the user or acquiring that user is very high.
We know from our customer that they start a business, use Excel and then reach a point where they need accounts. If we'd the same number of users as Excel does we'd be pretty happy. We're looking to narrow that gap between Excel and accounting product.
I also think the quality of product would have a greater impact on that than pricing. People are very sensitive about what kind of invoice they send, and they've high anxiety around tax.
Our product is designed with all the accounting logic built into the workflows so we get very little support questions, and we're just holding txt data so the servers are low on resources.
We're over 80% faster than Xero, so a bootstrapped business with 2.5 people on a freemium product is delivering a better service than a €800m funded 500 plus company.
You might say Xero's funding makes it dependant on charging: not good for them, good for us.
You write in your startup guide - How to Get 100k Free Off the Irish Government - "Wait till you’re trying to convince customers to hand over their hard-earned cash". What is the best way to do this, do you think?
If I remember that was in reference to leaving your job.
There is no question the value the customer gets from your product or preserved value is directly connected with their willingness to hand over cash.
I've seen interesting experiments with providing products for $1USD for life - huge value - enough for you to find your credit card and do that whole boring process. Then it makes clicking download on new apps much easier.
I've also seen products asking for Credit Card details, for a free but necessary part of the product. Same thinking as above.
Building a product people want is hard, and takes time. Although some bring good change, and succeed fast. There can also be trends, where the initial value is perceived high. But, on the whole it's hard.
Here is a simple example, when we thought about selling Bullet into recruitment companies as contractors get completely ripped off by contractor companies servicing them.
For instance, currently a contractor would be paying about €300-a-month for sending one invoice and running mid-year tax returns. Currently Bullet provides that entire service for free, saving you a day's rate a month, or €3,600 per annum.
We'd contacted the two leading companies providing this contractor service and we could see they were heavily staffed. Meaning it was all very manual and we knew from talking to contractors their attempts to automate the "accounts" was failing.
We thought "great" they can reduce cost, increase revenue and keep a competitive pricing for the contractor.
The top company wouldn't return any of our calls, and the number two cancelled the meeting stating we were too big a threat. All that took about two weeks.
That confirmed people were being scammed so we had to find some friendly recruiters that would talk to us. We had to understand how that industry really works, and how the contractor works.
What I mean by really works is they'll tell the contractor one thing but really only care about another, and vice versa.
That all took about another month or two as you want to hear common themes not one offs. Ultimately we found out the recruiters would want us to become a service-based business - we didn't want that.
All in all there was a preserved value for everyone in this solution, but it didn't match what we wanted to do.
Those investigations never end - especially if you're trying to do something different.
So just find the value prop and build that for the customer, easy!
Check out Bullet's eBook on How To Get 100K From the Government:
You say "customers are the only thing that interests me". What do you do to ensure you exceed customers' expectations? How influential has Bullet HQ been in other people's success stories?
Firstly we constantly listen to customers, I mean constantly. Everyone that has signed up to Bullet has received a personal mail off me. I use their email to look them up on LinkedIn and to find out about their company so I can personalise each one and understand who our customer is.
I also do support, granted it's only a handful of emails a day. But, anything of interest gets added to a list that we share with the team.
We also recently took segments of users and asked them about four questions like, 'What problem were you trying to solve with Bullet? What was your aha moment with Bullet that made you stay?'.
I recorded verbatim what they said i.e. in their own words. Then I started to group people based on the emotion they were portraying, anxiety, frustration, control etc.
From that then I'd create a report for the team, and we'd look to build in solutions for these problems. Problem: Anxiety. Solution: More reassurance, cleaner UI, etc.
Other times I'll take a group of users and have a chat with them to see what they're missing from the product.
Then a lot of the time I'll have a look at other products in different sectors and think that feature could work well. But, it all ties back to the user.
So it's a ton of stuff, none of which is very complex or hard to achieve, over time you get to know who's shouting and who's not.
How influential has Bullet HQ been in other people's success stories?
I think that's an impossible answer to answer, we're an ops product. I'd like to think because we're about 80% faster than the competition that people can spend less time doing accounts and more time on driving their business.
Our goal once the bank data gets opened up in the next year is to become autonomous, and simply delivering high value reporting and benchmarking.
We're a full double entry accounting fintech tool - so we can't just arse information together it all has to be 100% right. That can be restrictive.
What has been your biggest challenge as an entrepreneur? How did you overcome it?
Well being a founder I think you have to have a love of learning. I moved form IT bank infrastructure to the web and left ten years of knowledge, contacts etc. behind in the process.
My first challenge was learning about software projects. Then I started learning about design and how to design UIs. Then I moved from that to UX, and then into Marketing.
I think the biggest professional challenge I've had is around marketing. Like I mentioned earlier, we created a product that people don't really want. But, it's a fascinating challenge.
The personal challenge is self belief, your darkest days are when you question your own ability. You know how fragile starting a business is, you know when you talk to people about it they really don't care nor understand. I suppose that's why having a co-founder is important.
You won't get any sympathy but you'll get perspective. If you're a founder then that brings it from being the intangible to the tangible, then it's a simple problem and like the thousands you face everyday you just need to get a plan to get over it.
Your pay-with-a -tweet service has been very successful for you. What advice would you give to other startups looking to utilise social media and to target a specific audience?
Well it starts with your customer. If they're on it, use it. If they're not, don't bother.
Social media is a vortex for your time. Have a very tight plan, use tech to help you execute that plan. I'd say I'm on Twitter 15 minutes a day, if even.
We'll be building more tools ourselves around engaging with people on Twitter, especially when entering the US.
There is a couple of reasons we want to use pay-with-a-tweet. It's not executed very well at the moment.
- It amplifies our idea of community, which differentiates us from faceless accounting products
- We know referrals are our biggest growth driver
- We know people value what people in their network say
- We know business owners follow other business owners
- We know socially active people are users of Bullet
- We know people value their social channels more they did before, so if they tweet it carries more weight.
The greeting on Bullet HQ reads "Hand made with love in Dublin". What makes Dublin a good home for new startups?
I've no idea to be honest. I suppose you can move back home and save some money which gives you some more time, and time is gold dust.
Although we've a lot of friends in the startup community and rented desks in Startup Bootcamp when it started. We're not very active in the startup scene for a couple of reasons.
We never had the time to hang out at community meetups. For the first couple of years we were working 14-hour days pretty much every day of the week.
We were bootstrapped when we launched the Beta product. We'd spent €1,400 including company formations so we simply didn't have money for pints, or tickets to events. We knew it was a big product to build and time was what we needed to get it right.
We found a large part of the community was obsessed with raising money. We were obsessed with acquiring customers and had little interest in talking to the millions of "consultants", that don't have a penny but can get you that "deal".
We spend all our time on improving Bullet, talking to customers and trying to get new ones.
Dublin Beta was a great launching pad for Bullet HQ in 2012. With it on again this month, how important is it for startups to go to these events and which ones would you recommend?
We loved launching at Dublin Beta. Myself and Russell still catch up for coffee. Anything that gets you in front of customers is good for you.
We won that competition, which was great.
Other than niche community tech events, I think most the events are a terrible waste of time. We took a stand at the Web Summit one year. I couldn't get over how the government just handed the €4,500 over to us. It was a terrible, terrible waste of time. We brought a film crew to interview some of the tech stars but the place was so badly run the media person was just some kid from college.
Great event for Ireland but waste of time for a startup.
You'd be much better getting a list of events, sitting at your desk and engaging with them on Twitter via the event hashtag.
If you could offer your best piece of advice to early stage entrepreneurs, what would it be?
Don't spend one second on building a product for the Irish market. Although we love our Irish customer base, growth-wise it's been our biggest mistake.
Here are my reasons why:
1) If your product is for people aged under 35, everything they're reading is coming from the US media or a US platform pretty much. So there is a bleed.
2) We are a tiny, tiny, tiny market.
3) You'll hear the usual, "Why don't you go to Manchester", see point one.
4) As a society we're new to consumerism. You could build a faster, better product and you'll hear things like "Well I know X is shit, but I'm going to stick with X because I know how to handle it". How do you beat that!
5) If you use any kind of social platform to attract traffic most of the influencers will be in the US.
We built Payroll and Accounts for the Irish tax system. We thought like every startup we'd have it built in six months - two years later you've got it done and you can only sell it to a population of four. You spend the same time building a product for New York State's 19.5 million. So it's simply a marketing problem.
Thank you Pete for your valuable insights. We wish you continuous success on your entrepreneurial journey!
Check out "Bullet's Step-by-Step Startups Start Guide" to help you form your company in Ireland:
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Mark is a current journalism student in DCU and has covered a range of topics across print and radio. Having taken a class on entrepreneurship, he found startups were the most exciting thing happening in Ireland and developed a keen interest in them. Apart from technology, Mark has a love for biographies and Woody Allen films. You can contact him on Twitter or LinkedIn.