ChatGPT shopping is here ( powered by Shopify )

In case you’ve been living under a rock, it must be obvious to you that ChatGPT is steadily becoming the new “front page” of the internet:

People use ChatGPT more and more every day. They share their problems, research products, and trust ChatGPT’s opinion more than they trust themselves.

If you’re running an e-commerce store, there is no other place more important than ChatGPT for you to be at!

Make no mistake. Your website traffic will drop over time. And it will keep dropping. Online stores will always have their place, just as physical stores are still around, but e-commerce has passed its prime.

Ultimately, why would you go to research products yourself when ChatGPT can do it for you?

Here comes ChatGPT shopping

Recently, ChatGPT started including product links inside its interface by partnering with Shopify. When you look for a product on ChatGPT, it’s going to take your personal context ( where you live, for example ) and start recommending things to buy.

If you’re using Shopify, your products should already be inside ChatGPT, and you should be seeing new sales flowing. 💸

It won’t be long until you can buy directly from the ChatGPT UI, without even visiting the website.

ChatGPT is a great channel, but what’s the hidden cost?

The ChatGPT commerce launch reminds me of the 2010s battle for e-commerce.

Although nowadays it seems clear that there’s enough space for Amazon (marketplace) and Shopify (independent e-com) to co-exist, back in my day, there were concerns that Amazon was going to eat all of e-commerce.

I remember this battle well, because my previous company (Checkout X) fought hard on the independent front, providing seamless checkouts at a time when Amazon was still holding the one-click checkout patent.

In the end, Shopify & co managed to preserve independent e-commerce and now brands have the option to sell in marketplaces, but also sell on their own channel. Great brands usually do both!

The time has come to fight for independent commerce once again ⚔️

Why is independent commerce so important?

I’m bringing up Amazon because it has a great proposition - they have the customers, they have the traffic, you just make a good product and you sell, right?

Yes and no.

Platforms like Amazon ( or ChatGPT ) optimize for the following:

1. Customer experience

2. Their profit

3. Merchant ( your ) success

And as Uncle Bezos famously said:

If the customer is getting an amazing customer experience (price/quality ratio ) and if a middleman is making a profit, somebody’s getting screwed. Guess who?

Selling on Amazon can work great, but also

• Puts you in a direct price war with everyone else

• Holds the customer relationships hostage (and makes you dependent on their ads)

• Puts you at an existential risk if Amazon decides to sell a competitive product or something else

As entrepreneurs, we have to be masters of our own fate because business is war, and there’s always someone who wants to take our place.

I’m not saying to avoid ChatGPT or Amazon

That’d be foolish.

I’m saying to use ChatGPT as a way to acquire customers, but don’t rely on it to bring the same customer twice, for free.

Sooner or later, they will come for your margins.

How to become independent in the agentic commerce era?

If commerce is becoming agentic, is there such a thing as owning your sales channel? There is! All you need to do is build and place your own brand agent.

Building your agent

Building a brand agent is a bit different than building a general agent (like ChatGPT). General agents try to be useful to the customer. Brand agents have to be useful both to the customer and to you, the brand.

Being an effective store clerk requires a fine balance between being honest and helpful to customers, but also taking care of the business and profits.

For example, the best product for the customer’s needs might be Product X, but Product Y might be 95% there, with much higher margins for you. A good store clerk will sell the product that works best for the brand and for the customer.

How to build an agent

You could develop it from scratch

• Many agencies are trying to sell the idea that you need to build your custom AI system. They sell it as a “better integrated” and “cheaper” system. They’re neither. It’s very easy to get an agent to work 90% of the time. It’s extremely hard to get it to work 99.9%. And when the agent is talking to your customers, you can’t tolerate any bad replies. It takes a lot of time, effort, and bad replies to get to a point where the agent is solid.

• AI is moving so fast that staying up to date will result in never-ending development costs.

• If you didn’t hire a dev team to develop your e-shop site from scratch, then you probably don’t want someone to build your agent for you.

My recommendation is to use a SaaS provider. Here’s what to look for:

Easy “training” / “knowledge-base” setup

• Most agent-builders start from a blank slate and require you to import data manually or make a simple connection with your product catalog.

• This is ineffective because the real world is messy. Information is never structured well, it updates constantly, and by the time you launch, your agent might be outdated.

• That’s why Zipchat self-learns by sucking all the information there is about your brand. We take data from the API, we constantly check your website, etc. That way, Zipchat keeps itself up to date without any effort from the brand.

Minimal hallucinations

• In agentic commerce, saying the wrong thing costs money. Imagine saying a product is out of stock when it’s actually available… 🤦‍♂️

• At Zipchat, we employ a variety of techniques in the back-end, but our main weapon against hallucinations is the ability for the agent to work with the customer support team of the brand, exchanging information and escalating the conversation when needed.

Transparent costs

• Be wary of companies that charge a “percentage of sales”, “per visitor”, or other magic. All companies need to make money, and if it’s not clear how they’re making it, you’re probably being overcharged.

• At Zipchat, we charge “per reply”, and our pricing is super simple. 50% goes for our infrastructure cost. 50% goes for R&D and marketing.

Placing your agent

Besides having an agent that knows what to say, you need your customers to talk to it. Here’s where you could place yours:

Your website

The most obvious place is your website.

This works and is super effective, as high-intent visitors can share their concerns and be pointed to the right product easily.

Example: Our average chat-to-sale ratio is ~15%, which is a 10x improvement on the average conversion rate of an e-commerce store.

However, as we discussed earlier, your website traffic will decrease over time as ChatGPT is already on the home screen of your customers’ phones.

The inbox

In order to get customers to use your agent, you need to give them easy access to it.

A very small number of people will download a mobile app made by your brand, but all your customers already use instant messaging apps ( WhatsApp, Instagram, etc ) daily.

Our solution to the placement problem is exactly this: The INBOX ✨

It’s crazy what you can achieve with an AI agent and a platform like WhatsApp.

Instead of relying on customers visiting your website, why not engage with them while they’re talking to their friends?

And the best part, by providing a useful and respectful agent, you don’t have to be annoying. Some of the use cases we’re currently exploring are

• Follow-ups: Check on your customers with unique conversations based on their specific context.

• Gamification: Engage customers with daily chat-based games and give out awesome prizes.

• In-chat shopping: Let customers order products directly from WhatsApp, without going to your website.

Conclusion

Agentic commerce is here. Customers will follow the path of least resistance, and going on a website to buy products has much higher friction than asking an agent to buy stuff for you.

ChatGPT is going to become one of the dominant channels to acquire new customers very soon. But they will “own” those customers.

In order to stay an independent commerce business, you need to provide an agentic experience that matches ChatGPT.

At Zipchat, this is our mission. To empower merchants with the tools to stay independent through the new era! ✌️

I was honored to speak in front of 150 Shopify Partners at Mat De Sousa’s Wide Event in Paris 🇫🇷 last month. Meeting all those people from the community I interact with online was such a pleasure. Can’t wait to see the rest of the community in Toronto 🇨🇦 @ editions.dev next week. 🤘

When we were deciding the topic of my talk, I thought to myself - we are living in an amazing time to be a SaaS/Shopify App maker. With platforms like Acquire.com, Flippa & others, it’s now possible to find someone to buy your code/customer base at any point of the entrepreneurship journey.

Before you needed to work hard, become really successful, and hope someone big buys you. Now you can just decide it’s time to move on, list your app, and find buyers.

SaaS & Shopify apps can now be considered “assets” and be counted towards your net worth, similar to how you would count your house or stocks. 

I’ve been on both ends of such a transaction, I sold Vanga AI on Acquire.com, and recently I bought Zipchat off-market, so I thought it’d be useful to share a couple of tips that you can implement today, to get the best deal tomorrow, once you decide it’s time to move on.

Types of buyers

Before we discuss maximizing value, we need to define who we’re selling to: The buyer.

Buyers come in many shapes and forms, but we can separate them into 3 main categories:

The talent-oriented buyer

The talent-oriented buyer is an entity that doesn’t really care about your business but rather cares about what your team can do for them. 

The strategic buyer

The strategic buyers are the Facebooks, the Googles, and the Shopifys of the world. Those are the buyers that you see in the news. They look for acquisitions that add “strategic” value to their overall business. For example, by acquiring Instagram, Facebook became much more valuable in the process, resulting in a much more valuable Facebook+Insta combo than what Facebook and Instagram would be worth individually. 

Basically, strategic buyers are looking for a “1 + 1 = 3” equation, and because of that, they generally make acquisitions at higher multiples.

This is the best type of buyer that you can get, however, not every app has strategic value, therefore, this option is limited to a selected few.

The financial buyer

Financial buyers look to acquire apps with the hopes of collecting cash flow and/or growing the app and reselling it. They generally don’t have another agenda, they judge a business as an individual unit and are looking for a certain investment return. The good thing about financial buyers is that they have a wide pool of potential acquisitions, meaning they are way less picky. The bad is that they usually pay lower multiples than strategic buyers. 

Because, you can actually seek out financial buyers proactively, exit on your own schedule, and sell any kind of app to them, I’ll be mainly talking about financial buyers as a target, although most things are also applicable to strategic buyers too.

Financial buyers are risk-averse 

Any type of investing comes down to two main factors: Risk vs Return, and let me tell you - financial buyers ain’t VCs!

If you are a ( successful ) venture capitalist, you invest in 100 companies, 70% fail, 20% break even, 8% bring some returns, 2% bring 100x ROI and you make your money back, and then some!

Financial buyers, on the other hand, have a limit on how much they can earn from an acquisition. If they buy an app, maybe it grows 10% YoY, maybe 100%, but there’s no chance in hell that they’ll make a 100x return on investment. This also means that if any of their acquisitions fail, making up for it from other purchases will be extremely difficult.

Therefore, the most important thing for a financial buyer is to not lose their investment. 

When you are selling your app, you have context, you know how hard you worked, you know how good your product is and you know that you have a strong business, however, the buyer doesn’t know that. While you see an app that will continue growing, the buyer sees all kinds of potential threats that can kill the app and throw their money down the drain.

So, in order to sell to a financial buyer for a good price - you need to appear as a safe investment.

Tip 1: Have the right type of revenue

Financial buyers care about finances. With this kind of buyer, your acquisition price will always be calculated as some kind of multiple on your revenue. However, not all revenue is made equal.

There are three types of revenue: Recurring revenue, Usage-based revenue and One-off revenue, and your business will be valued differently based on the kind of revenue you have.

Buyers ❤️ recurring revenue. MRR is the holy grail of SaaS and buyers see it as an “almost certain” cashflow that will hit their bank account every month. On the other hand, one-off revenue is not money they’ll be getting on a monthly basis, it’s a historical record of what you earned in the past, which may repeat or may not repeat, nobody knows 🤷‍♂️

And there’s “usage-based” revenue which is somewhere in the middle. It’s kind of recurring as customers pay for usage every month and it’s kind of seasonal as there is no guarantee what customers will pay the next month. Both Checkout X and Vanga AI relied on a usage-based revenue model and trust me - it always brought arguments to the table. As a seller, you’ll always have to argue that usage-based is “just marketing” and it’s really recurring, while the buyer will always argue it’s actually seasonal and not recurring.

If you can take one advice from me, it would be to avoid usage-based revenue and push for recurring plans as much as possible, in order to get the best valuation for acquisitions, investments, loans, etc. At Zipchat, we charge per number of replies & number of pages, but those are packaged into different plans. Only if the merchant surpasses their plan limit and doesn’t upgrade, we apply a small amount of usage charges to make up for the difference:

Tip 2: Understand and document your numbers

I often give consultations to Shopify App / SaaS founders and truth be told, most don’t know their business metrics. The same goes for most apps listed on platforms like Acquire.com or Flippa -> the majority don’t provide any business intelligence besides a Stripe / Shopify Partners screenshot. Guess what this makes them look in the eyes of a potential buyer - risky and unprofessional.

Make Profit and Loss statements on a monthly basis

A P&L statement is a simple sheet that tells you, how much you made, how much you spent, what you spent it on, and if you made a profit or not. A simple document of great importance. 

Whenever you list your app for sale and show your numbers, you’ll be sharing a snapshot of your business. A single dot in time. But buyers don’t buy dots, they buy lines, therefore they need more context and data points, in order to see what the direction of the business is like.

They want to know what happened, did the business grow, did it lose money while growing, and what happened in order for the app to arrive here?

In theory, you can make those retrospectively, but it’s not always that simple, especially if you have multiple apps within the same company.

Plus, it helps to know what your bottom line is on a monthly basis.

Understand your churn

CHURN! Everybody talks about it, but almost nobody understands it.

There are so many ways to measure churn that I feel it’s unnecessarily complex. Especially in Shopify where you have double churn ( Shopify churn + your churn ).

Ignore all that, and ask yourself this: If I stop accepting customers today, how much time will pass until I don’t have any revenue? ( It’s an oversimplification )

Every buyer will be worried about churn, so you need to show them that:

• You understand your churn

• The churn is manageable

Understand your customer acquisition cost

How much does it cost to get someone to become a customer of your app? Even if you grow “organically”, this value is never zero. Maybe you make SEO / ASO, maybe you create content, maybe you employ salespeople, maybe you make onboardings -> no customer comes for free.

Buyers want to know what this cost is so they can understand what’s the ROI from each customer.

Understand your customer's lifetime value 

The other component for the ROI -> How much money do you earn per customer?

No customer stays forever, so there is a finite revenue that each customer will bring.

Those are some of the metrics that a buyer will want to investigate to assess your business. In general, you want to have good business intelligence so you don’t leave any room for speculation from the buyer’s perspective. Again, buyers are risk-averse, so anything that isn’t well documented will be perceived as risky and will eat off your valuation.

For Shopify devs, Mantle gives a good BI starting pack that you can implement easily.

Tip 3: Build a repeatable growth machine

I talk to many Shopify app founders, and when asking what they do for marketing, most of them answer “Nothing”. And they are proud of themselves…

There is nothing to be proud of. Buyers need to be masters of their own faith and need to be in control of their acquisition.

If you really “do nothing” and customers find you via searching Google / the app store, this poses an existential risk for the app, as the buyer won’t have control over the acquisition channel.

To be clear, I’m not saying Google Search or the Shopify App stores are bad acquisition channels.

They are probably the best acquisition channels in terms of ROI if you can get them to work. I’m saying that you need to understand what makes you rank well, and what you need to do to stay there. And ranking ain’t easy, so for sure you are doing something right - getting backlinks, getting reviews, optimizing content, etc. Document a repeatable process!

At Zipchat we’re not trying to get customers at any cost. We want to build a repeatable growth machine that can be used to attract new customers with predictable results.

Tip 4: Be replaceable

Even if you decide to stay on after the acquisition, a buyer needs to be able to run the business without you, so they need to know that they can replace you.

Document everything

Nobody likes folklore - knowledge that is transferred from person to person. But, if you show robust documentation of your processes and app, you will make a great impression on the buyer.

Separate roles

Even if you wear many hats, it’s still a good idea to define processes with “different” roles. This is because it’s easier to find a specialist to do a particular job instead of finding a polymath who can do many things at once. You might be doing everything from design, to code, to support, but a buyer would probably want to hire different people for each part of the process.

Delegate specific “know-how”

If your business has some kind of specific applied knowledge that most people don’t have, it’s a good idea to either have someone on the team who can do it, or build a network of partners to aid with the know-how. From my experience, those are usually some kind of services or white-glove onboardings that the founder provides on top of their product. 

Some examples that come to mind are: Setting up Google Shopping Feeds, Manually optimizing a site’s speed, etc.

To be clear, “Coding” or “Sales” are not specific know-how. 

Don’t be overdependent on founder-led growth

Founder-led growth is a great strategy to attract customers, however, if that’s the main growth channel, what happens when you leave?
A business needs to keep the same rate of attracting new customers to stay at the same place. If new customers stop coming, churn starts eating the business.

When it comes to selling the business, founder-led growth can potentially be a problem and you need to have a really good transition strategy to get away with it.

Conclusion

I hope my tips prove useful, that you implement at least some of them, and that they help you attract more potential buyers, at better conditions. Let me know if they do, and perhaps you can send me a pack of beer 🍻 once the time for exit comes. 

Just remember, those tips are icing on the cake - the most important thing is building a great business with strong MRR and healthy margins. 🤘

Remember how I acquired Zipchat AI back in January? It’s already been 2 months and I can say - I’m up to speed on the day-to-day life of an entrepreneur.

The constant bouncing between “OMG, this is going to be huge” and mini-WFIOs ( we’re fucked it’s over ) is something that I hadn’t felt in a while.

Jokes aside, it’s challenging, but I LOVE IT ❤️. I go to bed on Sundays with a spark, excited about the next work week!

Also, things seem to be going more “well”, than “unwell” which is the best you can hope for when running a startup.

What I found at Zipchat?

The good - a capable team

I’m super happy with the co-founders I “inherited” in the face of Luca and Carlo. They are hard workers, bring the fire every day 🔥, and seem to know what they are doing ( as much as you can know when trying to grow a startup ).

We also have a couple of contractors working with us, more notably Hunzala - my dev sidekick who also has skills and can get things done.

The bad

Even with a capable team, Zipchat is a 10-month startup that’s already servicing 200+ business customers. Growth like that happens only one way: by cutting corners.

Starting a company is like jumping off a cliff and assembling a plane on the way down. - Reid Hoffman

That’s OK! I believe the team executed flawlessly - they got things off the ground by building for tomorrow. It’s just that we’re now moving to a more mature stage and we need to grow as a company and as a product.

Half-baked product

I knew the product wasn’t perfect and indeed, we need to improve our product by a long shot. We’re missing functionalities, our chat responses are sometimes bad, and we have many bugs.

What took me by surprise was the complexity of building an AI chatbot

• I had the assumption that Zipchat is just a simple “ChatGPT” wrapper, so it’s going to behave like ChatGPT behaves, just for a specific store

• Turns out, that building an AI chat solution like Zipchat, which is supposed to work out of the box for any store, is much harder than I originally thought.

• On one side, that gives me hope that it’s not as easy to replicate, but we’re still not perfect at our core task - being an AI chat.

No visibility

• We had no idea what our Monthly Recurring Revenue ( MRR ) is

• We had no idea where our customers were coming from

No process

• No common knowledgebase - random docs everywhere

• Communication happened via WhatsApp, Slack, email, etc. Everyone is different.

• No test automation, monkey-patching, and bad dev patterns.

The ugly - Performance issues

The combination of building for tomorrow and the fast growth of Zipchat manifested in the worst possible way - performance issues and downtimes.

Literally on the first week of my onboarding, the database started crashing and I had to come in and figure out how to fix things ASAP.

We still face performance issues today and we spend more on servers than we should because of it. Yet, we have to pick our battles. And me being the “most senior” dev in the company doesn’t help, as I’m not “senior” in any sense of the word.

What have we achieved in the past 2 months?

Onboarding myself

• I now know the product and how to get around it effectively

• I now know the majority of the codebase

• We’re getting used to working together as a team

Structure

• We now use Slack ( big shocker I know 😄 ) with some channel structure and automatic notifications

• We now use Notion as a single source of truth for anything ( almost ) that isn’t chat

• We now use dev automation like automatic testing and AI-generated code reviews

• We’re trying to introduce some kind of tempo by making plans, setting quarterly / weekly objectives, and reporting on our progress

Visibility

• We now know what our MRR is 😱 ( big shoutout to Mantle )

• We now have some visibility on where our customers are coming from 😱

• We now collect feedback on our chat replies

None of this is “innovative”, but rather mandatory pieces of information that we need to make adequate product or growth decisions.

Performance & Stability

We’ve shipped multiple performance updates on our webhooks, crawling, and other sections of our app to decrease the load on our servers and DB.

Also a ton of bugfixes 🐛

Multiple product upgrades

Better crawling

• We’ve drastically improved our web crawling for non-Shopify stores, by introducing a variety of upgrades for efficiency, sitemap parsing, and anti-crawling blockers

Other features

• Suggestion messages

• Spam filters

• Better customer support tools

Growth

• We’ve grown our MRR by 25%

• We’ve reached $20k MRR for the first time in Zipchat history 🎉

What are the next steps?

Growth

When it comes to growth, we’re doing a little bit of everything: app store optimization, marketing, outbound sales, going to conferences, and it seems to be working somewhat.

We’ve managed to hit $20k MRR with this approach, however, the more you grow, the higher churn you will have so you need to make up the lost customers and add new ones, meaning you need to exponentially scale your growth channels.

We currently don’t have a good growth flywheel to scale:

• Our outbound sales seem to be working, but numbers are not that good to hire more people and scale it.

• Our marketing efforts produce results but there’s no single thing to push the pedal on.

• The app store brings installs, but competition increases and we’re already ranking well.

We need to start transitioning from things “that don’t scale” to things that “scale” to hit our EoY goal of $60k MRR.

Product

Core service

• Make our replies better

• Make our interface easier to use

• Repeat 🔁

Marketing automation

Most companies look at AI chats as a way to decrease customer support costs, but at Zipchat we see things differently. When a customer comes browsing to a website and has questions about a brand, they’re no longer a random analytics number - they are a real customer, with real needs.

If they decide to share their contacts, brands can access a whole universe of possibilities to market to those customers that were not possible before.

We’re already doing some experiments in that regard, and if they prove successful, Zipchat can become much more valuable than it is right now.

Customer insights

Imagine if you could talk to every single one of your customers? How much more would you know about their needs, how to market to them, where your product’s shortcomings are, etc.

Zipchat is already talking to a big portion of your customers, so why not analyze those conversations and see what it comes up with? That’s another experiment we’ll be working on.

Lessons learned for next acquisitions

Zipchat’s acquisition already had me reconsider some of my assumptions for the Boring Apps masterplan. Here are the changes that I’ve made:

Target companies that swim in Blue Oceans

Even though there are tons of similar solutions to Zipchat, less than 1/5 of our potential customers have tried an alternative. This makes me super optimistic because we just need to prove AI chats are valuable, instead of trying to prove we’re the best, most cost-efficient solution on the market.

Comparing that to my experience with Vanga AI ( where every potential customer had already tried 10+ competitors ), I can say with confidence - blue oceans are much easier to grow in.

A good hack to know if a company is in a blue ocean is to try to answer the “Why now” question. Read more on blue oceans and why now in my article:

Focus on growth potential, not on valuation

There’s a quote by Warren Buffet:

It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price. - Warren Buffet

I originally started “Boring Apps” with the idea of focusing on “fair” companies at wonderful prices, but looking at the ROI numbers, I see Buffet’s point.

Imagine the following scenarios

• Company A

  • $100k ARR

  • $300k purchase price ( 3x ARR )

  • Can grow 15% YoY

• Company B

  • $75k ARR

  • $300k purchase price ( 4x ARR )

  • Can grow 50% YoY

If the growth potential is fulfilled, and you hold the company for 3 years, then sell at the same multiples, you’ll end up with:

• Company A - $152k ARR - $456k sell price - 52% ROI

• Company B - $253k ARR

  • Sell at 3x ARR - $759k - 250% ROI

  • Sell at 4x ARR - $1M - 333% ROI

Of course, by remaining in my weight class. There are different investment strategies out there. For example, VCs and angel investors take this logic to an extreme, with their investments aiming to bring 100x+ ROI.

Don’t use MRR as a valuation multiple

MRR is a tricky metric, no matter how well you measure it - it’s never entirely accurate.

One of the hardest things in the Zipchat deal was to estimate the MRR correctly ( as mentioned above, they didn’t have good tools to do so ), so we ended up arguing and the MMR that we used as a multiple was a bit higher than reality ( like 15% )

I had another deal that fell through in December where we ran into the same problem.

I’m super happy with the deal, we’ve already made up that difference and above, but for the next deals, I would use historical revenue as a basis.

• For example: last month’s revenue x 12

Conclusion

Things are going well for Zipchat, we’re fixing issues and growing at a good rate. Hopefully, things will continue to go our way until the next update 🤞

Last month I published the Boring Apps Masterplan and I’m happy to announce that the first Boring Apps acquisition just happened 🎉 - I’ve acquired a majority stake in Zipchat AI and I’m joining the Zipchat team as its new CEO / Product lead. 

I’m super excited to join Luca and Carlo on our path to taking conversational commerce to the next level.

So, let me tell you about Zipchat, why I’m excited about it, and how the deal happened so quickly! 🚀

What is Zipchat AI?

Zipchat AI is an AI-powered sales bot that knows your brand by heart and acts as a 24/7 virtual sales clerk. 

Online store design and product presentation have gone a long way, but they can never be perfect. People will always have questions regarding finding the right product, how the product is made, how it’s shipped, what your policies are, and so on.

Some people will just leave your store. Others will ask a question, wait a couple of minutes, and then leave. That’s where Zipchat comes in. Zipchat is online 24/7, knows all there is to know about your store ( better than your support team ), answers instantly, and nudges people to ask questions!!!

And it works! Zipchat has proven itself to bring significant conversion rate increases to customers. The level of product understanding that Zipchat has is so sophisticated that it can even act as a pharmacist in online pharmacies.

Zipchat is currently used by hundreds of brands worldwide on multiple e-commerce platforms like Shopify, WooCommerce, Magento, and even custom stores.

What makes me excited about the company?

Zipchat fits perfectly the app criteria I outlined in my “master plan”:

• It’s a simple, single-purpose e-commerce app

• The app provides clear value to merchants and is easy to explain

• It’s growing like crazy, with a double-digit MoM MRR increase and a strong organic pull

• I’m buying the shares at an amazing price compared to similar companies

• The founder I’m buying out has a similar profile to mine, so we should be able to transition seamlessly

On top of that, there are some unicorn factors that make me extra excited:

• Zipchat is by far the best AI sales-bot app in the Shopify/E-com Tools space and I believe we have a shot at becoming the market leader 

• The majority of the team stays on, most notably Luca and Carlo, the current CMO & CRO, who are responsible for the amazing growth the company has achieved so far.

How did I get so “lucky” with this deal?

Besides being the luckiest person in the world in general, there are three reasons why I got to close this deal:

Long-term relationships

A wise man once said: “Play long-term games with long-term people”.

I have known Michael ( the original Zipchat founder ) for almost 10 years now. Way before I was doing Shopify apps and he was achieving one business success after another we were colleagues in a small French startup - Kactus ( which is also crushing it btw ). 

We shared curiosity for tech, a burning desire to build successful businesses, tight wallets, and a taste for €2 frozen Picard lunch plates. We bonded. Mike discovered dropshipping, started crushing it, and was kind enough to show me the ways. We both left our job.

He proceeded to crush it with e-commerce, I built Checkout X and we moved on. We kept in touch once in a while. Until last month, when Mike saw my post about buying apps and we kicked it off.

See, Mike is the co-founder of another AI company, and needed someone to take care of Zipchat and its customers. He believed that I had the competency to do it. Hopefully, I won’t disappoint him.

What are the odds, right? 

Actually, quite big. Imagine all the people you’ve interacted with in the past 10 years. All the colleagues, partners, people you met at a networking event, etc. Sooner or later you will cross paths again. If you have treated them well and have shown competency, they will reach out with opportunities.

Play long-term games with long-term people. 

Always pay your bills. 

Don’t fuck people over.

It’s going to pay off one day.

Flexibility

Another reason the deal worked out was that we managed to find a working solution for everyone on the team. We were facing a situation where:

• We had an original founder with know-how, who cared about the product but didn’t have the time needed to keep improving it.

• Two other co-founders who had stepped up and wanted to keep going with the app.

• And me, building an app portfolio with certain financial goals/limitations

In the end, we ended up with a solution where everyone is happy, Mike stays as an advisor, Luca and Carlo get to keep going even stronger, and I have good chances of making the return I’m looking for.

None of this would’ve happened if I had a one-size-fits-all model. I’m hoping that my small size and ability to be flexible will be an advantage in other deals going forward.

Speed

Last but not least, was speed. 

Time is of the essence, Zipchat needs to continue growing and my ability to iterate and actually close the deal was a major factor.

It took us less than 30 days to come up with different acquisition scenarios, find the right one, negotiate with all co-founders, perform due diligence, draft agreements, and sign them. 14 of those days were the holidays.

Next steps

I’m already getting onboarded and we’re drawing up plans to take Zipchat to the next level.

I’m optimistic about the future, but you never know if this is going to be a major win or a major loss.

Either way, subscribe to my newsletter and I’ll keep you updated on how it goes. 🤘

Boring Apps is a reverse-venture studio that buys e-commerce tools with the aim of improving on them, growing them, and potentially selling them in the future.

Mission

• Provide indie devs with an easy way to exit their ventures and move on.

• Provide merchants with simple, boring apps that work well.

Financials

• Invest up to €1M in personal funds

• In 4-5 apps / avg. cash purchase price ~200k

• No deadline, look for great opportunities

• Target 50% portfolio growth YoY

• Use the cashflow to secure financing for further acquisitions

• Once the model is proven:

  • Raise capital from people in the indie-dev community at a fair valuation

  • Use the community investors to get advice & ambassadorship

Strategy

We’re not playing a financial game, we’re playing a human game.

Types of assets

• Buy “boring”, single-purpose Shopify apps, that are in distress because the founder wants to move on.

• Assets should have strong organic growth and have low-hanging improvements.

• Assets should have good margins and stable finances.

• Assets should be easy to explain and provide clear value.

• Ideally, assets will bundle well together.

Management

• Build a team & system to acquire, grow, and sell apps

• Share resources across apps.

• Keep the assets lite but try to delegate as much as possible.

Cashflow

1. Use cashflow for seller financing

2. Use cashflow to pay management cost

3. Use cashflow to grow ( with good ROI )

4. Use cashflow to finance new acquisitions

Dealflow

• Build in Public, be transparent, and engage with the community.

• Be flexible, come up with creative options, and offer win-win deals to founders

When to buy

• Always be open to buy

• Make money on acquisitions - Pay 2x-3x ARR for organically growing apps

When to sell

• Always be open to sell

• When someone offers a high multiple of 7X+

• When an app is underperforming and taking unnecessary attention

Values

• Use simple, back-of-the-napkin math

• Play the game of humans, not the game of finances

  • Buy from people who want to move on from an asset

    • Because they have better things to do

    • Because they are tired

2023 has been a hard year for me. I’ve started the year by laying off the full Checkout X & Vanga AI team. I sold off Vanga AI, put Checkout X on life support and told myself - it’s time for a new beginning.

Over the years I thought… I’ve made many mistakes, learned my lessons and the next thing will be different. I won’t fuck myself over from inexperience and I will easily start something new... Boy, I was wrong.

I gave myself a year to “come up” with the “next big thing” and started “looking”. But the more I looked, the more blind I felt. The more I explored, the more lost I was becoming.

The only way I could describe my journey is: Limbo. I knew I was searching for problems, but everything seemed solved. I Identified as an entrepreneur but was building no company. I knew I wanted to move on but didn’t know on what to move. And every single person I was meeting was asking me the same question, over, and over, and oveeer again:

• “So, what are you working on right now?”

“Nothing” I would shrug. Say “I’m unemployed” with a smirk on my face. And behind it… a voice would scream in my head - “You are a failure! You are a joke!”

Although the Limbo was dark and lonely, I met other ex-founders hanging around. They didn’t seem to bear the same pain but I could see that they were struggling too. Turns out, it’s hard to start over. And most entrepreneurs only “make it” once.

As an EoY post, I wanted to share the struggles I had to fight with, in the past year, not to complain, but to explore the dark side of entrepreneurship. And if you are feeling any of those struggles, I want you to know - you are not alone.

We all struggle.

Ego

I’ve always put a ton of effort to stay humble and have always criticized myself for being “too cocky”. I try to minimize my success and effort, because that’s how I was raised. “Don’t brag” my mother would say every time she would buy me a new toy. After all, success speaks for itself and praise should always come from the outside, not from your own mouth.

However, it’s hard to stay humble. It’s hard to be on the cover of Forbes magazine and pretend it’s not a big deal. It’s hard to go on podcast after podcast, answering questions about the “secret to success” and don’t start believing that you are “successful”. It’s hard to accept invites into clubs of “successful entrepreneurs” and don’t feel that you are one of them. Especially when that’s all you wanted your whole life. To be an entrepreneur.. and to be successful.

The problem is - success comes and goes. Companies change hands. Forbes has a new cover to fill for their next issue. And at one point you have to answer the question: “Who am I?” - with the realization that you are neither an “entrepreneur” nor “successful” at this particular moment. The only thing left is the question mark…

So what do you do? The obvious - you start searching for the fastest way to pass as a “successful entrepreneur” to others, like a junky looking for their next fix, instead of asking yourself - is that what I really want?

A big part of my last year was that… Worriying what Vasko Terziev would think of me… Waiting to be excluded from the “successful entrepreneurs” club… Searching for ways to appear “successful” in front of my peers… Pulling out in the last seconds just because it didn’t feel right… The truth is, nobody cares what I do with my life. I have to pick something for myself, find a new mountain worth conquering. Even if I have to sacrifice my ego in the process ( hopefully I will - this MF needs a reality check ).

Doubt

Every time I write a post, talk about entrepreneurship, mingle with founders, etc I feel like an imposter. Maybe because my business was built on another ecosystem, maybe because I don’t have a formal education, maybe something else - pick your poison. The fact remains that I feel that I don’t belong there. And I shouldn’t be talking.

And from time to time, there’s this person that will come up out of nothing and throw something in the lines of:

• “You just got lucky”

• “Checkout X will probably be your biggest success”

• “Things just work out so easily for you”

• “Why did you sell Vanga for such a small amount?”

It hurts to hear those words from your “peers”. Not because it’s new information though. There’s nothing you can tell me that I haven’t already told myself a thousand times. I’m subscribed to a 24/7 livestream of my inner critic that points out all the ways in which I suck. And it makes him happy to hear others confirm his opinion.

I am so freaking afraid of waking up someday and realizing that my best days are behind me. I don’t want to be that guy that’s always talking about “back in the days”. I scroll on Social Media and read about the amazing things that others are doing and can’t help but feel like I’m falling behind. That I’m not as smart, as capable, as hard-working that they are. As you are.

So much of this game is mental. If I can beat the enemy within, the enemy outside can do me no harm, or something like that the proverb says. So I fight. And I keep going.

FOMO

It seems that every day there’s this “Once in a lifetime” opportunity that I just can’t miss.

• “AI is eating the world and everything will be AI - I need to be building AI tools”

• “The ChatGPT plugin store just opened, this is the next big app platform and I need to be one of the first”

• “But everyone is building AI stuff right now, I need to jump early on the upcoming hype”

• “Crypto is back in a bull run, need to buy crypto/build before the next hype cycle”

• “The Apple Vision pro is going to unlock a new AR realm, need to hop on this train”

• “Open banking is going to cut out the card networks, I need to be building an open banking company”

• “The macro for e-com tools is bad, I need to be acquiring Shopify apps RIGHT NOW”

• “I need to be building tools for the future and using my potential to advance humanity”

• “I have a kinda good reputation for raising capital right now, I need to use it and fund a venture while I still can”

• “I have knowledge and connections in the Shopify apps game - I must use it”

• “I can’t keep doing the same thing over and over and I need to move out of my comfort zone”

These are all contradicting ideas that are fighting inside of me and it’s just so NOISY. It feels like there’s so much happening that I can’t possibly keep up. I can’t be everywhere. I can’t go in opposite directions at the same time. I have so many opportunities that I’m paralyzed of not picking “the best” thing.

The sky won’t fall. AI won’t eat everything else. Crypto, ecom, AR will keep existing in similar manner, and I will be OK. I just need to work on something useful and fun. With a little bit of luck - I’ll have good outcomes.

Urgency

Imagine you don’t know where you need to go but you need to go there fast. Sounds ridiculous, right?

That’s how I feel. That’s the startup mantra after all. Move fast…

I’m like, “Oh my gosh, it’s been 6 months and I haven’t started a new company” panicking all over my yearly goal - “Start a new million-dollar a year business”.

I don’t acknowledge that it takes time to make discoveries, to understand yourself, to be creative.

And as the law of reverse-effort states, the harder you try the harder it gets. The faster I try to move, the slower I get, taking paths that lead nowhere.

Commitment ( lack of )

I’ve eaten a ton of crap building products that nobody wants. We ( devs ) are always like that. We have this “genius” idea, we build it, we commit and… nobody wants it. So we need to sell, pivot, pivot and sell, and so on until you ( hopefully ) build a decent business.

NO MORE I said -> this time I won’t build anything, I won’t write a single line of code until I am 100% certain people want to buy my product.

I’ve eaten a ton of crap walking the solopreneurship road. Hard work, loneliness, no moral support, nobody to share the burden with, nobody to challenge my decision-making.

NO MORE I said -> this time I won’t start anything until I find cofounders who are much better than me in every regard.

NO MORE eating crap I said.

Turns out, it’s really hard to talk to “customers” and fish for ideas. You can talk to people, do research, analyze trends, but unless you already have an idea or a very specific idea-space that you’re looking to work on all of the research is abstract and opportunities just don’t exist.

In retrospect, that makes sense - the low-hanging stuff has already been built. You can’t look at the horizon with binoculars and find the golden apple tree. You’ll end up switching your focus on a new shiny object every day until you realize that it’s just a reflection. You need to get deep into the forest, commit to a trail and see where it gets you.

Same thing for startups, you will never get a meaningful insight unless you commit and dig deep into an idea, build a prototype, show it to customers and get them to decimate it in front of your eyes. By the end of the exercise, you learned something.

For co-founders, I believe that like all relationships, you need to be doing great on your own and get into a relationship only if the other person makes you much better. No compromises.

I really the idea of partnering with somebody, and I tried working on different projects with multiple people, but it the end, it always felt I was doing a compromise with something. And that’s a no-go for me.

I am still open to partnerships, but I’m applying the law of reverse-effort - I don’t try to get a co-founder, but perhaps fate has different plans.

All that idea-picking, random customer interviews, and cool people that I can work with left me with 10+ projects that I’ve explored in the past year, with nothing tangible to show for it and a decision paralysis.

So I said, fuck it - let’s eat the crap and I picked TImecraft - which seems like a fun project. Let’s see where it gets me.

Opportunity

Say to yourself that you are open to opportunities and boy, you’re up for an adventure.

For me that doesn’t work. I’ve tried being open to everything that comes my way and I can’t take it anymore. Majority of “opportunities” are a tremendous effort and a waste of time.

Most people want money in one form or another, which is fine as long as they are upfront about it. What hurts is when they try to play your ego, tell you they really need your experience and guidance, but they don’t care about any of that - just waste your time and energy. They don’t want feedback - they want cash. Heck, one of the guys even asked me to buy them a new BMW.

At least when people buy a consultation with me I know that they care about what I’m going to say. Otherwise it’s pointless to have a conversation.

Even if it isn’t about cash, most “partnerships” are doomed. Like with co-founders, there needs to be a very strong and clear shared direction, which is rarely the case. Especially if you consider your opportunity cost.

Expectation

They say the secret to happiness is having low expectations.

But when you’ve reached a certain peak it becomes your measure stick.

The curse of achieving any “success” is that you’ll never be happy with anything that’s less than what you already achieved. It’s like one of those racing games where you compete with a ghost car of your best run ever. And even if you manage to beat it, the next time you have to compete with the new best record.

At some point you will reach your biggest achievement. You don’t know if it already happened or it’s going to happen but it is certain that one day, you’ll be your “most successful” self in whatever arbitrary metric you use to measure it. And then what?

It’s hard having modest expectations when you’ve seen what is possible. It’s also a matter of shooting for the moon and hitting a star, but… where should the measuring stick be?

It’s mental gymnastics - the same result can feel like a success or like a failure - all depending on your perception. You can either:

• Try to beat your best record

• Change your arbitrary metric or

• Lower the measurement stick and count everything above it as a success

I try to do all 3 to some extent, but in the end, I can’t help but have high expectations and ambitions about my next endeavors.

Conclusion

If first-time entrepreneurship is a challenge of skill and knowledge, second-time entrepreneurship is all about winning the battle with yourself. Unfortunately, the battle keeps going on forever.

I really hope that you saw a little bit of yourself in this article and that it made you feel better knowing that we share the same struggle.

Happy holidays, best of luck with your 2024 objectives and keep it going 🎅

All of the artworks are screenshots taken from the game LIMBO. At some of my lowest points during that year, all I could think of how to describe my feelings was this game. I highly recommend that you buy and play it.

I share my thoughts and experiences from the journey on a monthly basis.

I also do consulting, so if you want to talk, check out my Timecraft page.

I’m building a new product: Timecraft - which is a super-cool 🛸, simple to use platform for everyone who does time-based services over the internet. For Timecrafters.

See, I’ve been meeting all kinds of awesome people doing all sorts of awesome stuff via Zoom, like clinical research consulting, holistic singing, fitness coaching, language learning, therapy, date finding etc.

I figured, those people need their own mini-”Shopfiy”, in order to be able to grow their side-hustles into a steady income generating machines 🚂 and be free ✨!

Or as my friends call it: “Onlyfans for Coaches and Consultants”

But how can I know what Timecrafters truly need?

Talking to customers is an option. Tracking metrics is an option. But the only way to really feel your customer’s pain is to become a customer yourself. And use your god damned product!

Back in the Checkout X and Vanga AI days, I couldn’t help but feel disconnected from my customers. I would talk to them, I would follow their metrics, pray for their success ( sometimes quite literally 🙏 ), but still, sometimes they would leave and I would feel that I don’t know the real reason why.

I would give them tips on how to take full advantage of the product, but they wouldn’t do it and I would wonder - WHY?!????

I knew why… Running an e-commerce store is a complex machine that has thousands of moving parts and you need to make sure the machine keeps going. Any individual part needs to fit with all the other parts. If it doesn’t - you’ll just swap it out - you won’t waste time & energy on handholding the part maker in order to fix it over the next iteration.

Unfortunately… you can’t “just” make a successful e-com store in order to be able to be your own customer, so as a Shopify App maker I had to rely on interviews & data, no first-person experience.

For Timecraft, I thought: “Fuck it, how hard can it be?” and I started my own consulting practice on the side.

From my experience founders that use their own product will always win. No amount of research can substitute the understanding you can experience by walking a mile in someone else’s shoes ( of course, one doesn’t exclude the other ). If you are a founder, find a way to use your product. You’ll learn so much more than just looking from the outside.

Why you should start your consulting practice too?

The moment I started consulting, I thought - wow - why didn’t I do that earlier? Turns out consulting brings much more than some extra dollars.

Here are some of the immediate benefits that you can get by starting a consulting practice on the side:

Lead generation for your business

Besides Timecraft, I’m looking to acquire Shopify apps as part of my investment portfolio.

And guess what, the majority of people booking consultations with me are building Shopify Apps. So not only that I’m getting paid to talk to people, I can tell them what I’m doing and potentially find a good acquisition opportunity.

My case is not unique. Other Timecrafters tell me the same thing. They would get on a consulting call with someone that has a specific industry problem and often times they would become leads for their other ventures.

People will talk to you because they want to fix or achieve something. And if you’re doing other things in the space - chances are they can become customers for it too. Especially if they got value from you already.

Paid consultation to a Product sale will become a mainstream conversion funnel, especially for founders that engage in thought leadership. Don’t miss out 🙃!

Talking to interesting people

We usually underestimate how big our social presence really is. You’ll be surprised by how many people follow your journey on social media and know what’s going on with you. But see, most people are shy, so they’ll never reach you out of the blue and ask you to give them your time.

If you start offering services however, you’re sending an invite to anyone that knows you to talk to you. And as you’re charging them for it, they won’t feel guilty for “wasting” your time.

—It’s weird, because all of the people that book a time with me, are people I would love to spend time to and talk with anyways, but they never reached out beforehand.

Learning new things

Whenever I consult someone, I need to learn how their business works ( at least on a surface level ), so every-time I get real world insights on what works, what doesn’t and what challenges other are facing. Ironically, people don’t usually talk about that on social media, so it’s a type of information I can’t get.

Additional income

Over the years, I’ve always tried to be open and available for others, because that’s how you learn things, make connections and sometimes have a positive impact. I’m doing those calls anyways. It feels good to have an additional income stream, no matter how small.

It’s also the sad reality that the value a person can bring isn’t always proportionate to their net worth, as most professionals are not paid in gold in diamonds, therefore Timecrafting as a side-hustle might make a difference in their bottom line.

🤙

If those benefits sound good and if you want open a consulting/coaching practice - you need to be on Timecraft! Ping me for a demo.

What if someone can’t pay / doesn’t want to pay to talk?

That’s up to you. For me personally, I don’t direct people to my consulting page when they ask me for advice - I’m generally open to talk. Also, most interactions aren’t about consulting, they are about connecting and exchanging which brings equal value to me and the other side. I ask other people for advice all the time. 🤷‍♂️

If anyone wants to book a consultation, that’s fine. If they want to ping me directly that’s also fine.

Conclusion

Use your own product!

Start your consulting practice!

If you wanna talk, reach out or book a consultation!

GGHF!

I also do consulting, so if you want talk, check out my Timecraft page.

Introduction

In this article I’m going to shit all over remote work. Before this happens, I want to mention that I’m a 🫲 BIG BELIEVER 🫱 in remote work.

• I believe that even with all its problems, remote work has a net benefit for both employees and employers.

• I believe that remote work will become the standard across the majority of jobs.

• I believe remote work will completely change the way we see the world’s workforce as nations would become irrelevant ( when it comes to jobs ).

I myself, practice remote work and I can’t imagine going back to the office. Here’s a quote from my previous article on remote work:

I spend ~6 months of the year “traveling”, and ~6 months in my home base 🏡 ( Sofia, 🇧🇬 Bulgaria ). There is no difference in productivity. The only difference is I don’t have to choose between chasing my dreams and enjoying life. I don’t stay in the office daydreaming, I just go 🪁 Kite for 2 hours and get back refreshed. That’s the beauty of working remotely. That’s the freedom of being an entrepreneur.

With all that being said, remote work has its issues (to say the least). And If we want remote work to prevail we need to discuss and resolve those issues.

Otherwise, we’ll probably find ourselves locked inside the office prison once again.

Companies are afraid to talk about real issues

As soon as the pandemic was over, the majority of companies started plotting on how to bring people back to the office. Some examples:

• Even Zoom Is Making People Return to the Office

• Meta employees are back in the office three days a week…

• 90% of companies say they’ll return to the office by the end of 2024…

If you read corporate memos about returning to the office you’ll see the same message over and over:

Blah blah blah culture, blah blah blah collaboration, blah blah real innovation happens in a room…

But… here’s the deal:

Culture is not defined by free pizza in the office

I don’t know if anyone buys this BS, but having a nice office with tasty snacks and a massage therapist doesn’t define your culture. Printing your good-sounding-nothing-saying values on the wall doesn’t do it either.

Culture is about answering questions like: “What do we do differently than other companies?”, “How do we make decisions, what do we prioritise?”, etc.

None of those questions require an office or a physical space.

Innovation doesn’t happen in a noisy room. Innovation happens in silence.

Before I worked remotely, I worked in an office. I can’t recall a single instance when we gathered a bunch of people, we started shouting and drawing on a whiteboard and we came up with a genius idea. This happens only in the movies.

In reality, innovation happens in the following setting:

• There’s a big problem to be solved

• A person sits down and splits this problem into smaller bites

• A group gathers and discusses the big picture

• Everyone gets a bite of the problem and works on it in silence

• After some time the group gathers, connects the pieces together and repeats the process

So if culture isn’t defined by an office and innovation happens in silence… why are CEOs gaslighting their employees? Because if they say their employees are slackers they will face an armed rebellion 🗡️👩‍🌾🔥.

Working in an office comes with automatic supervision and peer pressure.

Remote work doesn’t have those properties, so it’s easy for employees to take advantage of the company. And in some cases to cause real damage.

And yes, yes - you and I are honest employees with remarkable work ethic - but let’s be honest: do you believe that all of our colleagues have the same work ethic as we do? 😉

The real reasons why your boss wants you in the office

Humans are slackers by default

Here are two cynical statements that make a compelling argument together.

1. Humans are hardwired to follow the path of least resistance. ( proof )

2. A job is an arrangement where

   1. The worker is incentivised to do the least amount of work without being fired

   2. The boss is incentivised to pay the worker the least amount of money to prevent them from quitting.

Sure, you can slack in the office too. But when you are in the office, you at least have to pretend to be working - when you are remote - you don’t have to pretend at all.

An overwhelming majority of remote workers report being more productive when working remotely. That’s probably true - as they don’t have to commute, talk shit with their buddies at work, and get interrupted all the time, but that doesn’t mean they’re anywhere near maximum productivity.

I’m surrounded by remote workers and let me tell you, anecdotal evidence shows all kinds of activities that employers are paying for, including:

• Having sex

• Reading books

• Going skating, biking, working out…

• Sleeping

• Doing dishes, laundry, & other household chores

• Traveling between destinations

• Picking up their kids from X

• Watching their kids

• etc

None of those activities scream productivity to me. And no employer is happy paying for them.

The majority of remote workers work multiple jobs

According to a survey made by resumebuilder.com

• 7 out of 10 remote workers have multiple jobs

  • 37% of remote workers work 2 full-time jobs

  • Other 32% of remote workers have a part-time side hustle

• Half of those report working 40 hours ( or less ) per week ( two jobs combined )

There are literally whole communities dedicated to people working multiple jobs like overemployed.com.

The folk at Overemployed even have a list of 10 commandments, with the first one stating:

Hence our first commandment: hold a minimum of two jobs and always be interviewing. You’re more than welcome to do more than the minimum. 3-4Js is the sweet spot for many in our community.

3 to 4 jobs. That’s insane. 🤯

Remote makes it easier to quit your job

Going to work in an office comes with some side effects, like

• Making friends in the office

• Organising your life around the office

  • Getting a nearby apartment ( sometimes )

  • Going to a gym, barber, coffeeshop nearby

  • Sending your kids to the office daycare

  • Etc

If you change your job, you also have to let go of your friends. You have to change your habits. You have to rip your child from their comfortable environment.

There’s a switch cost to moving from one company to another. And that makes you less likely to leave. If you work remotely, the switch cost is lower.

Legal risks - people working from different jurisdictions

Aside from all the productivity issues, remote work can cause legal issues to companies just because their employees work from another jurisdiction.

When you are hired, your employment is dictated by the jurisdiction of where you work. It takes care of your rights, taxes, and so on.

If you decide to relocate and live in another country for example, your employer might get in trouble for employing residents of that country without a local entity.

If you get hit by a bus in another country during work hours, your employer may be liable for failing to provide you with a “safe work environment”.

What’s the problem if I do my job well?

Usually, when I share my arguments with remote employees they take it personally and ask what the hell is my problem - their tasks are finished and their boss is happy!

The problem is that you are hired to work a certain number of hours of per week, not to do a certain amount of tasks per week. If you are slacking or working multiple jobs, you’re essentially stealing work hours from your company. And your manager knows that.

🙋

Let’s not get into the argument if work-hours is an adequate metric for employment in today’s world. I agree it’s outdated, but 99.9% of employment contracts pay for hours worked.

The work prisoners’ dilemma

In most companies, work never ends and it can’t be done fast enough. They’re always striving for maximum productivity. The “weekly tasks” objective is a proxy of what an average employee can achieve in a week. It’s a classical prisoner dilemma:

The illustration above is an over-dramatisation of how work objectives are set.

• If everyone works hard the amount of work they need to do increases

• If everyone slacks the amount of work they need to do decreases

• If some people work hard and others don’t, the hard workers are rewarded while the slackers are punished

The main goal of most managers is to raise the productivity average as much as possible so they can get maximum work done for dollars. Changing the work environment is one of the main tools at their disposal. Maybe you think it’s evil, maybe you don’t - it doesn’t matter. It’s business. The same way you want to get the most dollars for work done.

Returning people to the office is not about getting them to complete their tasks on time. By returning people in the office, managers are hoping to pit employees against each other, to get them in a competition mode and raise the productivity bar.

After all, if everyone else is working hard in the office, would you be skating under the sun at 2pm? Even though, you’ve finished your tasks early today…

What’s the solution?

I can tell you what isn’t the solution - forcing people back into the office against their will.

The problem with using the prisoners’ dilemma on your employees is that they will literally feel like prisoners. Nobody wants to be a prisoner by choice. And good employees have a choice.

The solution is for companies to find ways to incorporate:

• Better supervision

• Peer pressure

• A sense of belonging

• Hard stops on damaging actions ( e.g. employees putting the company in legal risk )

While letting their people be free.

If you represent a company that’s facing some of the issues I discussed above and are looking for a solution to the problem - let’s talk. I’m exploring the topic and would love to get into more details with you.

Introduction

As entrepreneurs we’re often expected to pursue grand “save the world” projects. We have to be fixing the environment, solving discrimination, or in general - “making the world a better place”.

I always found this mission/social-justice/social entrepreneurship idea to be a little bit of BS 💩, which got me rejected from multiple “entrepreneurial societies”.

But here’s the deal. Business is about money. If you build a profitable business you are a national hero because:

• The biggest problem in the world is poverty - people who are barely surviving don’t care about much else. In order to build a great nation you need people that can take care of themselves.

• The only way to eliminate poverty is through economic empowerment → people need to be able to become richer on their own.

• You’re bringing additional economic value to your nation through innovation or exports which is then transferred to the rest of the economy.

The problem with “poor people”

I was born in post-socialist Bulgaria in 1996

Bulgarians will always remember the period as one of the worst economic periods in our history. Hyperinflation, 24hr lines for gas, banks failing, mafia railing the streets and eventually people raising, and storming the parliament.

That’s a story for another day - I don’t remember much from those times, but what I remember is that the people were SUPER TRASHY 🌈 .

Some of my memories include:

People throwing their trash from their balconies

• We had some neighbours who would just throw their trash bags from the balcony. Under their balcony.. 🤦‍♂️

• It’s literally under your own balcony? Why would people do that?!

Dancing bears instead of strippers

• There were people walking around with bears, forcing them to dance on the street for money or they would beat them up.

• It was a totally normal thing for me to go on the tram and find a bear sitting inside. Nothing out of the ordinary. 🙈

Everyone living in commie-blocks

• Don’t get me wrong, commie blocks are awesome - they allowed for everyone to get access to housing, but…

• WHY DID NO ONE RENOVATE THEM?

• People would have the latest Versace carpet or whatever inside, but nobody would touch the “common areas” as they are for everyone.

Those things still somewhat exist in Bulgaria ( except the animal cruelty 🙏 ), yet, we’ve went a gone way as a nation. We think of the future, we discuss how many cars we want in our cities, we monitor the air pollution, we build new buildings and renovate old ones, we want to leave a better place for our kids. We invest in AI, startups, art and we argue about social issues constantly. Damn… Those 30 years made a difference for the better.

I often find myself traveling around the world and seeing people from other countries throwing trash bags out of their car windows right on the street and I think of the old Bulgaria. What changed?

I believe the main reason for the change is that Bulgarians have become significantly richer during this period ( 10 times richer ).

Let’s play a little game.

I’ll show you street photos from different countries → you tell me which one has a higher GDP per capita?

My argument is not to piss on poorer countries and I don’t pretend Bulgarians are better - we’re still savages in many regards…

I’m just pointing out that the correlation is staggering. In most cases, just looking at GDP numbers you know what to expect when visiting. Go to a rich country and you’ll usually find somewhat clean streets, pleasant roads and well-behaved people. Go to a poor country and you immediately need to defend your girlfriend from catcalls/unwanted hands, focus on surviving the traffic and walk among trash.

But why is that?

We take those things as normal, but we never think why this happens?

• Poorer people naturally have fewer things. Why is there more trash on the streets?

• How does lower income cause reckless driving?

• Why are poorer countries more aggressive/oppressive against women ( in general )?

Now those are some heavy issues. They are complex beyond measurement, but I believe there is a causation beyond the correlation. And that is:

Poor people are assholes

Ok, ok, hold your torches and pitchforks and hear me out:

Let’s define Poor and Rich for the purpose of this argument.

• Poor people are people who can’t secure the fulfillment of their basic needs

  • They either don’t have access to clean air, clean water, food, shelter, energy, information, and healthcare.

  • Or they don’t have the security that their basic needs will continue to be met in the near future ( e.g. If you don’t know how you’re going to pay for food next month - you’re poor )

• Rich people have their basic needs met and secured

  • If you don’t have to worry about how you gonna make it through in the near future - you’re rich!

Poor people are not really assholes. Poor people live in survival mode.

Take a look at Maslow's hierarchy of needs:

When you’re worried about your electricity being stopped any moment now. When you are worried about what you are going to eat next month. When you and your mom live in an 8sq.m ceiling room with no running water, the daily stress is so extreme that there’s no higher meaning present.

Using the heater is a problem. Eating too much is a problem. Alcohol and cigarettes are a problem. Clothing is a problem. Everything is a problem.

There is no spirituality. There is no thinking about the future, the war, or the planet.

Poor people are generally less concerned about their environment or other people’s feelings. They’re much more likely to resort to quick wins and be selfish as they don’t have the luxury of looking ahead.

Trust me, this is how I grew up. The only thing I could think about was getting some booze/weed and getting fucked up. That’s the only example I had seen. That’s the only future I could imagine. I was 14 years old.

And then… I discovered I can sell pixels on the internet. 13 years later, I get to sit, write and pretend to understand the world every once in a while.

In order to build great nations we need individuals that have their lives in order. That are capable and self-sufficient. That can look beyond tomorrow.

Turns out if you get people about $5000/year in avg. GDP they ( people ) start taking long term view of the future instead of scrabbling around in the dirt trying to get lunch. And you gonna burn everything around you if you have to. But if you got a bit of wealth and you can think over maybe a 20 year period ( which is a damn luxury ) then you can actually start being concerned about the aesthetic quality of the local environment. - Jordan Peterson on the Joe Rogan podcast ( link )

The only way out of poverty is economic empowerment

The global economic pie

Let’s get something clear. Money is not imaginary, it doesn’t grow on trees and is not created out of thin air. Money is a storage of created value.

We can’t “just” give money to the poor and solve the problem.

You can think of money as a 🔋 value battery:

• The more value you create for society, the more you charge your battery.

• The more value you consume from society, the more you use up your battery.

Value can’t be created out of nothing. It’s always taken from somewhere. For example:

• Printing money is taking value from everyone’s battery.

• Borrowing money is taking value from the future.

Think of all the economic value / money in the world as a 🥧 giant economic pie. Every country has its allocated share:

Split a country’s pie share by the number of mouths in that country and you’ll get the key metric: “Pie percent per mouth” ( PPPM👄 for short ), or as economists call it - “GDP per capita”. If we assume that a higher PPPM👄 means a better place to live, then the objective is clear → get more 🥧 pie for your country.

How to get more pie

There are two ways to get more pie:

1. Increase the size of the pie

2. Increase your country’s share of the pie

Increasing the size of the pie

In order to increase the global economic pie ( output ) you need to make humanity more efficient. You need to create a meaningful innovation that changes the way things are done around the globe for the better. Some examples of such innovations are:

• The steam engine

• Shipping containers

• The internet

• Vaccines

• GPS

• Nuclear reactors

• and so on

The main problem with innovation is that innovation is hard. Hard means expensive. It requires a significant amount of pie to be spent on projects that will most probably lead nowhere. Because of its cost, innovation (as a nationwide strategy) is reserved for rich countries. If your country isn’t as rich, then the only logical option is:

Get other countries to give you some of their pie by exporting value

The only realistic way for poorer nations to catch up with rich nations is by exporting products and services that are cheaper and/or better than the competition.

It works the following way:

1. An entrepreneur comes up with a way to provide a better service/product abroad

2. Foreigners pay for it

3. Entrepreneur hires local employees and pays them with the foreign money

4. Entrepreneur and employees spend their money in the local economy

5. The local economy has more money ( yay 🥳 )

The most patriotic cause

If you agree with me that:

• More exporting business = more GDP per capita

• More GDP/capita = a better society

We can conclude that the most patriotic cause you can embrace is:

Empowering local entrepreneurs to come up with export-oriented businesses.

Truth be told, I owe everything to the “trashy Bulgarians” I mentioned in the beginning. Never before in history, a 20-something-year-old Bulgarian kid would be able to create a multi-million company out of their bedroom. I was gifted with a decent education, an internet connection and a mountain of role-models to look up to. I was stepping on the shoulders of giants. All of this allowed me to “succeed”.

Hopefully I can pass the torch forward.

Investing in economic opportunities

All of the above ☝️ is an attempt to put my angel investment “thesis” into writing.

I never understood angel investing ( and still don’t ). I always had a feeling of imbalance between the effort required, the risk involved and the potential returns. And then it clicked:

Angel investing is not really about making money, it’s a form of productive charity. It’s a way to support what you believe in. And if you’re lucky, you won’t lose your money.

This year I’ve invested in 3 companies that empower Bulgarian entrepreneurs to create export-driven businesses:

• Cloudcart - Helps e-commerce companies grow their businesses and expand abroad.

• Klear - Brings much-needed capital to small businesses to start and grow their ventures.

• Coliving Semkovo - Is turning the forgotten village of Semkovo into a Digital Nomad paradise and will soon have hundreds of foreigners in need of all kinds of services around it.

I hope those work out. I hope they give birth to thousands of new entrepreneurs that push our nation forward.

Wishing the same for you and your nation. ✌️

I share my startup experiences on a monthly basis.

Introduction

There’s this notion that in order to succeed as an entrepreneur you need to sacrifice everything else and work brutally hard. This is stupid because:

• You can die tomorrow… Literally.

• Your time & energy are limited anyways. It doesn’t matter if you work 8 or 16 hours per day - it’s still not enough. You need to use leverage ( servers, software, employees, partners, etc ) in order to grow your business.

• The harder you try to do something, the worse it gets ( the law of reverse effort ).

• You probably won’t be reciting your churn rate & LTV numbers on your death bed.

• No amazing story starts with: “One time I was working late in the office and…”

Now this doesn’t mean that you shouldn’t work hard - you should work hard! But you should also play hard 🤘 - Life is about balance.

Maybe I’m wrong, maybe you need to “sleep in the factory” in order to achieve monumental success & wealth - but is that really worth it? Is that a life that you want to have? I don’t.

🧘

I believe that your work defines you - creating something of value is essential to a meaningful life, however, that’s not the only component of if - you also need to find Significant wealth, Romance, Good health, Social belonging and Fun times in order to feel deeply satisfied with your life. I plan to write an article on my framework for satisfaction & happiness as an entrepreneur - subscribe to my newsletter to get it in your inbox.

We get brainwashed by “hustle porn” from hype masters like Elon Musk or Gary Vaynerchuk and we try to follow in their footsteps hoping we’ll be able to come close to their achievements, but we forget that’s probably not the life we want to build for ourselves. At least I don’t.

But there is an alternative…

What if you can achieve success and also enjoy life at the same time?

Why can’t me and you, do too?

These guys seem to be doing OK in business…

I spend ~6 months of the year “traveling”, and ~6 months in my home base 🏡 ( Sofia, 🇧🇬 Bulgaria ). There is no difference in productivity. The only difference is I don’t have to choose between chasing my dreams and enjoying life. I don’t stay in the office daydreaming, I just go 🪁 Kite for 2 hours and get back refreshed. That’s the beauty of working remotely. That’s the freedom of being an entrepreneur.

Enough of the pretty talk - I’m sure you can figure out some places outside of the office you wanna be. But how to stay productive? I don’t know what works for you, but here’s how I work-n-travel.

Picking the destination

The first criteria for picking a destination is obviously what you want to do there. I travel mostly for activities ( 🪁 Kitesurfing, 🤿 Diving, 🎿 Skiing, 🏂 Snowboarding, etc ), so I look for spots that offer the required conditions:

Other criteria that I take into consideration are:

• 🕧 Timezone - I work in EU hours, therefore anything too far forces me to move my work schedule to an extreme. For example, I spent 2 months in the 🇩🇴 Dominican Republic this winter and I had to wake up at 3:30am every morning 😫

• 🔌 Connectivity - I need internet to work. There needs to be good internet & cellular coverage in order to be able to function.

• 🏡 Housing options - It should be possible to rent an apartment / a house, be able to shop groceries and mingle with the locals. I should be able to make myself feel somewhat at home.

Picking a place to stay

In most cases, I work from where I stay - coworkings are not an option as it takes time to go back and forth between the house, the coworking and the activities. I also usually pick more “wild’ destinations that don’t offer shared offices, thus I need to rent a bigger place with the option to work from there.

This doesn’t mean the place needs to be fancy or that it has a dedicated office - a big table with some chairs is good enough for me:

Here are my main criteria when picking a place, based on priority:

• Big table to work from

• Internet ( from the property )

• Washing machine

• Location

• Large living space ( as I’ll be spending a lot of time there )

• Kitchen

• Fanciness ✨

—

Depending if we’ll travel by car and take the 🐶 Doggo, I also look for a place that’s dog friendly.

Ensuring a stable connection

Internet is mission critical. If there’s no stable internet I’ll pack my bags and leave in 24hrs as I can’t do anything productive without it.

Almost all the places I travel to have unreliable internet so I always ensure a minimum of 2 independent connections. ( 3 is best )

Internet from the property

First line of connection is the WiFi of the property. In Airbnb there’s usually information about the speed of the internet connection. Additionally, I read the reviews of the property and search for specific keywords like “internet”, “wifi”, “connection” to see what people are saying. Some people even ask for a speedtest.net screenshot from the landlords.

Mobile internet

Roaming

To be connected when you arrive in a country, you’ll need access to affordable roaming, either from your main telecom plan or from a roaming service like Surfroam.com . I personally use Surfroam eSim and always have some credits so I can enable it as soon as I leave the EU.

Local Plan

Once you get settled in, it’s best to buy a local data plan so you can benefit from 4G and unlimited data to use your phone as a hotspot backup without limits.

There are also “local e-SIM” e-shops like Airalo, which claim to sell you a local plan directly, but my experience with them has been mediocre so far. ( Tested in 🇩🇴 DR and 🇹🇷 Turkey )

Starlink

Recently I got a Starlink device and used it for the past month. The internet has been… just perfect 👌. It’s fast 👍. It’s reliable 👍. My only issue with Starlink is that their “official coverage” is limited and they‘re forcing me to use their “maritime ocean plan”, which is quite expensive. It will be interesting to also see how I can take it on a plane ✈️

I hope they continue to evolve and improve the service as it has the potential to solve all my internet problems. 🤞

Setting a routine

Setting some kind of routine is essential in order to stay productive while you travel. When you travel to exciting places you’ll constantly be presented with awesome activities you can spend your time on. Before you know it, FOMO will hijack your brain and you’ll start neglecting your work.

The only way to combat this is to have a strict routine with clear time for work and play.

Remember, you’re not on vacation. You’re working. You’re there to spend your leisure time on fun activities, not your working hours.

Fixed schedule

The easiest way to manage your time is to set a fixed schedule. This schedule requires less willpower as you don’t have to negotiate with yourself when to work and when to play.

A good example is my schedule in 🇩🇴 DR:

Mon-Fri

• 3:30am - Wake up ⏰

• 4am - Start working 👨‍💻

• 10am - Workout & Brunch 🏋️ 🥣

• 12pm - Get back to work 👨‍💻

• 2pm - Finish work 😌

• 3pm - Go to Kite Beach 🪁🏄🌴

• 6:30pm - Dinner 🍽️

• 8:30pm - Go to bed 😴

Weekend

• Explore activities that take more time like 🤿 Diving, 🏄 Traditional surf, etc

Flexible schedule

Unfortunately, a fixed schedule is not always possible as there are sometimes external factors ( e.g. The wind doesn’t care about your work schedule ).

Whenever that’s the case, you’ll need to organise your work around the non-work activities, while maintaining productivity → which requires significant willpower 💪.

In those cases I aim to hit 5 productive work hours per day which I track with a time tracker ( Toggl ).

—

What’s a productive work hour?

For me a productive work hour means deep focused work on a task that’s directly connected to achieving my professional goals.

Included in a productive hour:

• Building my business ( Code / Design / Writing etc )

• Writing for my blog

• Investments-related stuff

Not included:

• Breaks ( Coffee, Toilet, etc )

• Social Media / Youtube / Reading articles

• Any calls that are not directly related to my business ( Touching base ; Advising/Mentorship, etc )

For some people 5 hours might be too much, for others it’s nothing - for me - it’s on the limit of deep work that I can do in a day.

Trip length

Settling in, organising a schedule, and making yourself comfortable takes time and energy, therefore, you need to stay somewhere significant amount of time in order to justify the trip. On top of that, you’ll be working most of the time thus you’ll need more days to “get the maximum” out of a place.

For me, the optimal work-n-travel trip length is somewhere between 3-9 weeks:

• Anything shorter than that isn’t worth the effort to establish myself. I’ll either go on a vacation for 1-2 weeks or not go at all.

• Over 9 weeks I start getting homesick.

Do you need to be rich to work-n-travel?

If you were rich you wouldn’t be working 😆

Jokes aside… depends on your definition of “rich”. You definitely need some extra cash when travelling, but I don’t believe you need to be a millionaire in order to travel and stay at “exotic” places - especially if you go for work-n-travel.

Most places I go, I don’t spend much more than I would spend in my hometown, so cost of living is more or less fixed. The standard of living is lower than the EU for the majority of the world.

I know some of my acquaintances see a photo with palm trees and immediately imagine me drinking champagne on top of an infinity pool with beautiful men and women feeding me grapes, but the reality is - I stay in normal, sometimes shitty places and I give up a lot of comfort for the experience - and it’s totally worth it. Again, I’m not on vacation, I’m relocating.

I also meet many Digital Nomads while I travel and they come in all shapes and forms. Some are living in luxury, some rent out their apartment back home and use the money for travel. Some budget, some don’t. Both groups enjoy their stay more or less the same.

If you want to work-n-travel and you’re doing OK financially, you should be able to pull it off.

Is all that hassle really worth it?

It depends on your values I guess 🤷…

My personal values are:

• I want to explore the world and enjoy my hobbies

• I don’t want to stop working in order to do that

I have been blessed with the opportunity to take a sabbatical, go on an unlimited vacation or even retire. But, I don’t want that.

• I don’t want to lie on a beach drinking cocktails all day long 🌴❌

• I don’t want to stay trapped in an office building and wait for my 20 days of vacation per year either ⛓️❌

I want to explore, enjoy and create new stuff - and that’s the dream life I’ve built for myself.

I hope this article inspires you to do the same. ( That is - build your dream life ☺️ )

Introduction

Let me first address the unicorn elephant 🐘  in the room.

I don’t know shit 💩 about building unicorn companies.

Never built one. Never invested in one. Never been in business school. So please take what I’m going to write with a bucket of salt.

However, I’ve spent my whole career either working for startups, building startups, and most recently - investing in startups. I’ve achieved some success, I’ve had some failures, and I can tell you this - it doesn’t matter how smart you are or how hard you work if the underlying fundamentals of your business are flawed.

Some businesses are a dead horse, some are instant hits and the rest fall somewhere in between:

So where does that new startup idea / investment opportunity / potential acquisition fall on the scale? I use the Dead Horse framework to try to figure that out.

Some horses ( businesses ) are better than others. The horses that end up growing a horn and pooping 🌈. rainbows share a strong combination of 5 key business fundamentals: Strong need, Favourable market, Scalability, Control, and Defensibility. The ones that don’t - don’t ☹️.

The dead horse framework is no crystal ball 🔮 - it can’t predict the future. Its purpose is to transition your mindset from making a single-dimensional assumption ( Good idea vs Bad idea ) towards a multi-dimensional assumption ( Needed vs Not needed * Scaleable vs Non-scaleable, etc).

1. Strong need 🔥

The simplest and hardest question of every business - why should someone buy your product / hire your services? In order for someone to give you their precious money and attention your business should either:

• Solve a significant problem

• Bring significant value

There are a lot of startup mantras like: “Don’t sell vitamins, sell painkillers”, “Focus on the problem”, etc. It’s not necessary that you solve a particular problem, but you should be aware what is the value that you bring to the customer.

The “problem/solution” question is obvious. What’s not obvious is that you need to consider what are the alternative solutions to the problem you are solving. I’m not talking about your competition, I’m talking about alternatives.

• The competition of a Ford is a Mercedes → the alternative is 🚌 Public Transportation.

• The competition of ChatGPT is Bard → the alternative is Google Search

When considering the “need” you need to look at both the size of the problem and the current dominant solutions.

Most startups compete with MS Excel, not with other startups. ( Cool article on the topic )

Questions to ask:

• Why does your product exist?

• What problem are you solving? What value do you bring?

• What would customers do if your solution didn’t exist?

• To what extent can the need you’re fulfilling be solved with a spreadsheet?

2. Favourable market

Markets and penises have something in common: The size doesn’t matter… as long as it’s big.

Imagine you’re aiming at $100M in yearly sales with a $1000/year product. In order to achieve it you’ll need to have 100,000 paying customers. Is that plausible? It depends on a couple of factors:

• Number of potential customers - how many potential customers are there?

• Financial capabilities - how much can they afford to pay you?

• Market saturation - What’s the competition in the space? What % of your potential customers are already using the competition?

Note: There’s also the topic of properly defining what market you are a part of, but it’s a rabbit hole for another post. ( Subscribe to my newsletter 🤞🐰 )

Questions to ask:

• Who’s the customer?

• How many customers are there?

• How much can those customers pay?

• Are you going after a red ocean (saturated market) or after a blue ocean(virgin market)?

  • Red ocean: Is the solution 10X better than the competition?

  • Blue ocean: Why is there no competition?

3. Scalability

If there are good market conditions and customers are crazy about your solution, you’re going to face another challenge - how do you service everyone?

Look at the graph above. To build a $100M/year business you’ll need to service:

• 🐘 1000 customers paying $100,000 / year

• 🦌 10,000 customers paying $10,000 / year

• 🐇 100,000 customers paying $1,000 / year

• 🐁 1,000,000 customers paying $100 / year

• 🪰 10,000,000 customers paying $10 / year

Can your business realistically service that many customers? Can your business even onboard that many customers? Can you manufacture this product in such quantities? Are there enough materials available on Earth to actually build the products?

There’s a reason why your favorite coffee shop remains small, while Facebook can service 3 billion people at the same time.

The essence of scalability is actually - reusability. You should be able to do the majority of the work once and any new customer should cost a minimum amount of extra work.

That’s the reason why information based products ( Software, Courses etc ) are the holy grail of Scalability - you make them once - it doesn’t matter if a single customer or a thousand use it. ( It’s an oversimplification, but the main point holds water )

On the other hand, any type of custom-commission / high-complexity work will be impossible to scale beyond a certain point as you’ll need to hire, educate & retain highly competent employees - a challenge with exponential difficulty.

And one more thing → scaling is never easy.

A general rule of thumb 👍:

• Easy Not too hard to scale → Self-service software / Informational products ( Books, Music, Videos, Courses, etc )

• Hard to scale → Hardware, Manufacturing, Standardised services

• Super hard to scale → Agencies / Consulting

🧑‍🎨

If you run a highly-complex / tailor-made service business not all is lost though, as in many cases you can scale vertically by increasing your pricing. Check this video on value-based pricing for services:

Distribution

Besides being able to service all those customers, you’ll need to acquire them. Does the business have a natural distribution mechanic that you can take advantage of - is there a viral effect? If not - how are you going to reach those customers at a sufficient scale?

I super-highly recommend the article: Five ways to build a $100 million business by Christoph Janz as a starting point.

Questions to ask

• Do more customers equal more work for the founder and key employees?

• Does the business depend on labor? Is it highly-competent labor?

• Does it change with size? Can the labor be replaced with repeatable processes/systems/machines on a larger scale?

• How are you going to reach those customers at scale?

4. Control

Why do you need to have control over your business? Read about my experience with gatekeepers: Bootstrapping to €600k MRR and getting killed by Shopify. The story of Checkout X.

What does it mean to have control over your business? Every business depends on other businesses. Every human depends on other humans. We can’t live in a vacuum, business can’t either. You’ll always have dependencies in business and in life, however, they come in different forms and shapes.

When you depend on somebody in a significant manner your decision-making will be impacted by their agenda. When you live in the universe you can’t escape the laws of physics. When you make Shopify apps you can’t escape the rules of Shopify.

Great companies find ways to control or replace their dependencies in order to be able to innovate, profit and grow. Apple insists on designing everything themselves. Microsoft works with a thousand different manufacturers and doesn’t care what a single one of them thinks.

Control doesn’t come for free. It requires leverage and is acquired over time. However, not everyone can acquire control. Some businesses are created to solve a specific problem in a platform, a regulation, a situation. I call those - over-dependent as they exist solely in the universe of a bigger entity.

Some examples:

• Linktree solves the problem of Instagram giving you a single link in your bio.

• Checkout X allows you to change the unchangeable Shopify checkout.

• Subway franchise owners are essentially freelance sales agents for Subway.

Over-dependent businesses can be great, they can provide a ton of value, generate a lot of money, etc. However, your success will always be in the hands of someone with a separate agenda.

Trust me, I’ve been building Shopify apps for the past 6 years - platform risk sucks. There’s nothing like going to bed and not knowing if you’ll have a business on the next day 💀.

So in terms of control: you probably won’t have any in the beginning, but you should have a clear path toward acquiring control over the long term.

If you poses Platform Risk in your business, check this tweet of mine on how to mitigate it.

Questions to ask:

• Who do you depend on?

• Whose agenda gets incorporated into your product/business?

• Are there gatekeepers that can kill your business?

  • If yes, how likely are they to do so? Is the chance 0%?

• How can you eliminate/mitigate those dependencies with time?

5. Defensibility

Last but not least, if you build a nice business others will notice. 👀 And they will want a piece of the pie. It might feel unfair, but reality is that the world of business is brutal. Once you start making some money, there will be many others wanting to take your place - and you need to be able to defend yourself. 🛡️⚔️

In business, there are 4 main defensive weapons that you can employ:

Branding

Branding boils down to customers knowing your name in a positive light and choosing it over the competition. Most brand awareness & marketing creativity is focused on this line of defense. Everyone can make sugar water, but there is only one Coca-Cola. Everyone can make sneakers, but not everyone can make Michael Jordan’s sneakers. 👌✨

The good news is - every business can leverage branding as a defensibility tactic. The bad news is - branding is reinforced by the other defense weapons and its effect is limited on its own.

Would Apple’s brand be so strong if iPhones didn’t have their features, quality and app library at a competitive price? Probably not.

Intellectual property / Capital

What will your competitors need to acquire/create in order to compete with you?

If you’re selling software you already have some level of defensibility as the majority of entrepreneurs can’t code, thus they’ll need to hire a dev team before they even start → a major hurdle.

Any custom tech, know-how, patents or capital ( real estate / cash / machinery etc ) that are needed to run the business will discourage others from attempting to copy you.

The more the better.

Ever wondered why all commercial airplanes are made by either 🇪🇺 Airbus or 🇺🇸 Boeing? Because making airplanes is hard and nobody is willing to put in the effort. ( Actually, China is finally launching its own plane. The fact that it took the masters of copycat hardware so long to get it going shows how hard it is to compete in commercial aerospace ).

Economy of Scale

In most cases, the more you make of something, the cheaper it becomes to make ( we won’t get into the details on why that is ). If your business can benefit from economy of scale it means that you can capture a significant part of the market before everyone else and then make it impossible to compete with you in terms of pricing.

Network effect

Some businesses become more valuable as more customers use them. Social media apps and marketplaces are great examples of network effect. Facebook is pretty much useless on its own, but when everyone you know is already there, you’ll never replace it for a Facebook competitor with better features.

Note that you don’t have to be a social media platform to employ network effect. Many products can add secondary features that benefit from a large customer base and improve their defensibility.

• iPhones have iMessage

• Shopify has Shop App

• Strava has community features like trails, leaderboards, etc

None of those are essential for their core business, but they give them an edge over the competition.

Of course, when you start you usually don’t have any defensibility. However, you should have some vague idea of how you can achieve defensibility over the long run. For some businesses the defensibility play is clear, for others - it seems impossible. If yours is of the latter - better to rethink your concept early on.

Questions to ask:

• How are you going to create a strong brand?

• Do you have aspects of your business that are hard to replicate? Technology, patents, capital?

• How can you benefit from economy of scale?

• How can you benefit from network effect?

Scoring

Time to figure out what kind of horse you got. Assign a score of 1 to 5 for each criteria:

• Need

• Market

• Scalability

• Control

• Defensibility

Where scores mean:

• 1 - Non existent

• 3 - It’s OK

• 5 - As good as it gets

Sum it all together and let’s see what you got:

• 1-10 points: ☠️ Dead horse - Don’t waste your time with this

• 11 - 15 points: 🐴 Work horse - Could be a business there, no big hopes

• 16 - 20 points: 🐎 Race horse - Looks like a solid business

• 21 -24 points: 🦄 Unicorn potential - Go for it

• 25 points: 🙅 You’re not looking at this rationally. Let a week pass and score again.

On assumptions

Whenever you’re scoring an idea, you’ll be making huge assumptions and that’s OK. You will get things wrong and you’ll still need to adjust your assumptions with each iteration of the idea.

On excitement

If you’re excited about an idea you’ll most probably give higher scores than you would otherwise. That’s OK - ride your excitement for the most part.

Having a spark ✨ for an idea is the 6th, secret fundamental.

On being too picky

I’ve been following this framework for the past months and I realised that I’ll probably never start anything if I wait for a 5/5 on all categories. I wouldn’t have started any of my previous businesses, that’s for sure.

The point of this tool is to challenge yourself into thinking about the different aspects of a business - but no business is perfect. If you find something good - don’t let analysis paralysis stop you from going after it.

What about the team?

The dead-horse framework doesn’t judge the execution capabilities of the founding team as that’s a completely separate science.

In general, it’s very important that there’s a strong Founder-Idea Fit ( more on the topic ). Founders should be competent, have good industry understanding and proficient skills to execute the idea. Although, sometimes outsiders revolutionalize industries, in the majority of cases that isn’t true → work on things that you understand!

As Bulgarians like to say: “🐸 every frog should know it’s pond”! ( Всяка жаба да си знае гьола! )

p.s. As with everything I write about on this blog, I don’t pretend any of the ideas I touch on are original. What I’m going to talk about is common startup lore, repackaged through the prism of my personal experience. I want to give a special shoutout to the book The Millionaire Fastlane ( by MJ Demarco ) and Deyan Vitanov ( among others ) who helped me shape this “framework” in my head.

I hope this framework proves useful in your business endeavors.

Introduction

As part of our Checkout X pivoting efforts, we decided to try building a completely new product - Vanga AI.

Sparing the details, Vanga AI ultimately failed to have the revolutionary impact on the Shopify Ecosystem that we’d initially hoped for, however, we still managed to build a solid product with a growing customer base.

I’d heard about Acquire.com in the past, so when I decided to move away from the Shopify App building business, I figured it was worth the shot.

So 18 months after its inception, Vanga AI got officially acquired on Acquire.com 🎉.

If you’re considering selling your SaaS business in the near future, I hope this article can give you some actionable tips on getting acquired:

Who’s this article for?

I’m writing from the perspective of a SaaS founder with growing revenue and customer base - actively looking to sell the business.

• Marketplaces like Acquire.com work best for SaaS projects looking to exit somewhere between $10k - $5M

• Over $5-$10M you’re probably looking for strategic buyers or private equity funds, so it’s best to hire an M&A advisor. ( I assume )

• For pre-revenue SaaS projects - revenue is the most important factor for those kinds of acquisitions. If the revenue is zero it’s going to be hard to sell a half-baked product for money. ( Though, I’m sure there are exceptions )

Managing expectations

As members of the startup community, it’s easy to look at the successful moonshot stories and multimillion “seed round” valuations, and expect that any exit means you get to buy a private jet.

I agree, my fellow aspiring entrepreneur “PLAYUH”, private jets are cool and I honestly hope you get there, however, you know what else is cool → a house 🏡, the freedom to travel the world 🌍, getting rewarded for your extra hard work 💪, this kind of stuff. Those days we tend to forget that a million dollars are A MILLION FUCKING DOLLARS 💰 - a life-changing amount for most people.

My point being that, only 1% of the startups will make it big, but even if you don’t make the 1% you can still get acquired at a reasonable valuation.

In this context, a reasonable valuation is usually somewhere between 2x-5x ARR

• Unlike traditional acquisitions, buyers on platforms like Acquire.com are opportunity driven - they usually don’t get strategic value from your SaaS but rather want to acquire a business at a fair price.

• Buyers need to account for the risk of everything going to shit 💩, while hoping they’ll manage to grow the business and make a profit.

• Buyers are not investors

  • Their acquisition money is not going into the business, but to your pocket.

  • The acquisition money is just the start, they’ll also need to pay for all expenses from now onwards.

Planning to sell your SaaS in the future?

If you’re not quite ready to sell your business yet but you want to sell at a later stage, it’s better to start preparing now:

Prepare P&L reports on a monthly basis

Monitoring your P&L is essential for your business anyways, but let’s be honest - we’ve all been a bit sloppy with our accounting. If you want to sell - buyers will want to see how the company was performing historically, so there’s one more reason to act like an adult and keep excellent track of your finances. ( There are a ton of templates online )

Create proper documentation

Another essential business practice: creating documentation. Yet, every company relies on folklore ( knowledge transferred from employee to employee ) more or less. Push yourself to create documentation - it matters a ton once you want to sell the company.

• Document processes

• Write good help articles

• Write tests and technical docs

Consider your business model

Not all revenue is made equal. There is a hierarchy of revenue:

1. Recurring revenue

2. Usage-based revenue

3. One-off purchases / Service revenue

Buyers want predictable revenue. In the end, they’re evaluating your business based on how much it makes. If you plan to sell your business in the future, consider pushing your revenue toward the recurring type.

Preparation for listing your business

Ready to sell? You need to prepare the following documentation:

P&L Statements

Prepare P&L Statements for your business

• Yearly P&L Statements for the whole history of your business

• Monthly P&L Statements for the last 12-24 months

Detailed Growth report

From my experience, most of the questions you’ll get will be regarding the growth of the business as buyers will probably want to keep growing it and they will want to be able to make an accurate projection of the business in the near future.

Try to be as explicit as possible about your growth. This will prove that you know what you’re doing and assure potential buyers their investment won’t regress after the acquisition.

Example documents you can create:

• Current customer numbers - Number of customers, MRR, Trials, Expected revenue, etc

• Acquisition channels, cost per acquisition, etc - are they repeatable?

• Activation metrics

• Customer & Revenue churn

• Etc

Documentation

As mentioned above - you need documentation on how your business runs. Process documentation, help center articles, tech documentation etc.

Assets list and transfer plan

What are you actually selling?

Are you selling the company or just the assets?

In many cases, it’s much easier to just make an Asset Purchase Agreement and transfer the assets, without transferring company ownership. That’s especially true if the buyer is in another country or/and you don’t have employees.

Do you have employees?

Are they going to keep working in the business after the sale? How would that work?

Do you want to stay in the business for a period?

Many buyers prefer to keep the founder working on the business at least for a period. Are you ok with that?

How are you going to transfer the digital assets?

What are your digital assets?

• Your codebase

• Your hosting account

• Your domains

• Your slack/notion/helpdesk

• Your Shopify account

• etc

Make a list of everything that you’ll need to transfer and plan on how it can be done. Some changes may require additional dev work.

Set a valuation

Setting the right valuation is crucial to generate interest from potential buyers.

Reasonably priced companies attract interest - badly priced ones don’t.

Keep in mind that you’ll need to collaborate with the buyer, so you need someone who’s serious and business-savvy. It’s best to offer a good deal ( for both sides ) and have a choice of buyer.

Factors to consider when setting a valuation:

• Determination to sell

  • How determined are you to sell the company? Is it a sale at all costs?

  • Is there a minimum amount you’re looking for?

• How fast do you need to sell?

  • Do you need to finish the sale in the next 3 months?

  • Can you continue growing the business and try again at a later stage?

• Will you keep working in the business?

• Will there be employees that will continue working in the business?

• Revenue & type of revenue?

  • Is the revenue recurring?

  • Is the revenue usage-based?

  • Is it one-time purchases or service revenue?

• Growth rate?

• Profit

  • Is the business profitable?

  • What’s the profit margin?

• Intellectual property

  • Codebase

    • How complex is the product to build?

    • How complex is the product to maintain?

    • Are there issues with the product that need to be fixed?

  • Other assets?

    • What other assets do you have?

    • Marketing assets? Social media following, mailing lists etc?

    • Patents, trademarks?

    • Other stuff?

How I valued Vanga AI

Facts I took into consideration

• I was determined to sell in the next 3 months

  • I had accepted a new position ( which ironically fell through 😄 ) so I needed to sell ASAP

• There was no team coming with the asset

  • I wasn’t willing to keep working on the project

  • We’d already disbanded the team as everyone wanted to pursue new ventures

• The business was growing 30% month over month

• The business wasn’t profitable

  • There was 80% gross margin

  • The salaries of the team pushed the business on the red

• 60% of our revenue came from usage

My valuation formula:

Last month’s revenue * 24 months

• As we were growing 30% MoM it didn’t make sense to take ARR into consideration, instead I used our last month’s revenue ( which happened to be December 22’ )

• As a usage-based e-commerce SaaS, November and December are the strongest months of the year. I knew buyers would expect a drop in usage revenue in the following months.

• I believed a fair valuation is somewhere between 24x-36x last month’s revenue - I opted for the low end as I wanted to sell fast and be able to pick a buyer.

• In the end, the valuation equaled around 5x our Annual Revenue

Where to list your startup

Acquire.com

• I found the Vanga AI buyer from there

• Very active for Shopify Apps and SaaS businesses in general

• This article is based on their process

SASI

sasi.unionworks.co.uk/for-sale

• For Shopify apps only

Flippa / Empire Flippers

flippa.com ; empireflippers.com

• Other marketplaces for online businesses, I don’t think they’re very popular among SaaS

• I tried Empire Flippers, but their onboarding didn’t make sense for my business

App aggregators

shopcircle.co/sell-your-business ; appregator.io & others

• There are a couple of Shopify App aggregators that you can approach directly

• For Shopify apps only

The acquisition process

Getting listed

Every platform has a slightly different questionnaire. I recommend Acquire.com’s guide on listings:

How to Create the Perfect Listing When Selling Your Business on Acquire.com

The first step in getting Acquire’d is creating the perfect listing. This article will walk you through each step of the listing process.

https://blog.acquire.com/how-to-create-the-perfect-listing-when-selling-your-business-on-acquire-com/

Here are a couple of questions that you’ll need to provide answers to:

Business description

• What do you do?

• What features do you have?

• Who’s your target customer?

• etc

Business size

• Revenue

• Customers

• etc

Valuation justification

• How did you get to that valuation?

• Why is your business worth that amount?

What are you selling?

• List assets you’re selling

Why are you selling?

• Explain why you wish to sell your business.

• It’s very important to be honest here - buyers need to be careful for businesses that are built on shaky grounds so they need a realistic reason for the sale.

Your timeline

• Pick a reasonable timeline for:

  • First calls

  • Getting offers

  • Deciding on which offer to pick

• This timeline can be extended but you need to have it. Otherwise, any buyer that gives you an offer will pressure your for an answer ASAP.

Evaluating buyers

Selling your business is a project on its own. You’ll need to collaborate with the buyer and they’ll need to come up with their end of the deal. A bad buyer can fail your acquisition, so choose carefully.

I recommend that you spend some time looking them up and talking to them.

A couple of things to consider:

• Do they have any past acquisitions?

• What’s their background? What’s their team?

• Are they asking you adequate questions?

• Are they thinking critically and asking hard questions?

• Do they look like they know what they’re doing?

• Do they look serious and reliable?

• What’s their game? Why are they looking into buying your business?

Field offers

If you start getting actual offers - congrats! 👏

Now which one to choose? There are a couple of factors:

Purchase amount

• What’s the total amount you’ll be getting?

Terms

• What are the terms of the deal? Is it all cash on purchase?

• Buyers may offer delayed payment, performance based pay, stock swap etc

  • Consider the main risk on non-immediate cash - there’s no escrow so if the buyer doesn’t follow through on their commitment you’ll need to sue them - which can be unrealistic depending on the sum and the jurisdiction.

  • Beware of stock swaps and performance based pay - their value is beyond your control. Consider the risk vs reward probability if you accept such terms.

Reliability

• Everything I mentioned in the previous section. Do you trust those guys they’ll follow through? Which offer seems the most reliable?

🤨

When I talk about trusting the buyer keep in mind - you can never trust a stranger completely, but you can’t sell the business without trusting anyone. Follow your instincts - if there are no red flags and the other side looks legit - go for it.

Due Diligence

Once you accept an offer the buyer will perform due diligence - they’ll need to validate that everything you told them is true. In the meanwhile, it’s not possible to negotiate with other buyers from Acquire.com

Discuss with the buyer what they need and how to give them access - but beware - you can’t protect everything. Sign an NDA before going forward, as there will be confidential information being shared. It’s not possible to audit your codebase without getting the codebase, for example.

My advice for this stage is: Be patient, transparent and responsive. Most of the times there will be small inaccuracies and that’s all right - make sure the buyer is aware of everything before their purchase - not after.

Escrow and Transfer

If the Due Diligence goes well, it’s time to sign your purchase agreement and proceed to escrow.

For those unfamiliar, escrow is a third-party arbiter that will hold the money until the assets are transferred and the deal is completed. It gives security to both sides.

Here’s how it works:

1. Terms are set in the escrow provider ( amount, assets to be transferred, conditions )

2. The buyer sends the money to the escrow provider

3. The escrow provider confirms they received the money

4. The seller transfers the assets to the buyer

5. The buyer confirms they received the assets to the escrow provider

6. The escrow provider sends the money to the seller

7. The seller receives the money

This whole process takes time. For us, it took around 3 weeks, mainly because Escrow.com held the buyer’s payment for a week and Shopify was very slow to transfer the app to the new buyer.

—

The asset transfer step is just… bizarre. You realise how weird SaaS businesses really are. In a traditional business sale you would be giving access to funds, keys to buildings/machines, introducing key employees - not in SaaS. The SaaS process is just sharing passwords and clicking “transfer account” on some websites.

This is the moment you get to realise that whoever holds a couple of key passwords is the real company owner → the cap table doesn’t matter.

—

⚠️ Be really careful with the assets transfer as there are things that can go wrong. In my case, with the transfer of the infrastructure accounts, somehow the infrastructure configs changed resulting in a complete crash of the app. It was a fun sleepless night of attempting fixes 😰

Acquired 💰

If you managed to go through everything - congratulations 🎉.

You’ve made an exit! 🚀

On Acquire.com’s pricing update

While writing the article, Acquire.com announced they will start charging a 4% commission on a completed sale, here’s the update:

How Our Closing Fee Helps You Get Acquire’d Easier Than Ever

Andrew here with phase two of our plan to help get more startups Acquire’d. As you might’ve heard, we’re charging a 4 percent closing fee on all acquisitions starting June 7, 2023.

https://blog.acquire.com/acquire-closing-fee-june-2023/

When I sold Vanga AI, the service was mostly free, but the update would not change my decision to list there. The reality is that Acquire.com and SASI were the only places I got offers from. Acquire.com helped me with finding a buyer and giving me structure on how to sell the business.

I completely support their decision on monetisation and I hope they keep growing so they can provide more and more opportunities for entrepreneurs like me and you. 🤘

p.s. I am not affiliated with Acquire.com, SASI or any of the other solutions - but happy to talk about them 🙂!

UPDATE: I got invited on the Acquire.com podcast

After my article got published, the Acquire.com team invited me on their podcast, which was super fun 🙏

Check it out here:

I hope this guide was useful to you.

Update: After writing this article, I acquired a Shopify App called Zipchat AI, and I’m currently very much involved in the Shopify App Ecosystem once again.

Obviously, take everything I’ve written here with a grain of salt and keep in mind that if you want to build tools for e-commerce, Shopify is dominating the space.

Introduction

I’ve spent the last 6+ years building Shopify apps:

• One got Hijacked by Shopify ( they never paid me my payouts )

• One got Banned by Shopify - after generating millions of dollars in revenue ( read the story )

• One got Acquired ✨

With that being said, I have a love-hate relationship with Shopify. On one side, all my entrepreneural success was founded on their ecosystem. On the other side, I’ve seen the short end of the stick, so trust me when I tell you Shopify is not your friend - they are a business, just like any other, and there’s nothing wrong about that.

There are tremendously successful companies that were built entirely on top of the Shopify ecosystem ( Klaviyo, Yotpo, TripleWhale etc ) and the hype for building Shopify apps is well justified - there’s a vibrant community, millions of potential customers ready to pay and a solid foundation built for developers.

To be super clear, I believe there are still a ton of business opportunities in the Shopify Ecosystem. I feel entrepreneurs like @DSMatie, @gilgNYC, @zero2exit, and others do a great job of showcasing the opportunities that the ecosystem provides - if you don’t follow those guys - check them out to get the “positive perspective”.

However, a lot has changed in the past 6 years, so I’ve felt it’s time to leave the Shopify app building business. Here’s why I believe you should stay away too:

Extreme competition

At the time of writing there are over 8,000+ apps on the Shopify App Store. Split that on the number of Shopify stores ( 1.7M ) and you get 213 stores per app.

A recent study made by The Growth Department, shows a couple of discouraging trends for new app developers:

• There are 82 new apps added to the Shopify App store each month

• Only 12.5% of apps generate more than $1000 per month

• Only 11% of apps reach 100+ reviews

The Shopify app store is a red ocean:

To swim in a red ocean you need to be outstanding, you need to beat the competition, but who are you competing with? These are main types of competitors you’ll face:

Indie Devs

Indie devs come in different shapes, but in general they are either a solo developer or a small team that develops Shopify Apps for a living.

🙋

( If you identify as an indie dev I recommend joining @DSMatie’s facebook community )

Those folk bootstrap their businesses and don’t need to make millions in ARR to be happy - they generally want to make a sustainable business that brings them income.

Problem is - the indie devs community is growing exponentially so it’s essentially a race to the bottom. There’s always someone that will offer similar features at a lower price.

VC-backed unicorns

With the great opportunities that the Shopify ecosystem provides and the success of companies like Klaviyo, there’s been no-shortage of VC-funding going into the space.

A couple of Shopify apps and their funding:

• ReCharge ( $227M )

• Loop Returns ( $125M )

• Gorgias ( $72.5M )

• Triple Whale ( $52.7M )

• Rebuy ( $21.4M )

The thing about VC-funding is that it comes with a constant pressure to grow. Those companies have raised millions in order to take as much as possible from the market and unless you have a secret weapon to beat them you’ll be left fighting for their scraps.

App conglomerates

Yes… there are now Shopify App conglomerates… those have money to spend and growth targets to hit. How do they plan to achieve it? By horizontal expansion - acquiring / copying successful apps and bundling them together.

Just look at Afterships’s app portfolio - It includes 11 apps which cover: Product Reviews, Referral&Affiliate, Email & SMS Marketing, Shipment tracking, Page Builder, Returns, Ads, SMS Marketing ( two SMS Marketing apps?!? ), Upsell & Cross-sell, Tiktok feed, Shipping…

Other examples of such companies are Yotpo, Bold, HulkApps and more.

Imagine the advantage they have when launching a new app compared to you. Even if you beat them to market, they have more dev power, more experience and an existing customer base that they can market to.

App aggregators

Similar to Amazon brand aggregators like Thrasio, there’s a trend to create Shopify app aggregators → companies that raise a bunch of money and buy a bunch of apps in order to create an app portfolio.

While most of them are probably aiming to sell the portfolio to a bigger fund in the future, their financial models rely on their apps to continue growing, so you can expect similar bundling and exchange of resources as with the app conglomerates.

Shopify

In recent years, Shopify is also slowly cannibalizing its own ecosystem by either developing free app alternatives or obsoleting apps by making a feature part of it’s core product.

Obsoleting apps Check this tweet by @gilgNYC

Sure, you could argue that LOOP’s and Aftership’s products are much more sophisticated, but nonetheless, they’ll have to deal with a new competition that comes native and free.

There are multiple other examples of Shopify expanding the core functionality offering at the expense of apps.

Competing with apps directly

The other way Shopify competes with app developers directly is their own collection of 38 apps, which include functionalities like Support, Emails, Affiliates, Reviews, Automation and more.

There’s the common belief by many app developers that Shopify’s apps are nothing to worry about as they are targeting the lowest-tier of customers. I believe that’s completely wrong.

A recent study by Shop Reviews shows that Shopify’s apps are some of the most popular apps for Shopify Plus stores, with Shopify Reviews & Shopify Collabs dominating their categories, and tools like Shopify Inbox also taking a significant market share.

IMO, from what we’ve seen from Amazon, Apple & others - the direction is clear - Shopify needs to grow at all costs. They can either grow by:

1. Getting more customers

2. Charging their existing customers more

The harder it gets to acquire more merchants, the more they’re going to focus on milking their existing customer base. Similar to how Apple is focusing more and more of their effort on Services - Shopify will certainly be growing their apps business in the future.

No defensibility

Let’s say you’ve found something 💎 unique, you’ve created a lucrative app with a lack of competition. Congratulations 👏! Now brace for the army of copycats coming your way.

Defensibility is one of the foundations of a sustainable business. There are multiple components to a defensible company, the main ones being:

• Branding

• Economy of scale

• Network effect

• Know-how / Proprietary tech

✉️

I plan to write an article on defensibility and foundations in the future, subscribe to my email newsletter and get the article directly in your inbox.

Most B2B SaaS companies don’t benefit from economy of scale or network effects that much, so their main defensibility traits are their brand and their proprietary tech ( rebuilding their product is hard and/or expensive ).

With Shopify, the bar to develop an app is set super low - building is easy and most of the heavy lifting is done by the platform. That’s great to start, but it also means that the majority of apps can be easily replicated by a solo developer somewhere in the world. ( Bonus: Their copycat will probably be promoted on your App page 😘 - more on that below )

Sure, you still have your Branding ✨ and superior product to guard you, but each new copycat/competitor is going to chip a piece of your potential customer base.

Lack of control

Over your distribution

The App store is a black box

The Shopify app store is the main acquisition channel for most apps, yet nobody has any idea how ranking / featuring is being done. One day you’ll be up, other day you’ll be down. You’ll see apps with less installs & reviews ahead of you, you’ll see big notable apps behind you on the ranking. You’ll see fake reviews, you’ll see keyword abuse, you’ll see a lot of 💩.

Point is, most apps depend on the app store for growth, and when the algorithm is on your side - you’ll be growing steadily. When they change, you’ll be crying on Twitter. To no avail.

🤔

Wondering how you can become independent from the App Store? One of the best strategies I’ve used over the years is influencer marketing. Feel free to reach out for tips regarding how to employ it for your Shopify app.

You’re forced to use your Shopify App Store page

Last year Shopify changed their rules to force all app installations to happen through the App Store:

To help facilitate merchant trust and security, we require that all apps, including public and custom apps, be installed or otherwise initiated directly on or through applicable Shopify surfaces (e.g. the Shopify App Store or the Shopify admin).

You can promote your app however you want, but in the end you need to send the customer to your app store page, meaning:

• You can’t track conversions - there’s no option to connect proper conversion events on the app store page since you don’t have control over it.

• Shopify is going to actively promote competitor apps. Even for the paid traffic you’re pulling in.

You’re a slave to reviews

Remember how I said the app store was a black box? One thing that most people agree on is that reviews are the most important factor in app ranking. ( Nobody knows for sure, but seems to be true ).

You need many 5-star reviews and you need to do everything possible to avoid bad reviews. Each bad review is going to tank your ranking. Guess what? Merchants know this.

We’ve had multiple merchants, using the app for free, actively threatening us to leave a bad review if we don’t add a new feature that they want.

Imagine that for a second…

Someone that never gave you a cent, that’s not even in your target group can FORCE you to do whatever they want and you have to drop everything else and please them…

I’ve honestly had nightmares of someone leaving a shitty review and having to do damage control.

On the other side, the only meaningful way to get reviews is to stimulate merchants to contact support with tasks that will have a happy resolution so the support can ask them for a review.

🤫

In other words: Add unnecessary friction to your app, create support problems that you can resolve fast and easy and you’ll get your reviews up. Hooray for the merchant.

Don’t get me wrong, review systems are one of the best human inventions. They work and they produce quality. Shopify’s review system has flaws. It still provides value for the merchants, but it’s gonna be a major pain in the 🍑 for you.

Over your core technology

Remember, you’re always building on top of Shopify. And they ain’t perfect. But merchants trust them. They don’t trust you.

Majority of the times you’ll have to hack things around because the API doesn’t support something, you’ll have to change feature design to just make it work and make a ton of compromise just because the API is limited.

But the API is not only limited, it has legacy, it has bugs and you inherit those in the moment you start building. The catch is - customers will always blame you when something breaks. Shopify support will also blame you in front of the customers. If there’s an app involved - it’s always the app’s fault.

And the bigger point is not who’s to blame, but that you’ll always have fundamental issues that just aren’t fixable. You’ll always have something to shrug your shoulders on and say - it’s just the way it is 🤷‍♂️.

You’re one-click away from losing your business

If you have a live Shopify app, you’re always a single support agent / automated bot away from losing your business. Think about that for a second.

Shopify has full power over your business. All they need to do is press a single button and all of your hard work, sleepless nights, investments, customers can be gone. Poof 💨

I’m not saying they will do it. But they can do it. And they’ve done it to me.

Shopify banned my app - Checkout X without it ever breaking their ToS ( they updated their ToS later on ). We just built a superior checkout, it started threatening them and they decided it’s gonna be easier to just get rid of us.

They also locked me out of my first app - Upsell X just out of spite. The app had nothing to do with Checkout X or broke their ToS in any way. They even continued charging Upsell X merchants, but those funds never made it to me. Not sure if they just stole it or are still on hold somewhere.

They kicked out Mailchimp. Got rid of Beeketing. They’ve delisted hundreds apps with or without justification. A simple twitter search shows a mountain of stories.

There’s a reason many apps try to get Shopify on their cap table ( at a substantial discount I imagine ) - Shopify poses an existential risk to any Shopify-based business.

Conclusion

We all get to choose our pain. If competing with thousands of other companies, being copied, hacking around unsolvable tech issues and operating at Shopify’s mercy are pains you can live with - Shopify Apps development still offers a mountain of opportunities.

None of those issues are unique to Shopify either, iOS is a similar ecosystem with similar issues that still gives birth to numerous unicorn startups every year.

For me personally, I feel it’s time to try something new.

But you never know… Maybe I’ll come up with a killer Shopify app idea and you see me sneaking back into the ecosystem, like none of this ever happened. 🤫

I hope my view of the Shopify App Ecosystem was useful to you.

Historically, Shopify has always had a checkout problem.

You were always able to customize your storefront UX until the checkout, but after you click checkout, you were locked into an old-school multi-step checkout with no flexibility whatsoever.

5 years after Checkout X first launched, Shopify is finally stepping up its checkout game and offers:

• One-page checkout with a minimal number of fields (soon-ish*)

• Address autofill

• Customizable sections

• Post-purchase capabilities

Sure, their one-page checkout is only available for Shopify Plus merchants, and their post-purchase upsells only work with credit cards and PayPal (when they work; their API is buggy AF), but let's say they've almost managed to catch up.

5 years ago, I bootstrapped Checkout X, which did all of the following:

• One-page Shopify checkout with post-purchase upsells.

• It grew to 6,000 active merchants.

• It generated €600k in monthly recurring revenue.

• It processed millions of transactions every year.

However, Shopify killed it - just because merchants were choosing our solution over theirs.

As I move on to new adventures and Shopify seems to be taking their checkout seriously now, it's a good time to share the full story of Checkout X.

Backstory

It all started in 2017 when I quit my UI/UX Designer job in order to create & pursue “my own business”.

By the time I had started and operated a couple of Shopify dropshipping stores, which did fairly well and gave me the confidence that I can actually create a company myself.

The problem was, dropshipping is super competitive and many of my competitors were just better than me. So I thought to myself:

When Everybody Is Digging for Gold, It’s Good To Be in the Pick and Shovel Business

I had experience with designing and building different web apps so I know exactly what I wanted to do full time - make Shopify apps. ✨

✍️ I drew the following plan:

1. Create a small Shopify app and get some customers to get a feel for the market

2. Create a bigger Shopify app that’s successful and generates enough money so I don’t have to be worried about working for a living

3. Create a business that changes the game

( Future me is so proud to see points 1 and 2 completed ✅ 🙏 )

So I got thinking. What app should I build?

What apps/add-ons bring the most value ( revenue ) to my dropshipping stores?

1. Was Oberlo ( app for sourcing products / delivery of my orders )

2. Was some custom javascript I wrote that was offering small upsells before checkout. Jackpot! 🎰

So, that’s how Upsell X was born:

It took me a while to build it - it was the first software I coded myself, but in the Fall of 2017 - Upsell X was launched. And it worked!

Over the next couple of months I got a couple of hundred of merchants and I was making $1k-$2k a month from it. Major win for me! 🤘

How Checkout X was born

Around that time I decided to move back to my hometown of Sofia, BG 🇧🇬 ( was living in 🇫🇷 France before ) and long-story short:

• Met with a friend

• Decided to open an online pharmacy together ( dumb idea 🤦‍♂️ )

• Decided the pharmacy will be running on Shopify

• Had to find a payment provider that works with

  • Shopify

  • Bulgarian entities

  • Companies that sell “legit drugs” on the internet

Needles to say - our business plan had a couple of flaws. But the payment aspect was absurd - there was absolutely no way to accept credit card payments.

Back in the time Stripe didn’t operate in Bulgaria. The couple of other companies that were allowed on Shopify ran as far as they could when they heard we’re some Bulgarians looking to sell drugs.

I was stuck…

• There were Bulgarian payment providers that would onboard us but they wouldn’t be allowed on Shopify

• There were Shopify-approved payment providers but they didn’t want to work with us.

So I got thinking - can’t I just bypass their checkout and integrate whatever I want? 🤔

• Yeah I could!

That’s how the first version of Checkout X was born:

Needless to say, our pharmacy idea didn’t go far. But I had solved another problem - I could connect any Payment Provider to Shopify 🤯

First business plan: Checkout X for payment providers

My first business plan was simple:

• Find Payment Providers that are not allowed on Shopify

• Integrate them with Checkout X

• Make them promote Checkout X as an integration solution to their customers

I spent a couple of months talking to dozen of different payment providers. Most were “interested” but we never really went anywhere. The only company that we made an agreement with was Bluesnap, which brought some customers, but not as many as I was hoping for.

Second try: One page checkout with post-purchase upsells

One day, while I was working on Checkout X - I got a support ticket from one of the Upsell X customers - Super-prix.fr

I don’t really remember what the support ticket was about, but one thing went to another and they asked me - “Can you integrate post-purchase upsells?”

I paused for a moment… I thought about it… and I told them that I’m making a checkout product and that it should be possible to add post-purchase upsells. They replied:

• “We need a one-page checkout page with post-purchase upsells. How much will it cost us?”

With a little bit back & forth I estimated they would be spending ~€5k/month per month if I managed to get all of their shops on Checkout X. I asked them to prepay €5k, so I’m sure they won’t change their mind later on.

• They agreed and sent me the €5k via PayPal.

• I WENT NUTS 🤯🤯🤯

€5k / month was huge for me:

• It meant I can work full-time on the project without worrying about paying the bills.

• It meant that Checkout X will be making 3X more than Upsell X from a single customer.

• I honestly thought - “I made it”.

Launching the app

When we first talked, I promised the Super Prix guys that their custom one-page checkout with post-purchase upsells will be ready in 2 months and I sticked to it.

2 months later I visited them in 🇧🇪 Belgium and prepared to do a test-launch on one of their stores.

We launched it together… 🚀

It was a shit show… 💩

They disabled the checkout after 2 hours… 🤦‍♂️

The checkout was working great - I had tested it from end to end. What didn’t work was all of the services that relied on the checkout. Here’s a list of some of the things that didn’t work:

• Metrics

• Any pixel tracking ( Facebook Ads / Google Ads / etc )

• Abandoned checkout emails

• SMS abandoned cart

• FB Messenger abandoned cart ( it was a thing back then )

• Refunds

There was no way that they could use the checkout until all of their services worked - I had no idea how I missed all those things. Worse, I had no idea how to fix those problems. I promised to find a solution somehow and had a long trip home.

It took me the whole summer to solve most of the issues.

Some things I managed to integrate, some things I had to rebuild myself, but in September of 2018 we finally launched on one of their stores. Then we added more.

Finally, the app was live. 🚀

The first 100 customers

Once the SuperPrix guys onboarded all of their shops and things were stable ( relatively 🙄 ) I started working towards getting more customers.

At the time, every customer had to be onboarded manually. I had to explain to them all the weird stuff that the app brought with it ( custom metrics ; integrations; etc ) and I had to add custom code to their shop.

Slowly but surely I got to my first 100 customers using the following channels:

Bluesnap partnership

At the time Bluesnap got kicked out of Shopify ( not sure why ) so they referred us to prospects that were on Shopify.

We had a lot of issues in our partnership, merchants were signing up for a payment provider and they were forced to use a custom checkout with all it’s quirks ( and benefits ).

The thing was, Bluesnap was selling their benefits, not ours - so the merchants were confused on why they had to use an alternative checkout.

It was tough but I got some of my first customer from them - I guess it was worth it.

Negative virality

For most products - being viral means that your existing users would recommend it to their friends. With Checkout X it was the opposite:

• Competitors of our customers were copying what our customers were doing.

• When they saw a custom one-page checkout on their stores - they went nuts.

• They needed to know how is this possible on Shopify? 🤔 How can they have it on their shop?

• We left breadcrumbs to Checkout X

SuperPrix didn’t allow us to put our logo on their checkout ( which we did later on other stores ) - but they didn’t say anything about the code.

So we spammed our page source and console with marketing messages. And it people found it!

Merchants copying the stores of our customers was the main acquisition channel for Checkout X until the end.

Scaling to 6000 customers

Over the years we eventually reached 6000 customers. Which isn’t a ton, but with €100 average revenue per store, we reached a record of €600k monthly revenue 🤯

We never ran paid ads.

We were never listed on the Shopify App Store.

All of our customers came from two channels:

1. Virality - Merchants copying each other and merchants recommending us

2. Affiliates - We were paying commissions to whoever brought customers

The key to a good affiliate program

Our affiliate program was simple. You bring a customer and we pay you 15-25% of the revenue we make from that customer. Forever.

That’s pretty standard. The reason why our affiliate program worked so well ( brought around 40% of our customers ) was because affiliates actually used our product and liked it.

All of the affiliates we onboarded approached us first.

Later on with Vanga AI, we tried replicating the same strategy and it was much harder, mainly because the influencers that we targeted never used Vanga AI before.

✌️

I’ve worked with hundreds of SaaS influencers over the years and I’ve found success with them on multiple apps. If you need help with employing influencer marketing for your SaaS feel free to reach out.

If you want influencers to want to work with you - make sure they use your product and they find it useful. Otherwise it’s an uphill battle.

Scaling the team

I started Checkout X alone. I tried attracting a co-founder on a couple of occasions but things just didn’t work out.

I had to do design, programming, marketing, sales, administration, etc by myself.

It was a lot of work and there were a lot of challenges, but there was no one else to do it and I didn’t want to worry about paying someone’s salary without being sure I can afford it.

I wanted to wait until the right moment.

First hire

Around a year after launching, I’d gotten to around 100 customers and onboarding/supporting merchants was starting to become a hassle.

I decided it’s finally time to make my first hire - a CS rep 👩‍💻.

I hired Karolina. She had the following responsibilities:

• Onboarding customers ( adding javascript to their code, debugging it, helping them set up their payment methods & design )

• Supporting existing customers

The moment I hired her we both realised that:

• She has no JS knowledge so she can’t onboard merchants

• There is no admin panel to support the customers - everything was done through the Rails Console ( programmer tool )

We had to do a lot of work before we can do the work.

For the first month all she did was learning basic coding skills while I dropped everything else and started implementing an admin panel.

Hiring developers

As the project kept growing I found myself being overwhelmed with all the 🔥 fires I had to put out while trying to integrate more and more services with the checkout ( every customer has a slightly different stack for payments, marketing tools, etc ).

The checkout is a crucial piece of technology - it’s where the actual purchase happen. In order to make everything work flawlessly, we had to build a mini shadow-Shopify that runs on the background. Checkout X handles products, customers, discounts, taxes, payments, analytics, themes, emails, integrations and so on. It’s a huge product.

I desperately needed help and I finally had some good cashflow so I decided it’s time to hire some devs. As I wanted flexibility and wanted to hire fast I just went on Upwork and started looking for Rails Devs that had experience with Shopify.

Almost instantly I managed to hire Niko & Vlad who were just finishing another Shopify project - it was an instant match. So I just fully booked their calendar.

Hiring a CDO, CTO, more devs, support, partnerships

We were always very conservative with hiring - we never wanted to be a big company. My thinking was - wherever there is a repeatable batch of work that can be allocated to someone - we’d look for such person.

• Someone needed to do constant iteration over our UX/UI - We hired Stoyan as our CDO

• Tech complexity increased and we needed someone to scale our technology & dev process - We hired Ventsi as our CTO

• We needed more dev power - We hired Alexey, Gokhan, Hristo, Valyo, G1, G2, Krum, Svetlin,

• We needed more support & onboarding agents - we hired Ksenia, Lucian, Daya

• We needed help with partnerships & marketing - we hired Jindra, Misho, Tina

The highest headcount we had a at a particular time was 16 people - all remote 🇧🇬🇬🇪🇷🇺🇵🇱🇬🇧🇺🇦🇷🇴🇨🇿

All those guys & gals were awesome every day and working with them was super enjoyable. I always had the idea I’m goofing around with friends, never felt like boring work.

Thank you for all the awesome moments - Checkout X team. You guys were awesome 🙌

How Shopify killed our business

Now, let’s be clear on something - Checkout X was born out of wedlock.

Control over the checkout is the centerstone of Shopify’s business.

It allows them to:

• Push their payment solution - Shopify Payments

• Push their fulfillment solution - Shopify Fulfillments

• Push their “marketplace” app - Shop Pay

• Collect commissions from other payment providers

• Collect 0.5%-2% revenue commission on stores that don’t use Shopify Payments

I was never so naive to believe that they’ll just let me go around forever, piggyback on their platform and reap most of the benefits. Even though what we were doing was not forbidden - it was clear that Shopify would disapprove of it.

My main logic was always - as long as we’re not breaking Shopify’s Terms of Service, we’re not doing any harm to the merchants.

Were there ways in which we could co-exist in a non-parasitic relation with Shopify achieving all of their checkout objectives and collecting all their revenue? - yes!

We’ve made such proposals to them, but they decided it’s easier for them to get rid of us.

Checkout was a grey area in the beginning

When I started building Checkout X there were no rules against such solutions and there were already similar products built by other companies - most notably Bold Checkout, so I decided to give it a go.

At the same time - as I mentioned, I expected they won’t be happy with the solution so I never bothered applying for the Shopify App store.

One crucial mistake I made - I didn’t create a separate partner account so the Checkout X unlisted app was on the same partner account as Upsell X.

Spring of 2019 - Shopify changed their rules

In the spring of 2019 there was a ToS update that said building public checkout apps is forbidden unless you get a written permission from Shopify.

We contacted Shopify ASAP and they connected us to a rep who replied in an email - “you’re allowed to do that for now”.

Thank god we fucking did that! 🙏

A week later another Shopify rep sends us an email telling us we have 3 days to tell our customers we’re stopping the service because of breaking the ToS.

We had to react lightning fast and show screenshots of our other email communication and thankfully this agent didn’t delete our app - close call.

⚠️

 Remember: A Shopify app is always a single-click away from being deleted from someone that works there. Even if you got a permission written permission from somebody else.

After this communication - came silence. Nobody told us anything. 😴

So in the summer we decided to go to Toronto, Canada 🇨🇦 and meet the Shopify team in person.

Shopify Unite was a great event.

We managed to meet Jason in person and he was pretty cool - he told us not to worry, that they’re thinking of ways to make what we do possible within the checkout and that they’d be communicating with us what’s happening.

They also announced they’re working on native Post-purchase upsell APIs while we were there.

But in the end - we achieved nothing. There was no communication on what we’re supposed to do or what to expect.

We just kept operating in the dark waiting for something bad to happen to us.

January 2020 - We get locked out of our app

One day I get this email:

I had mixed feelings. I was starstruck ( Harley is an idol for me ) and scared at the same time.

I had a call with Harley and he was pretty nice:

• He told me in plain words they don’t want us to continue operating and that they’re locking our API key for new installs as we speak.

• He told me to wait for “the new checkout APIs” that will be coming in the future and that if we cooperate we’re going to get early access.

And just like that, we could no longer onboard new customers…

There was just one thing though…

The new Shopify ToS said the following:

"not use an alternative to Shopify Checkout for web checkout or payment processing, or register any transactions through the Shopify API, without Shopify’s express written authorization. This Section 2.3.18 only applies to Public Applications.”

So… theoretically we could always make private apps? 😅

ℹ️

Private apps means that each merchant can create their “own APP” just for their shop and send us their API keys. It’s pretty much the same, but it’s designed for shops that need to make something custom just for themselves. In simple words: it’s a loophole.

We had a choice:

• Option A - Stop what we’re doing, downscale the business and wait for the new APIs. ( They eventually launched 1-2 years later )

• Option B - Make Checkout X work with Private Apps. Keep onboarding new merchants. Anger Shopify & disappoint Harley 😢

I chose option B.

The ToS allowed it and that was the only realistic option to continue operating as a business.

We kept onboarding new stores and Checkout X kept growing.

April 2020 - Shopify hijacks Upsell X

A while later, Shopify saw what we were doing with the private apps and decided to block our partner account - which held Upsell X.

Initially they quoted violation of the Partner Program Agreement and Terms of Service, but when pressed further they admitted we’re not breaking their ToS.

As Checkout X was using private apps at this point, the only result was that they locked us out of Upsell X and we couldn’t support it anymore. Even further - they kept charging merchants for Upsell X - but we never received those payouts.

January 2021 - They finally changed their ToS

At the end of 2020 they finally changed their Terms of Service. No more alternative checkouts, not on Public apps, not on Private apps.

It was time to stop:

1. Breaking the ToS meant our merchants can be banned ( and lose their business ) because they’re using our service.

2. We were tired of being treated like parasites 🐛. We invested millions in bringing a top-notch checkout experience to Shopify, which our customers loved (and Shopify copied in some cases ) - at the end all we got was a constant hostility.

We talked to Shopify once again - they weren’t interested in any collaboration. So we agreed to stop onboarding new customers, they agreed to let us support current merchants.

We announced the news, gave people 14 days heads up and closed installations.

For good.

Aftermath

There were so many people asking us to onboard them after the change, it was heartbreaking. We had to say NO to new customers literally thousands of times. 💔

Some merchants even created multiple Shopify stores, installed Checkout X before the close-off and started selling Checkout X enabled stores after the change. 🤯

Shopify also dedicated some of their employees to pretend to be desperate Checkout X customers and beg our support to let them in. Not sure if I should be proud or annoyed by such pitiful actions.

Checkout X is still operating today. We still support Shopify merchants that installed the app before the closing of the installations, but we haven’t onboarded new ones for the past two years.

Porting Checkout X to WooCommerce

The obvious move to survive the Shopify ban was to open Checkout X for other platforms. We tried. We spent way too much time porting Checkout X to WooCommerce and supporting both Shopify and WooCommerce simultaneously.

The project was a disaster. 🤦‍♂️ It took us much more dev resources than we planned initially and at the end we couldn’t really market it well.

WooCommerce is a very different platform from Shopify, so Checkout X wasn’t the right product for it. The platform has different needs ( it has one-page checkout & upsells ) and plugins there are expected to work differently.

We have some customers on WooCommerce but it’s nothing like Shopify.

We were so cocky because of our success on Shopify that we never stopped to think if anyone on Woo needs our product.

We haven’t tried other platforms.

What could have we done differently?

Pain + reflection = progress. Right?

Checkout X was ( and still is ) a wild journey 🎢. I know that some choices I made were good, some weren’t. Looking back there were a couple of ♟️ key moves we could’ve played differently.

Fundraising

We had multiple opportunities to fundraise. I had the chance to speak to some world-class VCs and I had tremendous support from the Bulgarian startup ecosystem. ( Thanks to everyone for the opportunities. 🙏 )

I always saw Checkout X as a limited-time-window opportunity and honestly I couldn’t see a future different to what happened to us. ( Maybe that’s why things turned out this way )

The reasons I didn’t want to take funding were:

• I didn’t want the investors to lose their money on me

• I didn’t see how funding would solve any of our problems

• I didn’t want to be stuck building Checkout X beyond Shopify, just because we have money in the bank

• I wanted to be able to cash out and leave at any moment

Looking back, maybe if we managed to get the right investors, they could’ve helped us lobby our way out of the situation with Shopify. Maybe not.

I believe VC funding is an amazing instrument that enables innovation, but I never saw fundraising as an objective to be chased at any cost.

Acquisition

For some reason everyone asks me if Shopify offered to buy us - no they didn’t.

They didn’t want to have anything to do with us.

We had one acquisition offer ( from another company ) - I declined it because it was too low.

We didn’t talk further.

Suing Shopify

One advice we got was to file an antitrust case against Shopify in a European Court.

Theoretically, we could’ve argued that Shopify uses anti-competitive practices to get rid of their checkout competition. Similar to what Spotify & Epic Games did against Apple.

While that might’ve been a viable option, honestly, I don’t have the balls to pick a legal fight with a multi-billion corporation.

On top of that, I believe that crying to the regulator is a bitch move. After everything, I still believe that Shopify built their platform and they should be able to do whatever they want with it.

Ignoring the Shopify ToS update

One thing that I probably would’ve done differently is not complying with Shopify’s updates.

If they want to harass and ban their own customers for using an alternative checkout - that’s their decision - they should’ve dealt with the consequences.

Instead, we helped them by becoming our own gatekeeper and refusing to onboard new merchants.

But again, I was this 25 year old, just made some money for the first time founder and I was afraid. Shopify has made numerous legal threats against me along the way and I decided to fold, get my profits and move on.

Conclusion

It’s been a wild ride. I believe that I’m leaving this adventure as a winner, as I find myself with more experience, contacts, recognition and finances than when I first started.

At the same time, it’s sad to see my best work so far slowly dying away and I still can’t get rid of the extreme anxiety I felt with Shopify looming over my head for the past years.

If I sound bitter - I’m not. I like Shopify. I own Shopify stock. I believe they’re completely dominating the e-commerce platform space and none of their current competitors stand a chance of catching up. I know they did what’s best for their business and this is the end I expected.

Still, I also believe it’s important to share stories that aren’t all 🌈 rainbows and sunshines.

At the end - I’m happy.

I had some wins, I had some fails - it’s time to move on.

It’s time for step 3 of the masterplan 😈