Bootstrapping My Side Project into a $1.4MM SaaS Business

Hello! What's your background, and what are you working on?

My name is Mike Kulakov. I’m an IT entrepreneur, executive, and a former engineer from Belarus.

I started my first company, Weavora, in 2010. It was a small web development agency that worked with businesses to help them develop apps for their products and services. A few years later, we thought about launching a SaaS product—Everhour—and part of the profits from Weavora was reinvested into its development.

As of today, we have 2300+ paid teams from 70 countries. The main thing our customers love is how fluidly we integrate into third-party project management systems. Suppose your team uses Asana, that all of your tasks live there, and the staff is there too. Why constantly switch between Asana and a time tracker? Why duplicate data? Instead, connect Everhour to Asana and track time right there. We integrate with Asana, Basecamp, Trello, Jira, GitHub, and more.

We received our first paid client in September, 2015 and have been steadily growing since then without any external investment and with a small team of seven people. This month, Everhour crossed the $1.4M ARR mark.

home

What motivated you to get started with Everhour?

It took us a while to figure out what to do, but we always wanted to build a product.

The idea of Everhour was born from our internal needs at Weavora. We were working on outsourced projects and needed to report and invoice our clients based on actual hours spent. At first, we used existing tools but soon realized that we could offer something better.

We knew the problem really well from firsthand experience and could test the product for ourselves, constantly tweaking and improving it. In addition, the issues of time tracking and time management are fundamental to almost every business, fairly straightforward to explain to potential clients, and can be met with solutions that aren’t in danger of becoming obsolete in a year.

Another important motivator was a switch in our business model. Working on outsourced projects is certainly much easier to organize than a profitable product, but over the years we came to see some of the downsides. You are constantly faced with deadlines, not all aspects of the project depend on you or are within your control, and the work isn’t steady—when a project ends, you never know how long it will take to find a new one. No ongoing projects mean a cash drawdown, same as someone going on vacation, slowdowns because of holidays, etc. It's annoying.

Last but not least was the consideration that a SaaS lets you scale while staying small.

What went into building the initial product?

I am often asked about the technological stack of our product. In my opinion, it’s not very important. We made a choice to build the product with a mind towards our staff and their expertise. It’s important to use tools with which you have experience and confidence. When you have hundreds of paid clients and are trying to work through incomprehensible problems with your server, chances are you won’t be thinking about the latest trends. Perhaps equally as important is finding an outstanding co-founder/CTO. I was so lucky to have one.

Some good ideas need time to mature.

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In June, 2013, we made our first MVP and started using it. Soon after, we made it publicly available, for free. At the time we still weren’t sure whether it was a good product and needed feedback from outside sources. There were multiple pivots before we had the magic “Aha!” moment. For more about our process, you can read this article about how we found our product-market fit.

In September, 2015, we decided to start working on the product more intentionally and hired dedicated people, removed the free version, and introduced paid plans. Since then, we’ve grown by over 100% each year.

Everhour was started as a side project. We worked on it whenever there was an opportunity in the late hours and gaps between projects. Today it’s hard to say exactly how much time and money we’ve put into Everhour as development was stretched out over quite a bit of time and our involvement was only occasional. Add to that the fact that I don’t consider the app to be a finished product at present. It’s constantly evolving and iterating, and even now we have ideas for several years into the future.

trello

How have you attracted users and grown Everhour?

Immediately after coming up with the product idea, we started to attract people to our project-to-be so that when we launched, we’d already have customers. Taking the easy route, we created a very simple "coming soon" page. When the page was ready, we submitted it to Beta List and a couple more directories. This gave us roughly 1,500-2000 early adopters right after launch.

We’ve also tested the waters with paid ads on Reddit, StumbleUpon, Google Adwords, Twitter, and Facebook ads. It’s not cheap, but it is quick! It works well in terms of testing hypotheses. In terms of attracting paid customers long term—it depends. So far we have not been able to make this process effective, most likely because of our impermanence. These channels don’t convert in one fell swoop, it takes a lot of work to research, design, test, and constantly optimize your copy and landing pages, and requires multiple dedicated resources. It’s even more challenging with a low average check (below $50).

The three strategies that seemed to work best were building in integrations, listing on partner directories, writing SEO articles, and word of mouth (due to constant product improvements). Partner directories, in particular, produced high-quality traffic.

What's your business model, and how have you grown your revenue?

We make money from paid subscriptions.

Initially, we started with billing by team packages (1 user = $7/mo, 2-5 users = $19/mo, 6-15 users = $39/mo, and so on). The advantage was the lack of pro-rates when adding or removing members within the package. The downside was the price of switching. If a client had 15 users, they were satisfied and felt like they were getting their money’s worth, though it was less profitable for us when people were running teams at the higher end of the user bracket. As soon as the client adds another member, there was a huge price increase and they would immediately start writing to us, asking for a discount. And as a company, you do not grow from the existing client base.

In the second version, we began to charge for each user separately. We also tried to separate plans by features (premium vs basic), but there weren’t enough upgrades to justify different tiers. In the end, we refunded the money and switched everyone to one plan.

pricing

Annual subscriptions work really well all around. They increase your cash flow by about 15% of the MRR. For a client, this is an opportunity to save and reduce the number of invoices. For you, this is an increase in lifetime value and upfront money for growth.

We use Stripe as a payment gateway and so far have been very satisfied. It automatically recovers payments that may have otherwise not been successful by sending emails when a failed payment occurs and by retrying cards at strategic times. Another great feature is how Stripe handles outdated cards. If your customer gets a new card from their banks (or the number or expiry date changes), they have to manually re-add it. With Stripe, their card will continue to work even if the physical card gets replaced by the bank. Stripe works directly with card networks so that your customers can continue using your service without interruption. Super beneficial for SaaS businesses with recurring payments.

Each SaaS product should track key metrics such as MRR, revenue growth, churn, etc. We use ProfitWell and I highly recommend it.

What are your goals for the future?

Jason Fried put it best when he said, “You’re better off steering the ship with a thousand little inputs as you go rather than a few grand sweeping movements made way ahead of time.” In accordance with this ethos, we try not to make hard and fast plans for the super long-term future.

Areas we are focusing at the moment:

  • Scaling improvements on the back-end
  • Hiring. No more jack-of-all-trades
  • A long list of feature improvements based on customers feedback
features

What are the biggest challenges you've faced and the obstacles you've overcome? If you had to start over, what would you do differently?

To be honest, I wouldn’t change anything. We have learned from every mistake and every decision we have made, good or bad. And some good ideas need time to mature.

I’d say the biggest challenge was combining our work on outsourced projects with our own product development. It was really difficult to find time for it all and to see the light at the end of the tunnel. We had to devote equal time to current projects, communication with existing customers, and product development and marketing. There was just no way to pack all of that into a regular workday, and we had to work extra hours to compensate. It got depressing at times. The main problem was figuring out how to focus our work and keep from devolving into chaos or giving up.

The upside to bootstrapping is that it forces you to launch sooner and validate your hypotheses before digging in.

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Businesses like ours tend to have no other choice than to rely on bootstrapping and lifestyle changes in order to make things work. Time tracking isn’t exactly a sexy topic. Though we are solving an important problem, we are not saving the world. As such, top news resources (TechCrunch, Mashable, etc.) aren’t particularly interested in featuring us. Similarly, investors don’t see us as a good exit. Regardless, reaching profitability is a must, so you do what you have to. It’s that, or fail.

The upside to bootstrapping is that it forces you to launch sooner and validate your hypotheses before digging in. Spending your own money makes you way more careful about costs and (hopefully) compels you to get your priorities in line.

Have you found anything particularly helpful or advantageous?

In terms of product promotion, building integrations and listing on partner directories were the best decisions we could have made. Asana or Basecamp both have an integration section on their website where you can post information about your product, which can drive huge amounts of traffic to your site.

Beyond that, if your integration is useful and enhances their product for their users, you make their product better and make their users stay with them longer. Lead conversion from partner directories is about 30%, so it’s a win-win scenario.

I highly recommend using your own product. This can quickly and cheaply show you whether your product is worthwhile, and gives you invaluable insight into the user experience. Synthetic testing can sometimes fail to detect a serious problem.

What's your advice for indie hackers who are just starting out?

Your product should have a clear advantage, and you should figure out what that is as soon as possible. In our case, it was how nicely we embed into third-party tools. We didn’t have a free plan, had much fewer features compared to competitors, didn’t have a mobile app, etc., but many users still preferred us. Why? Because we did one thing very, very well. And that one thing is all it took to give us an advantage.

Look for criticism for all your new features, and try to find it from a diversity of sources. Controversy serves the cause of perfection.

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Don’t try to make every new feature perfect. It’s better to simplify your offerings, release quickly, show it to your customers, collect their feedback, and improve. Look for criticism for all your new features, and try to find it from a diversity of sources. Controversy serves the cause of perfection.

As early as possible, start collecting positive feedback on popular sites such as Capterra or G2crowd. When preparing an article, some bloggers determine what products to include based on reviews and/or popularity on these sites, so having a positive presence can have a downstream effect on potential free advertising and traffic.

Do not chase traffic by any means. Make sure that your profiles in different directories are relevant and your blog content is actionable and unique. Less is the new more.

Where can we go to learn more?

Learn more about Everhour here.

You can check out other topics that I cover in my Medium. I do my best to share about my experiences, time permitting.

If anyone has any questions—please leave a comment, I’d be happy to help. Thanks for reading.

Mike Kulakov , Founder of Everhour

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  1. 5

    Awesome interview and great work on your product!

    1. 1

      Thanks, @rlfrahm. I'm glad if my experience will help someone.

  2. 4

    Great achievement @mike.
    I have a question regarding partner directories although. How you used them for advertising purposes? Did you ask them to mention your startup in their directory's newsletter or posting on their website?

    1. 1

      Each directory has its own procedures and policies. Check for guidelines or ask them directly. We never really asked anyone to boost or promote us. And I doubt that they would agree. Being listed in such directories is a stable traffic by itself, of course, if there is a demand for what you are doing.

      1. 1

        Thanks @mike
        And how to find those directories?
        Care to mention some of them?
        Cheers!

        1. 1

          Hey Vikas,

          I'm sorry, maybe I put it wrong. By "partner directories" I meant 3d party apps with which our product integrated. We are listed in their directories.

          For example:

          https://basecamp.com/extras
          https://asana.com/apps
          https://trello.com/en/integrations
          https://clickup.com/integrations
          https://www.pivotaltracker.com/integrations
          https://www.teamwork.com/projects-integrations

          Are you curious how we chose whether to integrate or not and with whom?

          1. 1

            Thank you for clearing that up. I was a little confused on what partner directories meant.

          2. 1

            @Mike. Thanks for sharing such details which are truly helpful. Can you please share the process of listing in trello's integration directory? we have launched a feedback platform that also supports trello integration (to convert user feedback into trello cards). So listing our app in trello directory would be a great idea. Any help would be greatly appreciated.

            1. 1

              Be sure to check below listings (they are different):

              https://trello.com/integrations
              https://trello.com/b/nPNSBZjB/trello-resources
              https://trello.com/power-ups

              I was contacting them via support email. Include a short intro about you, your product and a request to be added.

              It is better to contact them in advance, because the process may take a week or more. Also, prepare all the necessary assets and texts. Dedicated landing page is also a must.

              1. 1

                @Mike, Thanks a lot for sharing and much appreciated. That'll certainly help.

  3. 4

    Wow, that is honestly the best landing page I have ever seen. Clean, informative, explains everything and shows the product in a great light.

    1. 3

      Thanks Philip ☺️

    2. 1

      Yeah it's like landing page porn.

  4. 2

    I think it's the first product from Minsk published here =) Great job!

    1. 3

      heh, OK, I'll be the first to set an example :)

  5. 1

    Hello Mike,
    I am also working on a side project (A saas application) and have few queries .

    1.What would you suggest how should i go about choosing right developers for SAAS applications. Specially when you are on budget and with little knowledge of programming / coding.

    1. What would you suggest regarding multi tenancy . Single DB for all tantent or db per client?

    2. If i choose single db How would you make sure that each tantent only have access to his own data ( apart from logical isolation what can be done on db level) should i choose UUID for each tenant and thier departments and staff member for maximum isolation with in a same database ?

    3. I am very pro privacy. As a admin of saas app do we need access to clients personal / business data ?
      Say client may have many store and and staff working under him do we need to have access to that level ? i.e personal profiles , appointments, off days, sales or impersonate feature to access all the detail .

    It would be great help, if you could answer these queries.

    Thanks

    1. 2

      Hi @liquid

      1. When starting a SaaS business, I highly recommend you to find a very strong co-founder/CTO. There will always be technical issues, and their complexity will grow with the project. You need a strong competence. And it's better to find the right person at the very beginning.

      2. I think it very much depends on the specifics of your project. For example, we do not need it. We have everything in one DB.

      3. Sorry, I can not give you a competent answer here. I'm not so technical.

      4. Again, depends on your situation, but it can be useful. For example to help the client in a difficult situation, to figure out what is not working for him and why. But of course you need to be very careful and it’s better to get permission from the client in advance.

      1. 1

        Thank you very much for your response. Yep I will try finding CTO / Partner.its hard to find one but i trust your experience. :)

        Thanks

        Rahul

  6. 1

    Great insight! How many people have been working on it in the early days?

    1. 1

      As far as I remember - 3 or 4 people (designer, QA and 2 devs).

      1. 2

        Awesome, now I've seen you're based in Belarus, how did you set up a Stripe account back them? Did you open a business in the US or the UK?

  7. 1

    Hi @mike, congrats for your achievement. About removing the free plan, how did your clients reacted on that? How have you communicated them? How many free users did you had at that time?

    1. 1

      How we did it, we sent an email to all our users saying that in a few months we will stop offering Everhour for free. We also prepared a blog post with details and future prices.

      So it was not a complete surprise and those who did not plan to pay for service, had enough time to find an alternative, export their data and do proper testing without any urgency.

      I don’t remember an exact % of users who subscribed versus rejected. Probably around 30-40% stayed. 30 days after we start billing, our MRR was about $9k.

      1. 1

        Thanks a lot for sharing all this information with us.

  8. 1

    Hi Mike, how does it work with customer payments and wages for a company based in Belarus? 💳

    1. 1

      Btw, you can read a bit more about IT in Belarus in my other article - https://link.medium.com/64tzOlY6fS

    2. 1

      Hi Neil,

      Unfortunately, the most famous payment gateways, such as Stripe or Braintree doesn’t work in Belarus.

      However, at the initial stage, it is possible to dispense with incorporation somewhere abroad. You can find an intermediary who has a Stripe account and to enter into treaty relations (license agreement) under which this person/company will distribute your software and pay you a remuneration (royalty).

  9. 1

    I like how you mentioned that time tracking is not exactly "sexy". What are some things you and your team did to push through and stay motivated on the product?

    1. 2

      Hello Kevia,

      I meant that we don't change the world and not so innovative so that all popular resources wanna write about us. But this does not mean that the topic isn’t interesting for our employees.

      The main motivator for the team is to make a great product that is used by thousands of companies. The feeling that your efforts help others in their daily work. And of course freedom. If someone got an idea how to improve the product - we immediately take an action.

      Over time, we are getting a lot of interesting tasks related to the growth and analysis of a large amount of data. We have to learn a lot.

      And when customers publicly praise our product - we feel that our time was worth something.

      In general, if you love what you do, feel passion - you will easily find like-minded people.

  10. 1

    Hey Mike 🙌,
    big fan of your product 👍. Using it for almost 2 years already.

    1. 1

      Hey Igor. It’s music to my ears! Thank you for being our loyal customer.

  11. 1

    Congrats! You have a great story. Hope you continue to have success!

    1. 2

      Thank you, Ben.

  12. 1

    Which 3rd party integration do you think brings you the most? I am guessing Trello maybe?

    1. 1

      Asana and Trello

  13. 1

    Awesome job Mike! Keep up the good work, really impressed with your app and journey!

    1. 1

      Thanks for the praise, Travis.

  14. 1

    Awesome to hear that you grew this SaaS business starting as a Web Dev Agency. I too am starting out a small agency with some of my talented friends.

    Would you happen to have any advice on tackling this already mature and possibly saturated market? I definitely will make sure to re-invest profits into developing new ideas as well.

    1. 2

      Not a simple question. Indeed, it is a very competitive market.

      I would advise the following:

      • Focus on something. For example, when we started, we did not offer design/html/css services. Our core competency was backend, complex systems. Why? Firstly, we did not have such specialists on the team. Secondly, in my opinion, it is more difficult. More bugs and change requests. As the result, harder to maintain the quality of your work.

      • Be as transparent and honest with your customers as possible (estimates, timely updates etc.)

      • Learn to say "No". It is better not to work with some clients, it is better not to do some features etc.

      • Be very professional in answering to the "request a quote". There are so many agencies who try to reply ASAP, but without thinking about the problem. Who inevitably underestimates the project initially in order to win the deal. Think long-term. We were repeatedly convinced of this and our approach favorably distinguished us from others.

  15. 1

    what is meant by "bootstrapping" in this context?

    1. 1

      Bootstrapping is when an entrepreneur attempts to build a company from personal finances or from the operating revenues of the new company. No VC.

      1. 1

        ah, I see. Thanks. :)

  16. 1

    How did you go about sourcing help for things that you weren’t good at in the beginning? E.g. design, marketing, sales

    1. 1

      We were able to do all the technical side ourselves since we already had a team.

      We also did app design in-house. I did it, actually. Of course, there were a lot of bad decisions, but we learned gradually.

      Marketing process has so far been lacking. Yes, periodically we try some ideas (blogs, interviews, content marketing, reviews etc.), but not on a permanent basis. We have hired a dedicated person in the past, thinking that one person can do everything himself. We were so wrong. Marketing isn't a one-man job, not also a quick, simple and obvious as it may sound. In other words, so far we have failed here. I've learned that any founder always makes it better
      (especially at the beginning) rather than a hired employee.

      We do not have a dedicated sales yet either. Probably will add some in the near future. We do have one customer support rep who at the same time makes client demos. By the way, I strongly recommend you to search one or even two support reps ASAP.

      As for the competencies that we were looking for outside were HTML coder (for promo website), UI designer, again for the first version of our landing page (later we decided to do it ourselves), mobile dev and content writers.

      I've always used UpWork (or Dribbble for designers).

  17. 1

    Looks great and awesome interview. One thing I noticed on your "Book a Demo" form that you may want to address. The dropdown on the form only says "Please Select-" but it doesn't say what that selection is for. It is a range of numbers and I am guessing company size ? But you definitely want to clarify that.

    1. 1

      I agree, good point. Sometimes just not enough hands due to other work. But we will definitely adjust it.

  18. 1

    Ah... If I have known your product beforehand, I would have definitely used it on my former freelance projects. I'm pretty sure this will be sold on Korea(or Asia) too. Lots of startup teams would want it for outsourced projects. But the language barrier would make them hesitant to use your product. Great story! Thanks for sharing it. 👻

    1. 2

      Well, maybe you'll find it useful in the future 😉

      BTW, it's an interesting topic for discussion.

      We once thought about localization of our app, but then abandoned this idea due to a number of nuances:

      1. App translation
      2. Translation of all landing pages
      3. Translation of our knowledge base
      4. The need for support in these languages

      We found it very time-consuming and weren’t sure it would pay off at all. In addition, our main integrations also do not support other languages.

  19. 1

    Hey guys, feel free to ask questions and share your experiences. I'd love to learn from you too.

    1. 1

      thanks @evermike ! great story, super inspiring.

      i have a Q. you mention the burden of balancing the agency work w/ product work. i'm a freelancer, also struggling a bit with that. and i'm tempted to hire someone to help. the goal is still internal SaaS product development, but thinking extra projects would be more money and time to devote to the product. i guess the downside is the juggling and complexity. do you feel the agency-work expansion is worth the complexity or is it better to keep things simple eg. a few steady clients, not much hustle, etc..

      1. 1

        Hi there,

        If I understand you correctly, you are a solopreneur working on freelance projects to live, and in spare time working on a startup which isn't ready yet?

        Of course, I don’t know what kind of project you are building, but if it’s, for example, a SaaS service, then it will be extremely difficult to combine staying alone. Even if you can release the first MVP, after you have real users, it will require your attention full time. While growing a product even to 4 figures a month takes time.

        Option 1: assemble a separate team for freelance first and settle all processes, which would generate cash flow, and after that make yourself 100% engaged in the product.

        Option 2: seek for investment.

        Option 3: temporarily stay alone, finish and launch the first prototype, see how everything goes, whether there will be interest at all and then decide 1 or 2.

        My two cents.

        1. 1

          thanks @evermike

          yah, really great points, agree. and very helpful to have it spelled out like this for me. lots to think about. thank you!

          1. 1

            This comment was deleted 2 years ago.