Hello! Who are you and what business did you start?
Hi everyone, I'm Andrew, and along with Michael, I'm one of the co-founders of BasedLabs. We started the company together in December 2023, and now, just four months later, we've made some exciting progress.
Our primary product is a comprehensive, all-in-one AI Generator. To attract customers, we've built a handful of free AI tools and apps, such as Face Swap, AI Character Generator, AI Art Generator, and Character Voice Generator. These tools aim to add value to users, ranging from advanced video creators and AI artists to complete beginners using AI for the first time.
In just a short period, we've managed to achieve a MRR of $10,000 and have garnered about 150,000 user signups, all while spending less than $500 in total on marketing.
What's your backstory and how did you come up with the idea?
Myself and Michael both had extensive backgrounds in both the startup world and in web3. Michael came into this project with 15 years development experience and most importantly he just prior finished work on a CapCut competitor, so had a whole year's experience in developing video editing tools.
I come from a more Product / Marketing background, with about 5 years building/growing projects in the Web3/AI space and developing various relevant startup skills in the process.
The idea for BasedLabs originated when Michael and I spent a few weeks trying to build a tool that automatically created short-form content using AI. We encountered a major obstacle: there was no way for us to obtain high-quality AI b-roll for our automated short-form tool. This challenge ultimately led us to create BasedLabs.
Around the same time, Stability AI released SVD (Stable Video Diffusion), an open-source image-to-video model. This presented an opportunity for us to be among the first to develop an image-to-video website on the market.
We decided to pursue this idea because Michael had previously founded a startup that competed with Capcut, giving him years of experience in developing video editing software.
The only real validation we had for this idea was the incredible hype we observed on Twitter and Reddit whenever a new AI video or image model was released.
At the time, we were both unemployed and seeking new projects to work on. We each had about 2-6 months of personal runway, which gave us roughly five months to make BasedLabs a success before we would need to start looking for jobs again.
Take us through the process of building the first version of your product.
Michael had the website's MVP up and running within just three days. It included an image-to-video generator, Google Auth signup, and an infinite scroll landing page showcasing our users' creations.
Our goal was to ship as quickly as possible and acquire our first customers ASAP, enabling us to learn from their feedback and improve the product. During the first month, we maintained an extremely lean approach, spending only $100-200 on essential expenses.
To accelerate our development process, we utilized Replicates AI model API, allowing us to rapidly spin up new tools and services for our customers.
Our initial traffic came from a combination of Reddit posts, tweets, organic short-form content, and parasite SEO.
Here is a screenshot of our very first MVP landing page, featuring the logo I slapped together in Figma:
Describe the process of launching the business.
BasedLabs didn't have a traditional launch; we simply went live as soon as the site allowed users to sign up and create videos. From the very beginning, our aim was to build quickly, break things, and learn from the process. Now, four months and 150,000 sign-ups later, we are finally considering launching on Product Hunt.
Our "launch" essentially consisted of having the MVP ready and then spending entire days creating social media content and posting it on Twitter, Reddit, Medium, TikTok, Instagram, YouTube Shorts, and our blog.
It took approximately two months for us to start seeing decent traffic and a consistent stream of customers. Our key turning point was a viral tweet by @ThunderMonique who shared one of the videos she made on BasedLabs. We paid $100 for this promotion when she had about 200-300 followers at the time, and if I remember correctly, it boosted our traffic that week to around 10,000 visits.
Since then, our primary marketing focus and growth avenue has been SEO. By focusing entirely on this strategy from the early days, we were able to establish a very consistent flow of new sign-ups and visits daily, currently averaging around 5,000 per day from organic Google searches. We are completely bootstrapped, and the only things that required capital initially were the GPU costs on Replicate and our SaaS subscriptions, such as Google Workspace and Ahrefs.
Our journey so far has only reinforced our initial business decisions to build quickly, experiment frequently, gather feedback, and then focus on what works.
Since launch, what has worked to attract and retain customers?
From day one, Michael and I were fully focused on this project, with no other source of income. We both had decent personal runways (2-6 months), but this meant that our efforts to grow traffic and attract customers had to cost close to $0; otherwise, we would be cutting into our savings and considerably shortening our runway.
Taking this into account, we knew that our best growth would come from organic traffic channels like Twitter, Reddit, short-form content, and SEO. From the very beginning, we laid the foundations for SEO by creating articles, free tools, and user-generated content (UGC) on our site, as well as researching our niche on Ahrefs.
Our marketing timeline can be roughly summarized as follows:
Month 1: 500-1,000 sign-ups - Mainly from posting on Twitter, TikTok, and Reddit.
Month 2: 1,000-10,000 sign-ups - Started offering free credits to AI video creators on Twitter.
Month 3: 10,000-40,000 sign-ups - Began ranking for some SEO keywords and got some other blogs to use our affiliate link.
Month 4: 40,000-150,000 sign-ups - Focused solely on SEO and growing our affiliates and backlinks, started ranking on the first page for a handful of high-traffic keywords.
Google analytics last 90 days:
How are you doing today and what does the future look like?
To date, we've grossed about $18,000 and have a Monthly Recurring Revenue (MRR) of $10,000. However, we also face a churn rate of 27% and have spent approximately $10,000 on GPU usage on Replicate, as well as $3,000-$4,000 on hosting our own GPUs. So far, we haven't taken out a cent and have invested almost everything into GPUs, paying affiliates, and our SaaS subscriptions.
This month, we plan to move almost entirely away from Replicate, as their pricing is extremely expensive, and they add around a 4x margin on their GPUs. We are also migrating our CDN hosting from Google Bucket to Cloudflare, which should save us an additional $2,000-$3,000 per month.
We anticipate spending about $4,000 per month on all infrastructure, SaaS, and GPU costs after these migrations, meaning we would be profitable by about $6,000 per month, even if we don't continue to grow.
With this extra cash, we plan to double down on the distribution channels that are already working, particularly SEO. Our first hire is starting this week, and her primary role is to grow our backlink profile on our site and our AI tool pages.
Alongside this we have begun diversifying our products and have recently launched an AI Tools Directory to help boost our SEO efforts and funnel users to BasedLabs.
We also plan to start experimenting more with alternative marketing channels, such as influencers, ads, and competitions. In addition, we intend to expand into B2B offerings and even sell ad space to other AI tools on our site. We expect these new ventures to double or triple our MRR in the coming months.
Here’s today's stripe dashboard:
Through starting the business, have you learned anything particularly helpful or advantageous?
To be honest, there's nothing amazingly insightful to share. We've experienced very rapid growth in a short amount of time, so we've faced general growing pains, such as the occasional bug or GPU going down, but it's nothing we weren't prepared for.
My biggest takeaway from the experience so far would be not to underestimate the power of SEO and to even adapt your business or tool to rank well for SEO. Essentially, distribution is key—figure out how to get it, how to grow it, and how to keep it.
Another crucial lesson from this experience is not to hesitate when it comes to learning a new skill that could potentially add huge value to your business.
What platform/tools do you use for your business?
Because we had basically $0 to start, we tried to keep it as lean as possible and not waste money on non essential SaaS tools. That being said here are all of the tools that we use:
- SEO: Ahrefs, Medium, Reddit
- Infra: Cloudflare, Vercel
- Email: Google workspace, Sendgrid,
- Analytics: Google Analytics, GSC, Woopra
- Payments: Stripe
- Affiliate: Rewardful
- All Design: Figma
- GPU: Replicate, Vast.ai
- Socials: Twitter, Instagram, Facebook, Reddit, Medium, Tiktok, Youtube
- Community: Discord, On-Site
- Management: Github, Github Projects, Whatsapp
Everything on this list is vital, and most of it is completely free.
What have been the most influential books, podcasts, or other resources?
Top 4 books:
- Traction by Gabriel Weinberg
- That will never work
- The mom test
- How to get rich (paychecks are like crack cocaine
We’ve also both binged most of the YC Youtube information videos, and the podcasts on the My First Million channel as well as Brett Malinowski’s channel.
Advice for other entrepreneurs who want to get started or are just starting out?
Having a great co-founder can make all the difference. I've tried many times to start businesses on my own, but it can become very challenging very quickly when you realize the sheer amount of work that needs to be done. It can also be extremely boring and difficult when you don't have someone to share your ups and downs with or to keep each other motivated.
Here are some additional tips:
- Build quickly
- Experiment frequently
- Validate your ideas rapidly (see if customers are willing to pay)
- Establish a distribution network (grow on social media, master SEO, etc.)
Are you looking to hire for certain positions right now?
Not yet, once we get to $20-$30K MRR we may look for roles that include:
- Community manager
- Developer
- Content Creator
- Video Marketer (Youtube Tutorials)
Where can we go to learn more?
- How to Face Swap on BasedLabs - Article
- How to generate AI Images & Videos using BasedLabs - Article
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