Nov 2024: My first million!

$1M in annual revenue, B2B sales, SOC 2, resellers, grow team, and other updates in November 2024.

Hello everyone, it’s Tony again 👋

I haven’t written much for this newsletter in a while, mainly because the past few months have been uneventful.

Today, I checked our PnL and found that TypingMind has reached $1M in revenue in the last 12 months. So, I thought this would be an excellent chance to share a recap and some updates!

Surfing + Coding = Happy life!

20 months to reach $1M

I launched TypingMind in March 2023 (and made $22K in the first 7 days). So, it took me 20 months to reach $1M.

TypingMind started as a one-time purchase product, so for the past year, I’ve been working on converting more customers to our Team version (to build internal AI platforms), which brings subscription revenue.

As of now, one-off revenue is still the primary source of revenue, but it only accounts for ~50% of our monthly total.

My Journey Learning B2B Sales

I’ve been talking about wanting to focus more on B2B since I was building my last startup, BlackMagic. I think it has finally started working with TypingMind Custom!

B2B sales means I have to get on a lot of video calls, long sales cycle (sometimes a few months!), but get rewarded with a big contract deal value and potentially super low churn.

With the help from my teammates, getting on video calls is not so tiring anymore. When I first started indie hacking, I enjoyed NOT having meetings a lot, but I think there is a threshold where “some quantity” of meetings are acceptable for me.

I think the most important part of B2B sales is not only answering their questions on the call but also getting to know the customer, building a relationship with them, sometimes on a personal level, becoming “friends,” persuading the customer to make a purchase decision, and then continuing to follow up with them post-purchase, maintaining the close relationship.

It requires a lot of energy to do such activities. Most of my sales calls ended up only at the “answering questions” level. I was already feeling dizzy and had a sore throat, and I needed the rest of the day to “recover.”

My main motivation for getting on these calls is to make sure the customer questions are all answered perfectly, make sure they understand how TypingMind can help them, and that it’s worth their money. No one understands my product better than me, so I try to get on as much as I can. If I can’t make it, I let my teammate to attend the call.

Recently, we were able to close some big contracts, one 3,000-seat deal and several 1,000-seat deals. These are big enterprises wanting to set up an internal AI platform for their team, and they want to use TypingMind as the front end, which is a perfect fit!

I think what I (and my teammate) did well in these calls was to provide the customer with information about the product, but I did terribly in other aspects. Like “making friends” with them, talking to them more closely about their use cases, researching their company profile/industry, following up, offering personalized deals and discounts, and so many more things that could be done. For example, we asked them to provide us with phone numbers in the contact form, and they did, but we never actually called anyone… (which is such a waste of opportunity).

Going forward, I’d prefer to get a salesperson to do the talking part for me. I think a “Sales Closer” position is what it’s called. We have good incoming requests for the business/enterprise plan. Just need someone with the skills to handle it. I’ll still be on the calls as much as I can to answer information/product-related questions, but I’ll leave the main talking part to the salesperson. Partnering with an experienced sales team is also an option I’m exploring. Hopefully, I can figure it out.

I’m also on a “side quest” to try selling TypingMind Custom in my home country, Vietnam. It is a special feeling to see your customers using your product so close to you. But big companies in Vietnam are known for being slow to adopt new tech, so I hope this works.

Working with “branded resellers”

This is another path that I’ve explored to bring TypingMind to more companies by partnering with resellers.

Resellers are people who understand my product, have connections with local businesses, and are looking to deploy TypingMind for these businesses under their own brand (plus making a profit in the process).

My theory is that many local companies are not savvy and don’t know much about AI but want to apply AI to their workflow. Because they are low-tech, they need a lot of handholding, training, and onboarding to get started. Some don’t even speak English. I don’t have enough bandwidth to target and serve these companies, but someone from the local region who knows AI can serve them using TypingMind. Those are the resellers.

So, I will negotiate a deal with the resellers to sell TypingMind under their own brand while I act as the technical partner. The reseller will pay me a platform fee and then provide the platform plus their own added-value services like consulting, training, onboarding… Then, they can charge the local businesses a higher amount to make a profit.

And this model seems to work! I have successful reseller relationships in some regions and am looking to expand this further.

SOC 2, HIPAA, GDPR, security audits…

Working with B2B also means I must “upgrade” the company profile to be more serious.

In the past few months, I’ve spent at least $20K+ on getting all the compliance and certificates needed to make B2B sales easier: SOC2, HIPAA, GDPR, security audits, paying lawyers to draft and review contracts… It is the first time I have done anything like this.

As of now, TypingMind is SOC 2 Type II, HIPAA, and GDPR compliant. I’m super proud of this. In my last newsletter issue, I shared many details on the progress being made toward getting SOC 2 certified.

Things that contributed to TypingMind’s growth

I don’t track the growth closely, so this is all just my gut-feeling observation.

I think the primary growth-driven factor is the individual version of the app that people buy with one-time purchases. TypingMind is famous for being the most comprehensive LLM frontend for AI models. It gets mentioned positively on Reddit almost every day! People can buy a license and get lifetime access, which is a reasonable cost for many people.

Unlike what most people think about lifetime licenses, the volume of TypingMind license purchases has been increasing over the past 20 months and never actually going down. People may discover the app via organic mentions on social media, word of mouth, or via my Twitter profile since I have quite a lot of followers.

Then, among people who bought the individual version, some percentage converted to using the team version, which added recurring revenue.

Other than that, I tried to run paid ads and sponsorships, but the results were terrible, so I stopped. I still have not unlocked any paid marketing channel even now. It was a concern for me, but at this point, I think I can double down on improving the product and then rely on my customers to do the organic marketing for me.

Plan for the future

It seems like all I only talk about these days is TypingMind, and it’s true… The product has consumed all of my time and attention.

I still only work ~4 hours a day, but when I work, I mostly spend time on TypingMind. I have ideas and plans to build other products, like the email app that I have always talked about. But every time I spend my time on something else, I feel like I can gain much more value by using that time for TypingMind…

In the near future, I will try to set up a minimal team to help me explore my other ideas. I really don’t like managing people, but I guess this is the only way. So, let’s see.

For TypingMind, the plan is quite clear. I will continue to make TypingMind the best LLM frontend for individual users and use that advantage to bring more customers to the team version (building internal AI platforms for teams). I’ll also continue to invest more on the B2B and resellers front.

I’m also slowly expanding my team to have more capacity to work on TypingMind. Building more advanced features and shipping faster. Other than the Sales Closer role that I’m hiring, I’ve also started working with a design agency that will do a big UI/UX audit and improvements around the product and make it much more awesome.

That’s all for now!

I’m thrilled and excited to see TypingMind reach this milestone today, and I can’t wait to see what it will become in the future. It’s the biggest and most successful product I’ve ever built.

I’ll try to share as much as I can as I go through the next phases. I hope this month’s update is helpful to you in some way!

See you next time!

Cheers,

Tony