Bootstrapping a $1 million USD cleaning business as a foreign solopreneur in Thailand

Want to get a taste of what it takes to bootstrap a million dollar business? Read on.

Heads up folks, I’m trying something new today.

If you’re like me, you love reading stories and profiles of other entrepreneurs who were able to build big businesses, so I’m trying it out here too.

It’s a short 7 question interview highlighting a really cool solopreneur business that anyone could start: maybe you want to try it yourself, or maybe you can learn some key lessons to apply to your own biz.

Let’s dive in, and let me know if you enjoy it:

Who are you, what is your biz and why is this opportunity so exciting?

I’m Daigo Yoda, a foreign solopreneur in Thailand, who moved to Bangkok from Tokyo in 2017 with my Thai wife whom I met at a business school in the US. I run a 3 years old on-demand housekeeping business called bluuu with 100+ maids and $1 million in annual recurring revenue growing 2x per year, 100% self-funded. Before bluuu, I worked for Google’s advertising business in Tokyo. 

What surprising trends have you observed in customer preferences in the housekeeping industry?

As a foreigner from Japan, where everyone has their own cleaning equipment at home, I was surprised to find after launch that most of our customers in Thailand didn’t have any cleaning equipment! So at the time of launch, I had many angry customers calling me how the maids were going to clean. First 3 months were chaotic. My website’s functionality was quite limited, so there were a series of issues that I hadn’t anticipated. I barely slept for the first 3 months, working 100-120 hrs per week, every week, handling customer service and operations during the day, and developing and testing during the night. Thankfully, things are much better now. 

How did you ensure a 100% background check success rate among your housekeepers?

All maid applicants need to obtain a criminal record certificate from the Thai police, so we simply don’t accept applicants who don’t have a clean record. In Thailand, people can get this easily by applying online and then picking it up at the police headquarters a week later with a fee of around 5 USD.

I used to do this on behalf of our applicants by getting power of attorneys, but I realized that many applicants didn’t join because they weren’t necessarily interested, so I decided to have applicants do this themselves, so that only the interested would apply. Schlep is sometimes a good way to weed out unwanted people. 

What percentage of users choose package deals over single bookings, and why do you think that is?

Around 20-25% of our monthly active users buy package deals. Our package deals have discounts from 5-18% depending on the package size (4-28 times). Customers who buy packages typically use anywhere from twice a month to 3-4 times per week. Market size of regular usage is much larger (ie. google’s toothbrush test), so the more frequent the usage, the bigger the market. But surprisingly, none of my competitors are targeting this huge segment. 

What unique training methods do you implement to stand out in a saturated market?

Quality of maids is decided by selection and development. Training is a part of the latter, and we provide a half day training focused on customer service mind-set, manners, cleaning tips, and advice on how to exceed customer expectations. But our maids are mostly 40-50 years old, which means that it’s not easy to change them. So we put more emphasis on selecting the right maids and on maintaining the quality of our maids by removing the bad apples as quickly and as accurately as possible. Solopreneurs have limited resources, so we have to put our money on where it matters the most. 

Can you share how online booking impacts your customer retention statistics?

In any business but especially in B2C, the 2 key metrics that define success are CAC (Customer Acquisition Cost) and retention. And for retention, you should be using cohort retention analysis, which measures customer retention by groups (ex. new customers who joined in Sep last year) and tracking what % of them are still using your product after a period of time (say 12 months until Sep this year). We’ve been measuring cohort retention ever since launch and it’s been very good. Below is Doordash’s (worth over 50 billion dollars) cohort retention and ours is around 30% higher than theirs, so I’m confident we’re on the right track.

Credit - Y Combinator: 

What would you say are the 5 key steps someone could take to start and scale a similar business?

It depends on the competitive environment of your country and industry, but for anyone considering doing an online B2C business, below are steps you can’t avoid.

Invest in technology. Programmers are expensive and testing is tedious, but tech will let you differentiate and scale. A lot of VCs and accelerators advise to just set up a one pager and launch, but they are referring to revolutionary ideas like Airbnb. But most of us out there aren’t revolutionary, and are mostly incremental. So invest in your MVP to the best you can, because no one would use a one pager for an incremental idea.

Invest in ads. People will tell you that no one will come to your website, and you might think “No one = 1-2 per day”. No, no one means no one! You will literally get no one, not one month, not one year, but forever. Because a new website with no domain power is literally non-existing. So you’ll need to invest in ads to get traction. And you’ll need to invest big, because as your business grows, the % of ads will go down and help your bottom line. If you invest small, you’ll never get to space and orbit. 

Invest in SEO. One of my biggest regrets is that I had done nothing for SEO for 3 years after launch. I am a solopreneur and just didn’t have the time, but without SEO, you’ll be pouring all of your hard earned money into ads. SEO takes time, likely at least 1-2 years before you feel the effect on your bottom line, so make the time to write those blogs and build those backlinks. 

Track your CAC (Customer Acquisition Cost). B2C success can be predicted by looking at CAC and retention. How much it costs to get new customers and how many are staying with you. When I first launched, my CAC was through the roof and I remember being absolutely devastated that I had chosen the wrong market and business model. But as the website improved, CAC went down by around 10 folds, and I expect the downtrend to continue.

Track your retention rate. Cohort retention analysis is a must for all B2C businesses. It’s very simple math, so it shouldn’t be that hard to code. I had it coded in our dashboard since day 1 and this lets me sleep at night, because I know my customers are happy and about 30% are still with us even after 12 months. If your cohort retention rate after 12 month is low, say below 10%, then you know you have a leaky bucket.

What are your top 3 pieces of advice for solopreneurs out there?

First, please take my advice for what it is, an opinion from a mere ARR $1 mil USD growing around 2x per year, but still making a loss, who haven’t even paid himself for over 3 years.

Save money. Startups that get funded are just a tiny fraction of all entrepreneurs. So betting your life on a tiny probability is not wise. Do whatever you can to save as much as you can, so that you have enough to keep going for at least 3-5 years without pay. I’ve learned so much in the past 3 years, and am still making mistakes and learning. Learning takes time. If you only have a 1 year runway, you won’t have time to make any mistake. So you’re doomed to fail. 

Choose a big market. My Thai wife was also a solopreneur, but she chose a small market. It didn’t scale much, and she went back to corporate. Don’t choose a business just because you like it, or are familiar with it. Choose the biggest market that you can that has the biggest problem. If the market is too small, you’re gonna hate it anyway. Passion will follow, so choose your market by potential. But just don't choose something you hate. 

Expect to grind. I didn’t expect starting a business was this hard. To be fair I did launch during covid so that didn’t help, but especially if you’re a solopreneur, expect doing 100-120 hrs per week, every week for months. But it’s not the same as 100-120 hrs at corporate, because no one is forcing you. You do it because you have to. It’s still a grind, but it will feel completely different, and you might be surprised by how much more you can grind, when you just have to do it

If people want to learn more or get in touch, where should they go?. 

If you’d like to reach out to me, please email info@bluuu.co with the title “I read about you on Joshua Schachnow’s substack” and I’ll get back to you.

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Lots of great stuff in there and a big thanks to Daigo for taking the time.

Did you find it interesting? Helpful?

Let me know and maybe I’ll do some more…

Have a great day,

- Josh Schachnow

Canadian immigration lawyer, CEO at Visto.ai