#16 Shopify App Exit Story
İlke Karaboğalı & Ali Selim Aytuna
Are you ready to hear an exit story of bootstrapped Shopify app founders?
I have been living in the same neighborhood with İlke and her story with her co-founder is inspiring.
They exited their Shopify app when they had 150 subs and now focusing on their new adventure.
Enjoy!
Recommendation of the week:
Hazel reverse engineers how successful indie makes build multiple 7-figures. Her last issue breaks down how Jay Clouse grew to $600K per year as a solo creator. Here is the link.
Welcome to our interview, İlke and Selim. I met İlke through my LinkedIn account and learned that you co-founded a company named Personalization, which exited in 2022. I'd like to hear about your backgrounds and your journey with personalization.
When I heard İlke's story, it got me excited. So now, I'd like to hear more details from you. Before personalization, you were working for a corporate company, as I understand from your LinkedIn profiles, and then you transitioned to startup space. Could you share your experiences with the corporate part first, perhaps including some insights into your time at Nokia, before diving into personalization?
İlke & Selim:
Certainly. At Nokia, we were colleagues. I was working on the marketing side, and Selim was managing the developer ecosystem. During that time, we started discussing various startup ideas. After exploring a few concepts, I decided to leave the company and began working on a small idea. I shared it with Selim, and he was on board. Our motivation stemmed from being e-commerce users ourselves and experiencing the pain points firsthand. So, I left my corporate role first, and six months later, Selim followed suit. In August 2012, we began working on our idea.
I noticed your journey with Personalization began around 2019 on LinkedIn. Could you share more about your previous company, Shop Crowd, and the pivot towards Personalization?
İlke & Selim:
Yes, our journey started with Shop Crowd, which initially targeted B2C services but pivoted to B2B within 12 months. Our first product, designed for B2C, proved unsustainable, but upon speaking with e-commerce clients, we realized the potential for our solution as a B2B offering. This pivot was a natural decision, as it aligned with customer demand and provided a viable revenue stream. Over time, we transitioned from serving corporate clients to targeting smaller enterprises, leading to the creation of Personalization.
So, after the pivot, you rebranded as Personalization. How did this transition unfold, and what were your key considerations?
İlke & Selim:
Exactly. While the core technology remained the same, we repackaged it into an e-commerce app. Initially targeting Turkish clients, we later shifted our focus globally. This decision was driven by market demand and the need to adapt to changing consumer behaviors.
Expanding globally was essential for us, given the challenges of operating in an underdeveloped country like Turkey. Cash flow management was particularly challenging due to delayed payments from clients. By targeting a broader market, we mitigated these risks and ensured the sustainability of our business.
Can you elaborate on your approach to customer acquisition and the role of marketplaces like Shopify and WooCommerce in your growth?
İlke & Selim:
Certainly. We initially relied on field sales and founder-led initiatives to acquire customers. While educating potential clients about personalization and AI, we found success through direct engagement and demonstrations of our value proposition. Integrating with marketplaces like Shopify and WooCommerce further accelerated our growth by providing access to a larger customer base.
Choosing the right marketplace was crucial for our success. While Magento, OpenCartand PrestaShop were viable options, Shopify and WooCommerce offered higher conversion rates and better integration processes. Understanding the user demographics of each platform allowed us to tailor our approach and maximize our sales efforts.
At that time, how did you differentiate yourselves from competitors like Amazon in the personalization space?
İlke & Selim:
We differentiated ourselves by highlighting the scalability and accessibility of our solution. Unlike Amazon, which relies on vast amounts of data, our system was designed to be lightweight and suitable for smaller e-commerce businesses like up to 10 products. We emphasized our ability to deliver personalized recommendations without requiring extensive data points, making us an attractive option for businesses of all sizes.
Additionally, our focus on real-time recommendations and easy integration set us apart from conventional AI-based systems. By addressing common pain points and offering a seamless user experience, we positioned ourselves as a preferred solution for businesses seeking personalized customer interactions.
Looking back, what were some key milestones in your journey with Personalization?
İlke & Selim:
One significant milestone was our transition to a SaaS model and our successful integration with platforms like Shopify. This allowed us to reach a wider audience and achieve exponential growth. Additionally, refining our product offerings based on user feedback and market demand played a crucial role in our success.
Moreover, our focus on customer-centric sales strategies and targeted marketing efforts enabled us to establish ourselves as a leader in the personalization space. By continuously iterating on our products and prioritizing customer satisfaction, we were able to sustain our momentum and drive long-term growth.
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So during those early days, when you were just starting out, can you recall how many team members you had on board?
İlke & Selim:
We were a small but mighty team back then. Picture this: a handful of dedicated individuals, including backend and frontend developers, and a compact customer acquisition squad. Despite our modest size, we had meticulously fine-tuned and automated most of our processes. It was all about efficiency. And you know what? It worked like a charm.
We were able to cater to our customers with unparalleled dedication. And the response? Oh, it was heartwarming. Our clients showered us with gratitude, and our reviews? Stellar.
Those reviews were like gold dust in the marketplace realm. You see, in the competitive arena of online platforms, reviews reign supreme. A high review score was our ticket to acquiring new customers effortlessly.
So, did you diversify your approach back then? I mean, apart from the platforms you mentioned, did you explore avenues like Shopify or delve into the realms of Google ads?
İlke & Selim:
Yes, indeed, we cast our net wide. We dabbled in paid advertising across various platforms. From Shopify's marketplace ads to Google, Facebook, and Instagram, we left no stone unturned. But here's the kicker: the marketplace ads outperformed the others by a mile. There was an efficiency there that we couldn't ignore. Of course, we didn't neglect the power of SEO either.
We revamped our website, delved deep into technical SEO, and embarked on a journey of optimizing every aspect of our online presence. And you know what they say about high rankings on Google? It's like having a golden ticket.
Our blog posts were reigning supreme in the Shopify category, thanks to our relentless content creation efforts. It was a multi-pronged approach that paid off handsomely.
And then came the decision to exit the company. What prompted that move? Was it a case of seeking new challenges, or were there offers too good to refuse?
İlke & Selim:
It all started a few years back when a representative from FE International came knocking. They wanted to assess the value of our company, and let's just say, it got the wheels turning. Despite the initial valuation falling short of expectations, it sparked our interest in exploring potential acquisitions. We cast our net wider, exploring different avenues like MicroAcquire. However, it was our experience with Empire Flippers that truly stood out. Their meticulous due diligence process and the quality of offers made them the obvious choice for us. It was a blend of attractive offers and a desire to embark on new adventures that led us down the path of exiting the company.
Empire Flippers, indeed a game-changer. Did they sweeten the deal with a higher multiple compared to other platforms?
İlke & Selim:
Oh, absolutely. Empire Flippers set the bar high with their initial valuation, offering a multiple that was the envy of many. It was listed at a whopping 60x monthly EBITDA, a testament to the value they saw in our company. After some negotiations, we settled on a 50x multiple, which still left us grinning from ear to ear. The quality of offers and the rigorous due diligence process truly set them apart from the rest.
And now, onto your latest endeavor. Care to shed some light on the Seven Feet Framework towards Product-Market Fits?
İlke & Selim:
Ah, the Seven Fit Framework, our latest brainchild. Picture this: a culmination of years of trial and error, distilled into a framework aimed at helping budding startups navigate the tumultuous waters of product-market fit. It's still in the prototyping phase, mind you, but oh, the potential is palpable. We're testing it rigorously, ensuring it resonates with early-stage startups striving to find their footing in the ever-evolving market landscape.
So, is it tailored for early-stage ventures, or can established companies also find value in it?
İlke & Selim:
While the framework is still taking shape, we envision it catering to both early-stage startups and seasoned veterans alike. You see, the beauty lies in its versatility. Whether you're a fledgling startup finding your feet or a seasoned scale-up looking to fine-tune your strategy, the Seven Fit Framework promises to be your guiding light in the murky waters of entrepreneurship.
Exciting times ahead, no doubt. And before we wrap up, what pearls of wisdom would you offer to aspiring bootstrappers, based on your own rollercoaster journey?
İlke & Selim:
If I were to distill our journey into a few nuggets of wisdom, it would be this: embrace the psychological rollercoaster that is entrepreneurship. Bootstrapping isn't just about balancing the books; it's about navigating the highs and lows with unwavering resolve. Prioritize profitability, yes, but never lose sight of the value you bring to your customers.
Transparency, efficiency, and a relentless focus on delivering value are the cornerstones of a successful bootstrap journey. And remember, it's not about the size of the investment; it's about the impact you make with what you have. So, to all the aspiring bootstrappers out there, strap in, hold on tight, and embrace the journey ahead. The road may be rocky, but the rewards? Oh, they're worth every bump along the way.
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