Episode 90
· 48:25
Hello, friends. Welcome back to another episode of Product People. And this is another case study in that mega profitable series. If you have your own business, especially your own product business, something in software or digital products, and you've been trying to figure out how do I make more money at this? How do I keep more cash inside of the business instead of having expenses continue to rise with revenue?
Speaker 1:I wanna have some money left over at the end of the day. I wanna have something I can retire with. Man, this series is for you, and I've got a great story for you today from Bjorn Forsberg. Bjorn started a Shopify app business six years ago. He has been able to grow this slowly, reinvest profits into the business, and now it provides a full time income and lots of profits.
Speaker 1:So you're gonna really like this one. As an aside, if you are listening to this before November 24, I'm running an incredible Black Friday deal right now, and you can find out more about that by going to megamaker.co/blackfriday, and you will get all of the deals I'm running right now. If you're already on the list, you would have got the email. If you are not on the list, go to megamaker.co/profit, and I'll add you on there. Alright.
Speaker 1:Let's get into this interview. Maybe let's just get started with what's the name of your business and your product?
Speaker 2:Yeah. Sure. So my business is called Forestberg Plus Two, which is a terrible name if you're working with the Internet. But, yeah, I've got four products, and they're all really apps based for for the Shopify ecommerce platform. Okay.
Speaker 2:So merchants that wanna add additional functionality to their to their online stores, Shopify have an app store for that, and then, yeah, I've got four apps there.
Speaker 1:Now how did you get in to the Shopify app platform? Like how did you even realize that that was a thing that was worth pursuing?
Speaker 2:Yeah. I was actually looking to start a site business and I was looking to start an online store actually. Then I came across Shopify in that sense and then saw that they had an app store or a partner program. And I really liked the idea of of being able to, you know, not have a warehouse and the whole thing being online. So that's what really really brought me to it.
Speaker 2:And then in my day job, I was working for an investment bank as a business analyst product manager. Okay. Yeah. So yeah, so I understood the the process of software but Yeah. I didn't know how to build it myself but yeah, so building software didn't didn't scare me as such.
Speaker 2:Yeah. And I thought I'd go that avenue.
Speaker 1:And what what store were you thinking about starting? What was the what was the idea there? Yeah. So we we just,
Speaker 2:had our first child, daughter. So it was actually engraved personalized dummies or or, you know, what they put in their mouths. Oh. A soother.
Speaker 1:A pacifier.
Speaker 2:It's like, yeah. Soother.
Speaker 1:Yeah. Yeah.
Speaker 2:Which is a long way from software.
Speaker 1:What do you call them?
Speaker 2:A dummy.
Speaker 1:A
Speaker 2:dummy? Is that a
Speaker 1:is that an Australian thing, or is that a European thing?
Speaker 2:It's an Australian thing, I'd say.
Speaker 1:It's called a dummy. Yeah. Australians have all sorts of lingo that, what was the one that Dan Norris would always tell me? Oh, he said, I'm kind of a bogan.
Speaker 2:I'm like Oh, yeah.
Speaker 1:What the heck is a bogan? He's like, it's like, know, somebody who's kinda trashy that drinks cheap beer and, like like a a redneck? Yeah. And he's like, yeah. It's kinda like a redneck.
Speaker 1:So you were thinking about creating a store for pacifiers, dummies. And in in the midst of it, you kind of realized that there was a, like, a app store and ecosystem around it. So what Yeah. So how did you get into the app store? What was like, what did you do?
Speaker 2:Yeah. So luckily, at that point, there was only about 30 apps in the Shopify App Store, so there's lots of things that could be done. In the Shopify forums, there was actually a post there where merchants had put requests on saying, hey, we'd really love to see this type of functionality. And those may, you know, ten, fifteen ideas there. So I just went down the list and found one that I thought would actually be a good idea and something that I'd be able to pull off myself or be able to at least with a small budget get something up and running.
Speaker 1:Interesting.
Speaker 2:So it wasn't even my own idea to be honest, but yeah, it was about printing labels and invoices and things like this. Okay. Shopify had a free app where you could print a single document at a time, but then obviously, if you got, you know, 50 or a 100 orders, you you wanna print more than one at a time and stuff. So that was yeah. That was the idea for the first app.
Speaker 1:And and so you'd mentioned that you're not a software developer. What How did you build that first version?
Speaker 2:Yeah. So I outsourced it to India actually. Didn't have any contacts, but I decided to see what I could find online. Yeah. So I was used to building requirements documents for software.
Speaker 2:Mhmm. So being able to detail, hey, this should work in this way. It should look kinda like this and, hey, I'm built up a document like that, and then went through a few outsourcing places and found one that would work and then, yeah, sent it over to them.
Speaker 1:And so this show is obviously about profitability. How much did you invest that first year? And how much did you earn that first year?
Speaker 2:Oh, so, I invested $2,000. That was my budget for the for the initial act. But it was really a an MVP. Super simple. Did what it should, but but not much more.
Speaker 1:Mhmm.
Speaker 2:Yeah. How much did I make the first year? It started making money from from the first day, but it was only I think it was at like $5 a month or something silly like that. But, yeah, I don't know. I guess I was making maybe a thousand dollars a month or something like that by the end of the first year.
Speaker 2:Okay. So Yeah. So that $2,000 was the only money I've ever put into the business in that way. Right? Wow.
Speaker 2:So
Speaker 1:So you invested the 2,000 and initially initially you probably felt like, oh man, this is only making $5 a month. Yeah. What what made you keep going? Did you did you have kind of a long view from the beginning like, okay. You probably didn't know what to expect, did you?
Speaker 2:No. Absolutely not. And I guess I expected it to grow faster than it did. But then again, you know, I didn't need the income as such, so I wasn't really stressing about that. It was only maybe taking, you know, fifteen minutes of my day in the in the beginning to do support questions and things like that.
Speaker 2:So from my side, and we had a new a little baby as well. So from my side, it it fit pretty well. Yeah. So it was just chugging along and and obviously, I had lots of ideas of how I could improve it and how I could grow it. Mhmm.
Speaker 2:And Shopify was growing as well, so so there's obviously more and more, potential customers coming on, coming into the the ecosystem, I guess you could say.
Speaker 1:So you had mentioned that after two years, the app was making just over 4,000 a month. That's a big jump. You went from $5 to 4,000. What Yeah. What changed?
Speaker 1:And you said maybe after the first year, were making a thousand. So by the end of the second year, you'd 4x'd revenue. What what changed there?
Speaker 2:Yeah. I think because the the initial version was I wish I had had some really smart thing to say here, but it was really about incremental improvements to the product and then also, you know, a bit with pricing. So that's $5 and then you I've made two plans and had sort of more features for for more money. So there's mainly that. Just adding more features that more people needed and also, yeah, increasing pricing to those that could.
Speaker 1:And and were you doing anything inside the Shopify store to get more traction or was it just growing kind of organically?
Speaker 2:Yeah, a bit of both. So in the Shopify app store, you you can get reviews and obviously good reviews move you higher up the ranks. So, you know, for a while there, I was ranked number one and it was maybe out of 50 or something like this, but a lot of my, how would you say, my marketing strategy was to make sure I get lots of good reviews and stay at the top of the list. So then, yeah, giving really good support and then making sure that every person you sort of talk to, you'd kindly the ones that were happy, you you ask them for a review. Mhmm.
Speaker 2:And that's still probably one of the best ways to market in that App Store anyway.
Speaker 1:Yeah. It's reviews. Yeah. As I've been doing these interviews, there's some kind of definite stages that have emerged. The first is folks just doing something on the side and earning revenue.
Speaker 1:The second is earning enough revenue that they can quit doing whatever they were doing before and just focus on this thing. And then the third stage, which we'll get to in a second, is I'm paying my bills, but now I want to make this profitable. Yeah. How did you get to the second stage, which was quitting your job, making this, you know, this was a side thing for a while. How did you go from side thing to your full time thing?
Speaker 2:Yeah. So that was in 02/2015, I guess. I I made that jump. And it kind of came about by being pushed in a sense. Shopify came out with a a free product or they improved upon one of their free products, so which competed then with my my app.
Speaker 2:Mhmm. And that that obviously bummed me out, but but then I found out that I could actually create a second app which would leverage on this free Shopify app. So their free app obviously gets tons and tons of users, and so I came up with an idea where I could sort of, if you can't beat them, join them, right? So so it was a way to design documents and things like this for use in this free Shopify app. And yeah.
Speaker 2:And that really took off actually. So that was more of a a one time payment instead of a monthly payment, so much more like a traditional online store selling digital goods, guess you could say. Yeah. And that sort of took me up to maybe about 10,000 a month, which is pretty close to what I was making my full time work. Yeah.
Speaker 2:And then also, I was not really enjoying my work that much anymore. I'd got to where I needed to be and I was getting more into a managerial style role and that's not what I love to do. I like to be in the details and things like that. Yeah, so I thought, okay, maybe I can look at doing this full time and if I've been able to grow these little apps to this point part time, then imagine what I can do if I do it full time. Yeah.
Speaker 2:Yeah. My my wife sorry.
Speaker 1:Sorry. Go ahead. Keep going.
Speaker 2:Yeah. I was just gonna say my wife thought I was crazy. And she's like, you sure about this? Because obviously, you know, there's a bit of a risk you're sort of tied to a different platform and I had a good job and we had, you know, by that stage we just had our second child as well so yeah, it's but but I I felt, yeah, hey, I might as well give it a go and and see what happens. Yeah.
Speaker 2:And and how much did
Speaker 1:you have to invest in that second app? What was the the cost for that?
Speaker 2:Yeah. So that one was I actually ended up building myself. Oh. So as I had the the first app, I got sick of sending know, because I'd be saving money up from the income, from the first app, then sending it off to the developers to to get new features done. And and in the end, I you know, after two years, I wanted to actually make some money.
Speaker 2:Mhmm. And So, learned to code piece by piece looking at I designed this app so I knew how it worked. I just didn't know how it did what it did, right? Yeah. So, I was able to sort of work backwards and and then yeah, so I started started doing little small features and then, the the second app was was the first one that I built myself.
Speaker 1:Wow. So as you were in the process of doing this, you're you're basically rewriting the first one. Is that how how you learned?
Speaker 2:Or or adding small features, small bug fixes and things like that.
Speaker 1:Gotcha. Wow. That's interesting. So the second one was you invested your time.
Speaker 2:Yeah, exactly. That was built during the evenings as well while while I was still working. But but then, you know, I didn't really have sort of a deadline or anything like that. But, so I got that out. It took, you know, two, three months or something to build.
Speaker 2:A lot longer than probably somebody that knew what they were doing would take to build it, but, yeah, it worked out really well.
Speaker 1:Yeah, and you now you're in the ecosystem, so I think, again, depending on your stage, a lot of people are like, how do you find a good idea? And what you kind of stumbled into was, first of all, a platform and a community that was new. And so there's lots of opportunity there. And you were able to get in quite early.
Speaker 2:Definitely. Yeah. And I think it's been a huge help as well.
Speaker 1:Yeah. And then after that, you were able, you were in the community, so you were able to see, even when Shopify totally killed your first business, you were so embedded in the community that you could see an opportunity for something else. Some people would have said, How did you get the idea for the second app? You just said, Oh, I just got an idea. But that must have come from understanding the market.
Speaker 2:Yeah, I think so. But also the fact that, you know, I've been messing with print. So the first app helps you print and things like that. And the Shopify app does the same thing. Print is a pretty sort of specialized area if you're doing web development.
Speaker 2:You know, it's got its own little quirks and and things like that. So I figured not too many people are gonna be silly enough to to get into this. Yeah. Yeah. So I thought, yeah, definitely.
Speaker 2:And I and, you know, it was it was very Shopify's app is similar to mine, so I understood the concepts and things. It was just the the design part I could I could help people with.
Speaker 1:Yeah. I think that's another kind of key piece of profitability actually is one thing that drives down profits is or can be competition. So when there's a lot of players in the space, sometimes they'll compete on price, which erodes margins and then erodes profitability. But when you went into this messy area of print, which isn't very sexy and a lot of is kind of messy, it's like going from web to print is difficult, think that must have played into it as well. In a space where if you build up expertise, part of your kind of competitive advantage is the expertise, the way you understand the problem, right?
Speaker 2:Yeah, definitely. It's also one of my newer products. I've gone into email on that. So that's even more into the weeds of strange quirks and things like that. Yeah, definitely, I think you've hit it on my head where I've got into an area where a lot of people don't have a lot of expertise.
Speaker 2:And and, obviously, you know, Shopify is still relatively small community. So if you if you can carve out a niche within that community with some expertise, I think definitely helps.
Speaker 1:And so let's move in to the next stage I described. How did you go from just paying your bills to becoming profitable? What what changed there? What was the transition like there?
Speaker 2:Yeah, so I mean it was profitable from the start, so it was obviously a second income for me and then going to, you know, taking the plunge and then jumping from part time to full time doing this. Obviously, then yes, I was taking money out of the business to pay my bills and so forth. Luckily at that point, had a lot less bills to pay than I do now, but yeah, I think it was really focusing on the things that generate revenue. So, know, really thinking about my time and how I'm spending it and then as I wrote as well is I wasn't afraid to pay for things where I thought it would save me time. Obviously, the most important thing to me or the most costly thing to me is my time.
Speaker 2:If I'm spending it trying to build something myself which I could buy somewhere, it's lost train. So I think I've never been afraid to buy solutions. It might be seems strange to increase your costs to, you know, to increase your profits, but in the end, it's worked out quite well where you increase the cost a little bit but then you can increase profits a lot more.
Speaker 1:And what kind of profitability are you at right now?
Speaker 2:Like in total monthly earnings or?
Speaker 1:Yearly. What kind of yearly profits are you doing right now?
Speaker 2:Yeah. So I take home about 275,000 US a year now. It's 85% profit margin. So I'm making about $3.40, I think it was. Yeah.
Speaker 2:320, 340, somewhere in that range. Yeah. Then I've got about 15% costs.
Speaker 1:Yeah. Wow.
Speaker 2:That covers servers and things like that. But I mean, that's why I really like the idea of software as well, right? Because you can just as easily sell to a thousand people as you can to a 100, right? Almost at least.
Speaker 1:That's right. And it's just you that you're just one person?
Speaker 2:Yeah, it's just me and I kind of like it that way. Like I said, I've managed people before and I don't mind working with people. It's not that at all. But, you know, being the boss of people, don't really enjoy that.
Speaker 1:Yeah. I love your story because again, if we go through all the stages, I think a lot of people, they start off and it's making $5 a month like you were and they go, Well, this is never ever going to pay my bills or even close to it. And again, you built on a strong foundation. You were on this platform that had incredible demand and had incredible opportunity. And then you tackled a really kind of hairy problem, which was print, and now you've tackled other things like email.
Speaker 1:But it really the story of going from, you know, whatever you were making back then when you started to whatever you're making now is just kind of continuous improvement and you know the Yeah. Yeah.
Speaker 2:Yeah, no I think I think it is you know I wish I said I could say I have some magic bullet or I've done some amazing thing that's just you know grown 10 times overnight. It just hasn't been. I think it's really just a matter of putting in the time and giving it time to grow as well. So not expecting it to grow in you know a couple months but a couple years since then. Yeah.
Speaker 1:Yeah. And I I think and sorry. The your your profit right now, 275,000, is that after your salary or is that before?
Speaker 2:Well, that that is my salary.
Speaker 1:Okay. So you
Speaker 2:So because I'm just on my own. I've I don't really have anyone else to pay. Mhmm. Yeah. So I I leave some money in in the in the company, of course, but, yeah, most of it's just just for me.
Speaker 1:Yeah. That's great. The I think one thing I've been thinking about a lot lately is how because one of the questions I got on Twitter was, is this, you know, aft is this profitability after salary after founder salary or whatever? And kind of the benchmark I've I've given is, you know, let's say founder pays himself a $100,000 salary, would there be a $100,000 left in the business at the end? And the reason I'm asking these questions now is, you know, I my first year kinda independent selling products was last year, 02/2016.
Speaker 1:And I thought I did pretty good. I paid all my bills. I took home about a 100,000. And, you know, I'm I'm like, wow. I did it.
Speaker 1:This is the first year. We here we go. This is awesome. But
Speaker 2:It's well done. But
Speaker 1:now the question becomes, well, what if I get sick? Or what if lots of what ifs. And also, what am I doing this for? And I think the idea of focusing on profit and thinking, Okay, well, if my business made $100,000 and I paid myself $100,000 in disbursements or salary or whatever, that means I'm actually at 0% profitability. So how can how can I how can I increase that?
Speaker 1:And I love your story.
Speaker 2:Actually Okay. Yeah.
Speaker 1:You you broke down your your profit margins because a lot of people might not know, like, what what kind of margins can you make in the Shopify store. So you said 85%. That's that's after Shopify's taken their their share?
Speaker 2:Yeah. Exactly. So Shopify take 20% of what you earn through the App Store. It's like their their partner fee, I guess you could say. So, yeah, if if they give if if I generate a $100 from or get a $100 from a customer, there's $80 from me, then 15% less that, then I guess I end up with, like, $68 or something.
Speaker 1:Gotcha. Gotcha. Yeah. So it's and the benefit, of course, is that Shopify is bringing you all of the business. They're the primary channel.
Speaker 1:Yeah. And so the the $80 that you get off a $100 sale, that's pretty good still. That you're you're still making great margins on that.
Speaker 2:Yeah. Definitely. And I mean, I think it's it's money well spent or or paid out, guess you could say, because they are really the the main source of traffic. Yeah. It's it's the App Store is well well managed.
Speaker 2:It feels fair. So yeah, they I think they put out a level playing field and and yeah, obviously, they should get something for it as well.
Speaker 1:So let's go through I'm gonna veer off course a little bit here. And I wonder if we could just go through, in terms of profitability, what do you think are the biggest threats to your profitability? What What kinds of things do you think might affect profitability in the future?
Speaker 2:Yeah. So not so much like server costs and things like that because all of my apps, they're easy or cheap to run, guess you could say. Two of the apps, print one and the email one, more like theme store, I guess you could say. So you go use the app, you use it to design your emails or you print documents, and then you buy it for a one time fee and then you move on. So I don't like have a a big sort of daily user base of people coming on and increasing my cost.
Speaker 2:They're really cheap to run-in that sense. But then again, they're they're one time purchases. So so it's, with a monthly subscription model, people keep coming by, you keep getting revenue once you get somebody on board, whereas on these apps, it's much more in the traditional, hey, got to keep getting new customers coming through, otherwise they'll stall and and disappear. So obviously, one of my biggest fears, I guess, you could say is is that something comes out or Shopify makes, you know, their own thing free or improves on something that makes one of these apps obsolete. Mhmm.
Speaker 2:And I guess, yeah, it it makes me feel a bit better that I've got multiple products. So I've got, you know, my revenue sort of split between three products. I've got one free free thing, which is really just more for for cross promotion and and traffic generation. Yeah. But those three apps, they're they're really making around the same.
Speaker 2:So between 8 and 12,000 a month.
Speaker 1:Mhmm.
Speaker 2:Which makes me feel better because if one disappears, it's not the end of the world, right? I have sort of all my eggs in one basket, but yeah, other than that, it's it's really just traffic, yeah. Not so much cost. Obviously, if I get sick, yeah, that would be not very good because it's all in my head, you know. I'm the support guy, I'm the marketing guy, I'm the developer, you know.
Speaker 2:So there's lots going on there. But I mean, for me, I've actually paid to get some really good insurance as well, which has really made me feel a lot more relaxed.
Speaker 1:Yeah. Where
Speaker 2:I can still get a 120,000 a year if if I get sick. And that's for like seventeen years or something like that which is which is a nice thing. It's relaxed me a bit as well.
Speaker 1:Yeah. What other kinds of weaknesses do you see in your business right now and what are you doing to to fight those?
Speaker 2:Yeah. So so marketing is definitely not my my strong point. So I'd I'd like to very much improve on those areas. Just sending, you know, regular newsletters. For a guy that has an email app, I'm terrible at sending off emails.
Speaker 2:Right? Mhmm. And then maybe getting into sort of some advertising, Facebook advertising, Twitter, things like that. Mhmm. And then also yeah.
Speaker 2:I I think that's my biggest weakness is is not yeah. And may maybe being too much of a control freak too. Right? Because I I should have maybe outsourced my customer services a long time ago. Mhmm.
Speaker 2:But it's also, you know, my best channel for for new ideas and improvements and, you know, having a pulse on the businesses.
Speaker 1:Mhmm.
Speaker 2:But it does take up, you know, half my day now.
Speaker 1:Mhmm. Yeah. And what is like is 80% of your traffic coming from the App Store? Is like what's the
Speaker 2:Yeah. Yeah. Yeah. So there's a little bit of organic. I named my apps, know, one's called order printer templates which is the most boring name ever but that's what people type into Google.
Speaker 2:And so, in that sense, I still get some good traffic from Google. I have a little blog which I don't update very much, but there does you know, there's some traffic from there. Yeah. But definitely, I'd say, yeah, 80% if not more come from directly from the Shopify app store.
Speaker 1:So there one the other kind of element of profit, of course, is you get a picture of how if you pull other levers that could increase revenue, which could also increase profit. And so it sounds like you're saying there is other opportunities, like you could start doing Facebook ads or something else, and you might be able to increase profits even more.
Speaker 2:Yeah. Definitely. And I think, because of my lack of marketing experience, I'm sure I could get a lot more out of my existing products just by marketing them properly. Another thing that's been really interesting I'm just doing at the moment is to do partnerships with, on Shopify, there's also a theme store, guess you could say, where you can pick up web templates to how should your store look and things like this. These are really professional designers and Shopify are really stringent in who they led into this theme store.
Speaker 2:Mhmm. And for my for my emails then, obviously, that's a specialized area. So if I can build, you know, complimentary email themes that match these web themes, It's a really good, yeah, good conversion and and and a good source of traffic. So I'm starting to do some partnerships with the developers of themes. Mhmm.
Speaker 2:So that we, you know, obviously make sure that they like the designs and they're they're they're on board about it. And then yeah. So so they can market towards their their customers. They get some some referral revenue for that. But then, obviously, I get a new channel of of traffic as well.
Speaker 2:Yeah. And I've just done I just launched the first one and I've got some more on the way, but so far it's looking really, really good.
Speaker 1:So affiliates could be a huge channel for you going forward. How do you because you've got three products, How do you track them? Like, do you track them individually in terms of revenue, expenses, and profit? Are they just all combined? What kind of, kind of, yeah, ongoing things are you tracking with those?
Speaker 2:Yeah. So I'm I'm tracking, I guess you'd say, revenue than I am expenses. So expenses are all just pulled together. Yeah. As long as, you know, as long as those are in a manageable area, I'm I'm fine with that.
Speaker 2:And then on the on the revenue side, I I built a a a little metrics dashboard so that I could get a better insight into that. And that was actually one of the first things I did when I quit my job. I had a couple months of paternity leave, so so I actually built I know if you if you know, like, biometrics and Mhmm. Josh's product Yeah. It it's it's very much modeled on that, but because Shopify just gives you a CSV file Yeah.
Speaker 2:Of all your payments and things like that. So I I sort of built this this view on top of that CSV file where you can you you can see a recurring revenue, your one time revenue, your average sale price, churn, things like that. Yeah. I track those all the time. Ended up turning into an open source free product for all the other Shopify developers as well.
Speaker 1:Oh, cool.
Speaker 2:That's been really good.
Speaker 1:And I guess one of the other challenges you're going to have moving forward is up until now, you've been very lean. But once you start to get into affiliate sales and advertising, etcetera, your expenses and tracking those expenses are gonna become a lot more important. What what are your plans around that? Do you is that something you struggle with? And you know, how how do you think about those kinds of things?
Speaker 1:Obviously, in the past you haven't been scared to spend money to make money. How do you evaluate that? Like, when you're spending money, how do you evaluate what is a good return?
Speaker 2:Yeah. So I mean, as long as I feel that I'm making a good wage at the end of it, so I I I don't wanna sort of, you know, spend so much on marketing and and affiliates that there's nothing left over. Mhmm. So I'm not gonna I'm not on a race to the bottom sort of thing. But I also wanna make it worth their while.
Speaker 2:So I've been sort of testing out with, 25% sales price as the the affiliate referral fee. Yeah. And I think it I think that works out because my margins are so high. There's still a good good amount left over, I guess you could say, where they get something which is fair I still have to do the support and everything else, but I still feel it's a fair share.
Speaker 1:Yeah. It'd be interesting to talk to you again in six months or a year because it will affect your margins. So in our example before, a $100, the customer pays. Shopify takes 20%. You have $80.
Speaker 1:Right now, your expenses are 15%. But that that amount will that expense amount will increase. Right?
Speaker 2:Definitely. Yeah. Absolutely.
Speaker 1:And so sometimes I mean, what's great about your situation is you have amazing margins. Like, for most businesses, having 15% profit margins would be quite good. And so you obviously have a lot of room there and if overall profits I guess for you are growing then you are still happy, right?
Speaker 2:Yeah, definitely. And the way I see it as well the way it works as well is is that the the referral fee would be paid out before Shopify take their cut. Mhmm. So if I give away, you know, 25%, then take a $100, remove 25%, remove another 20% for Shopify.
Speaker 1:So Oh, wow.
Speaker 2:I get 55% left. So so it does make quite a big difference to to the amount that I actually receive. Mhmm. But the good thing too is is my apps are kind of complementary to each other as well. So if you used one, there's a high chance that you'll also end up using my other app.
Speaker 2:Mhmm. Especially on the the one time. So so in that sense, maybe I pay to get this customer on board or get them referred. Mhmm. But then I'll be able to, you know, cross sell or or whatever to to bring up that.
Speaker 2:So I guess you could say it will even out to a sense.
Speaker 1:Yeah. How are you doing that cross selling right now?
Speaker 2:Yeah. So it's both in app. Once you purchase something, we'll say, hey, here's our other great apps. You can also do it a little bit within the the app store. So you just list out the other apps you've got.
Speaker 2:Mhmm.
Speaker 1:And a lot of
Speaker 2:people are just browsing. They say, hey, oh, I actually need this more than I need this one. And then, yeah, using Intercom for for like email series and welcome series and things like that.
Speaker 1:Okay. So you are using some onboarding and as you onboard folks, you're also saying, Hey, there's also these other things too.
Speaker 2:Yeah, exactly. So obviously keeping that part quite toned down as footnote sort of thing. I really want to give people the information that they need and not be sort of pushy and things like this. But yeah, just making wherever it makes sense to have a touchpoint or to show these other products, then I'll have it there. Mhmm.
Speaker 2:But I've never sort of send an email saying, hey, look at our other products. Right? I don't think that's cool, but I'll make them aware that they're there.
Speaker 1:Yeah. And another element of profitability is that if you ever decided to sell your business, most businesses are valued on their profitability. Is that something you've thought about? Would you ever sell your business or do you want to do this till the day you die? What are some of your thoughts around that?
Speaker 2:Yeah, that's a good question. Everything for the right price, I guess you could say. But like I wrote as well, I don't want to give away or I don't want to give up any of these apps until I feel that I've got them to where I could get them myself. So especially like on the email app, feel that there's a lot of places I can take this app still. And so I I don't feel I'd get what it's worth if I sold them now.
Speaker 2:Mhmm. I went through sort of a the start of a a purchase process not long ago, a couple months ago. And, you know, I I guess I just wasn't really ready to sell and they maybe weren't ready to buy, but it was an interesting process also just to make me think about, you know, how do I feel about selling these businesses. Mhmm. And it's pretty tough especially when they were looking at my oldest product, right, which is sort of the start of the whole thing.
Speaker 2:But yeah, I'd definitely be open to selling them, but I wouldn't want to sell them all or leave myself with nothing to do.
Speaker 1:Yeah.
Speaker 2:I love what I'm doing so I don't want that to stop either.
Speaker 1:Yeah. And on the flip side, have you thought I mean the other advantage of profits is that if you have cash in the bank, can acquire products as well. Is that something you've been thinking about?
Speaker 2:I've got too many products myself now, think, or at least I'm, you know, for a one man show, I guess you'd say, I'm sort of at my peak and it's been really important to me to to keep a good life balance as well. Like, I've got a young family and and, you know, one of the main reasons for me starting to do this was actually to have more more time with my family. So I wanna be careful about sort of overloading myself. I I still wanna be able to, you know, get in at nine and leave at four or whatever and and not sort of, yeah have too much in the back of my head.
Speaker 1:Yeah actually I'm glad that you mentioned that because that's another element of profitability especially for small companies or one person companies is that our time actually does play into profitability whether we like it or not. If our time is worth and x amount of dollars so, yeah, what you you meant you you work about nine to four every day. Is that kind of your your your daily routine right now?
Speaker 2:Yeah. Except Tuesdays where I go a bit further into into the day. Okay. Yeah. And that that's really good when I wanna get focused on doing some development and things like that where I have one long day where I might stick around the office until, you know, seven or eight or nine even.
Speaker 2:But yeah. So so I really wanted to to have a good I I wanted to start a business to have a better life, not to have a busier life. And my previous job was very much a suit and tie style job, which is, you know, to five, maybe to six, maybe to seven. And that's just not the way I wanted to live life, right?
Speaker 1:So, I
Speaker 2:thought, yeah, definitely. I see a big part of my, how would you say success in how much or how little time I need to spend at work, So I'm still doing, you know, decent hours, at a level where I'm happy. Yeah. Key in keeping me motivated as well.
Speaker 1:Yeah. I I think we almost need to invent another form of profitability, is time profitability, stress profitability, cognitive load profitability. And for you, part of that is saying, now you're working nine to four most days, so at the very least you're saving an hour a day. For me, when I went independent, I was also saving an hour commute into the city and an hour commute out of the city.
Speaker 2:Yeah.
Speaker 1:And all of that kind of played into my overall feeling of like because profitability is like getting ahead. So Yeah. You're you're getting ahead in money, but what else are you getting ahead in? And it sounds like and and I guess that's the other thing is because you could have gotten into this, but, you know, let's say it was quite sophisticated and complicated and you're up till three in the morning fixing servers every night, that wouldn't have been kind of profitable in the way that you'd you'd want. What would it?
Speaker 2:No, not at all. And I think, yeah, I think it's right that we shouldn't measure profitability any other ways. And it's also being able to, you know, if one of the kids is sick, freaking out and not being able to take the day off or you have somebody breathing day and neck saying, hey, you've got too many days off, right? Yeah. And and like for you, yeah, being closer to home or or and this is the same for me.
Speaker 2:I had, you know, okay, it was only half an hour, forty five minutes, but now I've got an office five minutes, from where I live. So
Speaker 1:Yeah. Yeah. Me too. I I think the the other thing is so much of profitability in terms of money is about mindset. So until somebody gave me an imagination for keeping money in my business bank account, I hadn't thought much about it.
Speaker 1:And I think in the same way, you know, one of the things I've done this year is I had this this mindset that, no, I really need to be at the office cause I love being at the office, you know, nine to five or nine to six every day. Yeah. But I've started to realize that I actually I actually can work a lot less than I think I need to. And that's been interesting too, especially in this profitability mindset. If it's, you know, if your expenses is the amount of hours you spend and you just reduce the amount of hours you're spending at the office, then all of a sudden you have all this time profitability.
Speaker 1:And just getting to enjoy that a little bit has been really fun.
Speaker 2:Yeah, definitely. And I think also being being more focused in the hours that you are in the office. I find on the days that I've got other, you know, Tuesdays or whatever, when I've got a longer day ahead of me, I find myself sort of, you know, veering off into, hey, I'll just have a look at this for a little while, know, when I know, hey, I've got to leave by, you know, 03:30 to go pick up the kids or whatever, then, you know, alright, let's get things done and I'm a lot more efficient, I guess you could say in that time as well.
Speaker 1:Yeah. This has been great by the way, Bjorn. I really love hearing your story. Let's end with this. What do you think aspiring product people get wrong about building profitable products?
Speaker 1:Like what's a big misconception that you see?
Speaker 2:Yeah, that's a good question. I think from my sort of bootstrapped world at least, it was really about giving it enough time. Even some of my friends or whatever, they expect these things to just sort of take off overnight and know, they've got some unicorn on their hands in six months time, right? I think give the products time to mature and give yourself time to mature as well to learn and what works, what doesn't work. I think that's that's been the key for my products.
Speaker 2:It's just not obviously, if an idea is not taking off at all, then then sure, move on to something else. But if you see that it's growing and it's a steady growth, I'd say give it more time than maybe you were planning on investing in it. Yeah.
Speaker 1:Yeah. And the other thing with your story, I think sometimes people's impatience comes from the fact that they really want it to start paying their bills right away. And the luxury that you had, which was so important, is that you were doing this on the side, and so you didn't have all of that pressure. And even when you quit your wife was still like, are you sure you wanna do this? Right?
Speaker 1:Because it creates a whole other pressure that people aren't prepared for and you had built it up to you know about $10,000 a month at that point right?
Speaker 2:Yeah yeah and yeah. I think if I if I had tried to do this as a full time thing from the beginning, I would have failed miserably. And I I wouldn't have enjoyed it either. And I I really you know, you don't have to sort of jump into it all at once. I think it was a for at least for me, it was the only way to do it, I guess.
Speaker 2:Mhmm. I'm a pretty cautious guy, but I don't mind taking chances every now and then. But I, you know, I was a lot happier to have it sort of building up on the side, definitely.
Speaker 1:Yeah. And I I think, again, I understand people's frustration. Like, I had a two hour commute every day and I was just like, I got to get out of this. But if people don't understand, like, how much pressure there is when you do quit. Like, it really changes.
Speaker 1:And the cognitive load that you put on yourself is really destructive to, you know, that kind of freedom you had. You had the freedom of, like, Shopify killed your first product, and you had this almost, like, okay. Well, let's just see what else is out there, you know, without having to freak out because you weren't gonna be able to pay your mortgage that month.
Speaker 2:Yeah. Absolutely. And I think, you know, even from going you know, having a a 10,000 a month and taking the leap, the the difference in my state of mind is completely different to when I had a full time job as well. Right? And it's something you worry about no matter how much money I think you're making.
Speaker 1:Yeah. Yeah. I think that's the other thing that's come up quite a bit is when I've asked people, like, you know, you're profitable. You've made it. Like, Everyone on the internet wants to be you.
Speaker 1:But the same thing that comes up over and over again is and you're in the 0.001% of people that will ever be able to do this. But the recurring trend is no matter what the success people are like, what if this all goes away tomorrow? And people don't realize that you're trading, You do get more freedom. You do get all of these other things, but you will always have that anxiety of what if this doesn't work? What if it, you know, it goes away?
Speaker 2:Yeah. Definitely. And, you know, a lot of careers, they'll span over, you know, twenty years or whatever. And I'm sort of looking at my products and thinking, are these guys, there's no way these products are going be there in twenty years, right? Yeah.
Speaker 2:So yeah, you just can't sit back and it's definitely a frightening thought, I guess you could say, but I'll go for as long as I can.
Speaker 1:Awesome. Well Bjorn it was great to meet you in person. Thanks so much for doing this call. I would actually I would like to follow-up in six months and do it again.
Speaker 2:Just Yeah, please do. That'd be great.
Speaker 1:I think getting the ongoing narrative is awesome.
Speaker 2:Fantastic. Thanks so much.
Speaker 1:Yeah. Thanks so much, man. If you want to check out more of Bjorn's stuff, go to forsberg+2.com. You can also just search for him on the Shopify app store. If you search Forsberg, F O R S B E R G dash two, you'll find all of his apps and be able to check out what he's doing on there.
Speaker 1:Thanks again for listening. I've got lots more case studies recorded. I just need to edit them and release them, So stay tuned for those. They're coming soon.
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