Wavve, a tool that converts audio to shareable social media videos, began as a side project and ended up as a million-dollar business. Founded by Baird Hall and Nick Fogle, Wavve's story is one of unexpected success born from an initial failure.
The company's growth trajectory is remarkable: Wavve started with a mere $1,000 in monthly recurring revenue (MRR). Over time, it grew to an impressive $125,000 MRR. The company's rapid growth caught the attention of investors, leading to a seven-figure acquisition by Calm Capital. By the time of the sale, Wavve had amassed over 200,000 users and was generating $1.5 million in annual recurring revenue (ARR).
This article examines Wavve's journey from its origins to its successful exit. We'll look at how Hall and Fogle recognized a market need, developed their product, and implemented growth strategies. The story covers their initial struggles, key decisions, and the steps that led to their success.
By the end of this article, those interested in tech startups will learn some lessons from Wavve’s experience, with insights into building and scaling a software-as-a-service (SaaS) company in today’s competitive market.
Building the uTalk platform
In 2015, Hall and Fogle launched uTalk with the idea of creating a "Reddit for audio" that would improve the quality of call-ins to sports radio shows. Despite its innovative concept, similar to today's Clubhouse or Twitter Spaces, uTalk struggled to gain traction. The audio and podcast market was still in its infancy, making the timing unfavorable for such a platform.
For two years, the founders worked tirelessly on uTalk. They developed mobile apps for iOS and Android, built a social network and audio-sharing platform, created an embeddable player, and secured various partnerships. Despite these efforts, uTalk failed to attract a significant user base.
Facing the prospect of failure, Hall and Fogle decided to try a new marketing approach. They planned to share audio clips on social media to generate interest in their app. However, they soon discovered that social media platforms didn't support direct audio sharing, only video content.
This limitation led to an unexpected opportunity. The founders quickly developed an internal tool to convert audio files into MP4 video format. As they used this tool to market uTalk, they noticed that podcasters were more interested in the conversion tool itself than in the original app.
Discussion of a Pivot on Slack Channel
Identifying and addressing a market need
The irony of their situation became clear: the simple tool they had created in just 50 hours was generating more interest and revenue than the complex audio-sharing platform they had spent two years developing.
Initially, Wavve operated with a basic, manual process:
1. Customers paid via Stripe.
2. Users uploaded their artwork to an AWS S3 Bucket.
3. The founders shared an IP address (http://52.36.108.20:8888) with customers for video download.
This rudimentary setup stored all customer images in the same bucket, highlighting the MVP's simplicity.
For the first nine months, Hall and Fogle manually created designs for each customer. This hands-on approach allowed them to understand user needs intimately, informing the development of their full-fledged design editor later on.
Wavve early design
Strategic growth and marketing
Wavve's growth was steady and progressive, with notable achievements such as:
- 6 months to reach $1,000 MRR
- 1 year to achieve $10,000 MRR
- Consistent 15-20% month-over-month growth after introducing customization features
A critical technical improvement involved switching from servers to a serverless architecture. This change reduced video generation time from 3-5 minutes to just 30 seconds, significantly improving user experience.
Wavve transitions from server to serverless
The founders implemented several effective marketing strategies:
1. Targeted cold email outreach:
Hall and Fogle developed a systematic approach to identify potential customers:
- They searched Twitter for users promoting new podcast episodes, especially first or second episodes.
- They created an internal search dashboard using the iTunes API to find relevant shows.
- They extracted email addresses from podcast RSS feeds.
- They sent 30-50 personalized emails every day or two, using templates but including specific details about each podcast.
Wavve cold email
2. Social media engagement:
Recognizing the growing importance of Instagram and Twitter for podcasters, the founders engaged directly with content creators on these platforms. When they saw podcasters sharing episode images, they would suggest converting these images into videos with audio included, showcasing Wavve's value proposition.
3. Product-led growth:
Wavve's growth was partly driven by the product itself. The company included watermarks in its branding, particularly for free-tier users. This feature turned every Wavve-created video into a potential advertisement for the service. Even premium users appreciated Wavve's unique animations, which helped their content stand out.
Expanding the product ecosystem
As Wavve grew, Hall and Fogle identified additional opportunities to serve their user base:
1. Zubtitle:
This tool addressed the need for captions, allowing users to easily add subtitles to their audio-visual content. This feature was particularly important for viewers who prefer to watch content without sound.
2. Churnkey:
To address Wavve's high churn rate of 9-11%, the founders developed Churnkey. This tool allows users to pause their subscriptions rather than canceling them outright, acknowledging the seasonal nature of many podcasts and helping to retain users during off-seasons.
How Wavve prepared for a successful acquisition
Wavve's growth from a struggling startup to a successful exit demonstrates the founders' ability to adapt and respond to market needs. Key factors in their success included:
- Continuous product improvement based on user feedback
- Strategic marketing efforts tailored to their target audience
- Development of complementary tools to address user pain points
- Focus on reducing churn and improving user retention
These efforts culminated in Wavve's acquisition by Calm Capital for a seven-figure sum, marking a successful exit for Hall and Fogle.
Calm Capital acquired social media co. Wavve for mid-7 figures
Conclusion
Wavve grew from a small tool made to solve a marketing problem into a successful business. The company gained over 200,000 users and made $1.5 million in yearly income. Hall and Fogle, the founders, spotted a chance to help podcasters share their content on social media. They built their product based on what users needed and marketed it well. This led to Calm Capital buying Wavve for millions of dollars. The story of Wavve illustrates how a startup can succeed by paying attention to what customers want and changing plans when needed.
