The Koerner Office - Business Ideas and Deep Dives with Chris Koerner - 004: Turning a Small App into a $20K/month Business.

Episode Date: September 7, 2023

On today’s episode of Startup Gems we tell the story of a full-stack web developer from Poland who together with his twin brother, built FreeYourMusic.FreeYourMusic allows you to transfer your playlists across music streaming services such as Spotify, Apple Music, and Amazon Music. Most of their customers are simply people who want to switch to a different provider and take their playlists with them.

Welcome to Startup Gems. We find undiscovered startup growth hacks, stories, and case studies from every random nook and cranny of the internet. Whether you're a seasoned entrepreneur, an aspiring startup enthusiast or simply someone seeking inspiration, startup gems is your source for the stories that ignite the flames of innovation. Let's dive in. Episode 4. Turning a small app into a 20 grand a month business. On today's episode of Startup Gems, we tell the story of a full-stack web developer from Poland, who together with his 12,000, brother, built Free Your Music. Free Your Music allows you to transfer your playlist across music streaming services such as Spotify, Apple Music, and Amazon Music. Most of their customers are simply people who want to switch to a different provider and take their playlists with them. Let's dive in, how I came up with the idea. Immediately after the release of Apple Music in 2015, I really wanted to switch from Spotify so I could try it out. Usually someone develops a tool like free your music. But after waiting two weeks, I noticed that there still wasn't anything there.

Moving 3,000 songs manually would have taken me hours, so I tried to figure out how to automate the process. After a few hours of playing with AppleScript, I created an app that literally just used the mouse to click things in iTunes. Search for a song, click more, click to add music, repeat. How the app works. It's really simple. First you log in with your account to one streaming service, for example, Apple Music, and then you log into another, let's say Spotify. Free Your Music will then fetch all your playlist with song titles, author names, and albums from Apple Music. Then it will perform a search in Spotify with a little bit of magic to properly match songs, because some services use different naming systems.

Once Free Your Music has properly identified all the songs, it will create a playlist in Spotify. Adding multiple sources and destinations is always a bit tricky, as they are so different. from each other. Let's turn it into a business. I figured what I built could be useful for others, so I made a small website and posted it on product hunt. At the beginning, it was free, but people could donate money via a buy me a beer button. The first day I got reviewed in multiple newspapers and online magazines, got 20,000 unique visitors to the website and made $97 in donations. I thought, all of this because I made a small script after work, nice. Then my brother said, hey, let's make it better, and start selling it. So my brother Mike, our friend Chris and I, got together and spent all night

creating a proper app. I think it was five in the morning when we released it. We got our first payment within five minutes and then went to sleep for a few hours. Things got crazy after that. I went back to work and saw people buying licenses all day long. We had so much stuff to do that I had to take a week off work. For the first few months, we had to work 16-hour days, half for our full-time jobs and the other half for free-year music, how the revenue changed over time. The first month, we made over $15,000 in revenue because of product hunt, but the next few months were much smaller at around $6,000. Now, after over five years, our average monthly revenue is around $20,000. We've experimented with different pricing models. It was $5 at the

beginning, then $12. And after some tests, we saw that a $9 price mark for free year music works the best. In the meantime, we've also added support. for iOS, Android, and many new music services. Thanks to Free Your Music, my brother and I were able to quit our day jobs and focus on building our own companies. How we grew. From the beginning, we focused on having the correct SEO tags and all the basics. If you Google SEO website checker, you will get a ton of resources telling you what you

are missing. Meta tags, descriptions, fast loading, heading tags, compressing, and others. It all affects your Google ranking. After that, it all grew organically. We were just constantly improving our apps and adding new services and platforms. We were also the first to support Apple Music Playlist Transfer via an iOS app, which was made possible with the iOS 9.3 update. The real growth started when we realized that free your music was a real business, not just a

cash machine that would last for a few months. After that, we started paying ourselves fixed salaries, but not too much. We kept lots of money in the company's bank account, and that allowed us to invest in the business. We've hired more people to help us with the development, marketing, and customer support. We're constantly thinking about how we can improve Free Your Music so that users are happier. Right now, we are launching a new service for music curators. It will help artists and brands to grow their audience with universal cross-platform playlists, how we handled legal problems.

Free Your Music was an overnight success, and we started making money on day one, which forced us to open a company as soon as possible. Fortunately, my parents had been self-employed, so I was accustomed to business. In Poland, you can open your own company in less than a day, so I took a few days off work, and by the next day had opened the company. Then we incorporated civil law partnership, which was basically a joint venture of all the founders' self-owned companies. We had one problem with it, though. It was not a separate legal entity, and all liability would fall on us in case of any problems.

People also trusted us less when they saw the weird partnership in the company name. They are used to LTDs and Delaware companies. So in the following months, we established freer music LTD in the UK and moved everything there. As for legal problems, we were always careful to not step on anyone's toes. The music business is really strict about their rights, so we made sure not to break any licenses. The things we would do differently. For sure, we would have immediately started by using Electron to build a Windows and Mac OS version based on one codebase. At the beginning, we'd been building something.

separate native windows in Macauas apps, then at some point we realized that it takes us too much time to copy features over to Windows. We had been focusing on Macaas. I'm glad we had the balls to say let's rewrite what we have an electron, so we will have one shared code base. We would have incorporated as an LTD at the beginning. We would have paid for a proper logo and website design much earlier. We would have used Stripe instead of Braintree because Braintree's bank closed our account as a result of them not understanding Spotify's SDK license. Of course we know all of this now, but when Free Your Music was starting, we had no idea how long it would last, so we were cautious to spend money. We didn't quit our jobs immediately just in case Free Your Music failed, and I think it was a good

call. You should not jump into deep water. You should first try it out slowly and run your business as a side project. At the same time, you should see where it's going and make a decision quickly, my current job or my business. In hindsight, we should have quit earlier. Next, some advice on how to turn your side project into a profitable business. To be independent, you have to make money to support yourself. If you have a project you're working on after work, but months have passed without it having any paying customers, that usually tells you that there's no market for it, or that you haven't focused on it enough. Before, for your music, I created numerous projects that failed, and this is what I learned. All businesses have to make money, and you need to quickly

kill the ones that do not. Treat your side project as any other business. If it doesn't make money after a few months, either change something in your product or kill it and start something new. Also, outsource things that take a lot of your time, but could be done by anyone. We wasted a lot of time replying to customer emails instead of improving the app. Read everything from Paul Graham. His writings contain so much knowledge and good advice that you'll be amazed. Go through stories of how other companies started. It's true when they say that, almost every company has similar problems. For sure, there is some company from the same vertical or with problems similar to yours which you can learn from. Talk to others. There are numerous Slack

groups, Facebook groups, Quora questions, etc. You will be amazed how much others want to help you. Diversify. If we had kept focus limited to Spotify and Apple Music and only on MacOS, we would be much smaller or dead. Look around for market opportunities you are still not taking, but that are easy to grasp with your product. For example, look at what Uber has done with delivering food. You can do the same even when you are quite a bit smaller than Uber. Thanks for joining us on this journey through the world of startups and innovation. We hope you've uncovered some valuable gems to fuel your entrepreneurial spirit. Don't forget to tune in next time for another inspiring story that will keep your entrepreneurial fire burning. Until then, keep exploring, keep innovating,

and keep shining bright with startup gems.