is officially dead.

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Entrepreneur Aaron Lerch offers a post-mortem post about his startup Beautiful Savings.

Beautiful Savings is officially dead.

Beautiful Savings was the first business I’ve ever started. I wanted to take a minute and write about the experience of bootstrapping your own startup. Some things I did well, and many things I did poorly.

First of all, you should know something about me. I’m 33. I’m married with 3 young and energetic kids (ages 7, 5, and almost 2) and we’re in the process of adopting a 4th. I’ve never been an entrepreneur before, and I’m “moderate” in my risk taking. I’ve never worked at a startup, and I don’t personally know any software folks that have, at least none that talk about it. I love to learn and try new things. I got moderate grades in school, but always aced my labs. You could call me a “hands on learner.” You can find me on twitter: @aaronlerch

When I learn a technology, I do best if I have a project or specific focus. I can’t create a “hello world” app or a blog engine, that’s so. freaking. boring. Give me some real meat and let me start chewing. So when it came to learning Ruby I had to have something to do with it. Enter “online local coupons.” This was after Groupon was around, but before it started getting so well known. The Indianapolis space for online coupons only had about 2 or 4 players in it, and they all sucked in one way or another (or all ways). The only one with good content has a website from 1995. I will not name it nor link to it because I want it to go to the place on the internet where websites never return from.

I had my project.

As I began to create my site and learn Ruby, Sinatra, Padrino, MongoDB, Rails, jQuery, and tons of other things, I began to look at the market, do back-of-the-napkin calculations about my competitors, and think “you know, I think this could actually work.” So after I had a workable beta of the site that I could demo to potential customers, I set up the business and gave this entrepreneur thing a go. Here’s what I learned.

Stuff that was good

I talked to my potential customers. And then I talked to them some more. I actually had two types of customers, small businesses and their potential customers. During the entire process, I polled and grilled any small business owner that would listen. My wife and I were on a date, and before I knew it the owner was pulling up a chair as we talked about coupons, marketing, etc. I got great feedback, and learned a lot. For example, did you know that most small business owners are not technology savants? Shocking, right? Did you also know that, in general, they don’t really track and measure their marketing activities except through “general feelings based on impressions?” Actually that one did shock me a bit. I learned a ton about who my primary customers were. And I even got verbal agreements – I would sometimes ask “if I come back after I finish this, would you be willing to sign up?” and if they said yes, they did indeed sign up after I came back.

I knew my competitors. I did research into my competitors. Why were they failing? Why were they succeeding? How could a website that was SO FREAKING UGLY be the most successful online coupon provider in Indianapolis? Mind boggling. This is a bit different than just a “regular” website, because I determined that the keys to success were having a very tangible local physical presence. The current king did this by putting gawd-awful signs in the business window. I did something similar (better-looking signs, of course.) and almost half of my site traffic was from direct hits, or google searches for “beautiful savings”. People saw the signage, and it made an impression.

I did the simplest thing that could possibly work. I didn’t quit my job, I didn’t hole up and ignore my family, I fit my work on Beautiful Savings into the available space. Because of that, I had to take a hard look at every feature and trim it down to the absolute bare minimum. Based on what I learned about my customers, I cut things out liberally. I didn’t have accounts for customers, I didn’t have automated ways for them to update their content. I didn’t provide automated analytics for them, though if they asked me for data I could provide it. I did everything via email or phone calls. And those were great decisions. Of my almost 30 customers, I had one or two ask about some of those features. And they were the more tech-savvy of the bunch. One customer asked about providing automated reports. I said that I didn’t have any, but I could build that if it was something they needed. They responded that no, they didn’t need it, but they just wondered if I had them.

I leverage hosted services for everything. I built the site using cloud services likeHeroku and IndexTank. Originally I used MongoHQ until I dropped MongoDB in favor of using a relational database (SQLite for dev and Heroku’s built-in database for production.) Because most hosted services offer introductory plans while you build your business, Beautiful Savings was costing me a grand total of about $15 a month for DNS services and GitHub. As I grew, the idea is that my increased revenue would cover the costs for the hosted services. And eventually, when a site gets big enough/popular enough, you want to own more of the infrastructure – you don’t want your business to be at the mercy of, say, an Amazon outage. 😉 But I never even got to that point. No premature optimization here, thank you very much.

Stuff that was bad

I didn’t talk to my potential customers. Yeah, this was both good and bad. I got great feedback about the service and features, but what I didn’t recognize,because I wasn’t actively trying to sell it to them, was that small businesses just aren’t excited about coupons. Plain and simple. They do them, because “they’re supposed to,” but by and large they are very skeptical. And they should be. Daily deals sites are abounding. Online coupon sites are growing in number. One customer told me we were the 3rd coupon salesperson in their store THAT. DAY. The space got really noisy, really fast. Beautiful Savings had ways to differentiate itself, but as a new player in the space we couldn’t offer huge traffic or guaranteed results. So we had to give it away for free. And even that was a tough sell.

I focused on things that don’t matter. I may have trimmed features down, but I was geeking out on starting a business, too. I did a lot of business-related things that could have waited. I didn’t need a separate bank account. I didn’t need a merchant account to someday process these fictional credit cards. I didn’t need a separate phone number. Etc.

I didn’t have enough skin in the game. I didn’t quit my job and throw caution to the wind. I fit Beautiful Savings in the space available. And for it to be successful, it needed more than that – it really needed all of my space. At the end of the day, I just didn’t care or believe it in enough to give it my all.

I didn’t have a team. Some startups can work great for just a developer to start. Usually these startups are focused on other developers as their customers. If you’re doing a startup, you need a team of people with the right skills. I had advisors and a ton of help. Friends helped me with sales. Entrepreneur friends gave me advice on the business and marketing side of things. But I needed someone else focused on it to help complement my weaknesses. I hate sales. With a passion. I dreaded going out to call on sales leads. And after a while, I just stopped going. People I know who enjoy it were helping me, but they were doing it casually – they weren’t as invested in it as I was, they didn’t share any “ownership” because I was paying them a commission and that’s it. I’m not saying I needed to have a set of equal-equity partners, but I didn’t have a team of dedicated people with complementary skills to make it happen. In this case, that was a bad thing.


This was the most successful failure of my life. By starting this business, I learned a ton, failed fast, and have so many lessons to apply to any future endeavors it’s ridiculous. I’d like to thank everybody who helped me out along the way, and continues to help me out. You know who you are. And you’re awesome.

I think the most surprising of all my lessons was that the technology was the easy part. By far.

Some of it is salvageable, too. The LLC I can keep, along with all the things related to it. I’ll just rename it to be more “generic” of a business that I can house any other future endeavors under. I bought an iPad to help with sales calls. Now I get to play Angry Birds all night if I want. I call that a win. :)

So in the words of the dolphins, “so long, and thanks for all the fish!”


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  • Anonymous

    I find it a poor choice to copy/paste the entire content of the article, especially without even a link back to the original. An excerpt, perhaps. A bit of commentary plus an excerpt, even better. But just an intro sentence followed by the entire contents is just wrong. It doesn’t even improve SEO due to Google (and others) ignoring or downgrading duplicate content. Unless there’s some other reason I’m not aware of, this is pretty cheeky and just poor form.

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