The Story
Praneeth Pike quit his $250K/year software engineering job to go all-in on building apps. He built Rabbit Holes AI (now Canvas Mode) - a canvas-first AI interface that lets users branch conversations into nodes instead of linear chats like ChatGPT.
The first version launched with a typical freemium/subscription model. It got downloads but almost nobody converted to paid after the trial. Praneeth was stuck at $1-2K MRR for months with no clear path forward.
Then he made one critical change: he switched from subscription to lifetime deal, converted from web app to desktop app, and made it "bring your own keys" (BYOK). This eliminated his AI costs and server costs entirely.
The result? $80K in revenue over the next 6 months with 1,200+ users and ~75% profit margins.
Key Insights
Why the First Version Failed
- •Subscription model in a saturated market
- •Target users (Power AI users) already had multiple AI subscriptions
- •No personal brand to drive initial traction
- •Web app meant ongoing server and AI costs
The $80K Pivot
- •Lifetime deal instead of subscription - Bootstrappers can't afford to wait for subscription revenue to compound
- •Bring your own keys (BYOK) - Users pay for their own AI usage, eliminating costs
- •Desktop app instead of web - No server costs, runs on user's computer
- •Progressive pricing - Started at $29, raised to $49 after 100 users
Why Every Bootstrapper Should Do LTDs
- •VC-backed companies can delay product-market fit with funding
- •Bootstrappers need immediate validation
- •LTDs provide cash injection + morale boost
- •LTD users give better feedback and are more engaged
- •Can always add subscription later once validated
Pricing Strategy
- •Started at $29 (under 100 users)
- •Raised to $49 after 100 users
- •Planning to raise higher and add recurring model at 1,200+ users
- •60% lifetime users, 40% annual (renew for updates)
Growth Strategy
- •Nail the landing page copy - call out your ICP directly
- •Reply to relevant conversations on Twitter
- •Don't just promote - hint at solutions related to your product
- •Target Power AI users specifically in messaging
Business Numbers
- •~$80K gross revenue
- •~$75K profit (after refunds)
- •1,200 users
- •38,000 unique website visitors
- •Near-zero operating costs
Tech Stack
- •Cursor (AI coding)
- •Next.js (landing page)
- •Electron + React + TypeScript (desktop app)
- •Cloudflare (hosting)
- •Vercel AI SDK (abstraction for multiple AI providers)
- •Costs: ~$50/month (Vercel) + $200/month (Cursor for new features)
Key Advice
- •Stop operating as a "skillsman" - your goal is product-market fit
- •Don't build to impress peers - build to make users' lives better
- •LTDs are truth-seeking - they validate demand immediately
- •BYOK model works great for AI products
Resources
- •Follow Praneeth: https://x.com/praneethpike
- •Rabbit Holes AI: https://www.rabbitholes.ai/