Over 1 year ago, Magic Lasso became a full time endeavour. The increased focus over the first year has shown some great success. We’ve been able to deliver a much improved ad blocking app. As a result, sales are up, profits are up and subscriptions are up too.
However, it has not been all positive.
Working solo on an app full-time can be hard. There are daily fears and some failures. YouTube ad blocking has been a time sink. We were almost sherlocked by Apple. These are the things that we’re trying to get better at tackling and putting into perspective.
Let’s start with the positive news though. In financial year 2023, Magic Lasso revenue grew over 50% with profit growing over 80%. Although from a low base, one of last year’s primary goals for Magic Lasso was to become a sustainable, ongoing business. With these results, we’re getting there.
In this post, we’ll share what we’ve learned about being a bootstrapped indie app startup over the last 12 months. It’s broken into three main areas; first the successes then the fears and failures and finally the goals for the next year.
Previous posts
These Year in Review posts are a semi-regular Magic Lasso tradition. They’re timed with the end of financial year here in Australia, meaning it’s a good opportunity to reflect, look at the overall financials and plan for the year ahead.
See our previous two posts in the series below:
Successes
Magic Lasso profit grew over 80%
VC-backed startups typically have a ‘grow at all costs’ mentality. Investors want a big return on investment, as quickly as possible. Oversized investment valuations can fund accelerated product development, huge marketing budgets and ever increasing team sizes.
As a bootstrapped startup, Magic Lasso doesn’t have these ‘luxuries’. But the reality is, growth is incredibly important when you’ve quit your job to focus full-time on a relatively new business.
You need to ensure you don’t become complacent. You also need to fund your time so you can support and evolve the product. Ultimately you need enough money coming in to be able to live, eat and keep working on the business. Therefore, as soon as Magic Lasso moved from a spare-time side-hustle to a full-time startup, we’ve needed to make a profit.
Last year, our stated goal was to grow profit by 30% over the year. We have surpassed that goal.
Profit actually grew over 80%. Along with that success, active subscriptions also grew more than 30%.
Additionally, the total number of downloads of Magic Lasso Adblock has now surpassed 320,000 during the year.
A lot of this is due to the changes in our business model as noted in last years post. Overall those changes have been successful.
Growth is (relatively) easy when starting from a small base. It may be harder in future years to achieve the same level of growth. For now, we are celebrating that a lot more people are discovering and loving our app leading to a better, more sustainable business.
Acquisition offers: It’s nice to be wanted
“We’re big fans of what you’re building – we’d love to have a chat.”
From time to time, we get unsolicited emails that start something along those lines. We have not been actively looking to be acquired, nonetheless we have been fortunate to have a number of unsolicited acquisition offers arise over the last year.
Generally, these are from VC-backed startups. Startups that are looking to supplement their existing products with another app that is growing and well-regarded. All potential acquirers we’ve spoken to so far have been straightforward to collaborate with. Their existing products are good, the people are great and they share our unwavering belief in user-privacy.
Why then haven’t any of these acquisition discussions progressed further and resulted in a sale?
Well, as stated, we are not actively looking to sell. We still love working on Magic Lasso and enjoy hearing from our customers on how the app can be improved and what a difference it has made to their browsing experience. So there is no reason, at this stage, for us to sell.
Also, the valuations placed on the company by some acquirers haven’t been consistent with the growth and future opportunities of Magic Lasso.
In VC-speak, the valuation premium has been inadequate. Our full-year growth figures confirm this is the case.
Actively looking to be acquired or looking for investment can be a huge time sink for a startup. Though we are still open to discussions and connecting with future opportunities, we feel no need to sell at this stage. Instead, we’re focused on spending our limited time on creating a great product.
More time equals a better product
The big change over the last 12 months was the ability to focus on Magic Lasso full-time.
This has resulted in us delivering a host of fantastic new features. Concurrently, we’ve continued to significantly improve the app internals, removing legacy tech debt, leading to streamlined product development.
Along with releasing new ad blocking rules regularly, our goal was to release a new app version monthly.
In the 2023 financial year, we met that goal and delivered a total of 13 app releases across iOS, iPadOS and macOS.
Here’s some of the significant features included in those releases:
- Tap to Block and Custom Rules
- Performance Insights
- Redesigned Magic Lasso app
- YouTube ad blocking improvements
- Family Sharing support
Some of these features have been literally years in the making, so it was satisfying to finally deliver them and hear the positive response from users.
Fears and failures
YouTube ad blocking has been a stressful time sink
In mid to late 2023, YouTube started to become more aggressive about detecting and nagging users if they had an ad blocker installed. This required some significant changes and updates to how Magic Lasso blocked YouTube ads.
Over the last 9 months, further ongoing improvements have been made to continue to support YouTube ad blocking and ensure that Magic Lasso users avoid seeing anti ad block messaging.
This cat and mouse game is an inevitable consequence of developing an ad blocker that is increasingly in the sights of the world’s largest adtech company.
Google will be pleased to hear that this work has been a time drain on developing other product features. It has also increased our customer support load considerably. And finally, it has been a stressful endeavour to keep on top of.
Nonetheless, we’re determined to continue to provide best in class YouTube ad blocking and have become increasingly good at rapidly responding to YouTube’s detection techniques.
We’d prefer that so much of the last 12 months wasn’t focused on these problems. Unfortunately that’s one of the difficulties of working on an app, with limited resources, that integrates with many third-party websites and apps.
Magic Lasso was almost ’sherlocked’ by Apple
May and June 2024 was a worrying time for Magic Lasso.
It was due to a report, by AppleInsider, that Apple was planning to release an inbuilt content blocking feature in Safari as part of their next major operating system release. The rumoured ‘Web Eraser’ may have allowed all Safari users, without any additional software, to block ads in Apple’s default web browser.
Depending upon its scope, this rumoured feature may have destroyed much of the existing market for Magic Lasso.
Anyone who has been part of the Apple developer ecosystem for long enough will know of the notion of being “sherlocked”. It’s the term used for the increasingly regular occurrence of Apple releasing a feature that supplants or duplicates third-party software within their operating system (OS).
All app developers live in fear that each new Apple OS announcement may be the one which destroys their years of work on an app.
When we first developed Magic Lasso, many years ago, we knew that this was a possibility. We thought though, with the potential for anti-trust lawsuits, Apple would never make such a move. But Apple has changed. They are more and more willing to take aggressive actions, irrespective of regulation or competition law.
Now with a month or so to go until Apple’s Worldwide Developer Conference (WWDC) in early June, this frightening outcome looked increasingly likely.
We tried to rationalise it. How this may be positive for our app and perhaps increase the overall market. How Apple wouldn’t include everything that our users wanted from an ad blocker.
No matter what though, we were worried. We would have to endure the wait, to see what happens.
On the day of WWDC, and due to the timezone differences between California and Sydney, we woke up especially early to possibly hear the bad, startup destroying news. The days before were terrible. At least now, judgement day had come.
Tentatively and still in bed, we opened Safari to read about all the new software announcements Apple had made. Half awake, we scrolled through the Safari feature page on apple.com worried that everything was about to change.
We kept scrolling and saw no mention of a ‘Web Eraser’.
We were given a stay of execution.
Apple did not include the rumoured feature in the next version of Safari. Why? Who knows. Possibly it wasn’t ready. Possibly they’d listened to the protests of publishers and journalists who were also concerned about the feature. Possibly the rumour was bunk.
Nonetheless it was a positive outcome for Magic Lasso. It has galvanised us however to not be in the same situation next year. We are looking at ways to de-risk this possibility, which may result in some new approaches from us in the future.
Tech is hard, marketing is harder
The technically perfect product that no-one uses. It’s a common startup trope because it’s true.
No matter how good your product is, if no one knows about it or uses it, then it’s a failure.
Luckily, Magic Lasso hasn’t fallen into this trap. We are fortunate to have a vibrant and growing user base. However, just like last year, it’s still been hard to consistently and successfully market our app.
It’s not all bad. We do have some marketing channels and approaches which work, but the ability to scale some of these techniques is limited.
We also have the constant fear that growth will plateau. That our current marketing will not reach enough new users. That natural customer retention loss will lead to a shrinking user base. None of this has happened. Well, not yet. And maybe never. But trying and testing new marketing approaches is constantly at the top of our priorities.
This is the point where VC-backing can be helpful. Marketing a B2C SaaS product is challenging at the best of times. It’s significantly more challenging when trying to bootstrap the product, and it’s marketing, using only the small income from existing subscribers.
To solve this issue, we’ve tried many things. Last year we touched on how we tried content marketing. To a lesser extent, we continued that during the last 12 months, with variable success. Our post on how digital advertising may be causing almost 2% of global carbon emissions was one of the bright spots in terms of interest.
For the year ahead we’ll keep trying new things. Potentially see if SEO can help us to reach a broader audience. Or, despite our natural inclinations, if social media channels could be better used.
One positive marketing initiative has been the introduction of our newsletter. We’ve grown its subscriber base substantially over the last year and it has been a great way for both existing and new users to learn about Magic Lasso and related topics.
Goals for next year
Every year we try and set an ambitious target for the year ahead. We may not meet it, but even if we come close, it will be a success.
As always, our number one goal for Magic Lasso still stands: to create the most user-friendly, privacy aware and platform-native ad blocker for the iPhone, iPad and Mac. To achieve this we have a suite a great new app features and improvements already in the pipeline. These should elevate Magic Lasso even further and deliver on the user requests and feedback we’ve received. Sign-up to our newsletter to be notified when they arrive.
From a business standpoint, just like last year, we will again set a goal to grow our profit by 30% over the next 12 months. This will help to support new marketing initiatives and product development. 30% growth will become progressively harder each year it remains a target. However, based upon the prior 12 month results, it should be achievable.
Finally over the next year we plan to de-risk Magic Lasso, to lessen the impact of being ‘sherlocked’. It’s too early to make any specific announcements of how this will be achieved but it has been our inclination to do so for a long while. With our recent experience, this has now become a much higher priority task.
Overall, the last 12 months have been a pivotal time for Magic Lasso. We still love working on the app, love hearing from our users and love using the app ourselves. While all three continue, we’ll keep making a product we’re proud of.
