Four tips for bootstrapping from Workfast, a startup that hit $1 million in revenue within two months of launching
Thursday, March 9, 2017/
Founders should take a work-in-progress approach to getting their venture off the ground, according to one Sydney entrepreneur whose startup hit $1 million in revenue within two months.
Sydney-founded Workfast is an online platform enabling businesses to hire workers at short notice around Australia.
Two months after launching in September 2016, it topped $1 million in revenue and within the next 18 months, Workfast co-founder and chief executive Tim Nieuwenhuis is aiming to hit $30 million.
With no external investment to date, Nieuwenhuis says he and the team have grown Workfast’s client base to 8000 temp workers and 400 businesses.
“We get three to 500 applications a day,” he tells StartupSmart.
While online recruitment platforms are not new, stemming back from veterans like Seek through to new players like Sidekicker, Nieuwenhuis says Workfast addresses a real problem in the market.
Most of the businesses using the platform come from the warehousing, mining, building and construction industries. The platform gives these businesses access to workers who have not only been screened and interviewed, but are insured for public liability and workers’ compensation, he says.
“We created the platform to fill a need,” he says.
While Workfast already has runs on the board, Nieuwenhuis says it’s not an overnight success. The Workfast team spent around 18 months testing, tweaking, iterating and developing the product before releasing the full version.
“Even after launch, we had to pivot a little bit,” he says.
Reflecting on the experience, Nieuwenhuis shares four tips for startups to grow without external funding.
1. Don’t start with a complete product
When launching a new venture, Nieuwenhuis believes founders should take a work-in-progress approach to their product or service.
“Don’t release your product fully done,” he says.
“Create a website, put a 1300 number there, do advertising and see how many people call.
“Don’t just create a landing page, create a website [and] take the time to make it look like a real business that’s up and running.”
Once this is done, track how many people call, what they want and when you start selling, track all costs, says Nieuwenhuis.
“Test how many people call and see how much [each customer] costs,” he says.
“Customers are going to ask you over the phone what they want and you make the product to suit that.”
2. Identify your target customers and figure out quickly how to reach them
In terms of raising brand awareness and driving sales as a new startup, Nieuwenhuis says it’s important to figure out quickly who the target customers are, where they hang out, and when. Startups can then use this information to create an effective advertising strategy.
“Advertise everywhere and see what gets the best response,” he says.
“Facebook is great for exposure but usually doesn’t convert into paying customers.”
Instagram and Snapchat are good for targeting younger customers, says Nieuwenhuis, while he believes selling on affiliate markets like Ebay and Amazon is an effective but cheaper alternative to advertising.
“Find out where your marketplace is and that goes for every single business,” he says.
“There’s always a marketplace for your business.”
3. Keep tracking and proving the business model
Nieuwenhuis says it’s vital to calculate and track profit and losses with each transaction and product tweak.
“Make sure you know those figures to the absolute cent because when you talk to investors that’s all they’ll care about,” he says.
Even if a startup has no plans to raise capital, Nieuwenhuis says thinking like an investor with high benchmarks on business and financial modelling can push founders to really consider the robustness, sustainability and viability of new ventures.
These numbers will tell you if your business will work, he says.
“What’s the gross revenue, net revenue and operational costs?”
4. Don’t fall in love with an idea
“Be agnostic about what you want to do – don’t be romantic,” says Nieuwenhuis.
While having an end vision is crucial, Nieuwenhuis believes founders should keep an open mind and pay close attention to what the market wants and will pay for.
“Have an idea of where you want to get but the path on how you get there may change everyday,” he says.
Nieuwenhuis says Workfast has gone through many iterations and he’s aware the future could see the business branch into many different verticals.
“Things can change 100 different times,” he says.
“You’ll go broke if you’re stubborn about [change].”
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