The SimpleDirect story: How we went from $29/month (and bleeding money) to $2,000/month (and profitable) by doing the exact opposite of what Silicon Valley teaches
Let me tell you about the day I realized we were complete idiots.
We were charging contractors $29 a month for SimpleDirect—a financing platform designed to help them close more deals.
Twenty-nine dollars.
One day I'm on a call with a customer, and he casually mentions: "Yeah, my Google Ads guy charges me $12,000 a month."
I almost dropped the phone.
"Twelve thousand dollars? A month?"
"Yeah, but it's worth it. He brings me about five leads a month, and I close at least one or two of them. Each job is worth $15,000 to me, so the math works."
He was paying someone 400 times more than he was paying us. And he was happy about it.
That's when it hit me: The problem wasn't the customer. The problem was us.
We'd been following the Silicon Valley playbook—build a product, make it self-service, charge almost nothing, scale later.
Meanwhile, blue-collar business owners were out there begging for solutions and happily paying real money for them.
We were just too stupid to ask.
The Advice That Almost Killed Us
Here's what every startup advisor told us:
"Don't worry about revenue yet. Just focus on product-market fit."
"You need users first. Monetization comes later."
"Keep it free during beta so you can get traction."
"Once you have enough users, you can figure out pricing."
This is the standard Silicon Valley playbook. Y Combinator preaches it. VCs repeat it. Every startup blog echoes it.
And it's completely, catastrophically wrong—unless you're raising millions of dollars in VC funding.
But remember from the last article? Only 0.05% of startups ever raise VC.
So for the other 99.95% of us, this advice is a death sentence.
The Data Nobody Talks About
According to CB Insights' analysis of startup failures:
- 42% fail because of "no market need" (they built something nobody would pay for)
- 29% fail because they "ran out of cash" (they burned runway before finding monetization)
Let that sink in. 71% of startup failures are directly caused by the "build first, monetize later" mentality.
And here's the kicker: First Round Capital's research shows that companies that monetize in Year 1 have a 3.5x higher survival rate than companies that defer monetization.
Your odds of success go from 25% to nearly 90% just by charging money from day one.
But every founder gets fed the same line: "Facebook did it. Twitter did it. Instagram did it."
Sure. But they're the 0.01%.
For every Facebook that deferred monetization and became a $1 trillion company, there are 10,000 companies that deferred monetization and died.
This book is probabilistic, not aspirational.
The Startups Bleeding Out Right Now
I see this pattern everywhere.
A few months ago, two founders pitched me their code interview prep platform. They wanted me to try their free pilot. They'd hop on a call with me every day to make sure I was using it right.
Two founders. On the phone. Every single day.
Their plan? Once I loved the product, I'd convert to their $129/month subscription.
I remember thinking: "I'd pay you $1,500 a month if you could actually solve my hiring problem. Hell, I'd pay $3,000. But instead you're going to burn out doing free onboarding calls and hoping I'll pay you $129?"
They're probably out of business by now.
Or here's another one: There's a startup I know doing heavy operational lifting for clients—actual fulfillment, customer support, the works—and charging $29 a month.
Their costs per customer are probably $200+.
They're bleeding money.
When I asked the founder why they don't charge more, he said: "We want to get traction first."
Traction to what? Bankruptcy?
The SimpleDirect Story: How We Followed All the Rules (And Almost Died)
Let me tell you exactly how we screwed this up.
In the early days of SimpleDirect, we did everything "right" according to the startup playbook:
Step 1: Validate the problem We talked to dozens of contractors. They all had the same issue: customers would balk at $20,000 renovation quotes because they didn't have cash on hand. Contractors were losing deals.
Great. Problem validated. Real pain. Big market.
Step 2: Build an MVP We spent months building a platform. Clean code. Decent UI. Automated onboarding.
Step 3: Launch a pilot program We got contractors to sign up for...$29/month.
Most of them quit within two months.
Step 4: Iterate based on feedback We told ourselves the dropoff was about product issues. Maybe the onboarding was confusing. Maybe we needed more features. Maybe the website wasn't polished enough.
Wrong. Wrong. Wrong.
The real issue was simpler and more brutal: $29 a month signals "this isn't important."
What We Didn't Understand About Our Customers
Here's what I learned after three years of banging my head against the wall:
Contractors run businesses by:
- Talking on the phone
- Driving to job sites
- Closing deals in person
- Getting referrals
They absolutely hate:
- Reading emails (they get 50+ spam messages a day)
- Using web apps (they're always on their phones, outside, on ladders)
- "Self-service" anything (they want a human to call)
But here's what they love:
- Services with guarantees: "We'll generate 5 leads a month"
- Simple ROI math: "Spend $2K a month to make $15K a month"
- Someone accountable: "Call me if anything goes wrong"
When you sell a SaaS product, you're asking them to log in, troubleshoot, and figure it out themselves.
When you sell a service, you're saying: "I've got this. You focus on running your business."
Guess which one they're willing to pay real money for?
The $2,000/Month Breakthrough
After three years of struggling with SimpleDirect as a product, I tried something different.
I called up two of our existing customers and pitched them on a service: full-service direct mail marketing for $2,000/month.
Not software. Not a tool. A service where I'd handle everything: targeting, design, mailing, tracking, optimization.
Two out of three said yes on the spot.
Didn't negotiate. Didn't ask for a discount. Just: "When can we start?"
That changed everything.
The Real Numbers
Here's what the shift looked like financially:
SimpleDirect v1 (Product-First Model):
- 20 customers at $29/month = $580/month revenue
- Cost to support them: ~$2,000/month (support, infrastructure, my time)
- Net: -$1,420/month (bleeding money)
SimpleDirect v2 (Service-First Model):
- 5 customers at $2,000/month = $10,000/month revenue
- Cost to deliver: ~$3,000/month (mostly my time doing manual work)
- Net: +$7,000/month (profitable)
Five customers. That's all it took to go from bleeding money to being profitable.
And here's the thing: those five customers were easier to keep happy than the 20 product customers.
Why? Because we were talking to them regularly. We were solving problems proactively. We were accountable.
Why Founders Are Terrified to Charge
I know what you're thinking: "George, why didn't you just charge more from the beginning?"
Great question. Here's the honest answer:
I was scared.
Scared that if I asked for real money, people would say no. And that no would mean my idea was worthless.
Rejection from a VC? That's fine. Rejection from a potential customer? That hits different.
But here's what I didn't understand:
When someone says no to $2,000/month, they're giving you valuable information.
They're telling you one of three things:
- The problem isn't painful enough
- Your solution isn't valuable enough
- You're talking to the wrong customer
All three are things you need to know before you build a product.
The Silicon Valley Model (And Why It Doesn't Work for You)
Here's the model VCs want you to follow:
- Build a free product
- Get 10,000 users
- Convert 2-3% to paid
- Raise money on "traction"
- Scale from there
This works if you have $2M in the bank and 18 months of runway.
Because you can afford to:
- Support 10,000 free users
- Iterate until you figure out monetization
- Burn through your runway "finding product-market fit"
But if you're bootstrapping? If you've got $50K in savings and need to pay rent?
You're dead before you convert a single user.
Here's what actually happens:
Month 1-3: You build and launch. Free users sign up.
Month 4-6: You realize supporting free users is expensive. You're answering support emails, fixing bugs, adding features they request.
Month 7-9: You run out of money. You still haven't figured out monetization. You start panicking.
Month 10: You shut down.
And then everyone says: "Well, you didn't find product-market fit."
Bullshit.
You found product-market fit. You just didn't find customer-payment fit.
The Pattern That Actually Works
Forget "build-measure-learn."
Here's the pattern that actually works:
1. Find a painful problem Talk to potential customers. Find something they're actively spending money on (or losing money because of).
2. Charge real money to solve it manually Don't build anything yet. Solve it by hand. Charge $1,500-$5,000/month.
3. Automate the parts that take up your time Once you're doing it manually for 5-10 clients, you'll know exactly what to build.
4. Raise money (if you want) from a position of strength Now you have revenue, customers, proof. VCs will actually listen.
The difference? In this model, you're profitable at every stage.
You control your destiny. You're not praying for a VC miracle.
One Customer Paying $2,000 > 100 Customers Paying $0
Let me make this crystal clear:
One customer paying $2,000/month is worth infinitely more than 100 customers paying $0/month.
Because:
- You're learning from paying customers (skin in the game)
- You're validating willingness to pay (not just interest)
- You're generating cash flow (runway extends)
- You're building a real business (not a vanity metric)
Free users don't validate product-market fit.
Paying customers do.
What This Means For You
If you're currently:
- Building a product with no revenue → Stop
- Optimizing for free users instead of paying customers → Stop
- Waiting for "the right time" to start charging → Stop
Start charging today. Even if it's manual delivery. Even if it's imperfect. Even if you're scared.
Because the market doesn't care about your fear.
It cares about solutions.
And if you solve a real problem for real people, they will pay you real money.
That revenue is the only validation that matters.
The Bridge to Everything Else
You don't need venture capital to build a successful company.
You don't need to be in San Francisco.
You don't need a perfect product.
You just need customers willing to pay you money to solve their problems.
Everything else is optional.
Next Article: In the next piece, I'll show you the exact consulting-first model I used to build SimpleDirect and ANC—including the month-by-month breakdown of how to get from $0 to $10K MRR in 6-12 months without writing a line of code.
Want the full revenue-first playbook? Download Chapter 4 of The Anti-Unicorn where I break down:
- The exact scripts I used to sell $2K/month services
- How to price for value (not time)
- When to transition from service to product
- Real financials from SimpleDirect's pivot
George Pu is the founder of ANC Ventures and author of The Anti-Unicorn. He's built three profitable companies from Toronto without raising venture capital—including SimpleDirect, which went from $580/month to $10K/month by doing the opposite of what Silicon Valley teaches.
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