A Stripe dashboard built in about eight days, run in public, and sold for US$4,000,000

Josh started building things for the web in the 1990s, in high school. The first business was designing websites for bands. 7

Trading time for money felt slow, so Josh built sites that earned from ads: ReallyFunArcade, ReallyDumbStuff and TutorialOutpost. 7 ReallyFunArcade sold a year later for US$4,500, and Tutorial Outpost sold six years later for US$19,000. 8

In 2004 Josh started TheAppleBlog, a site about Apple. GigaOm bought it four years later for US$75,000, plus a salaried job for two years. 8 When Josh left, Om Malik called Josh a "starter", a word that stayed with Josh. 6

The line to Baremetrics runs through toys. Josh helped run a vinyl toy store, Fugitive Toys. To follow the shipments, Josh built an internal tool, then released it as TrackThePack. 7

TrackThePack brought an email from David Hauser, a co-founder of Grasshopper. That led to consulting, and then to PopSurvey, an online survey app, where Josh became CEO. A second app, Temper, followed. 7

Josh's site lists 94 projects in all. 50 of them started before Baremetrics, and 30 of those 50 were shut down (our arithmetic, counting the list). 8 In Josh's words, Baremetrics "was 10 years in the making." 7

In 2013 PopSurvey and Temper made "maybe four or five thousand bucks a month". Josh wanted their SaaS metrics, and nothing on the market gave them easily. 12

On 15 October 2013 Josh tweeted the plan to build a Stripe analytics app that night. Josh worked until about 3 a.m., and the product went out a month later. 2

The idea was simple: Stripe already held almost all the data, so the software could put the metrics together with no setup. 1

Seven days after the launch, Josh published the numbers 1:

• Idea to launch: 30 days, 10 of them out of the country. About 8 full working days of work.
• 23 paying customers.
• US$1,328 in recurring revenue.
• About 1 million Stripe events processed.

The marketing was one tweet. Patrick and John from Stripe shared it, and so did friends with SaaS companies. 1

Josh expected to get back to PopSurvey and Temper within a year. Instead, within about six months Baremetrics made more than both together, and Josh sold them. 12 Josh's site says PopSurvey sold and "made nothing from the sale". 8

On 16 February 2014 Josh made the Baremetrics demo show the company's own live numbers: MRR, lifetime value, churn and dozens more. 9

The first reason was practical. Baremetrics needed a demo, and making fake data for a dozen metrics would take far longer than one line of code. 13

The second reason: no founder knew what "normal" looked like. Josh could not tell if the first month's US$1,000 was good news or bad. 9

At MicroConf, Hiten Shah, an advisor to Buffer, suggested that Buffer use Baremetrics and make its dashboard public too. Two weeks later, the deal was done. 14 In two days the Buffer deal added about US$1,500 in new MRR. 5

Josh called Buffer's move "the big inflection point": the MRR curve changed angle for good. 13

The other engine was writing. Josh published one article a week from real experience, not generic content. One post, on retargeting, added US$1,500 in new MRR in 48 hours. 5

The monthly updates showed the work, not only the wins:

• April 2014: MRR crossed US$10,000, almost 80% more than a month before. 5
• July 2014: US$18,500. The cheapest plan went up to US$39, user churn fell to 5.6%, and lifetime value passed US$1,500. 15
• November 2014: US$25,300 from 290 customers, and annual revenue above US$300,000. 3

In April 2015 Baremetrics launched the Open Startups initiative: seven companies, Buffer, ConvertKit and Ghost among them, sharing all their revenue metrics. 16

Openness had a cost. Josh said the public numbers also brought a wave of copycats, many copying the design. 13

By April 2014 the one-man show was wearing thin, and the scaling problems were over Josh's head. 5 The first hire came in May 2014. 2

In September 2014 Baremetrics raised US$500,000 as part of a new fund for companies on Stripe. 2 The money came from General Catalyst, for 5% of the company, at a US$10 million valuation. 13

Baremetrics was growing 10 to 20% most months, so Josh spent fast. US$250,000 went out in 120 days, mostly on payroll, as the team went from 2 to 6 full-time people. 10

Josh moved from maker to manager. Writing took about 20% of the week, and one support role drew more than 800 applications. 17

Growth slowed. In December 2015 Baremetrics raised US$300,000 more, and used it to hire two more people. 10

In June 2016 a forecast showed the truth: a net burn of nearly US$40,000 a month, and just over 8 weeks of cash left. 10 Everyone on the team took a 15% pay cut, and Josh took 30%. 18

December 2016 was the first profitable month since the 2014 funding, on reduced pay. By February 2017 everyone was back to full salary. 10

In April 2019 a buyer reached out, and by mid-May Josh had four offers of US$3–5m. Josh accepted the top one: US$4.95m, about 3.75 times revenue. 11

Days before the planned close, the buyer stopped answering emails and calls. The buyer had claimed to have the money, and did not. Baremetrics had spent nearly US$20,000 on legal fees and months on due diligence. 11

The other offers, from US$1m to US$4.5m, did not make sense. After six months, Josh did not sell. 11

Josh's lesson: time off would have been a better fix than a sale. 19

Early in 2020 Baremetrics hired three people. Then came COVID: March was rough, but the next months were some of the best growth ever. 6

Still, the swings reminded Josh of what running a company costs. Ten team members and more than 1,000 customers depended on Josh. 6

In April 2020 Xenon Partners, a tech private equity firm, emailed. Josh had met its founder, Jonathan Siegel, nearly 15 years earlier, doing design work. 6

The terms, published by Josh 6:

• Price: US$4,000,000 in cash, about 2.65 times annual recurring revenue.
• Josh's take: US$3,700,000, guaranteed whatever due diligence found.
• No earnout, so Josh could leave on day one.
• Paid in three parts: at close, at 12 months and at 18 months.
• Six weeks from the letter of intent to the close.

The missing earnout cost money. Josh could have negotiated more from another buyer, but most buyers would not let the founder walk away. 6

The team stayed, on the same pay, and US$300,000 went to the team for stock options and bonuses. General Catalyst and Bessemer wrote off the US$800,000 investment. 6

Why sell at all? Josh is a maker and a starter, and had spent most of seven years as a manager, no longer enjoying it. 6

At the offer, annual recurring revenue was about US$1.5 million (our arithmetic: US$4,000,000 ÷ 2.65).

Right after the sale, Josh ran a laser cutter 12 hours a day for Laser Tweets, a small shop of engraved wooden tweets. 18 Josh said: "I feel probably mentally freer than I had in the previous seven years." 18

Josh's site now lists 94 projects. Baremetrics is marked "Sold 7 years later for $4,000,000". 8

1. What was MRR in the month of the sale, and what share came from the add-ons built after 2017?
2. Did the public numbers bring more customers than the copycats took away?
3. Knowing about 2016, would you take the US$500,000 investment again?
4. Of the 50 projects before Baremetrics, which one taught you the most for it?