Wavve
Turn Audio into Social Videos
Wavve has been acquired by Calm Capital (https://calmcapital.com).
Towards the end of last year, we started to realize that the skills needed to take a company from zero to one compared to the skills needed to take it from a one to a ten are not the same. We love creating. But that’s not what Wavve needs right now. It needs seasoned business operators.
When you’re a founder and you’re running a growing, bootstrapped SaaS company, you can feel a lot of risk when your company equity is the majority of your net worth. A lot of bootstrapped founders don’t talk about this much. But as we started families and got older, we all wanted to take some risk off the table.
After examining the situation from different angles (and knowing that we weren’t interested in a sabbatical), we knew that selling the business was the most attractive path. But deciding that we were ready to sell led us to a whole new set of challenges.
Check out this blog post that details out why we sold, how we did it, and why we went with Calm Capital: https://churnkey.co/blog/wavve-has-been-acquired-by-calm-capital
We hit another huge milestone this morning - $125,000 MRR / $1,500,000 ARR. We use the Baremetrics goal tracker and it always feels amazing when that progress bar hits 100%. We only have two major revenue goals left, so I think we're going to need to set some new goals!
Exactly 5 months after crossing the $1M mark, we've managed to add another $500,000 to ARR. Our main video service continues to post strong growth and revenue from our wavve.link offering has started contributing to revenue as well.
We've been pretty obsessed with customer retention for a while now, and after years of testing and optimizing our churn-fighting approach, it's really starting to pay off. There's no way we'd be where we are today if we hadn't taken steps to decrease churn by as much as we have.
Wavve's growth continues to exceed my expectations. Sometimes it's hard to believe that our little bootstrapped software business has grown into something so large.
Next stop, $2 Million ARR.
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Congratulations
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Thanks!
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This must be a bug with Indie Hacker's Stripe revenue reporting. cc @csallen
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Will investigate, but for me it says your revenue is $126k in the post 30 days. Not sure what @Natalie_H saw?
I made some fixes to the revenue script earlier this week. Well, at least hopefully I fixed things instead of breaking them :)
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@csallen I reset the connection so sounds like your fixes worked 👍 You can see the same issue on Zubtitle page now if you want to take a look. (Haven't reset it yet)
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This comment was deleted 6 years ago
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This comment was deleted 6 years ago
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Thanks!
Technically zero employees, but we have a few contractors who help with things like customer support, marketing, and occasionally product development. I know many companies prefer the traditional w2 employee-employer relationship, but we've found the 1099 relationship is better and more flexible to fit our needs.
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Yesterday we crossed over the mythical $83,333 MRR threshold that we'd long dreamed about.
When we set the goal of hitting $1M ARR, it seemed incredibly audacious. There was a very low chance we'd actually hit it. I had a few different financial projections, and none of those figures would get us there. At the time, our churn and growth numbers had us plateauing at a much lower threshold.
Some things that helped get us here:
(1) Running a broader range of growth experiments
(2) Revisiting pricing plans regularly
(3) Reducing churn by letting users pause their plans
(4) Some luck - podcasting has continued to grow as an industry and we've been very fortunate to have a growing TAM
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Wow, congrats! Can you tell me more about #3? For example, how long can they pause it for? And do you have any numbers around how much this decreased Wavve's churn?
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Thanks @IndieJames!
Customers can pause for 1 or 2 months at a time. Pausing is particularly important to our market, because a lot of podcasts are seasonal shows.
As far as the impact on Wavve's churn rate, the pause feature had an immediate impact on our Customer Churn (decreased by 2-3%).
It took a bit longer for Revenue Churn to decrease by the same amount, because while a paused customer is still a customer, you are temporarily missing out on that monthly revenue. Since paused customers reactivate faster and with greater frequency than canceled users, Revenue Churn should roughly mirror the decrease in Customer Churn rate.
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Congratulations, Nick.
Besides the reasons you mentioned helped you get there. Have your ads on Facebook & Instagram helped too?
I've been shown some of them and noticed you've been running them since February. So have they?
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Thanks!
We've been lucky to have a product that shares well on social media so organic growth has always been strong. We wanted to run more growth experiments in 2020 and kicked off some paid ad campaigns in January (including Facebook). So far the results have been pretty good, but paid acquisition still only accounts for 10% or less of our overall growth. Right now I'm viewing these paid strategies as more of a supplement to growth than something we need to rely on.
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This is by far our most in-depth write up about our story at @wavve. In this written interview w/ Starter Story, we go through the failed startup that preceded Wavve and really dig into the early days of launching and getting those first 10-100 customers.
Re-living the early days turned out to be a pretty therapeutic experience. Three years feels like forever ago. We dug out some early product screenshots & videos which were fun to revisit as well. Give it a read 👇
(started working on this post when we were at 71k MRR but posting with today's date)
Last January we were doing $28k/mo, and in just 12 months we've more than doubled. Here's what seemed to help:
- Increased prices for our top tier plans
- Added subscription "pause"
- Launched wavve.link, a complimentary product
- Redesigned our editor and web app
- Introduced $60/mo Pro plan
- Continued investing in content marketing
We continue to run Wavve as a lean business and have still never taken external funding. I think this was the first year where we were able to hire help for many of our ongoing support and marketing needs. This has been huge for freeing us up to travel, spend more time with our families, and to focus on big picture business goals.
This was the first year where we set clear monthly revenue goals, and this made a big difference for me. During the multi-year grind of building a SaaS company, it's easy to grow numb to the slow, gradual revenue climb. Clear goals make it easier to track progress, align the team, and remind you to celebrate each victory.
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how Sway?
I want to learn how Wavve is a huge success, while a similar product on IH not so much (https://www.turn.audio/)?How same products have different results?
Thanks
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Thanks for the kind words but important to note that "success" from one product to another doesn't always match up.
I think the products and markets are very different. Turn seems to focus on musicians and music promotion while Wavve is geared toward podcasters. They are very different markets and user groups (we know because have some musicians that use Wavve).
Wavve is more focused on allowing users to create custom templated videos while Turn creates a very specific type of video.
tl:dr I don't think these products are very comparable due to their approaches.
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We doubled our revenue in 6 months!
The new video infrastructure was a big part of this. Customer videos are now ready in as little as 30 seconds. Previously, it could take 3-5 minutes. We also started getting more paid user conversions by offering free users more time to try our service.
Our old duct-taped backend got us to over 1,000 customers before we hit scaling issues: servers started running out of memory, the job queue would get backed up, and customers were waiting longer and longer for videos to finish. This was something we put off for as long as we could.
We spent two months rewriting our entire backend and now we're really starting to see the benefits. Our AWS bill decreased by more than 50%, video wait times dropped by several minutes, and the system is much more robust with increased logging visibility and retry logic.
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Good work
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Really cool. Do you have more info on how you dropped your aws bill by 50%?
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Sure, happy to give some context. It's mostly the difference between relying on EC2 for video generation vs. AWS Lambda.
Prior to the update, we were paying for a bunch of C4.xlarge instances handling the video processing load. When wait times started getting out of hand, I'd just spin up a new one and throw it behind our video worker. I'd experimented with quite a few instance types, and the C4s were the best bang for our buck. Eventually we were getting diminishing returns from each additional instance, and we'd had our eye on Lambda for a while.
It was a massive effort to get all of our video infrastructure rewritten, but after a few months we got it done. Looking back, I don't think we'd be where we are now if we hadn't made the switch.
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hey , can you please elaborate , how did you used lambda to reduce the price?
what are using lambda for ?
the video processing ?
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Wow didn't know AWS Lambda made such a huge difference. Did you also investigate Google Cloud Services?
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Not really. We had a bunch of other services on AWS, so it just seemed easier to stay put when building out the new architecture. I think prices are roughly the same between AWS, Azure, and GC's serverless functions, so it's probably more a choice of where your team is more comfortable.
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Thanks. It's just me for now. :)
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Almost a year later - We hit 10k MRR. Slow & steady wins the bootstrapped race
It took 6 months to hit 1k MRR. 6 MONTHS!! There were times that I wanted to quit but each month showed a little bit of growth.
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Hey Baird, congrats on this result. Would love to get you on my podcast to talk about this acquisition and also your new company.
Yaro
Would love to. Let's do it. My email is listed in my IH profile.
Congrats Baird, super happy for you guys!
whoa! congrats!
I remember hearing your podcast here in IH.
Inspiring story, hard work, pivoting, smart moves... 💪
Well deserved! 👌
Congrats! Great post, too - wish more founders provided such an approachable perspective on M&A transactions along with practical tips.
Thanks! Calm Capital has been awesome and were totally open to us writing about our experience. It's been nice to share the details we wish we'd known more about when we were first considering a sale way back in 2019.