10 ms·

Why We're Bootstrapping Readwise (2018)

107 points by tristanho 8y ago

harianus 8y ago
> Now that we're bootstrapping, we've shifted away from a freemium business model (where users could optionally pay if they wanted) to a paid-only model after a free trial. I think this is great, and where venture capital fails; having real demand and not only focus on growth.
tristanho 8y ago
Founder of Readwise here -- just posted this article from ~10 months ago on a whim. Happy to answer any qs or chat about how the decision to start bootstrapping has gone since then (well!)
- nishanth_v 8y ago
  How are guys exporting highlights from kindle? A couple of months ago, I was looking to implement a kindle to Evernote exporter. I couldn't find any official API with the capability, so I ended up writing a scrapper that did the work. See: https://github.com/nishanthvijayan/kindle-highlights-to-googlesheets https://github.com/nishanthvijayan/kindle-highlights-to-goog...
  - tristanho 8y ago
    We actually maintain an open source tool called Bookcision which is for easily exporting your Kindle highlights which follows roughly the same approach we take (but is non-automatic, unlike our product): https://readwise.io/bookcision https://readwise.io/bookcision https://github.com/tristanh/bookcision https://github.com/tristanh/bookcision Readers should have access to their own reading data! :)
- eruci 8y ago
  Hi. I used to run a fanfiction site (which I sold about 2 years ago) and one of the things I found quite difficult was monetizing in this field. (I did integrate ebook exporters, readers and other rings and bells into the app after quite a bit of effort, getting very little in return.) Is your experience similar to mine? How did you decide on the right pricing model?
- burtonator 8y ago
  How's the bootstrapping going?
- rmorey 8y ago
  Looks like a great product, I look forward to trying it out this month. Do you have plans to support notes from Google Play Books?
eruci 8y ago
I've bootstrapped everything I've ever built. Yet, I constantly get investor pitches from bootcamp/accelerators/etc. One of them I got just the other day put forward this interesting offer: "$25K for 6% equity" on my current bootstrapped project which is earning about $20k per month in profit. Thanks, but no thanks!
- tarr11 8y ago
  $25K does seem somewhat pointless when you can wait a month and get that, with no dilution. Their offer was a bit low. However, it's not quite as insulting as you may think. Many bootstrapped SaaS businesses are valued at 3-6x profit (aka "discretionary earnings") [1]. At 3x, your business would be worth $720K, which makes 6% $43,200 At 6x, your business would be worth $1,440,000 which makes 6% equal to $86,400 [1] https://baremetrics.com/academy/how-to-value-a-saas-business https://baremetrics.com/academy/how-to-value-a-saas-business
  - true_religion 8y ago
    That's a value for selling it to someone else in its entirety, but no one who runs a stable business is going to sell 6% of their company at those rates because it literally means that every share sale will turn a profit guaranteed in 6 months merely from dividends. Imagine what the stock price of a company who boasted such dividends would be.
  - a13n 8y ago
    Lots of SaaS companies sell based on a multiple of their ARR, and it can get a lot bigger than 3-6x. https://www.quora.com/What-are-typical-exit-revenue-multiples-for-SaaS-companies-at-sub-5mm-5-10mm-10mm+ https://www.quora.com/What-are-typical-exit-revenue-multiple... Definitely depends on how much you're making, how fast you're growing, who the buyer is, and why they're buying. Sure, if some random person/business is buying you to just consume your existing profits, that's about the worst-case scenario you can find.
- speeq 8y ago
  > my current bootstrapped project Is that geocode.xyz?
trevmckendrick 8y ago
readwise is so good that even though I LOVE physical books, I don’t buy them anymore. They wouldn’t get into my Readwise notes, which is now a crucial part of my daily workflow.
- noamhacker 8y ago
  I’ve manually entered quotes from an old physical book into my readwise because they were so well written, so it’s possible to use physical books too!
- TheSpiceIsLife 8y ago
  Would you mind sharing what device(s) you use, along with any other software / services / etc you're using. I've been reading books, mostly fiction, on my phone as I don't presently have a tablet / ereader. I'd like to move away from reading mostly fiction again, highlighting and note taking and all that, but don't have the gumption to launch a research project in to what's available and what works.
  - hoodwink 8y ago
    Kindle for nonfiction. Audible for fiction. Instapaper for articles. Take notes and highlights while reading nonfiction to better connect to the material. All hooked up to and constantly synced with Readwise for enhanced retention and easy consistent review.
    - TheSpiceIsLife 8y ago
      Thanks. And where do your notes and highlights end up? I have a flat text file that's nearly 1MB in size, that I started 17 years ago! But it's just stored on Dropbox, which is cumbersome to use to search in the file while mobile.
      - hoodwink 8y ago
        All my notes and highlights, from all sources, are in Readwise. Includes metadata like tags, future notes, chapter, etc.
T3RMINATED 8y ago
CUZ YOU DONT BELIEVE IN THE PRODUCT, SHOOT IT DOWN NOW!
_____s 8y ago
This is a great post. The fact that you're bootstrapping is nice but I love how clear you are on why you're doing that and how it helps your business.
- tristanho 8y ago
  Thanks :) For us, we're really not that dogmatic about bootstrapping vs VC. VCs are definitely not evil, just optimized for a certain class of business, and probably not in our best interest at our stage. For another business, VC might be perfect, but in our space we've seen it cause one too many "reading tech" startups to drive off a cliff :)
gumby 8y ago
> A budding minority within the tech community ... supplies an alternative: A nice article (I am a fan of anything that supports reading!) but seriously, bootstrapping has been the default since literally forever (i.e. presumably since the beginning of commerce, before the invention of reading). Tons of successful businesses have been built that way, they may just not look that way to you. Consider that many may be bootrapped businesses that later wanted money to grow more rapidly than organically. As companies like that will have already demonstrated market value and execution ability they can typically get better valuations than just a PPT or a PPT+MVP
- a13n 8y ago
  Within the modern tech community, bootstrapping is definitely a budding minority. You can tell because a bunch of investment firms have recently popped up to try to capitalize on this new wave, like Earnest Capital. https://earnestcapital.com/funding-for-bootstrappers/ https://earnestcapital.com/funding-for-bootstrappers/
djhaskin987 8y ago
Often I'll buy a non fiction book solely so I can evangelize some best practice or methodology by sharing the book around. I still buy physical non fiction books because physical ones are just so much more easier to share without worrying about copyright infringement. Barring physical, I'd use Amazon precisely because it's easier to "lend" someone a book if you're both on the same platform.
aaronbrethorst 8y ago
VC is known for loving bold, humanitarian visions, and a startup with the mission to reinvent books should be a great fit, right? I can't tell if this is supposed to be sarcastic or not.
sweetheart 8y ago
Oh man, I’d never heard of Readwise before but this seems so useful! I love things like highlights and notes on the Kindle, and how words you look up are added to a special list for review later, but I never could figure out a simple way to take advantage of that later. Does Readwise also handle that new word use case? I love expanding my vocabulary and tend to exclusively read on a Kindle.
- hoodwink 8y ago
  Soon :) Shoot us an email at hello@readwise.io and we'll send you more details.
hiei 8y ago
Can any one describe how they use readwise in their workflow or personal use. Would love to hear - not affiliated with readwise please.

107 points by tristanho 8y ago

> Now that we're bootstrapping, we've shifted away from a freemium business model (where users could optionally pay if they wanted) to a paid-only model after a free trial. I think this is great, and where venture capital fails; having real demand and not only focus on growth.

tristanho 8y ago

Founder of Readwise here -- just posted this article from ~10 months ago on a whim. Happy to answer any qs or chat about how the decision to start bootstrapping has gone since then (well!)

nishanth_v 8y ago
How are guys exporting highlights from kindle? A couple of months ago, I was looking to implement a kindle to Evernote exporter. I couldn't find any official API with the capability, so I ended up writing a scrapper that did the work. See: https://github.com/nishanthvijayan/kindle-highlights-to-googlesheets https://github.com/nishanthvijayan/kindle-highlights-to-goog...
- tristanho 8y ago
  We actually maintain an open source tool called Bookcision which is for easily exporting your Kindle highlights which follows roughly the same approach we take (but is non-automatic, unlike our product): https://readwise.io/bookcision https://readwise.io/bookcision https://github.com/tristanh/bookcision https://github.com/tristanh/bookcision Readers should have access to their own reading data! :)
eruci 8y ago
Hi. I used to run a fanfiction site (which I sold about 2 years ago) and one of the things I found quite difficult was monetizing in this field. (I did integrate ebook exporters, readers and other rings and bells into the app after quite a bit of effort, getting very little in return.) Is your experience similar to mine? How did you decide on the right pricing model?
burtonator 8y ago
How's the bootstrapping going?
rmorey 8y ago
Looks like a great product, I look forward to trying it out this month. Do you have plans to support notes from Google Play Books?

eruci 8y ago

I've bootstrapped everything I've ever built. Yet, I constantly get investor pitches from bootcamp/accelerators/etc. One of them I got just the other day put forward this interesting offer: "$25K for 6% equity" on my current bootstrapped project which is earning about $20k per month in profit. Thanks, but no thanks!

tarr11 8y ago
$25K does seem somewhat pointless when you can wait a month and get that, with no dilution. Their offer was a bit low. However, it's not quite as insulting as you may think. Many bootstrapped SaaS businesses are valued at 3-6x profit (aka "discretionary earnings") [1]. At 3x, your business would be worth $720K, which makes 6% $43,200 At 6x, your business would be worth $1,440,000 which makes 6% equal to $86,400 [1] https://baremetrics.com/academy/how-to-value-a-saas-business https://baremetrics.com/academy/how-to-value-a-saas-business
- true_religion 8y ago
  That's a value for selling it to someone else in its entirety, but no one who runs a stable business is going to sell 6% of their company at those rates because it literally means that every share sale will turn a profit guaranteed in 6 months merely from dividends. Imagine what the stock price of a company who boasted such dividends would be.
- a13n 8y ago
  Lots of SaaS companies sell based on a multiple of their ARR, and it can get a lot bigger than 3-6x. https://www.quora.com/What-are-typical-exit-revenue-multiples-for-SaaS-companies-at-sub-5mm-5-10mm-10mm+ https://www.quora.com/What-are-typical-exit-revenue-multiple... Definitely depends on how much you're making, how fast you're growing, who the buyer is, and why they're buying. Sure, if some random person/business is buying you to just consume your existing profits, that's about the worst-case scenario you can find.
speeq 8y ago
> my current bootstrapped project Is that geocode.xyz?

trevmckendrick 8y ago

readwise is so good that even though I LOVE physical books, I don’t buy them anymore. They wouldn’t get into my Readwise notes, which is now a crucial part of my daily workflow.

noamhacker 8y ago
I’ve manually entered quotes from an old physical book into my readwise because they were so well written, so it’s possible to use physical books too!
TheSpiceIsLife 8y ago
Would you mind sharing what device(s) you use, along with any other software / services / etc you're using. I've been reading books, mostly fiction, on my phone as I don't presently have a tablet / ereader. I'd like to move away from reading mostly fiction again, highlighting and note taking and all that, but don't have the gumption to launch a research project in to what's available and what works.
- hoodwink 8y ago
  Kindle for nonfiction. Audible for fiction. Instapaper for articles. Take notes and highlights while reading nonfiction to better connect to the material. All hooked up to and constantly synced with Readwise for enhanced retention and easy consistent review.
  - TheSpiceIsLife 8y ago
    Thanks. And where do your notes and highlights end up? I have a flat text file that's nearly 1MB in size, that I started 17 years ago! But it's just stored on Dropbox, which is cumbersome to use to search in the file while mobile.
    - hoodwink 8y ago
      All my notes and highlights, from all sources, are in Readwise. Includes metadata like tags, future notes, chapter, etc.

T3RMINATED 8y ago

CUZ YOU DONT BELIEVE IN THE PRODUCT, SHOOT IT DOWN NOW!

_____s 8y ago

This is a great post. The fact that you're bootstrapping is nice but I love how clear you are on why you're doing that and how it helps your business.

tristanho 8y ago
Thanks :) For us, we're really not that dogmatic about bootstrapping vs VC. VCs are definitely not evil, just optimized for a certain class of business, and probably not in our best interest at our stage. For another business, VC might be perfect, but in our space we've seen it cause one too many "reading tech" startups to drive off a cliff :)

gumby 8y ago

> A budding minority within the tech community ... supplies an alternative: A nice article (I am a fan of anything that supports reading!) but seriously, bootstrapping has been the default since literally forever (i.e. presumably since the beginning of commerce, before the invention of reading). Tons of successful businesses have been built that way, they may just not look that way to you. Consider that many may be bootrapped businesses that later wanted money to grow more rapidly than organically. As companies like that will have already demonstrated market value and execution ability they can typically get better valuations than just a PPT or a PPT+MVP

a13n 8y ago
Within the modern tech community, bootstrapping is definitely a budding minority. You can tell because a bunch of investment firms have recently popped up to try to capitalize on this new wave, like Earnest Capital. https://earnestcapital.com/funding-for-bootstrappers/ https://earnestcapital.com/funding-for-bootstrappers/

djhaskin987 8y ago

Often I'll buy a non fiction book solely so I can evangelize some best practice or methodology by sharing the book around. I still buy physical non fiction books because physical ones are just so much more easier to share without worrying about copyright infringement. Barring physical, I'd use Amazon precisely because it's easier to "lend" someone a book if you're both on the same platform.

aaronbrethorst 8y ago

VC is known for loving bold, humanitarian visions, and a startup with the mission to reinvent books should be a great fit, right? I can't tell if this is supposed to be sarcastic or not.

sweetheart 8y ago

Oh man, I’d never heard of Readwise before but this seems so useful! I love things like highlights and notes on the Kindle, and how words you look up are added to a special list for review later, but I never could figure out a simple way to take advantage of that later. Does Readwise also handle that new word use case? I love expanding my vocabulary and tend to exclusively read on a Kindle.

hoodwink 8y ago
Soon :) Shoot us an email at hello@readwise.io and we'll send you more details.

hiei 8y ago

Can any one describe how they use readwise in their workflow or personal use. Would love to hear - not affiliated with readwise please.