Back in 2017 Danielle Simpson had an unlikely bio for a SaaS founder. She was an opera singer auditioning for roles and side hustling as an online ESL teacher. That side hustle quickly turned into the startup FeedbackPanda, when she realized how inefficient and time consuming it was to track course work and feedback for dozens of students. In about a week, her boyfriend (and software engineer) Arvid Kahl built a prototype to help her create feedback templates she could reuse, and reports to track courses and students. They opened up the platform to other teachers, and let them share their templates with the whole community. In just a couple of years, they had a bootstrapped, $55k/month SaaS business. Earlier this year they made the decision to sell, and in July it became official: FeedbackPanda is the newest member of the SureSwift portfolio.
Recently we sat down with Danielle and Arvid to chat about what it was like to build their business from the ground up, how they knew it was time to sell it, and what they’re planning next.
An Interview with FeedbackPanda founders, Danielle Simpson and Arvid Kahl
What was the #1 reason that you decided to start your own business?
Danielle: Arvid and I are both very entrepreneurial, so we always had our eyes peeled for an opportunity that could combine our skills. What immediately set FeedbackPanda apart from any other ideas we had was that it was born out of a real need. So when Arvid and I saw the opportunity for this product, we seized it.
One of my gigs was teaching English online. The coolest part of that work is that the teacher gets to act as a freelancer. Teachers are flexible to work as much or little as they want and choose the times that work for them. For these reasons, teaching online quickly became my main gig. It was amazing and so exciting to be able to work from home, to sing and smile at students all the way in China!
There was just one catch. As an online teacher, you’re only paid for the time in front of the camera. Any time preparing, getting organized, and giving feedback to students is not paid. This may seem like no big deal, but this responsibility adds up quickly in both time and mental load. Feedback after classes would take me hours and not leave me with much time to prepare for the next day’s classes.
I tried cutting the repetitive part of the work down by using templates and a spreadsheet, but it was still quite complicated. Of course, I knew that software products could be built to automate things, but I didn’t know how it could possibly stay organized. Then I found the magic ingredient, the student and course ID numbers were exposed. I pulled Arvid in right away and asked him to double check that I was seeing this correctly. When he confirmed, I explained my idea.
Admittedly, I still had little knowledge of what Arvid’s skills were and what the limits of what could work technically were, so I just explained my ideal scenario. When he said, “Sure, I can build that,” I could have cried. I was so relieved but also excited. This was something that all teachers needed, not just me.
For this reason, FeedbackPanda was different than any other business we started. I immediately saw the potential, the market was new and growing rapidly, and there was an obvious need for the tool.
This wasn’t a luxury product or something we’d need to convince people they could benefit from. It was actually going to make people’s lives better in such a significant way that once we knew how to solve the problem, it felt more like a duty we needed to fulfill.
Tell us more about the process of building FeedbackPanda? What did it look like to go from having the idea, to actually building it?
Arvid: Once we realized what was possible, I set to work on the prototype. The first version was finished in about a week. Although it was basic, it was already able to solve Danielle’s problem and cut down her time giving feedback from hours to minutes. This was our first success, but we wanted to keep improving on it. Danielle kept prodding me to see what else was possible and we worked closely in a constant feedback loop of Danielle dogfooding the product for about three months.
Since we were hopeful that Danielle wouldn’t be the only teacher using this system, I set FeedbackPanda up to be used as a Software-as-a-Service (SaaS) product. I integrated services that would eventually take care of authentication and payment for us quite early, but I made sure only to build out the parts that were relevant to capture revenue. Features like account management, up- and downgrading subscriptions or changing login methods were omitted. There’s no point in working on features for customers you don’t even have yet. Instead, we focused on things that would help out teachers and attract them to our tool.
Once Danielle told other teachers about FeedbackPanda, they came to check out the product. The best thing we did then (and still do now) was having a direct line of communication with each teacher using the product. Many teachers commented on what they expected and how FeedbackPanda could be even more helpful. They had even more wonderful ideas and so the next stage of FeedbackPanda became considering these ideas, and building it out to an even more helpful system.
FeedbackPanda is such a great name. Is there a story behind it?
Danielle: Kind of… but it’s more strategy than a story. Feedback is the biggest pain point that teachers have, so choosing to put that front and center in the name was our best branding strategy in the early days to help create awareness around how we help teachers. As someone who’s obsessed with sounds, it was also important to me that the name sounded good.
The first time we said, “FeedbackPanda,” I immediately loved the repetition of the short “a” vowels on the “back” of “Feedback” and “Pan” of “panda”. It may seem a bit obsessive, and I could totally nerd out about phonetics here, but it was the first name that really sounded good to us.
Also, who doesn’t love a cute Panda? Adding the animal to our name gave us a clear mascot, which makes teachers super happy when they see it. Even teachers who don’t use FeedbackPanda recognize our panda and may even be convinced to check us out due to the cuteness factor.
When you were deciding on the tools that you were going to use to build and run FeedbackPanda, how did you pick those? We’d love to hear more about this.
Arvid: I worked on the prototype at night and on the weekends while I was working full-time as a software engineer in the industrial IoT space. The company I was working for was very progressive, building an IoT platform using the Elixir programming language on the backend and Vue.js on the frontend, so we decided to use the same tech for our own product.
If you have a clear vision of how you want to solve someone’s problem, you want to use the tools you know.
Many people use side projects to learn new technology, and that’s a great use for learning. But those projects aren’t businesses, they’re learning projects. We knew this would be a business, so we stuck with what would allow us to build as efficiently as possible. Click to Tweet.
Before we released it to the public, we also made sure to offload as much of the complicated tech to other SaaS tools so we weren’t reinventing the wheel on components like billing or user management. We integrated with Stripe for payments, Intercom for customer communication and Auth0 for handling our user management, among many others. All of those services have a trial or startup plan, so we could easily bootstrap the company and never took any funding.
We wanted our tech stack to be as simple and portable as possible. So I decided to make the application cloud-native. I knew from prior experience that at some point in any successful software product’s lifecycle the system might need to migrate from one infrastructure to another, for many possible reasons. To make this easier, the application was dockerized and hosted with cloud providers from the beginning.
You had really impressive growth in a short period of time — can you tell us more about the business model, and how you grew so rapidly?
Danielle: Ya! Overall, our growth has been pretty stable, around 10% over the many months the company has been live. We use a simple subscription model for the software, offering a monthly plan and a slightly cheaper yearly plan, both with a no-strings-attached 30-day trial.
From the beginning, our subscriptions came in reliably through word of mouth. Teachers love to share helpful information so all of our growth was organic. Our strategy was to give teachers a great experience once they made it to our product and help them see the value we provide.
The price of the monthly plan is equivalent to most teachers’ pay for teaching a single 30-minute class session. The benefit of using the product equates to much more than 30 minutes of time, so the price makes it easy for customers to understand that the value we provide far surpasses the cost.
The 30-day trial is another great way to show them that value. Some teachers loved the product so much, they paid a few days into their trial. However, most take advantage of their free access for the full 30 days. In that time they’ve seen the value and invested their time and energy into the product. They’ve also created the habit of using the product and by the end of their trial, they can’t imagine teaching without FeedbackPanda. This enabled us to reach a conversion rate of over 25%.
Our churn is also quite low, below 1%, as most teachers heavily invest into the product by putting in their personal, unique records. The churn occurs when our customers switch jobs or take parental leave.
A huge advantage for us has been that the Chinese education market is picking up speed, and we were lucky to recognize a niche in that market that we could not only fill but also benefit from the growth. In 2017, the largest competitor in the online English market, VIPKID had less than 15,000 teachers, now they have around 70,000. It’s really exciting to be a tiny part of this trend.
Once you had money coming in and you knew this product just might work, what was your goal? Was it hitting certain MRR number was it selling it? Tell us a little about what your plans were once you saw FeedbackPanda could generate real revenue.
Arvid: Looking back at the last two years, the business had three distinct stages and three goals that I had personally set for each. Overall, I had always wanted to build a business that would make over $50,000 USD in a month. So that became the overarching goal, with step goals for each stage.
The first stage was the “survival” stage, and there, the goal was for the business to pay for itself and create enough revenue for us to feel confident that it might go somewhere. As we bootstrapped the business and were careful to spend as little as possible, that was reached 45 days after we started marketing the product to our customer niche at an MRR of around $2,500 USD.
The second stage was the “stability” stage, where the goal was to be able to work on the product full time and feel safe enough to quit our previous jobs. We reached this goal of an MRR of $20,000 USD nine months after launching the product. At that point, we could dedicate our full attention to FeedbackPanda, and we felt safe that its trajectory would sustain us for a long time.
The third and last pre-acquisition stage was the “growth” stage. Here, we set the goal of reaching the $50,000 USD in MRR that I’d had in the back of my mind the whole time. We steadily grew the company by doing what worked and experimented with systems and ideas to solidify our processes. Shortly before SureSwift reached out to us, we reached that goal, less than two years after having started the business.
At what point did you know it was time to sell FeedbackPanda?
Danielle: We had reached all of our goals for this product, so when SureSwift approached us it just seemed like a natural progression.
Reaching our goals, although thrilling, shifted our risk level to an uncomfortable height where we suddenly felt that we had something to lose. I noticed that we were no longer making smart business decisions, but decisions rooted more in comfort and safety.
This was not good for us, and definitely wouldn’t translate to good things for a business. This gradual fear began to hold us both back. So when the opportunity presented itself, we were ready to handover the company to someone with a higher risk tolerance who could make strategic, calculated risks to continue to grow FeedbackPanda.
Tell us more about how you connected with SureSwift? I hear there was some serendipity with IndieHackers?
Arvid: Before working on FeedbackPanda, I was working as a software engineer for a company in another city, and I would commute from Berlin to Hamburg multiple times a week. An almost three-hour train commute allowed me to read a large number of books and listen to many podcasts regularly. I didn’t know it back then, but all this knowledge prepared me for building our SaaS business efficiently without having to make all the potential rookie mistakes.
I started listening to the IndieHackers podcast and worked my way through the catalog of episodes whenever I would travel. I remember one very serendipitous experience with that particular podcast. I was on my way to the bank to open an account for our company when I was listening to yet another IndieHackers podcast episode. The guest was Moritz Dausinger, a German developer, just like me. Moritz talked about how he had built DocParser and MailParser, and I found a lot of interesting similarities in how he and I approached software and business.
At the end of the episode, he mentioned that he had sold his company to SureSwift Capital, and that piqued my interest, as I’d never heard of this kind of company before.
A year later, we connected with Courtland Allen from IndieHackers, and Danielle gave an interview about how we grew FeedbackPanda as a bootstrapped business to then $35k MRR. That interview put us on the radar for SureSwift, and eventually you reached out to us. When that happened, I knew exactly who SureSwift was, and in some way, a loop was closed that started on the day we opened that bank account.
How did you know SureSwift was the right fit?
Danielle: You and the SureSwift team were the most straightforward and easygoing team we spoke to and your business model is so exciting, which made us want to join in. You understood us as bootstrappers, but more importantly, you understood our clients, the teachers. Seeing the other companies on your portfolio with similar value propositions to FeedbackPanda gave us the confidence that you would remain focused on serving a great product to teachers.
What’s the transition been like? What kinds of things are you helping the team with? How has it lined up with what you expected?
Arvid: In preparation for the handover and the transition, I was reading a lot and listened to dozens of episodes of the Built to Sell Radio podcast by John Warrillow. There were a lot of stories of complicated interactions and extensive back-and-forths in those episodes. I prepared for the worst, for days if not weeks of hard and exhausting work.
I was pleasantly surprised to find that working with SureSwift was painless, pragmatic, and enjoyable. The handover was done extremely fast, and the following weeks were a breath of fresh air for me, as both the main developer and the point of contact for Customer Service for FeedbackPanda. The SureSwift team jumped in immediately, and I was able to start training people. Hiring was something we had painfully neglected while running FeedbackPanda, and I learned the value of asking for help very quickly.
We had prepared extensive documentation of our processes and the product itself. While operating FeedbackPanda, we had recorded many of the Customer Service activities so that we could easily see what needed to be done using screen-recording services like Loom or Tapes. That turned out to be extremely helpful when training Customer Service agents later on.
All in all, the transition has been a very professional affair. It was a very human, very friendly and open-minded process, with people and ideas being much more important than numbers or graphs.
Now that your product found a new home with SureSwift Capital, what are you hoping for with the future of FeedbackPanda?
Danielle: I’m excited for FeedbackPanda! One of the things I love about SureSwift is the diverse range of products and people within the portfolio. Everyone is coming from a slightly different angle and is able to see things a bit differently, which is incredibly valuable and creates just the right amount of friction to create great work together.
There are many people with diverse skill sets working together and FeedbackPanda has already benefited from having some fresh perspectives.
What are you planning to do when the transition is complete?
Danielle: We’re working on getting back into some healthy routines and planning a nice vacation. Any traveling we’ve done in the past 2 years has always included working on the side, so I’m looking forward to being fully present to experience new things.
Having some time to unplug and build up our physical and mental health is on the agenda so that we can do this all again!
What’s your best advice for fellow or aspiring SaaS founders?
Arvid: In the past, I’ve been a part of many projects that were solutions looking for a problem. With FeedbackPanda, I finally experienced it the right way: We found a problem first — a real, very painful problem. We then solved that problem and that problem alone. We wanted to help teachers in a particular niche with their feedback. We didn’t set out to revolutionize teaching as we know it. That reduced scope allowed us to zero in on the core of the problem and solve it in a very direct way.
It was very helpful that I felt the consequences of Danielle working hours of overtime every day. That was such a clear and real pain. Solving that problem not only made her life better, it also affected me directly. Whenever I would add a feature, it would immediately translate into me being able to spend more time with her.
Finding a pain you can understand is hard for developers, particularly if we look outside building tools for software development. Many programmers have strong opinions about how their job could be improved but have a hard time relating to the struggles of people in other industries. Asking friends and family about their most annoying problem at work can often give you an insight into markets you may not yet understand. However, working with people directly affected by real problems will lead you to insights very quickly.
Building a startup business used to be all about the VC world in the last decade. Hockey-stick growth, incubators, and raising a lot of money were things that “founders did because that’s what founders do.” I believe differently. Having a steadily growing, bootstrapped business without Venture Capital is a desirable business to build. Not falling into the trap of having to scale quickly and living a fast-paced life means that you can build a business that aligns with your own values, not those of a large VC fund. Staying mentally healthy is so much easier when you’re in control of your business and can set your own goals and expectations.
What are your favorite books/podcasts/sites for entrepreneurs?
Arvid: There are so many great books for aspiring founders. One book that had a tremendous impact on how we designed FeedbackPanda to retain customers is Hooked by Nir Eyal. I also read Built to Sell by John Warrillow before founding the business, and we took a lot of steps outlined in that book, which made selling the company very straightforward. Finally, The E-Myth by Michael E. Gerber has been instrumental in understanding the different roles you have to play in your business, particularly when you are alone, or just a really small team.
Kevin McArdle | CEO, Co-Founder
Kevin is the CEO and Co-founder of SureSwift Capital. His passion for personal relationships and driving business results are at the heart of SureSwift’s impressive growth to date.