How Schedugram founder Hugh Stephens turned an “absolutely garbage” MVP into a $5 million startup
Tuesday, September 18, 2018/
He may have grown his business through a crowded market to an impressive $5 million in revenue without taking on a single dollar of venture capital, but Schedugram founder Hugh Stephens says he wouldn’t wish the challenge of running his startup on anybody.
While few would dispute the extensive difficulties associated with running any startup, Stephens’ specific challenge is almost certainly unique. His company Schedugram, founded in 2013, provides a scheduling service for the massively popular social media platform Instagram, and has over 10,000 users around the world.
Scheduling services for every other major social media platform are commonplace, with many even including the feature natively as part of the service. However, since launch, Instagram has been notoriously cagey with letting users access its API, which means a scheduling platform is much harder to implement.
But instead of giving up, Stephens came up with an ingenious yet “idiotic” solution.
Instagram “nightmares” spark an idea
Stephens comes from a consulting background, telling StartupSmart he dropped out of uni and almost accidentally started up his first business Dialogue Consulting.
“I was speaking at a conference one day about something or other I found interesting, and afterwards someone came up and asked if I did this for work and if I could help them,” he says.
Dialogue Consulting started out focusing on social media risk management, but moved into general strategy consulting and business strategy. “All the fun stuff,” says Stephens.
But through his consulting work, Stephens began to see the issues his clients were facing when it came to the world of Instagram. They’d tell him it was a nightmare to manage, and businesses were finding themselves overpaying social media agencies by huge amounts simply due to the difficulty of keeping an Instagram account up to date.
So the founder decided to take things into his own hands, spending the summer of 2013 building what he labels an “absolutely garbage” MVP (minimum viable product) for Schedugram.
That “garbage” MVP didn’t use any whizz-bang way to circumvent Instagram’s closed API. Instead, Stephens developed what he calls an “end-to-end hardware solution”, which in reality is 200 smartphones strapped to a board at the Schedugram offices, each formulating, customising, and posting hundreds of Insta posts a day for the company’s clients.
Stephens specifies the system is automated by custom ‘clicker’ software installed on the phones, and the phones aren’t operated in a “1,000 monkeys on typewriters situation”.
“Today it’s just part of Schedugram, but it’s definitely ballistically crazy. Customers wanted to not only schedule stuff, but use all the other features available like location and product tagging, so this was a way to let us handle those features,” he says.
“But it’s certainly a bit of a weird one. I would never wish the challenge on anyone,” he laughs.
The company’s unique setup also allows it to quickly pivot to adapt to new features and methods of posting, with Stephens saying visual components such as video are quickly becoming embedded in the future of the platform, and Schedugram’s setup means it can easily adapt to those new trends.
The Schedugram MVP was launched in early 2014 for a few local clients, but before long Stephens found himself with international clients, including an Italian company and an Arabic one.
“We very quickly learnt the challenge of building the software to write right-to-left,” he says.
Initially, he viewed Schedugram as a side project and way to generate leads for his main consulting business. But within 18 months it outgrew Dialogue Consulting, and today the company employs more than 25 people and pulled in an impressive $5 million in revenue last year.
“We’re slowly working our way south of the ‘valley of death’ between $1-10 million revenue. It’s definitely a different set of challenges and learnings compared to going from $0-1 million,” Stephens says.
An aversion to fast growth
Slow and steady is the name of the game for Schedugram, which has never taken on a dime of venture capital. Stephens says he prefers it that way as he “doesn’t want venture scale growth”.
“Growth of 40% overnight would be a nightmare for us, as with our post-delivery aspect it would be very challenging. We’re here for slow organic growth, and that suits everyone in the business, plus it makes it much easier to hire,” he says.
“It’s definitely a different model to what founders might usually be used to. The bottom line is a very important aspect, and you have to cover payroll and cash flow and all those fun things you don’t really have to worry about with a VC-funded startup.
“It was clear from early on what sort of business I wanted to run. I could have poured a ton of VC into it and it might have accelerated the business, or it might have killed it.”
Stephens says there needs to be more celebration and recognition of businesses like his. Startups raising millions and burning through all their cash is one journey, but it’s “not the only journey”, and the Australian startup scene is “quite bad” at celebrating sustainably growing businesses.
These businesses are the more “SME-like” startups, says Stephens, who highlights businesses like Envato as an example.
“Those sort of companies have a steady, long-term end goal, which is a lot different to the founders you see in the early stage who think they’re not successful unless they’re raising cash and hiring 30 people per quarter,” he says.
Living in fear
Stephens’ business model is one some would describe as tenuous, as Instagram could choose to implement its own scheduling function literally overnight.
The founder acknowledges this, and says for the first few years he viewed Schedugram as having a six-month use by date. However, these days he’s not anywhere near concerned; his business is profitable and the various discussions he’s had with Instagram imply the company isn’t looking to implement scheduling anytime soon.
“Our view on Instagram is that they’re primarily focused on consumers and the consumer experience, and all their work on future growth will be about getting consumer eyeballs, which works well for us,” he says.
“At the same time, it’s absolutely a risk, just like any business with a relationship with a third-party platform, but we just have to deal with it.”
One of the ways the company ‘deals with it’ is choosing not to become a holistic social media management tool such as Buffer, with Stephens saying he’s never wanted to compete in such a “crowded” space. He says Schedugram’s future is more in the social media marketing tools, and he wants to build something unique rather than be a “copycat”.
“We’ve got some initiatives going on in that space, but we’ve still got a long way to go, and we’re meeting with customers and non-customers every day to try and understand what the market’s going to be like,” he says.
“Customer insight will drive this, rather than being all about focusing on our competitors and what they’re doing. I think always playing catch up is not a very effective way to run a business.”