Case Study: How Mike Moloney Bootstrapped FilterGrade
- Online Business
- Mar 16, 2017
FilterGrade (site: https://filtergrade.com/) is a marketplace where photographers, designers, and other creative entrepreneurs buy and sell their digital products. Looking at it, you’d never guess that it is run by two teenagers; 20-year-old founder Mike Moloney and 18-year-old co-founder Matt Moloney.
How did Mike, who launched FilterGrade when he was only 15, manage to bootstrap a profitable startup at such a young age?
How FilterGrade got started
It all started when Mike was 12. He was very interested in video games, so he started making video montages and putting them on YouTube, which is how he met a friend who was interested in making films. “He introduced me to the world of creativity through filmmaking and photography,” Mike shared.
Mike was hooked. He started teaching himself various skills like animation, photo editing, video editing, etc. He became more and more fascinated with everything about graphic design, photography, and cinemaphotography. “It really captured my attention and became a passion of mine.”
At age 15, he started creating his own photo filters and selling them on the Envato marketplace. That was where he met Adam, an entrepreneur who quickly became a friend and mentor. He was the main person who encouraged Mike to create a website and sell his products.
“I was very hesitant at first, because I was already busy. I was a junior in high school, I had to keep my grades up, plus I also played football. I was worried that I simply wouldn’t able to manage all my commitments.
The initial reason I did it was because Adam kept pushing me to start something. He knew the value in building your own community and audience. While I was worried about time, I was also curious about the potential of running my own project. In November of 2013, I started working on the first filters that helped launch FilterGrade.”
The Minimum Viable Product
Mike started by testing his products on another marketplace to see if people were interested. He put 10 different packs of filters on Creative Market and linked to FilterGrade in his profile so that interested buyers could find out more about the company.
One of the biggest challenges he faced was building the product. He had created Photoshop actions in the past and said he very much enjoyed that process. However, after a a month of many long, hard evenings spent creating over 200 unique Photoshop filters, he was faced with the problem of how to launch his business.
How would I put my product in front of buyers? I had no budget for ads. I couldn’t code much either. But I really wanted to launch my product. I wanted validation. After reaching out to a few friends, I decided to try something a bit different. I was going to take the marketplace route.
Fourteen days later, he launched FilterGrade on CreativeMarket. His only investment at that point was his time spent creating the products and listing them.
Just launched a small photo actions shop. https://t.co/OsGUnVMNpR Working on a cool site to share soon. :)
— Mike Moloney (@moloneymike) January 19, 2014
Mike got the validation he wanted – people bought his filters! He said, “When people actually hand over their money, you know you’re on the right track. This is a stronger signal than getting someone’s email address or a click to a specific landing page.”
Once Mike validated his idea and made some money, he decided it was time to expand his business. For the first six months, he sold on CreativeMarket. This allowed him to bank enough money to invest in web development. He validated his product and refined the profile of his ideal customer. He launched a full FilterGrade online store in June 2014.
During the next two years, he worked to build the FilterGrade brand and also a solid community for people to learn more about photo editing and photography. How did he do it?
The biggest thing that I think a lot of people miss is that you need to listen to your customers. Try to build a dialogue through emails, surveys, reviews, social media conversations, and more. Really listen to what your customers [say]. Pay attention to how they use your product.
As you learn those patterns, write content to answer their questions and solve their problems. Help your customers with whatever the most stressful parts of your products or services are. That’s usually the best way to get great content that people will always find helpful. Putting out great content on a regular basis remains the core of our marketing efforts to this day!
Mike finds that email drives a lot of traffic to his site.
We utilize email as a tool for distributing our content to our customers, fans, and community members. Segmenting emails helps a lot with getting the right content to the right people. This increases our open rates and helps more people find what they are looking for.
Another thing that FilterGrade does is send emails to the entire list. They send these emails out regularly so that customers know they can rely on the company to be consistent. Some of the content includes info on important website updates and news from the marketplace. We also try to send emails to the entire list on a consistent basis about the most important updates from the website and marketplace.
“That way we don’t annoy people with unnecessary emails and information,” Mike shared.
“The main way we use Instagram right now is for promoting our partners and their new filters. We work with partners to help share exclusive previews and more on our Instagram Story to help show people in the community how the products work. You can see more on the @filtergrade Instagram.”
Mike uses Pinterest to showcase various facets of the FilterGrade Community. He stresses that this is not just about the products and selling to followers.
A lot of companies seem to think that Pinterest is just for selling and promoting products, but it’s a lot more than a buying platform, it’s also a way to discover things and save them for later. That’s why we share everything from our products to our blog content to our customers’ own edits.
Mikes wants WHSR readers to keep in mind that Pinterest isn’t a “social network where you post something and immediately get results – the best way to drive traffic to your website is by sharing quality content over time and building up your most popular boards.”
#5 Facebook and Twitter
“We have a Facebook fan page where we post updates and a Facebook group where people can share their own photos/edits and share which filters they used. We also have a Twitter account where we share updates, as well as promote the content of our partners.”
After he graduated, his parents insisted that he go to college, so Mike enrolled to study marketing. That didn’t last long, though. “Ultimately, it just wasn’t for me, because I felt trapped. I like being able to set my own schedule, work at my own pace, travel… Plus, FilterGrade was growing, and running it required a lot of time.” After his first semester, Mike dropped out of college and started working on his business full-time.
From an Online Store to a Marketplace
In June 2016, his brother Matt joined him as a co-founder. A month later, they started selling products by other photographers on the website, effectively starting the FilterGrade Marketplace.
“We didn’t announce anywhere that we were becoming a marketplace. We simply launched partner products to see how they would do. After three months, we ran the numbers, and we realized that selling partner products not only increased sales, but also helped grow traffic and build brand awareness.”
The big change from an online store to a marketplace happened as a result of a conversation with a friend who was also an entrepreneur. “Guys, your website doesn’t look like a marketplace, right now, it looks like you’re just selling filters.” After hearing that, the brothers went home and redesigned their homepage.
They started by featuring partner products on the home page. This showed more content. Then, they added buttons to products, one direct link to the shop and one direct link to freebies.
Personally, I think that this homepage adjustment was probably the key to changing to a marketplace. We also changed our slogan a little bit, and people finally understood that we were a marketplace where you could buy filters from your favorite photographers.
1,000+ Cold Emails
Around the same time the brothers started sending cold emails to potential partners. “At first, it was just my brother and I reaching out to photographers, and it was very challenging because we had no real name yet. A lot of people simply didn’t know who we were. They were like ‘What is FilteGrade? What are you doing? Who are you?”
“After we got our first 10-15 partners, it became much easier, because we had the actual data showing that the customers were happy, the products were selling, and the photographers were making solid money for their work.”
At this point, Matt has sent well over a thousand emails, and they currently have around 50 partners (5% conversion rate).
What did they learn from sending so many cold emails?
I learned (though I didn’t send as many emails, that was Matt’s job, I helped our partners to get involved with the site), is that you have to show the benefits of that partnership to the person you are approaching via cold email. You have to think who you are reaching out to and what it is that they’re looking for. That’s what you should lead with in your cold emails. Don’t talk about what’s in it for you, explain what it’s in for them.
They also realized that getting people on the phone helps a lot. At first, they only did emails, but after a month or so, they also started offering a call with a co-founder during which they could discuss everything. This really resonated with people. “Now we do a lot more business calls with our partners. This helps to better explain what we do and answer any questions very quickly. After that it’s usually pretty easy to get the product going.”
Crazy Work Weeks
Their decision to turn FilterGrade into a marketplace has definitely started to pay off. They’ve hit their product-market fit – sales are growing, traffic is going up, and their brand is getting attention. It seems that, after years of work, FilterGrade is getting somewhere!
That, of course, also means that running the company requires more time and energy than ever. “Sometimes I work 60-90 hour weeks now. I don’t like to promote or glorify overworking – I think it’s very unhealthy to overwork your body and mind. It’s mainly just a matter of not having the choice. At this point, I am trying my best to automate tasks, build systems to help as we scale, and hopefully hire our first employees soon.”
What motivates Mike to work so hard?
“My aim with FilterGrade is to help creators sell their products in an effective way to support their careers. The money made directly helps photographers invest in themselves to improve their craft, get new equipment, travel, and more. That’s why I think the work that we’re doing is so important and I’d like to find ever more ways to help people with our marketplace as we grow.”
Mike’s Top 3 Tips in Growing a Startup
Tip # 1: Be Open to New Opportunities
“A lot of the biggest things that have happened to me in my career so far came from very random connections and seemingly meaningless events. It’s important to stay open minded even if an opportunity doesn’t seem like a big deal.”
Tip # 2: Support Your Community
“Want to build a successful company? Care about the people you work with, care about your customers, and care about your community. These are the people who support your projects and your dream, so it’s important to do as much as you can to support them too.”
Tip # 3: Never Stop Learning
“Take in as much information as you can. For me, this involves reading books, reading blog posts, watching videos, discussing with others, and ultimately questioning things. Just do whatever you can to gain as much knowledge as possible.”
What’s Next for Mike?
For the rest of 2017, Mike plans to travel and further spread the word about the FilterGrade brand. He wants to connect with a variety of people.
In terms of the next 3-4 years, one of my biggest goals is to move to San Francisco (I’m currently based in Boston). I’d like to move there and spend a lot more time taking pictures. Other than that, I’m going to continue working on FilterGrade and focusing on my photography while meeting cool people along the way.
WHSR would like to thank Mike Moloney for taking the time to give us some insight into how he grew his company from scratch. His story is one of rags to riches and definitely inspiring.