Learning From Mistakes

Growing a Time Tracking Software to $316,000/Month

Dave Nevogt is a 38 years old entrepreneur, who built Hubstaff, a time tracking software that is now making $316K/month. He, in partnership with a co-founder, and with a few developers, build the website in 10 months, and SEO, word of mouth and content were their three marketing strategies. However, during the process they have committed lots of mistakes. Learn from them!

Hubstaff - Mistakes

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Hi Dave! What's your background, and what are you currently working on?

Introduce yourself and what you built. What's your name, age, where are you based?

My name is Dave Nevogt, I am 38 years old and I live in Indianapolis, Indiana.

I have built a number of different businesses but my most recent venture is Hubstaff, a software that helps organizations track time.

Explain Hubstaff at a high level. What is it?

Hubstaff is a time tracking software that helps people from all industries reduce waste and increase productivity within their organization. It provides a clear picture of what exactly is going on within your team, helping you understand what everyone is doing and providing the tools to keep everyone on track

What's your title? What's your job duties right now in at Hubstaff?

I am the CEO of Hubstaff. I spend most of my time on high-level planning with my team, supporting the team in getting things done, building corporate culture and recruiting new team members.

Hubstaff Members
What's your business model?

We are a SaaS, customers are billed on a monthly basis based on the number of team members in their organization. We offer a Solo Lite package for single users, a Basic package with all the base features and a Premium package with all the basic features plus some.

What's your backstory and how did you come up with the idea?

What's your background? What part of your background defines you, and possibly led to starting Hubstaff?

I grew up always thinking that the best route was the one with no risk (completely the opposite of what I believe now) so after graduating college with a degree in finance I accepted a corporate finance job in Chicago thinking this was just the next move to make. This is where the road to Hubstaff begins. After 18 months of being cramped in a small cubicle and commuting two hours to and from work every day, I realized this was not the path for me. I quit my job and built my first online business where I sold instructional golf material.

I loved what I was doing and was finding great success in it, so much so that I thought it would be a good idea to scale the business and rent an office - it seemed like the next logical step. I realized shortly after being back in an office that this was in fact not the right move for me and all those feelings I felt in a corporate office came rushing back. The freedom I once enjoyed from my online business was dwindling as the responsibilities of managing an office and employees became more prevalent. Eventually, the stress and lack of freedom were too much and I decided to sell the business in 2009, it was a good run but I was ready to move on to something new.

After I sold the golf business I was given the opportunity to buy into an SEO company. I was excited about this new opportunity since I’ve always had an interest in software but never had the experience. One of the things that really attracted me to this opportunity was that it was remote, my office could be anywhere I wanted it to be. I learned a lot during this time but one of the most important things - and ultimately the thing that lead me to where I am today, was how to manage a remote team. I learned that a good project management software was key to running a productive and successful team.

I left the SEO business after a few years and decided I was ready to create something of my own, it was at this time I truly realized the benefits of a good time tracking software. I saw how important this kind of software was to me and believed that others most likely have this same need and that’s how Hubstaff was born.

Before Hubstaff, what were you doing? Working, school, traveling? What were you focused on professionally?

This question goes hand-in-hand with the previous one. Before Hubstaff I started a few online businesses (e-commerce and software) and ran them for about 9 years before starting Hubstaff. The other businesses were successful but Hubstaff has become the largest venture to date.

If you had any failed and/or previous ideas or businesses, it is great to talk about them and how they molded your decisions.

My first online business was a golf business where I created and sold training material such as DVDs and books. At first, I was the only person in this specific niche but eventually, the competition began to arise. My brand was not strong enough to keep competition out and although competition means you have a good idea, my brand wasn’t at the level where it could maintain the monopoly. On top of growing competition, the advertising market was also changing at a rapid pace and prices for ad space was continuing to rise. As difficult as it can be to see a business fail, this particular experience taught me so much and I was able to take what I learned, especially about myself, and carry that with me in future business decisions.

Did any big life events lead to starting Hubstaff?

There wasn’t a specific life event that lead me to start Hubstaff, in fact, it was quite the opposite. It was a series of events, trial, and error if you will, that lead me to where I am today.

How did the idea come to you?

The idea of Hubstaff was born out of my own personal pain points from managing a remote team. I came to realize that a good project management software was crucial to a successful remote business and when I was still with the SEO company we tried out several but never found anything that had all the features we were looking for. I started thinking up ways of how a SaaS could help manage remote teams, I decided to focus on time tracking with management aspects. I wanted the software to integrate with different project management and payroll systems so that eventually it would become the hub for your remote staff - and that’s how the name Hubstaff came to be.

How has the original idea grown and changed over time?

The original idea of Hubstaff was to provide managers with the ability to understand what their team is working on without the constant need for follow up. Over time we’ve continued to work on growing our software and making it the best it can possibly be. We’ve also listened to what our customers have to say since their feedback is the most important. Now, Hubstaff has grown into a general time tracking application that helps companies of all shapes and sizes streamline their business processes.

 

What were your motivations to build Hubstaff?

I knew that I wasn’t the only person trying to figure out the best and most efficient way to manage their remote team. I felt there was a lot of value that Hubstaff could provide to other business owners that were building remote teams and I understood their problems deeply. I knew that this was a product that they would get a lot of value from on a daily basis.

How did you build Hubstaff?

From when you got started until you went live, explain the process in detail.

My co-founder, Jared Brown and I started building Hubstaff in 2013. We first developed the applications and made them completely free. We wanted to get a real sense of what our customers had to say and measure the demand for our SaaS. Testing our concept was key to launching a successful startup, we needed to put the time and effort into the concept in order to shape the company’s direction down the road. Once we gathered enough feedback we decided it was time to launch our paid platform.

Hubstaff Founders
How long did the process take?

The entire process took about 10 months.

 

Who was involved?

In the very beginning, we had two developers and myself doing the marketing.

 

What resources/tools did you use?

The concept was based entirely on the past experiences of myself and my co-founder. We took the knowledge gained previously and put it into action for the development of Hubstaff.

 

How did the initial product look?

The initial product looked really bad, it was very small and only performed a few actions - basic time tracking and screenshots of the team members. We’ve come a long way since then.

Hubstaff Dashboard
What sorts of doubts did you have when starting?

The biggest doubt we had when starting was getting the desktop application to run without any bugs. Like any software development, there is a level of trial and error but we wanted to roll out a product that was free of any major glitches.

 

Did you run into any obstacles in this process? What did you do to overcome them?

The biggest obstacle we encountered was getting the bugs ironed out among all the operating systems - this was no easy task.

 

Did you enjoy the process of getting started/building it?

Building Hubstaff was the greatest challenge of my professional career but it was also the most exciting. It was so rewarding to see the increase in demand and people actually using the product. That being said, there was a ton of testing that was required and that was not a ton of fun.

 

How did you approach pricing your product?

In the beginning, we offered a generous free plan but we realized that this business model didn’t make sense for a SaaS company like ourselves. We learned that free plans cost more money than they make and that if people value your product, they’re likely willing to pay for it. We looked in the marketplace to get a better understanding of what others were selling for and we asked our users what they valued the product at. As we continue to improve Hubstaff we re-evaluate our pricing accordingly because we feel it is important to price your software according to the overall value it offers your customers.

 

Did you launch/publicize your product in any way? If so, how did that go? Did it go as expected?

We didn’t launch or publicize our product other than releasing to the database of users that we had built up over time.

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Which were your marketing strategies to grow your business?

Since launching your product, what have you done to grow Hubstaff?

Since launching Hubstaff five years ago, we’ve been working hard to make our product the best it can possibly be. We’ve built a skilled and knowledgeable customer support team that listens to customer feedback which gives us the opportunity to create a product that meets our customer’s needs. Hiring the right people for our team has also been key when it comes to growing our company, we take time to hire people that are extremely knowledgeable in their area of expertise and once we hire them on there is a detailed onboarding process they must go through. Having a team that knows what they are doing is key to a successful business and we credit our strong team for the growth Hubstaff has seen.

Branding has also been very important when it comes to growing our company, it has helped guide us in our decision-making process and we continue to refine it as we grow.

What tactics worked?

SEO, word of mouth and content were the top three tactics that worked for us.

Content and SEO go hand-in-hand and we knew early on that a blog would be beneficial to getting our name out there. We produced regular content and made sure it was keyword based. We wrote about topics like time tracking, outsourcing, and screenshots which helped lead customers to our website.

Word of mouth was also beneficial when it came to obtaining new clients. People that were led to us through the blog were telling others about us which really helped us grow.

Hubstaff Blog
How did you employ/approach these tactics?

We knew that hiring employees who were specialists in these areas was key when it came to pursuing growth. We never rushed in to hiring someone but rather took the time to find the right person for the job. It was important to us (and still is) that we find people who are experts in a specific area.

 

What didn't work?

One tactic that didn’t work for us is paid advertising, it never really worked and I don’t know why - I wish I did.

 

When did you start to see traction? How did that feel?

We started seeing traction from our free program almost immediately which felt awesome. Seeing such positive feedback so early on was the motivation behind sticking with the work of building.

Have you found anything particularly helpful or advantageous?

Word of mouth has been particularly advantageous for us. The biggest thing is that people love the product and appreciate the way we do business, if they’re happy with that they’ll spread the word.

What were the biggest challenges you faced and obstacles you overcame?

Challenges you have faced in the process of building and growing Hubstaff.

One of the biggest challenges we faced while building and growing Hubstaff was the technology, it’s very complex. We have one of the strongest platforms for time tracking in existence which is a great feeling and we’ve built it with a relatively small team but it was a very challenging software to build.

The obstacles you have had with Hubstaff.

The biggest obstacle I’ve faced as an entrepreneur is figuring out where to place my resources, it’s kind of like a game of chess. I really enjoy the challenges of entrepreneurship but I’ve realized over time that it takes a lot of guts to go through with when you have a family and employees that are counting on you.

 

Obstacles and challenges in your personal life, while building your business.

The biggest challenge in my personal life has been creating a work/life balance. It’s easy to get caught up in work, especially when your office is at home. I’ve learned that sometimes I have to disconnect and unplug. My goal has been to create a team that is equipped to answer questions and solve problems for themselves so that I can achieve a work/life balance that in the end will make me a better entrepreneur because of it.

 

Which are your greatest disadvantages?

My personal disadvantages.

My personal disadvantage is that I refuse to spend all my time working. I hate to say it because it’s not necessarily a bad thing but it can be a disadvantage when comparing yourself to other people.

 

The disadvantages of your team or anyone who has helped you somehow to build Hubstaff.

Being a remote company has many advantages but there are also a few disadvantages. It would be nice to have the ability to get the team together in person, not only would it make collaboration easier but it would also help build a sense of community and culture. These are things that take extra time and effort when working remotely.

 

Disadvantages in the market of Hubstaff.

I can’t really answer this question because I’m not quite sure where we fit into the market yet - still figuring it out five years later.

 

Disadvantages you have, in comparison with your competitors.

There are no major disadvantages that stand out other than the fact that “time” is not in our name which would help when it comes to SEO.

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During the process of building & growing Hubstaff, which were the worst mistakes you committed?

Mistakes you, or your team, have committed.

The biggest mistake we made was offering a free plan. In the beginning, we thought this would bring in quick and constant revenue but in the end, we realized there was no benefit to this method. Free plans take up resources and don’t necessarily attract future customers but rather people who are merely interested in a free product. If we were to do it all over again, we never would have offered the free plan.

 

Did you make any mistakes that cost you time and/or money? What were they?

Spending time and money on developing the wrong features is a huge mistake. I’ve since learned to make sure that we are spending time on features that our customers are going to use every day.

 

Things that could have been made in a better way.

Customer feedback is the most important thing and simple surveys can provide you with so much information. Looking back, we would have done a survey or relied on direct feedback before moving forward on a new feature.

If you had the chance to do things differently, what would you do?

If you could talk to your former self before Hubstaff, what would you tell him?

If I could talk to my former self before Hubstaff, I would tell myself to only develop features that people need. I would also give myself a heads up that building a desktop software is very hard.

 

What do you wish you spent more time on in the beginning?

I wish we spent more time on branding and hiring. Looking back, if we would have given these things a little extra time we may have avoided some setbacks in the beginning.

 

What do you wish you spent less time on in the beginning?

I wish we spent less time testing in the beginning.

 

Have you found anything particularly helpful or advantageous?

As I’ve mentioned before, customer feedback has always been number one. Hearing directly from the people who use our software on a daily basis has been extremely helpful when it comes to building a software that others will want to use.

Apart from mistakes, what are other sources of learning you would recommend for entrepreneurs who are just starting?

I love these 3 books:

  • 80/20 Principle by Richard Koch: The 80/20 Principle is one that both I and my organization follow. This book has taught me how to achieve more with less effort, resources and time by identifying and focusing my efforts on the 20 percent that really count. It has helped me maximize my productivity and become the most efficient I possibly can be. This book is great for anyone, no matter what industry or level of career, the 80/20 Principle will help you maximize output without burning out.
  • First Break All The Rules by Gallup: I highly recommend this book to all managers out there, learn what makes a good manager, how to build a successful team and so much more. It really is a must-read.
  • Deep Work: Rules for Focused Success in a Distracted World by Cal Newport: This book has taught me to focus without distraction and I recommend it to others looking to do the same. The techniques discussed in this book have truly changed the way I work.

I would recommend you these two tools: Hubstaff and Google Docs!

Where can we go to learn more?

You should visit Hubstaff website here. And if you are an entrepreneur, you will probably find our blog really interesting, in which we share everything we have learned growing Hubstaff. Furthermore, you can check our metrics here.

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