How a Melbourne med-school dropout used credit card debt and a wall of phones to turn an “idiotic” idea into a million-dollar startup – StartupSmart
When Melbourne med-school dropout-turned-entrepreneur Hugh Stephens launched a side project startup nearly three years ago, he expected it to be out of business in six months.
The 23-year-old was already running his own business consulting company, Dialogue Consulting, and after numerous clients complained about not being able to schedule Instagram posts, he decided to do something about it.
Funded solely with credit card debt and cash flow from the consulting business, Stephens built the MVP for Schedugram over the Christmas period in 2013, but didn’t have any lofty aspirations for the creation.
“When I started it I thought it’d be around for six months,” Stephens tells StartupSmart.
“After another six months I thought there surely wasn’t long left. I’ve said that every six months now for a bit over two and a half years.”
Despite these worries, Schedugram has grown rapidly and now boasts thousands over users around the world.
The startup now accounts for the “bulk” of Dialogue Consulting’s $3 million annual turnover.
But with the flick of a switch Instagram could put the business in jeopardy.
If the social network giant decides to open its API, allowing outside parties to schedule posts, or to simple incorporate a scheduling function in the app, Schedugram would be faced with countless competitors.
While he says Instagram is currently focusing on the commercial side of things, he’s sure they will eventually open the API for all.
“At one point it probably will be a priority,” he says.
“The question is, is that the end? I don’t know.”
Going old-school
Schedugram doesn’t bypass Instagram’s closed system through a high-tech solution. It takes a rather old-school approach, with a wall of physical smartphones automating the posting process. The phones are dimmed and other measures are taken to save battery, but they’re still replaced every 11 months or so.
“Think of someone sitting behind a phone 24 hours a day, logging in and out of Instagram accounts, writing captions, and posting photos,” Stephens says.
“We do that except there isn’t a person involved all the time, there’s a pool of phones. There’s a layer of automation but every now and then there’s still some manual intervention involved. A phone will cark itself or be grumpy about the wifi and we’ll still have to poke and proud around.”
Stephens, now 26, has made no effort to hide this old-school method, but says people are still shocked when they find out how it all works.
“I’m surprised that people are surprised – it’s been on the website since we started,” he says.
“Some customers like it being this magical black box and get totally gob-smacked when they see. It’s not a secret – the complexity is in the implementation.”
Schedugram is now used by thousands of clients, from large agencies and celebrities to smaller businesses trying to maintain a social media presence.
“We’ve had to rip apart a few of the assumptions we initially made as far as where we’d end up,” he says.
“We still continually iterate. It’s turning three at the end of December and we’re polishing off our third total re-write. We’ve made a habit of doing that every 12 months.”
Schedugram has six employees in different countries around the world.
An “idiotic” idea
The startup has been entirely bootstrapped, with Stephens saying he has never even tried to seek outside funding.
“I always thought nobody would be dumb enough to put money into something that’s only going to last for six months,” he says.
“Through a combination of some glorious credit card debt and work from the consulting business we built it.”
While initially thinking the idea for Schedugram was “idiotic” because of its inability to scale, Stephens says that he learnt this is the perfect way to test the feasibility of an idea.
“Doing things that don’t scale is a place to find that area of competitive differentiation,” he says.
“It can help you make sure you’re solving problems that people want solved, and that often requires something that doesn’t scale initially.”
The first MVP for the startup could only cater for 10 clients, but the interest it generated proved Schedugram’s concept which then began to be scaled.
“Build for the scale you have as you get it rather than assuming you’re going to have five million customers on day one, or doing something that’s totally impossible to scale,” Stephens says.
While Schedugram now earns the majority of Dialogue Consulting’s revenue and takes up most of Stephens’ time, he still likes to think of it as a side project.
“It still feel likes a side project and it has been quite important to me to keep it feeling that way,” he says.
“It still feels like a fun side project rather than a full-time job.”