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Growing Our SaaS to $1M+ ARR: 7 People, 3 Years, No VC Money
- nakodari 8y agoHuge congratulations! I noticed there was a constant revenue at 20K MRR but then starting January 2017 it picked up in growth. How did that happen?
- evermike 8y agoNot an easy question. I think I can write a separate blog post about it. But generally speaking, we completely redid the whole system. In the beginning, we did not understand correctly what customers really need, and our architecture did not allow us to make this "pivot". The hardest thing is that we could not learn it without failing. We got it only after we showcased the product to the market and after talking to hundreds of customers.
- nakodari 8y agoThanks for sharing your knowledge! I noticed that one of the books that inspired you was Traction. Which growth channel worked best for you?
- evermike 8y agoFor us, the best growth channel was partnerships and listing on 3d party marketing pages (Asana, Basecamp, ClickUp etc.). It is not difficult and costs nothing (if you have a good integration) while the traffic quality is awesome!
- evermike 8y agoHey guys, My name is Mike. I'm co-founder and product at Everhour. I'd be happy to answer your questions if any. Feel free to ask here or on Medium.
- adventured 8y agoWhat's the venture capital market like in Belarus? What kind of options are there for a growing SaaS business, in regards to either angel investors or traditional venture capital firms?
- evermike 8y agoGenerally speaking, the are no VC is Belarus. However, we do have some great success stories (e.g. AIMatter (was acquired by Google), MSQRD (was acquired by Facebook)). Most promising startups incorporate in US from day one and raise money there. In addition, there are number of funds in Russia or Ukraine. In other words, if you have an interesting idea, you will find money or money will find you :)
- qaq 8y agoCan’t believe you didn’t mention wargaming they are actually a unicorn.
- evermike 8y agoI agree. I have not listed many cool companies. It is a long and IMHO impressive list. TargetProcess, PandaDoc, FriendlyData, Eightydays.me, Maps.me (was acquired by Mail.Ru Group), SplitMetrics etc. Plus the biggest company is Epam (Market Cap, 7.406B).
- stevoski 8y agoFTA: > 5) The advantages of annual billing How do you encourage customers to choose annual billing?
- jaxn 8y agoI'd love to know the same question. We are making our way to $1mm ARR and have very low churn, but no annual billing option. Do you give a discount at all?
- jirenandcell 8y agoCongratulations on your success. Have you ever worried about VC funded competitors doing what you are doing?
- evermike 8y agoThanks! I did not study 100% of our competitors, but the most known like Toggl, Harvest or Hubstaff did not get investments. Perhaps only some small amount on seed round. I continue to believe that VC money needed for explosive growth. We believe that it is a little too early for us. We are still continuing to pay a lot of attention to the product, communication with our customers, finding our product/market fit and not marketing. Our current revenue is enough for this. And no, we are not nervous about our competitors :)
- kown223 8y agoI don't see the point of this, is just content marketing.
- evermike 8y agoYou do not see the point in the article? Products never start with $1M revenue. It is a certain bar. And to be honest it is hard. In the article we share our experience, what decisions we made, what worked for us etc. I think that for many entrepreneurs it might be useful.
- kown223 8y agoprobably works in Belarus where you pay people peanuts, and everything is cheap, also lots of lots of people lie about revenue to get attention.
- evermike 8y agoI can not agree. Salary of an engineer here is $3000-4000 per month (after tax calculation). Still less than in USA, but I can not call it a trifle. As for our revenue, I told the truth. If you do not believe it, well, I will not persuade you. I think a knowledgeable person can check math. BTW, in the article I attached a screenshot from our analytics platform (ProfitWell). What caused your distrust?
- beilabs 8y agoHuge congrats to you guys. I've been using your product for at least two years now for a particular client and they seem very happy with it (especially the pivotal and chrome integration). Keep up the great work guys!
- evermike 8y agoMany thanks. I am very pleased there are people on HN who heard about us (we are still such a small company). This means that we are doing something important. Will keep doing our best.
- yazr 8y ago> CPC for the best keywords might be up to 10–15 USD. Is this for real ? 10$ per click ?!! That's really depressing, and completely shuts out all the small players.
- evermike 8y agoI'm serious. Check this - https://app.kwfinder.com/dashboard?source_id=0&keyword=project+management+software&location_id=2840&language_id=1000 https://app.kwfinder.com/dashboard?source_id=0&keyword=proje...
- elorant 8y ago$10-$15 isn't the most expensive. There are industries like insurance or loans where it can get as high as $50.
- evermike 8y agoTrue. Here is a good article - https://medium.com/marketing-and-entrepreneurship/here-are-the-top-10-most-expensive-keywords-on-google-aaf3773479eb https://medium.com/marketing-and-entrepreneurship/here-are-t...
- bochoh 8y agoSo for sleazy payday loan ads if you were to click them for a half an hour a day it could impact their bottom line?
- Cthulhu_ 8y agoProbably not, that'd be click fraud and the clicks wouldn't be counted.
- paulie_a 8y agoI either use an adblocker or will click the stupidly expensive ads.
- briandear 8y agoMesothelioma can be in the hundreds per click.
- gazarullz 8y agoHi, out of curiosity what tech stack have you used for your product and why ? btw kudos for your successes :)
- evermike 8y agoNo problem. Our main tech stack is the following: PHP (Symfony), Angular, MySQL, Redis, Nginx Of course it's not an entire list, but if there are any additional questions - ask, will try to clarify.
- yazr 8y agoI know PHP is really common in UKR. Can i ask what other languages/frameworks are common for web apps / dash boards ?
- evermike 8y agoI think it's very important to choose the stack with which you have the most experience. In this way, you will protect yourself from the situation when something went wrong on PROD and you do not know how to fix it. I generally for reliability and predictability. Sorry, maybe it does not answer your question?
- yazr 8y agoI meant to ask which frameworks are most used in Ukraine and makes it easier to recruit programmers ? We cant use PHP.
- evermike 8y agoWe aren't from Ukraine, so I don't know. We are from Belarus. I'm not an expert here. To get the right picture, I would recommend searching for some kind of UpWork report. Like this - https://www.upwork.com/press/2018/05/01/q1-2018-skills-index/ https://www.upwork.com/press/2018/05/01/q1-2018-skills-index... But if you consider remote employees, you want have problems with any framework.
- ksahin 8y agoCongrats :) And thanks for the blog post. How did you go from 0 to 20K mrr ? It's not really clear in the charts. Looks like the most difficult step for many boostrapers, the difference between "Default alive" and "Default dead" as PG says.
- jerrre 8y agohttp://www.paulgraham.com/aord.html http://www.paulgraham.com/aord.html to save the next person looking it up
- evermike 8y agoTo be honest, the whole secret is in the product itself. At the very beginning we wanted to do everything faster - more features, more blog posts, more visitors, more backlinks etc. Did not work well. Then we decided to stop - pause any ads and promotion and 100% concentrate on the product, improve everything we have, do not add any big features. We talked a lot with our customers, found out what they liked/disliked the most. I would say that this is what helped our product. At that time we completely rewrote the whole project.
- andyidsinga 8y ago> We talked a lot with our customers, can you say a bit more about your product and were you went to find relevant customers to talk to? thanks.
- andyidsinga 8y agouch -- ignore my question - didn't realize I was responding to OP :)
- evermike 8y agoWe tried a variety of resources. For example this - https://betalist.com/ https://betalist.com/ We were listed here before even had a product. Collected mailing list. After public release, this service brought us about (I don't remember exactly) 700 or 900 signups. Try to spend a few hundred or thousands $$ on Google ads and add Intercom or Drift on your landing. Try to chat with visitors. I think you'll get some insight. Be sure to read reviews about existing products on the market. What pros and cons their users write (Capterra, G2Crowd, TrustPilot, TrustRadius).
- jirenandcell 8y agoWhat books do you think helped you become successful and how did you cope with the more challenging aspects in running your startup?
- evermike 8y agoI can see two questions. Let me start with books I can recommend: (1) Traction: A Startup Guide to Getting Customers — Weinberg, Gabriel (2) Scaling Up: How a Few Companies Make It...and Why the Rest Don't — Harnish, Verne (3) The Lean Startup — Ries, Eric (4) 100 Days of Growth - Sujan Patel & Rob Wormley (5) Delivering Happiness: A Path to Profits, Passion, and Purpose - Tony Hsieh
- leowoo91 8y agoSo out of nowhere, people wanted use your product because you outstand as a way way different product? How is it much different than Jira with few plugins?
- martin-adams 8y agoThey integrate with Jira, so my thinking is that the answer may be that they are not any different to Jira with a few plugins, because their solution IS Jira with their product as the plugin.
- evermike 8y agoIn truth, Jira is not our main platform. Our plugin isn't so valuable in this case, because Jira has a built-in ability to track time. Such platforms as Asana or Trello or Basecamp converts much better. Yes, there were other solutions, but our clients decided that we are better. And objectively we offer some very unique and competitive benefits.
- ernsheong 8y agoBrowser extensions are underrated, and ideal for such use cases! More people should consider it as part of their tech arsenal. Congrats!
- evermike 8y agoI agree. And once again I will note that browser extension was the crucial idea behind our growth. But there are some difficulties. For example, sometimes our customers do not understand that the extension is needed and delete it :) Or, for example, they have several computers and on each, they need to install our extension. And they simply forget it.
- ernsheong 8y agoInteresting real challenges. Definitely the cons of an extension for a product like Everhour.
- briandear 8y agoI really hate browser extensions because the product now forces me to use a particular browser. Rarely do products like this support Safari for example. It also requires a strong level of trust as well.
- k__ 8y agoAren't extensions standardized for a years now?
- ernsheong 8y agoSafari hasn’t joined the standards yet. You can do one code base for FF and Chrome, but Safari is a totally different beast.
- evermike 8y agoMoreover, Apple is deprecating legacy Safari Extensions now and pushing developers to transition to Safari App Extensions – which are offered through traditional Mac apps via the Mac App Store. More here - https://9to5mac.com/2018/06/09/safari-12-extensions-more/ https://9to5mac.com/2018/06/09/safari-12-extensions-more/ It's another headache for us. So far we did not find any good step-by-step article on how to do it.
- pcprincipal 8y agoQuestion for this company / anyone who runs similar businesses - is $1MM ARR enough to pay 7 people? I'd be interested to know what they do in EBITDA and how they think about salaries. This is actually a general question I have about start-ups. The economics of having a business that makes $1 - $10mm in revenue and hires 7 - 100ish people is still difficult for me to understand. Yes, you can raise equity or debt because equity / debt holders believe in a certain business model and then use that capital to pay people, but to be a standalone business without VC or bank funding, you need cash flow (not revenue) that can pay engineers market value.
- xtrapolate 8y ago> "Product: Everhour. HQ: Minsk, Belarus"
- kumarm 8y agoDepends on where you are located. If its a US Based company, obviously not enough revenue to sustain 7 employees. The company is based in Belarus where salaries are lower than US: https://blogs.elenasmodels.com/en/average-monthly-salary-in-belarus-1991-2016-statistics/ https://blogs.elenasmodels.com/en/average-monthly-salary-in-...
- beberlei 8y agoobviously? Not every employee must be a high paid engineer. And there are certainly non SV based engineers that are totally fine with less than 100k $ per year? Being based in Germany, I calculate around 100k€ revenue per employee myself, maybe a bit more.
- debacle 8y agoIt's likely that at least two of the people at this SaaS have put in an average of 60+ hours a week from its inception.
- PacifyFish 8y ago1mm is their revenue. It will be reduced by cost of goods sold, rent/electricity, taxes, payment for services like AWS, etc. before employees are paid.
- brianbreslin 8y agoCongrats! Love to see more and more of these stories. Is this a trend lately to see more companies going for cash-flow at the outset?
- evermike 8y agoIt seems to me that everyone understands that personal experience and especially everything money related is way more interesting. Secondly, more and more people believe in transparency. Today you helped someone, tomorrow they helped you. Lastly, I can not say that time tracking is kind of "sexy" topic. We are not changing the world, thus top news resources aren't particularly interested in this field. Investors neither see us as an opportunity for good "exit". Therefore, businesses like us do not have other choice as to move towards "work-life balance" business. Where being profitable is a must!
- evermike 8y agoDear HN community. Just wanna thank everyone for such a warm feedback and interesting questions. I'll do my best to reply everyone. Although sometimes it's not easy to notice a new comment :)
- allannienhuis 8y agothis chrome extension: https://chrome.google.com/webstore/detail/hacker-news/geancnifhbkbjijfkcjjdnfemppmcjmk https://chrome.google.com/webstore/detail/hacker-news/geancn... does a nice job of highlighting new comments since your last view.
- evermike 8y agoLooks like it doesn't work. Or I'm doing something wrong :(
- allannienhuis 8y agosorry, my bad; I linked the wrong extension. I forgot I had two installed. Try this: https://chrome.google.com/webstore/detail/hckr-news/mnlaodleonmmfkdhfofamacceeikgecp https://chrome.google.com/webstore/detail/hckr-news/mnlaodle... I use the collapsable threads feature a lot too.
- evermike 8y agoThanks, will try. Meanwhile, I found this - https://chrome.google.com/webstore/detail/hacker-news-enhancement-s/bappiabcodbpphnojdiaddhnilfnjmpm https://chrome.google.com/webstore/detail/hacker-news-enhanc...
- docker_up 8y agoI would love to know how the revenues/profits are shared among the employees. Is there an equity plan or profit sharing plan with the non-founding employees?
- evermike 8y agoWe do no offer any revenues/profits sharing for employees. Just very competitive salary. But maybe we will consider this in the future. In addition, it is still not very common in Belarus. Even in terms of legislation.
- GordonS 8y agoSerious question: why would you assume profits are shared among employees, rather than the 99% case of them simply being paid a salary?
- giarc 8y ago>$1 million by itself isn’t a big thing. Don't be so humble. $1 million ARR is f hard. Take credit where credit is due.
- evermike 8y agoThanks! It feels that you are speaking from your own experience. Indeed, it's hard. But not everyone understands this.
- charlesdm 8y agoDo you think having access to "cheaper" talent (I don't mean they're worse in skill, but I guess there are less opportunities for capable engineers in Belarus) is a huge competitive advantage? Do you think you would have been able to build the same business in say London?
- aviv 8y ago> Do you think having access to "cheaper" talent (I don't mean they're worse in skill, but I guess there are less opportunities for capable engineers in Belarus) is a huge competitive advantage? Why wouldn't it be?
- evermike 8y agoHard to say. Most likely the result would be the same, but more expensive. We have good technical people here in Belarus. But we have other problems. It’s almost impossible to find good Sales or Marketing talents here. I think it's due to the fact that we still have fewer product companies and more outsourcing. And of course English language. It's not native for us. While these positions imply impeccable knowledge. Therefore, perhaps in London we could build sales/marketing team from day one and could sell better. But with the engineers it would be pretty much the same. Or even worse. I can imagine that we would probably hire people remotely, to save money, and this approach has some drawbacks.
- giarc 8y agoIt is coming from experience! Been at a Saas product for 3 years or so. Still under $1000 MRR but with a new product in the wings.
- ericintheloft2 8y agoHi! Very interesting read and congratulations on the success. How you every had a higher price tag, or have you thought about raising it? It feels like a very low price, but I don't know what the average your customers are ending up paying - I guess they most often have several users per account?
- evermike 8y agoOur ARPU is about $50. Most of our clients are fairly small or just at an early stage. And this is natural. Bigger companies mostly have time tracking process in some form, and they do not want to change the tool (something that already works). For small teams our pricing is ok, although we've being often told that this is too much. People want everything free today. When we thought about our pricing, we looked at competitors, but also considered how much we ourselves would be willing to pay for such a tool.
- ericintheloft2 8y agoAh I see, interesting!
- sleepless_on 8y agoCongrats with your milestone and nice landing page you have there. Did you start a business before everhour?
- evermike 8y agoWe were running a small web development company - Weavora for a couple of years. At first were 100% dedicated, then tried a few ideas (i.e. combined existing business and new initiatives) and only now we are mostly a product company. At some point just stopped accepting new quotes and switched employees to the product.
- andyidsinga 8y ago> (6) Finding your promotional Channel This is really interesting and helpful. We've found generating leads for our SaaS [1] difficult, with similar results from google ad words and really bad results from LinkedIn ads. In retrospect, talking to some friends about google ad words, the results aren't so surprising, but I'm glad we went through the experience. This note from the article rings very true: > Plus you should constantly optimize your landings, banners, texts etc. constantly looking at your landing pages, keywords and ad configurations is not a trivial task - it requires a lot of thought and discussion. we've figured out the content marketing approach (blog posts and relevant SEO) and will be doing that; but we've also been looking for better lead generation approaches. great post ..thanks.
- evermike 8y agoYep, that's true. I would also advise you to devote some time and collect feedback on such sites as Capterra, G2Crowd, TrustPilot, TrustRadius. Firstly, people search and read reviews before making their final decision. Secondly, reading about the competitors, they will find you. Third, sometimes bloggers use these sites to select the top 10 tools they will write about. If you are there - awesome. And finally, these sites sometimes do their own reviews and marketing campaigns. You better be there :)
- andyidsinga 8y agothanks - really appreciate the advice and you taking the time to hang out here talking about your biz :)
- evermike 8y agoNo problem. I'm glad if you found something useful for your business in our experience.
- jwr 8y agoHave you had any success with Capterra? I've been considering investing some time/money there, but I have doubts as to whether any customers actually visit those sites.
- mrhackerpoland 8y ago5 million USD revenue: adplexity.com Enough to pay 3 fulltime engineers. 100K yearly AWS expense. Running several scraps....scraping ads and listing them on site. Most developers don't know where the market demand is, so they don't make a lot of money.
- jiveturkey 8y ago> $1 million by itself isn’t a big thing. 0-1 is a huge thing! Very humble presentation, great job. One of the very, very, very few medium posts that are worthwhile to read. I find this very impressive with only 7 people because probably 5 of them are engineers and/or actually support the product. That leaves only 2 people for the marketing aspects, which are difficult. It would be more enlightening if you would post cash flow data. > 4) Freemium can put you on the wrong track. Sure, but this is very highly product-specific. Freemium can also win you mind share and technical lock-in.
- evermike 8y ago1) Actually right now we don't have anyone dedicated to marketing :) Our team structure is the following: CTO and COO (two other co-founders), me (design, product and marketing), 1 customer success, 2 front-end devs, 1 back-end dev. We'll hire a few more people soon, but this is how our team looks today. 2) I agree, many successful companies grew via freemium modal. So our case can't be applied to everyone.
- MuffinFlavored 8y ago> me (design, product and marketing) Who drafted the layout for your landing page + integrations pages + wrote the content? They are very, very good and look like the work of multiple people, not just one person.
- evermike 8y agoI did all of this (except HTML/CSS coding). But it wasn't accomplished in one day. There were several rounds of improvements.
- deleted 8y ago[deleted]
- elvirs 8y agowow what a short, on point and helpful article. very impressive story too. good luck guys, not that you need it:) keep kicking ass!
- evermike 8y agoThanks! ;)
- mrhackerpoland 8y agoWhat if you guys are reported to the dictator and the officals sieze your app and revenue?
- evermike 8y agoSorry, such a discussion is not very interesting for me. I think you have a distorted opinion about our country. Read about the "Belarus Hi Tech Park" initiative and conditions for IT companies. A very serious and important work has been done here.
- mrhackerpoland 8y agoMy partner was multi millionaire from Belrus who owned a steal rolling company. Now, he took whatever he had and moved to states. He got his company raided and government officals took over it. Anyways, if the situation has improved, that's a good news :)