A long conversation with a two-person studio that has been profitable for nine years.
Two engineers, one product, one shared spreadsheet. They have not raised money. They have not hired. They have, by their own account, no plans to do either. An afternoon at their kitchen-table office.
The studio's product is a piece of B2B software used, by their own count, by something between four and five thousand small businesses across the UK and Europe. The product has, since launch in 2017, been built and maintained by two people. The two people are both engineers by training. They handle, between them, every aspect of the business: the engineering, the design, the marketing, the support, the accounting (mostly outsourced), and the long, ongoing strategic question of whether to remain a two-person operation or to grow.
I spent an afternoon with them in late April, at their shared workspace, which is — as the headline implies — the kitchen table of a small flat in Walthamstow. The conversation that follows has been lightly edited for length and clarity, and several specific details have been omitted at their request. I have, at their suggestion, used the initials A and B for the two of them throughout.
The conversation
Specsheet: Let's start with the basic question. Why two people? Why have you stayed at this size for nine years?
A: The simple answer is that the work fits. The product is at a level of maturity where it does not, in most weeks, need more than two people on it. We have, between us, the capacity to handle the engineering, the support, and the marketing that the business currently requires. Adding a third person would mean adding work for that person to do, and we have not, in nine years, identified a third role that the business actually needs.
B: The longer answer is that we have, over the years, become genuinely suspicious of the assumption that growth is the same as success. We are profitable. We are growing slowly, by which I mean somewhere around fifteen per cent year-on-year on revenue. We have, between us, the income to live on and to take occasional holidays. The product is in good shape. The customers are, by and large, happy. If we were to hire, we would be doing it because the rules of the game say we should, not because the business actually requires it.
S: What about the people who think you are leaving money on the table?
A: We probably are. We have done the napkin maths several times. If we hired three more engineers, raised a small round to fund them, and went after the obvious adjacent markets, we could probably triple the revenue in three years. We could also blow up the company. We could also spend three years doing work we do not particularly enjoy. The expected value of the larger company, after probability-weighting the various outcomes, is not obviously higher than the expected value of staying the size we are.
B: And the expected value calculation does not include the cost of becoming, in the process, a different kind of company. We like the company we are. We do not particularly want to be the company we would have to become if we doubled or tripled in size. That cost is real.
"We probably are leaving money on the table. We are also leaving on the table several years of doing work we would not enjoy."
On the marketing operation
S: Tell me how the marketing actually works. You have, by my count, four or five thousand customers. How are you finding them?
A: Mostly through content. We have, since the second year of the business, been writing a steady stream of long-form articles that are, in honesty, useful. The articles rank for a small number of long-tail queries that our potential customers actually search for. The articles convert into trial signups at a rate that is — by SaaS standards — quite good, because the readers who arrive at the articles are already in the buying mindset.
B: We also have a small but consistent stream of customers who arrive by referral. The product has, baked into it, a fairly minimal but well-thought-out referral mechanism. We did not, when we built it, expect it to do as much work as it has done. It now accounts for, depending on the month, somewhere between fifteen and thirty per cent of new signups.
A: The third channel, which is the one I find most interesting, is integrations. We have, over the years, built integrations with about a dozen other products that our customers use. Two of those integrations send us a steady stream of trial users. Most of them send us almost none. The two that work do a disproportionate amount of the channel's work.
S: No paid acquisition at all?
B: Almost none. We have, in nine years, run paid acquisition campaigns perhaps four times. Each time, the unit economics did not justify continuing. The kind of customer who finds us through paid channels, in our experience, is not the kind of customer who has the patience to use the product properly. They sign up, get confused, churn within six weeks. We stopped, eventually, trying.
On the engineering
S: How does the engineering work when there are only two of you?
A: Slowly. By which I mean: we have, over nine years, become very careful about what we add. Every new feature is something we will, between us, have to maintain for the rest of the product's life. We are not going to be able to throw an engineer at a problem to keep it working. The maintenance cost of a feature is, for a two-person team, much more visible than for a larger team. We say no to a lot of features as a result.
B: The stack is deliberately boring. We use a mainstream backend framework, a single mobile platform, a managed database, almost no custom infrastructure. The boringness is not an accident. We can both work on any part of the system. We can both deploy. We can both debug. There is no piece of the system that only one of us understands. Bus-factor is, for a two-person team, an existential risk, and we have spent a fair amount of effort over the years making sure we do not have one.
S: What does a typical week look like?
A: Roughly: about a day and a half on feature work, about a day on customer support and conversations with customers, about half a day on the marketing side, about half a day on the various administrative and operational things that a business has to do. The remaining half-day is the buffer. The buffer almost always gets eaten.
B: We are quite strict about working hours. We start at nine. We stop at five. We do not, in normal weeks, work weekends. We do not, in normal weeks, work evenings. The product has been built, over nine years, in fairly conventional working hours. The point of being our own employer, we decided early on, was to have the kind of working life that the larger employers we used to work for did not offer. We were not interested in being our own employer in order to work more.
On succession
S: What happens when one of you wants to stop?
A: We have talked about this regularly. The honest answer is that we do not, at the moment, have a clear plan. We would almost certainly try to find a buyer for the business — probably a small private buyer rather than a strategic acquirer, because we would want the business to continue being run as a small business rather than absorbed into a larger operation. The valuation we have in mind, based on the rough industry benchmarks, would be enough that either of us could comfortably retire on our share.
B: We have also talked, occasionally, about handing the product over to one or two of our long-term customers who have, over the years, become collaborators on its development. That is not, at the moment, a serious plan, but it is something we have both said we would consider if the right people approached us.
S: Any regrets?
A: Honestly, no. We have, by any reasonable measure, the kind of working life that most software engineers would describe as ideal. We work on a product we like. We work with people we like. We have, between us, enough financial security that we are not making decisions out of fear. The cost has been that we are not, by industry standards, "successful." We have not been on any lists. We have not been to any conferences as keynote speakers. We have not, as far as I know, been the subject of a single magazine profile before this one. We are fine with that.
B: The only regret I have, if I am being honest, is not having done this sooner. We both spent the first five or six years of our careers working for larger companies. I learned things I needed to learn at those companies. I also, in retrospect, would have been happier if I had started doing what we do now earlier. That is not a regret about the current business. It is a regret about how long it took us to figure out that the current business was possible.
S: What would you say to someone considering a similar path?
A: That it is harder than it looks, and that the rewards are different from the ones the industry talks about. The financial rewards are real but modest. The reputational rewards are essentially non-existent. The professional rewards — the ability to do the kind of work you want to do, at the pace you want to do it, with the people you choose to do it with — are, in my experience, the most valuable rewards there are. They are not, however, the rewards the industry talks about. You will have to know, going in, that those are the rewards you are optimising for. If you do not know, you will probably end up unhappy.
What I left thinking
I left the kitchen table at about half-past six in the evening with what I think is the clearest articulation I have heard of the trade-off the small-studio path involves. The trade-off is not, as it is often described, between "lifestyle" and "ambition." It is between two different kinds of ambition: the ambition to build a large company, and the ambition to do work of a particular quality at a particular pace with a particular set of collaborators. The two ambitions are, in most cases, incompatible. The studios that have made the choice for the second kind — and who have stuck to it — are doing some of the most interesting work in the industry. We will continue to write about them.