GigaOM » buffer

Buffer bucks the startup secrecy trend as it finds growth

Eliza Kern — Tue, 06 Nov 2012 21:40:08 +0000

It’s all too common to see news of companies raising several million in funding without any details from the founders on what they’ll do with the funding or how many users they’ve actually acquired on their service. Buffer, the app best known for allowing you to schedule your tweets in advance, turned the model on its head last year by explaining just how it courted investors and secured $400,000 in seed funding, and now it’s continuing that tactic of disclosure as it grows.

Even if it’s just a clever marketing tactic from a company that couldn’t get press coverage otherwise, the story of Buffer’s funding round was an interesting explanation of a process that doesn’t often get aired in public and a refreshingly candid approach to announcing the news. So it should come as no surprise that the company has been equally candid about their successes and progress so far in building their company, an approach that other startups might do well to consider. The company now sees users posting more than 1 million updates through Buffer to social media each week, and they’re open about how they got there.

Buffer automates a process that can be laborious for people — such as publishers — who have to distribute a lot of content over social media networks. But the company also targets people who consume lots of content on Pocket, Reeder or Instapaper (which all have Buffer integration), and want to share what they’re reading in manageable doses, rather than several tweets all at once.

In December 2011, when the company announced its seed funding, it had about 85,000 users and were making $20,000 a month in revenue. While individual Buffer accounts are free, the company offers premium, or “awesome” subscriptions for $10 a month for companies looking for several people to manage multiple accounts and send more updates. As of November 2012, co-founder Leo Widrich said the company is now making about $70,000 a month in revenue, and hasn’t needed to touch its seed money yet. It has about 370,000 users, with about 6,500 of those users paying for the premium subscription.

“It took us around six months to send the first 100,000 updates and now we’re sending 1 million updates a week,” he said, noting the breakdown of the posts are about 65 percent to Twitter, 20 percent to Facebook, 10 percent LinkedIn, and about 5 percent to App.net, even though many people know Buffer as an app for scheduling tweets. He said that going forward, the company is going to work to improve its native mobile apps and increase the amount of Buffer updates to Facebook, since that platforms tends to drive the most engagement with content.

And as for more fundraising? Don’t expect the Buffer founders to be knocking on VC doors any time soon. Widrich said they’ve calculated that they could grow their team from seven to 25 employees and still have seed funding in the bank, since they’re profitable each month from their subscription plan and seeing revenues increase by about 20 percent month to month. He said the team isn’t looking to fundraise further right now, since the process of fundraising is so labor and time-intensive. He pointed out that they spoke to about 150 investors when looking to raise a seed round, and ended up doing deals with 19 of them.

“The biggest thing I would say is that fundraising is a huge distraction. You can’t work on the product or helping you as a user if you’re also working to get money from investors,” he said. “There’s this saying that when you’re fundraising, you can’t do anything else. Every day, for three or four months, you fundraise. And it’s crazy, right?”

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Buffer gets $400K funding — and tells exactly how they did it

Colleen Taylor — Wed, 21 Dec 2011 02:37:01 +0000

Every day, it seems like there’s a new press release about a startup landing seed funding. You know the headlines — “Startup X nabs $1.2 million for dog-friendly mobile app” or “Y raises $700K to digitize your sock drawer.” Sure, it’s exciting for the companies involved, but the straightforward financial news is not always terribly interesting. The story behind the funding is usually the really cool part, but it often goes untold.

That’s why Buffer is doing something different. The startup, whose app enables users to easily schedule Tweets and Facebook posts to be posted at a later time, has raised new seed funding. But for Buffer, the fact that it has taken on $400,000 is secondary to explaining how it all happened — and the company’s hope is that other startups can learn from the experience.

Pulling back the curtain on seed funding

Buffer on Tuesday published a detailed blog post that details exactly how founder Joel Gascoigne and co-founder Leo Widrich met each of their 19 new seed investors (including Guy Kawasaki, AngelList designer Graham Jenkin, Huddle co-founder Andy McLoughlin, and AngelPad’s Thomas Korte and Gokul Rajaram) and why they decided to take on each investment. A typical paragraph begins with, “It was a sunny day in October when we sat down in a Starbucks in San Francisco with Andy…” It’s a fun read and could be especially helpful for other startup founders interested in how the funding process happens.

From left: Buffer founder Joel Gascione, co-founder Leo Widrich, and engineer Tom Moor

“As a company, we always want to be very transparent,” Widrich said in an interview Tuesday. “So instead of the typical funding announcement, we decided to write this story where we explain every story behind every investor. We wanted to help people understand the fundraising process. There’s really no reason to be secretive about it.”

The Silicon Valley advantage

It was just five months ago that Gascione and Widrich moved from Birmingham, UK to San Francisco to turn Buffer, which had profitable operations as a “lifestyle business,” into a full-on company. Since then, the app has grown its user base from around 20,000 to 85,000, seen a huge uptick in engagement, and Buffer has added a third full-time employee. Right now, Buffer is making some $20,000 in revenue per month.

For Buffer, being in the Bay Area was a hugely important step for enabling this growth, and for helping its founders forge key relationships in the tech world. Widrich said:

“The most interesting thing about Silicon Valley is the aspect of serendipity. Here, if you keep your mind open and your eyes open, you can connect with anyone. Being here has been a fabulous way to get in touch with people.”

Unfortunately, due to an inability to secure H-1B visas, the Buffer guys are moving from San Francisco to Hong Kong this week. The company will use the new funds to hire more people, but in true lean startup form, all Buffer’s operations will be virtual. “We basically pulled up Google Maps and said, ‘Where in the world do we want to go?’” Widrich said. “Hong Kong sounded pretty cool.” Indeed — it’s a pretty cool time for startup founders in general, and for Buffer especially it should be an exciting road ahead.

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The app dilemma: Is it a feature, or a business?

Colleen Taylor — Thu, 04 Aug 2011 18:00:19 +0000

Every developer who makes a popular web or mobile app is eventually faced with a decision: They can either stick with the status quo or swing for the fences.

A successful app can provide a nice living for a small team of one or two people. That kind of “lifestyle business” can be an attractive end in itself. But it can be very seductive to take on venture capital, hire a larger staff, and turn an app into a genuine startup. Taking that path is risky — but it also has the potential to bring on much bigger economic rewards.

These days, it seems like more and more developers seem to be swinging for the fences.

Spinning the risk-reward roulette wheel

Buffer is one example. It’s an app that enables users to easily schedule their Tweets to be posted at a later time, and has amassed a sizable user base that is growing every day. Just seven months old, Buffer is currently bringing in enough money for founder Joel Gascoigne and co-founder Leo Widrich to work on the app full-time. But now they want much, much more.

Last month, Gascoigne and Widrich moved from Birmingham, UK to San Francisco to turn the app into a full-on startup. The two men, who began working together while students at the University of Warwick, are now scheduling meetings with potential investors in the hopes of raising up to $500,000 in angel funding.

“We’ve been completely self-funded so far, and we’re making enough money to sustain ourselves. But we’re here to take it to the next level,” Gascoigne told me in a joint interview with Widrich in San Francisco last week. “There’s so much more we want to do.” They have a vision of building Buffer into a sort of “Evernote for social media.” To do so, they plan to add functionality to schedule messages for Facebook and Google+, as well as build out the app’s analytics capabilities.

But for now, Gascoigne is doing all of Buffer’s coding while Widrich handles the marketing and community support. They’re hoping that outside funding will allow them to hire a few more developers to help with those plans.

Aiming high could really pay off

I have to say, it was really invigorating to talk to the Buffer guys — two young entrepreneurs who are taking a risk to come to Silicon Valley and make it big in tech. I usually cover bigger tech companies and more established startups, so it’s fun to have conversations with smart and hungry developers in the earliest stages of building a business.

Stories like Buffer’s are evidence that Silicon Valley’s decades-old status as the epicenter of tech dreams is alive and well. And time and time again, entrepreneurs from Steve Jobs to Tim Westergren have shown that small ideas can grow into big companies — and real financial rewards.

Staying small has its perks

But some critics argue that the “shoot for the stars” mentality that often comes along with bringing on outside funding does not always make sense for every app. MetaFilter founder Matt Haughey put it this way in a recent interview with Willamette Week:

“I’m OK with this lifestyle business. It’s a put-down for a lot of people, especially in Silicon Valley. I think it’s the best thing in the world. You don’t have to kill yourself. I’ve been at startups where we worked 16 hours a day and didn’t get anything out of it. It’s stupid. Geeks who know how to program and make things should be able to make a small thing that runs forever and make $100,000 a year and live off that. I mean, what is wrong with that? It’s an awesome goal.

… It’s like nobody sings unless they want to be Britney Spears. That’s stupid — we should all sing in bars three nights a week if we like it and get paid as professional musicians. Who says you have to be a superstar? I hate the whole ‘rock-star programmer’ thing where you have to make the next Facebook.”

Similarly, Instapaper founder Marco Arment has been very vocal about maintaining his app’s status as a self-sustaining, self-funded entity, even as competitors like ReadItLater opt to go the VC route. As Arment told GigaOM’s Ryan Kim in a recent interview:

“Profitability with a small company and no outside investment is a great place to be, but not everyone’s businesses can sustain that, and it forces constraints… To me, these constraints are a net positive: this is the type of business I want to have.”

One thing is for certain: As more venture capital money continues to flow into the tech industry, more app developers will surely take on funding to go the “superstar” startup route. How that will shake out for those businesses — and the tech industry at large — will only become clear with time.

Roulette wheel photo courtesy of Flickr user cmogle.

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Quick Tip: Change iTunes Buffer Size for Smoother Streaming

Jenny Kortina — Mon, 06 Oct 2008 19:30:21 +0000

When I moved in with my old roommate he already had a router…a router that did not play nice with my Macbook Air. Browsing the internet was almost as painful as being on dial up, and streaming media seemed like an impossible task.

After a while of watching videos play in stop motion through iTunes, I decided that there must be something I could do to remedy the situation. After a poking around in iTunes I found out you could change the streaming buffer size. Changing the buffer size to “Large” tells iTunes to load more of the movie/song/whatever before starting playback, that way you experience fewer (or even no) breaks in playback.

To change your buffer size for smoother streaming:

Launch iTunes
Go to Preferences
Go to the “Advanced” tab
Go to the “Streaming Buffer Size” pull down menu. If you have a slow internet connection choose the “Large” option. If you have a fast internet connection (DSL or cable modem) select the “Small” option to have streamed media playback faster.

After I switched my streaming buffer size from the default medium setting to large, my videos definitely streamed a lot smoother. As always, have fun and good luck!

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