Hey, I fancy trying out some more of my own analysis on how companies make revenue. This is my analysis of Key Values. I first heard about this business on the Indiehackers podcast. It's one of my favourite episodes!
You can pre-order more revenue reports - I'm going to be covering:
- Pieter Levels making $600k from Nomad List and Remote OK
- Pat Walls making $12k a month from Starter Story
- Andrey Azimov making $10k a month from Sheet2Site
- 1Hakr making $10k a month from Visa List
As far as I know, the last two of those haven't been properly analysed in podcasts or interviews and Pat and Pieter don't give many interviews so quite a lot of information out there is pretty dated now. 😎
What is it?
Key Values is a website founded by Lynne Tye which gives software engineers an insight into the working culture of different tech companies, mostly in the US. People can filter companies by lots of different factors like diversity, work/life balance, management style, daily routines etc.
How much revenue does Key Values make?
In the Indiehackers podcast, Lynne talks about revenue of about $300,000 a year. She is in a position now where she can charge thousands of dollars for companies to be featured but originally she had to list them for free. Obviously this is the classic chicken and egg marketplace problem. After a year or so she was able to start charging new companies.
How much money goes into running Key Values?
Lynne descibes her costs being very low - a few hundred dollars a month.
What is the business model?
Lynne sells profiles on the website to company. Courtland Allen says this is one of his favourite business models as there are no ads: "the content is the advert". You can think of this like a job board. These feature "adverts" e.g. job listings. So having a company pay to place content on Key Values negates the need for distracting ads, just like job boards.
Lynne charges on an annual basis which is excellent for cash-flow, especially with companies cutting costs just now due to Covid and the economic problems that come with that.
Does Key Values require many employees?
No, it's just Lynne.
Is Key Values hard to build?
No, not especially. You really just need to be able to add companies to a web page and then make filters. You could do this easily with a no-code tool like Webflow, for instance. Although, of course Lynne emphasises in her Indiehackers interview that "the value is not the code". Although it's easy to build, the value is capturing interest from developers to come to the platform and getting companies to pay to have their profile added.
What can you learn from how Key Values makes revenue
- Sell to businesses
B2B (business to business) is extremely lucrative. Businesses have cash reserves (hopefully!) and budgets for things like marketing and recruiting. You are asking someone to spend the company's money, not their own money. Whereas with consumers (B2C) you have to ask them to pay for something by forgoing a weekly coffee, perhaps. I think businesses are more likely to take a risk on spending as at the end of the day the person making the decision isn't losing any of their OWN money.
- Take 'all you can eat' approach to subscriptions
Lynne could have pursued a business model where companies for each job post. Instead Lynne can offer unlimited job ads in exchange for one BIG payment each year. This is good for her as the cost of adding more job ads is negligible and it's good for the businesses as they aren't having to shell out $300 for every job listing. ($300 is standard on job boards). If you can deliver unlimited value to a client then you can charge a large amount.
- Pursue high value customers
Obviously tech companies are a great target for the entrepreneurs. They have lots of money to spend! They are also spending a lot of money already on recruitment. Lynne lives in San Francisco so has the added advantage that they are all on her doorstep. But really, anyone can sell to tech companies. Just find an email, Twitter or LinkedIn and make a non-spammy, personalised pitch.
- Use whatever advantages you have
Lynne is clearly an extrovert so enjoys doing sales and meeting people. She also had a good network to start with having worked for startups in the Bay Area before. So she already had a list of people she could pitch.
Although I love this business I would say replicating Lynne's success would be harder if you didn't have a good network or lived in a tech hub. Also, she had a big cash runway from having learned to code and charging $100/hr. I believe for the first year or so she didn't make any money from Key Values.
Of course one thing you could do is make it a part-time thing until it starts paying you. B2B just takes a longer as they are more people required to approve the decision. But then again you can charge a lot more so you have to weight the pros and cons.
Companies are willing to pay to look good. It could be that you could make a similar site for companies that promote women or have diverse teams, for instance. There are lots of different possibilities here. Key Values is also very tech-centric so of course you can make a version for another sector altogether! I could see this model working for law firms, for instance.
If you'd like more reports like this please validate this idea and place an order