Coconote · B2C · AI lecture note-taker
Put in ~$10K each and reinvest revenue into creators
Cash-flow positive throughout; no outside funding
What they did
What happened
- Stage
- launch to exit
In their words
Bootstrapped to $6.7M ARR and an Exit to Quizlet in 2 Years – Brett Bauman & Zack Hargett, Coconote
Jacob EitingYeah. I mean, I guess it's like you need good transcription quality, not perfect maybe, right? Especially if the LLM is probably, it's going to know the professor didn't say fish or something like that is going to do a pretty good job of fixing that, I would imagine.
Zack HargettJacob, one thing to add on to this in terms of the finances is that we were very mindful of the financial structure from basically day one. We knew we'd have to invest some upfront and it was around 10,000 maybe each that we had to invest upfront to get things off the ground. But pretty much every month from inception to the acquisition, we were around 50% EBITDA margins. And so we really tried to be lean.
Zack HargettAnd then to your point around raising or reinvesting, there are absolutely trade-offs. One of the reasons why I think we're so excited to now be under Quizlet is that we can think longer term. We can make longer term decisions without this make belief, 50% EBITDA.
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More from this episode
- Launch a basic version fast and charge from day one$100K ARR in 45 days, $1M in 4 months
- Hire creators with 5-10K followers, found via the Gmail in their bio3 of ~30 made a huge difference; main engine to $1M ARR
- Have one hired creator run the brand's main video accountHundreds of millions of views
- Tell creators to show the app as a fix or identity, not a noveltyConverted best, per the founders; no numbers
- Launch a viral 'PDF to brain rot video' side site to funnel users~41M views on one video, but no paying users; shut down
- Aim videos at the parent who pays, not just the studentMany viral Instagram videos used this angle; later scaled back
- Ask customers to describe the app; put their words in the first screenshotFounders call it one of their best moves; no numbers
- Charge students $99/year and push the annual plan~80% chose annual
- Raise the annual price from $99 to $129More users and more revenue at the same time
- Give one free note, then require a free trialCredited with early cash flow; no numbers
- Run paid ads cut by an agency from creators' raw footageBeat boosting viral posts, but never profitable; stopped
- Double onboarding to ~15 screens with more questions and social proof+16% trial starts
- Ask people to log in after the paywall, not on the first screenBiggest onboarding win; removed ~10% drop-off
- When people cancel, offer 7 more free days instead of a discountSaved 25% of cancellers; beat a 30% discount and a 3-month pause
- Hire a banker to run a buyout so the founders keep buildingSold to Quizlet; revenue roughly doubled during the process
Tags: bootstrapped, reinvest, cash-flow