Interview with Steven Chan, Founder of GoodNotes: How He Turned an App Idea into a Profitable Business

Archive date: May 2, 2019

In his last semester of university, Steven Chan registered for as many bird courses as possible and staked all his efforts into a new app. Since then, he has built his product GoodNotes into an award-winning app featured on Apple’s App Store multiple times. Rather than pursue a venture-backed business model, Steven’s devotion to product development and revenue-driven growth also afforded him the time to pursue other meaningful experiences in life, such as travel and be a digital nomad. After his first few years as a solopreneur, Steven began to build a team to expand GoodNotes into a tool that can realise the potential of digital note taking for every work situation. Find out how and why GoodNotes has gained success by aiming for profitability over fundraising.

When there’s no clear path, build something to find it.

Steven staked his career on GoodNotes. He had one final semester to complete and no clear career in sight. Steven enrolled in the easiest electives to finish up his degree and doubled down on an app idea he had been mulling over for months. His idea for the GoodNotes app emerged out of his own need as a student to take notes that were easy to save and didn’t take up space. None of the apps available in 2010 quite fitted his needs, so he set about to create his own. Fortunately, GoodNotes was not Steven’s first attempt to build a product. He had begun teaching himself programming since he was 10, before the first iPhone came out. He built games with Macromedia Flash throughout secondary school and when the first iPad came out, he tried building a documentation app for developers. This first app had mild success, but it gave him deep insight into his own working style and the product development process. His years of first-hand experience in obsessing over product features, combined with his curiosity and self-taught understanding of startup methodology, prepared him for his new venture.

Delivering unparalleled UX through understated details

From day one, GoodNotes had a specific target user: math students like Steven. Unlike humanities majors, who could type lecture notes on laptops, writing was still the best way for notes with numbers and calculations. But having tried other handwriting apps available on the first iPad, Steven knew that subtle details were the crux of UX for note taking. When Steven did his market research with other note taking apps, he noted that they lacked the exact combination of features he wanted. In addition, the feeling of writing was just not as good and that created a barrier for him continuing to use them.

He set out to build the app he could happily use every day, but focused on developing features around his observations from other apps. As a solopreneur, Steven worked on his app’s features organically, but they centred around these two UX themes:

1. Recreating the feeling of writing
2. Improving the note taking experience

Recreating the feeling of writing

While apps, as minimum viable products (MVPs), initially focus on function over form in order to validate features, in some cases, form is part of function. For GoodNotes, the aesthetic of recreating realistic ink was crucial for a convincing writing experience. Creating a convincing writing aesthetic helped users focus on their writing. Steven says, “User Experience is the most important. How can the ink bleed work better? How can the texture be more realistic, to the point where people forget it’s an iPad?”

Improving the note taking experience

However, just recreating the writing experience was not necessarily enough to keep users, or attract die-hard analogue writers. The second part of GoodNotes’ product development required unlocking the potential of a digital tablet as a multifunctional tool that surpasses paper. This meant that GoodNotes had to build out features that could address the other pain points of note taking on paper. For Steven, the app had to create an experience that “could anticipate what a user wants to do, so that they would never need to go back to pen and paper.” However, these features may not always be obvious. Instead, Steven observed, “Many small features created a compound effect for users.” Rather than relying on major features that could be quickly replicated by competitors, such as having different notebooks, GoodNotes also differentiated itself through a micro-level obsession to UX details, such as the app automatically switching back to writing mode following erasing notes. Some seemingly small conveniences, however, require incredible investment to do well, such as using machine learning combined with global search functions to be able to group relevant information to provide a more personalised assistance for app users rather than just returning exact word matches. Adding this feature and delivering the same quality of experience for multiple languages, such as Chinese, also requires significant behind-the-scenes investment. The result is a smooth and seamless experience for a broad base of global users in a multitude of scenarios, which builds the enduring popularity of the app.

Evolving product development by growing the team

As a frequent user for his own app, Steven prioritised features based on the number of requests he received from users and his own pain points. As a solo devleoper, who did everything from customer support to feature development, there was no specific process to feature prioritisation. Now that Steven has built a team, GoodNotes has a product development process and can do more in-depth UX planning, such as conducting user research. With the additional investment, the team can now understand key questions that guide future product development, such as:

1. How and why are users actually using GoodNotes?
2. How does GoodNotes fit into users lives and workflow?

Features are now developed according to product development best practices, such as wireframing, protyping, and user testing. However, one tip that Steven gives to solopreneurs is that you can still do key UX exercises with limited resources. He says that shortly after he brought on his early team members, they took advantage of WWDC to ask for volunteer user testers through a newsletter and Twitter call out to do tests in San Jose during the conference. Fans would not only drive for hours to give them valuable product feedback, but rooted for the lean startup team by evangelising for GoodNotes.

Editor’s note: The photo shown above is courtesy of a GoodNotes user. You can check out more on GoodNotes’ Instagram.

Charting a course for revenue-led growth

As a solo founder and product owner, most of Steven’s time was devoted to product development, rather than “growth hacking”. Rather than use the startup approach of acquiring a large user base for an app to attract investors, Steven saw his app as his direct income generator. This means that Steven charged for his app since it launched. The income from the app justified his continued investment to iterating the product to improve the experience of his users, who became his evangelists. In contrast, venture-backed companies need to answer to investors, who may want to push certain features that are not in the users’ best interests. Steven estimates he dedicated a solid six hours of coding every day when he was first developing the app, not knowing where it would go and whether it would be well received. Steven laughs when he recalls, “One of the worst things is getting a user message saying that something didn’t work. They couldn’t open something.” Though he was often caught firefighting, this product-first approach, fuelled the app’s organic, often word-of-mouth, growth. Steven says he did not invest in marketing.

Picking the right details to fuss over for launch

For his app launch, Steven committed resources that seem, at first, counter to MVP approaches. Steven invested in details such as the logo design so that the product looked professional and personally wrote on-boarding messages. When the app launched, it had English and French version and was soon localised into Japanese as well. The handwritten messages, in this case, was aligned with the app’s core note taking offer. In addition, the early app functioned the same way for people taking notes in any language, so translating early on-boarding messages allowed it to expand quickly into new markets. The Japanese localisation got GoodNotes featured on Japan’s App Store within months of the app’s launch.

Solopreneur as product owner

“Building GoodNotes has never not been a challenge. User feedback and encouragement was one of the main motivations for me when I was just starting out.” – Steven Chan

As a solopreneur, Steven was never distracted from developing his product by fundraising. Instead, as the product owner, he responded to user requests and won over fans who would recommend the app by word of mouth, which is a more valuable form of marketing than paid advertising for customer acquisition. Steven’s focus on improving the product built a community that helped amplify the reach of his app.

Taking GoodNotes to heights only teams can deliver

When asked about his early milestone targets during our interview, Steven paused. He then responded, “In the first few years… I guess it was mostly about beating competitors. I didn’t have specific growth targets in mind.” Aside from the bottom line, that the app generated revenue that he was happy with and continued to incrementally grow, Steven was not fixed on chasing optimistic growth targets. However, once he decided to pursue a bigger product vision, he had to build a team, which also means expanding the GoodNotes business model. After working on GoodNotes for 4 years, Steven wanted to realise his more ambitious features for GoodNotes. To execute, he had to build a team, which was a new challenge he was eager to try. However, as a revenue-focused company that has not sought funding, Steven continued to build a product-focused team. This means that the GoodNotes team still consists of people who work on product: developers, UX/UI designers, and product leads. With a team to sustain, GoodNotes also needed to expand from a B2C (consumer) market into a B2B market with schools and offices. This was aligned with Steven’s vision of GoodNotes as a tool that augmented note taking, helping to facilitate key human interactions such as meetings, collaborations, learning, and communication. Steven mentions that the app is meant to reduce the manual work of typing up notes after meetings, and instead creating a digital set of notes that everyone can contribute to, work off of, and keep. Of course, business development also includes improving localisation and servicing strategic geographic markets. For example, GoodNotes has a team member in Germany, one of the app’s most popular markets, to grow its customer base. In addition, the company has invested in more engagement channels, such as Instagram, which is quickly catching up to their e-mail engagement. As a team, GoodNotes can now not only dedicate resources to taking care of users through feature development, but also customer service and community engagement.

Choose profitability over fundraising

At this point, it might seem as though the natural path is fundraising. For that, Steven has a clear response: “Fundraising is a full-time job, and right now, we don’t have the time for that.” Steven says that investors have approached the company, but he has not taken investment because it requires a different focus. Instead, the company continues to focus on profitability-driven growth. As we were wrapping up the interview, Steven shared his outlook on how the digital handwriting era would help people work and learn better, and the features GoodNotes was already working on to help make that happen.

Message to entrepreneurs

We asked Steven what message he would share with developers and entrepreneurs just starting out. He said, “Study what you don’t already know.” Steven said that in high school, he read discussions on HackerNews since it was first launched and read entrepreneurship books. Even though he was interested in computer science, he decided to study mathematics to learn something new in university. For entrepreneurs looking for their first product to build, Steven gave this advice: “Work on something that that you really want to know about, something where you really care about the details.”