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From 4 failures to $1 million+ bootstrapped SaaS startup: The story of how Damon Chen turned failure into fuel for business success – TechStartups

Republished By Plato
Republished By Plato

Date:

Views: 123

In 2021, Damon Chen quit his stable eight-year job at Cisco to chase his passion for entrepreneurship, hoping to create a better life for himself. He ventured into the world of SaaS by starting four projects, all of which unfortunately ended in failure. Despite these setbacks, Chen persisted, refusing to give up. His determination eventually led to the success of his fifth business, generating over $1 million in revenue.

As we’ve discussed on numerous occasions, nine out of ten startups end up in failure, and Damon’s journey was no exception. However, what set him apart was his resilience in the face of failure and adversity. He experienced multiple unsuccessful product launches before striking gold with Testimonial.to, a platform for gathering video testimonials.

Launched in December 2020, Testimonial rapidly grew, achieving over $1 million in annual recurring revenue (ARR). Alongside Testimonial.to, Damon also developed other successful products like embed.so and channel.so. He further expanded his portfolio by acquiring Supportman from fellow Indie Hacker Noah Bragg.

We first came across the story on X (formerly Twitter) after Tibo, the founder of tweethunter.io & taplio.com, shared an inspiring thread detailing Damon’s journey from four failed startups to building a thriving bootstrapped business that’s now surpassed $1 million in ARR.

According to Tibo, when Chen quit his job, he made a promise to his wife — “I’ll return to my job within a year if I cannot make $100K annually” He reached the goal, and in the next 3 years, he beat that goal by 10X. But he didn’t take long before he crossed the $1M+ ARR milestone (from two SaaS). Now his next goal is to get each of these projects to $1M+ ARR each.

Damon’s primary project, Testimonial.to, hit $200K in annual recurring revenue (ARR) within its first year of launch. Presently, it has expanded to approximately $840K in ARR. Notably, his tool is used by Fortune 500 companies and acclaimed creators such as Justin Welsh.

How Damon Chen Went From Stable 9-5 Job to Reaching $1M ARR

But how did Damon transition from his secure 9-5 job to achieving over $1 million with his SaaS venture? His journey in indie hacking began amid the pandemic. With offices shuttered, he felt the absence of daily social interactions and experienced loneliness. In response, he developed LonelyDev, a project later renamed IndieLog, aiming to address this isolation.

What began as a small project evolved into a community of numerous bootstrappers, gathering to share their indie hacking experiences. However, despite this engagement, it generated zero revenue.

Damon experimented with multiple projects to test the waters, and it was the fifth attempt that gained traction. Testimonial swiftly started generating revenue within a week, marking a milestone and an elated moment—his first income from a SaaS he built himself.

The necessity for Testimonial.to was evident. People were spending time collecting testimonials through form-based websites. This tool automated the process of gathering video and text-based testimonials and displaying them on websites.

In the final week of 2020, Damon launched Testimonial on Product Hunt, experiencing an uptick in organic traffic and acquiring early users. He responded to this momentum by initiating an affiliate program and promoting it through onboarding emails.

Damon attracted more early users by employing a framework that included shipping the Minimum Viable Product (MVP) swiftly, building in public while listening to user feedback, adding features that catered to the target audience, and iterating this cycle for six months—an approach embodying product-led growth, an idea worth considering for building and expanding your own bootstrapped startup project.

Here’s the framework:

  1. Ship the MVP fast
  2. Build in public – listening to users
  3. Add features that serve your target audience
  4. Repeat this cycle for 6 months.

Three months after launching the Testimonial.to, Damon took the leap, quitting his job to dedicate himself entirely to the venture. Since then, he’s excelled in managing sales, marketing, and customer support single-handedly.

One of the standout features Damon introduced with Testimonial.io was “The Wall of Love,” a platform showcasing customer testimonials on a single page. This feature can be effortlessly embedded on a site with a few clicks, requiring no coding expertise and ensuring a user-friendly experience for customers.

Once he acquired early users, he took a brilliant approach by publicly developing his business on Twitter. Initially, he began with only 1000 followers, but now, his following has skyrocketed to over 50K, transforming the platform into a significant marketing channel for him.

Although many customers discovered his tool through word of mouth, the efficacy of such referrals relies on customers accurately knowing the business name. A branding mishap nearly cost him hundreds of customers. In March 2022, Joe posted a thread highlighting Testimonial.to. The thread amassed over 1600 retweets and 7800 likes, becoming a viral sensation. Unfortunately, despite the thread’s popularity, Damon received zero traffic due to Joe’s misspelling of the domain (which wasn’t Joe’s fault).

On social media, Damon mistakenly wrote Testimonial.io instead of Testimonial.to in his tweets, using the incorrect domain. This blunder was significant, and it wasn’t the first time someone had misspelled the website. Recognizing the branding error’s impact, he took decisive action by purchasing the .io domain for $35,000. Additionally, he acquired several other domains to ensure brand integrity.

Moving ahead to the present day, Testimonial.to continues its rapid growth, but the inner indie hacker within Damon longs for more. Recently, he embarked on developing his second SaaS, which came in the form of an acquisition. In May 2023, he purchased LooseLeaf for $20,000 and introduced new features such as an AI Quiz Generator and document search capabilities.

Damon remains entirely bootstrapped. However, acknowledging the business’s growth, he innovatively sought ways to raise future funds. Not long ago, he crafted an investor page using his own tool. Impressively, given his track record, 135 investors expressed interest by signing up! Unfortunately, legal issues led to the necessity of refunding the money.

Nevertheless, this move garnered significant attention, as the associated tweet reached almost a million people, effectively serving as a clever marketing strategy for his tool.

We hope this story will inspire other solo founders to take that leap and embark on their own entrepreneurial journey. You can read the rest of Damon’s story on X. We wish Damon continued success in all his endeavors.

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