Episode #024

From Side Projects to Serial Entrepreneur with Moritz Dausinger

Moritz Dausinger started off like so many of us, releasing and then abandoning project after project. But when he launched Mailparser, something changed. Listen to the story of how he built, grew, and sold a profitable business as a solo founder.

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Transcript

Courtland Allen 0h 0m 8s

What's up everyone, this is Courtland from IndieHackers.com, where I talk to the founders of profitable internet businesses and I ask them how they got to where they are now so that the rest of us can learn to do the same.

Today I'm talking to Moritz Dausinger, the founder of Mailparser and Docparser.

Moritz has a story that a lot of us can relate to. He had a full time career, but on the side, he spent years working on project after project without any of them really amounting to a long term success. That is, until he finally started Mailparser, the side project that would allow him to quit his job and begin a career where he had the freedom to truly work for himself.

In this interview, my goal was to let Moritz do most of the talking and tell a story from beginning to end. He did a great job highlighting the most common challenges that frustrate entrepreneurs and describing exactly how he was able to solve them. So without further ado, let's hop in. I'm here with Moritz Dausinger. Moritz, thanks for joining me.

Moritz Dausinger 0h 0m 56s

Hey, how are you doing?

Courtland Allen 0h 0m 57s

I'm doing great.

Moritz Dausinger 0h 0m 58s

Thanks for having me.

Courtland Allen 0h 0m 59s

Yeah, I'm glad to have you on the show. Why don't you give listeners a brief introduction as to your background, the companies that you've started and where they are today.

Moritz Dausinger 0h 1m 7s

Yeah, sure. I'm currently a solo founder working from Paris and I think my first serious attempt in building online businesses was 10 years ago. Since then I had a couple of successes but yeah, definitely failed several times as well. So, my two most recent products and also the most successful ones so far are Mailparser and Docparser. Mailparser launched as a side project and Docparser is online since mid 2016.

Courtland Allen 0h 1m 41s

It's funny, I pinged you on Twitter to come onto the podcast and you sent me an email. But your email was in response to, in fact, a much older email that I had sent to you around this time last year.

It was from when I was launching Indie Hackers. I actually reached out to you as one of the very first people that I wanted to interview because I found some information about you and Mailparser on Hacker News. And for those of you listening who don't know what Hacker News is, it's basically a tech focused online community.

Anyway, you had made some giant post on Hacker News asking everybody what had become of the side projects that they'd launched in the Hacker News community. And you started off by basically sharing your own story of how you had launched Mailparser a few years earlier and now you'd grown it into this big thing where you'd hire some employees and revenue was increasing. And the thread was super popular. You got like 300 replies to it. And I saw it when I was doing research to try to find out what idea I wanted to work on, and it was one of the inspirations for Indie Hackers itself. Thanks for that.

Moritz Dausinger 0h 2m 41s

First of all, I remember that email, and I'm super happy to hear that this thread on Hacker News inspired you to launch Indie Hackers. I put this post online because it was a day when I tried to clean up a little bit my workspace and I look back and all those projects I did last year.

At that point, Mailparser became already, it's called a real company, like a real business with a good income and a team in place. I wanted to just hear a little bit how it went for other people. Especially on Hacker News they are mostly developers, so as a developer myself I feel very inclined to launch new ideas, this is really the fun part of my work, to sit down, think about new stuff and launching new ideas. So obviously, over the last years, I launched a couple of projects and each time it was more like the fun of doing it.

Mailparser is one of the few projects I really had which then turned into a business. By that I mean, you have other aspects other than just developing it. Developing it is one thing but having a business means much much more than just developing a software. The projects which didn't turn into a real business, I think they were either never meant to be a real business. So they were some kind of fun projects which were just technically challenging, which I liked, or I wanted to create a business but there was just this initial small trench missing which kept me going.

Then you start losing interest, but as you poured so much time into it, you also don't want to just kill it. So, yeah, what's the choice left? Okay, you put it on autopilot.

Courtland Allen 0h 4m 39s

Yeah, I've talked to a lot of different people who… there's just an extreme range of where people are when they decide to start a new project. On one extreme, you've got people who have stars in their eyes and from day one, they're thinking about being the next Mark Zuckerberg and starting the next Google or Facebook, and everything they do from the outset is with that goal in mind. The other extreme is that you've got tinkerers, which is like what you mentioned. People who build projects where they just want those projects to exist for their own sake and they're not necessarily thinking about how can I turn this into a business and makes sales and keep working on it indefinitely. What kind of a head space were you in when you launched Mailparser?

Moritz Dausinger 0h 5m 17s

To be completely honest, when I started Mailparser, I had no goal in mind whatsoever. I just liked the idea to transfer data and not just text written by humans. Transferring data from A to B by email.

I liked this idea, so I thought okay, let's try whatever could I build around it. While doing that, I discovered that there might actually be a business case, there might actually be a potential to build a business. But then still, back at that time I had another full time job. I was really not in the mindset of that Mailparser going to be my next big business.

So I built a very, very minimal prototype, which I launched on Hacker News. It hit front page, I got a lot of contacts there, but then still this didn't result in any paying customers. It was still not a business.

However, I got in contact with the guys of Zapier, and so Zapier's a platform which allows you to connect several apps together. And basically, two of the founders told me look, if you build a product around this, there can be really a use case and there can be a business case for it because we have a lot of demand for this kind of stuff. Definitely hearing that from those guys motivated me a lot to just continue exploring the idea.

As I said, it was a side project and no real ambition of making it a huge company. I also always thought Mailparser is some kind of niche product, so it would not have the potential to build let's say, 30, 40, 50 people team around it. The idea is maybe too small, too niche to support a big company behind it. I kept just going with it and luckily, through Zapier, through the guys of Zapier, I got some leads coming in, I got some first customers coming in.

It was really an amazing feeling to have the first alert email coming in telling me that there's a paying customer. That was a huge moment. I remembered back then I told my wife and I said to her, look if this software could bring something like 400 bucks a month, that would be really cool. Just for helping us with the rent and all this kind of stuff. Still when I had my first customer, I didn't think that this will be my full time job and a big success story one day.

Courtland Allen 0h 7m 55s

$400 a month is a very modest goal. Just to give listeners some context, describe to us exactly what Mailparser is.

Moritz Dausinger 0h 8m 4s

Mailparser is a cloud-based email processing and workflow automation tool. From a technical point of view, you can look at it as a web scraping tool, but for email.

It allows you to pull data out of recurring emails, emails which have the same kind of format all the time. For example, if you are a real estate agent or you are a call center, or I don't know, you have a website with a contact form, chances are high that you are getting the same kind of email every day as let's say, between 10 or 100 per day, and my customers find themselves copy and pasting this data which is inside their emails to a database or CRM system or whatever, where they want to have this data.

And with Mailparser they can automate the entire task, meaning they automatically forward the email to Mailparser, set up some parsing rules, and once the data is extracted, it goes straight to our CRM system, a database, an Excel file, or you name it.

Courtland Allen 0h 9m 11s

Yeah, that's a great idea. I talked to a lot of people who have trouble coming up with ideas. I think it's one of the great bottlenecks to entrepreneurship. Just that beginning stage of figuring out what it is that you want to work on that people will actually pay for and that you'll be motivated to continue with. You on the other hand, have launched a ton of projects including Mailparser and Docparser. Can you tell us how you came up with the idea for Mailparser?

Moritz Dausinger 0h 9m 34s

For me, the process with the coming up of ideas is, you stumble on an idea, on some kind of problem space, and but you don't know yet exactly what you want to do there. And then you start exploring and then during this process of exploring, you might end up with an idea and you think this idea could actually be worth it, but then still then, I think you are at the point where you don't know anything about what you want to do. You still need to validate if what sounds logical to you is actually a valuable business.

I mean, I'm a big fan of coming up with a brilliant ideas in the shower and all this kind of stuff, but I think that's just a moment and the whole process of developing ideas is actually a long process which is about iterating, trying out, stopping, restarting. Then one day I think you will have an idea or you will have a project in mind and once you get this initial validation from a paying customer, or from somebody who could become your final user, who tells you yes, I would pay for that, or I'm paying for that, even better. Yeah, then this is the moment where I think you actually have something. Then it's about executing, then it's about going forward and really doing the hard work.

Courtland Allen 0h 10m 56s

Did you have an idea notebook or like a collection of ideas that you were choosing between, or? Was Mailparser sort of it?

Moritz Dausinger 0h 11m 3s

I definitely have always a list of ideas on my computer, but I'm not exploring those ideas in a structured way most of the time, I'm just noting them down and to be honest, since maybe one or two years I didn't open that this text file anymore, so.

Courtland Allen 0h 11m 22s

It's just sitting there alone and untouched, huh?

Moritz Dausinger 0h 11m 24s

Exactly, exactly.

Courtland Allen 0h 11m 26s

I think a lot of people have similar things going on. My personal idea notebook will sometimes sit untouched for a year, and then sometimes I'll write in it five times in a week. When you came up with the idea for Mailparser, were you at all worried that there might be another tool out there that was pretty similar, or were you not even looking at the market or the competition?

Moritz Dausinger 0h 11m 45s

Well, I definitely did some research. I discovered all of the competitors over the course of doing things, so yeah and in the beginning I thought okay, I'm the only one doing that, that's weird. That's a bad sign.

Then I found like one or two software products were doing the same thing but they were like old school desktop software for Windows I don't know, '95, '98. I thought okay, there was software like this before, back in the day, so Windows '95, '98, and somehow, nobody made this kind of software, but for the cloud. So, I thought, there's real potential to really do more less the same kind of stuff, but in a much more modern way, in a much more easy way. Better looking, better pricing, all this kind of stuff. So, I was aware of the competition, but I thought I can do it much better. So that motivated me a lot.

Courtland Allen 0h 12m 50s

I think you have a great insight there, that a lot of people don't develop even after spending years running a business. And that's that it's not a bad thing to enter a market where there's competitors, in fact, it's probably a good thing because that validates the fact that there's actually a market for what you're selling. There's actually a problem there that people need solved and are willing to pay for.

The reality is that pretty much every idea has been tried. Whatever you think of is probably not original, and so if it's worth its salt, it's likely that there will be at least a few semi-successful companies already out there trying it, and I think the most common thing is for people to think the exact opposite. That if there's no competitors, that means I'll be all by myself, and that therefore it'll be easy to reach customers.

In reality, that's just not the case, and no competitors is a pretty clear sign that the problem probably doesn't exist. What you want to do is enter a market where it's clear that the problem does exist, and then you differentiate yourself from the existing competitors by building a solution that attacks the problem from a different angle.

In your case, that was recognizing that all the existing software out there that solved this problem, only appealed to people who wanted a desktop application, and so instead you built a web application.

Moritz Dausinger 0h 13m 56s

I actually had the same situation when I launched Docparser. Just for giving you some context, Docparser is basically based on the same idea of getting data out of unstructured format, but it's about PDF documents, so it's more about invoices, purchase orders, all kinds of business documents.

And so, when I was researching the potential for Docparser, I was seeing a lot of service based service companies who were offering this kind of stuff for big enterprise customers. Basically, this kind of companies where you land on the website, and they're talking about what they can do, and there's no demo, there's maybe not even a video. You cannot create an account, you need to schedule a demo and you know that there will be a sales rep responding to you.

I thought, is there maybe a possibility to make this technology which is now reserved for let's say big enterprise customers, make it available for smaller and medium sized businesses, because I think those small and medium sized businesses today, they are much more into automating their workflow, they're using Zapier, they're using other automation platforms to create their own custom made workflow automation system.

So I thought that the timing would be actually right. You say, okay this kind of stuff is solving a problem which bigger companies have and they have the money to purchase this from a consulting company and it might cost several thousands of dollars. Maybe there's a possibility to make this kind of technology accessible for smaller companies, maybe not as powerful, but maybe it will still do 90% of the job and people will be really happy to pay, let's say, $29 per month for it.

Courtland Allen 0h 15m 50s

Another thing that trips up a lot of early entrepreneurs, besides just coming up with the idea is finding the time and the motivation to start something and then to keep working on it and take it to completion. Unless you are rich or you've got investors, or some other beneficial financial situation, you probably have a job, you might have a family, you might have hobbies outside of entrepreneurship. What kind of situation were you in when you started building Mailparser, and how did you find the time to get the product to the point where you could launch it?

Moritz Dausinger 0h 16m 21s

First of all, I think it's a huge advantage that I'm a developer by heart. It's really what I like doing, so it's some kind of pleasure time for me developing a new product. Having the time constraints, so that you can only work at night or on the weekend is a curse, but also an opportunity. Because it forces you to really boil down your idea to what you call the minimum viable product, so what is the smallest feature set you can offer which really brings enough value to a customer.

Also in terms of marketing, in all kind of things you need to do you need to limit yourself to the bare minimum in the beginning, and it's really hard to choose what you should do and what you should not do, but by doing so you stay focused I think. There was for example something when I went in full time on Mailparser, there were some moments where I thought, okay I have so much time now. What should I do, actually. Should I launch a marketing campaign, should I do cold outreach emails, should I do this and this and this. It's an awesome feeling, but it was the first time that I was in a situation where I thought, now I really need to decide what I should do. Before that it was always really clear what I should do, but I never had enough time to do it.

Courtland Allen 0h 17m 48s

I was just talking to a friend who is working on launching her new startup, and she's having a lot of prioritization issues. But it actually doesn't matter because she has five or six things that need to get done before launch. And so regardless of the order that she works on them in, she has to do every single one of them before she's ready. I think it actually gets much harder later on when you get to the situation that you brought up, where your product is out the door, and now you can go in one of 100 directions and it's not obvious or clear which one is the most beneficial. Anyway, I'm sure in the early days of Mailparser, all you really cared about was getting to the point where you were ready to launch. What went into that exactly and why did the launch on Hacker News go so well?

Moritz Dausinger 0h 18m 25s

As I said, I put this show Hacker News post online when the product was really minimal. The website was embarrassing, if I look at it right now. People started commenting in the spirit of, look if you build something around emails, and for example Excel, those are the tools which are used by so many people out there, so there has to be some kind of value in it. The discussion continued on Hacker News and it drove a lot of traffic, I think I has something like 11,000 page views, which I could attribute to this Hacker News launch. However, this traffic resulted in zero customers. Literally, nobody was using it. However, I got in contact to the guys of Zapier. I was able to talk with the guys of Zapier, they told me that that sounds really interesting, so we continued the discussion from there on. I got in contact with other people.

Courtland Allen 0h 19m 30s

Did the Zapier guys see your Hacker News post and reach out to you or did you email them?

Moritz Dausinger 0h 19m 36s

They commented on it and I wrote them an email.

Courtland Allen 0h 19m 40s

Got it.

Moritz Dausinger 0h 19m 41s

Saying thanks for the comment and really interesting, maybe we can talk a little bit about that. But then they also told me that they were actually working on their own e-mail parser, or not really working on it, but they had some kind of eMailparser prototype flying around. I think it was Brian who developed that. And they told me they might launch that one day.

And so I knew that it's an interesting topic for them and yet they actually launched their own e-mail parser, but we still see a lot of customers coming in through the support of Zapier. Because, basically Mailparser is just a much more developed version of the Zapier e-mail parser. So the Zapier e-mail parser covers a lot of basic cases but when it gets a little bit more complex, then this is the moment when you need to use a solution like Mailparser. So, I think this show Hacker News post didn't result in any business, it didn't give me long term sustainable traffic, but it opened a couple of doors and those discussions which resulted from this post kept me motivated.

Courtland Allen 0h 20m 58s

A lot of companies go through the infamous trough of sorrow, where they launch and get a ton of press and a ton of traffic from that press, but it turns out to only be temporary. So a few days or a few weeks later, their traffic is completely dried up and they find themselves scrambling to find out how to get more users in the door. What did the aftermath of your launch look like with Mailparser, and what did you do to take the Zapier deal, which was only providing a small trickle of users and snowball that into a larger number of paying customers down the road?

Moritz Dausinger 0h 21m 26s

I definitely saw the same thing here. There's this huge peak of traffic and then there's just nothing.

For me this was not a huge deal because as I said, it was a pet project. There was no real ambition there. I was totally fine with having just a couple of visitors on my website and I don't know, maybe two people created an account per day just to try it out a little bit. It was really low. Luckily, there were a couple of really targeted leads coming in from the Zapier platform that was really cool. And I also started slowly creating content.

By doing those two things a little bit on the side, without any time pressure, over a couple of months, it just became more and more and more. The content worked really good. But by now, content is for both businesses, Mailparser and Docparser, the main acquisition channel. And with content I mean like, really targeted blog posts, speaking to the customers, talking about the problems our customers might have. The thing with content is it's just takes a long long time.

Another huge driver was word of mouth, like people who actually found that useful, what I was building. We were talking to other people in their network and it happened quite often that people told me yeah, I heard about you from a friend of mine, and so on. That's definitely a really good sign if you have people referring other people.

Courtland Allen 0h 23m 0s

Word of mouth is like the Holy Grail of growth channels. I've found that it tends to work best when you're doing what you mentioned earlier, and targeting a specific niche of customers, who tend to hang out and talk to each other. Because then they can actually spread your product and refer it to one another. Did you notice that any particular niche of users was getting the most out of Mailparser?

Moritz Dausinger 0h 23m 19s

To be honest, it was a long process for me to figure out who my customers really are. And this is probably because Mailparser and Docparser are both what I would call a tool in a chain of other tools. They are by definition, very broad in the use cases. We are offering lots of integrations, lots of different use cases are shown on the website so it was a really broad spectrum of people coming in.

Also, the advantage in the early days when things were really slow, it allowed me to really double down on customer support and become in really close contact with the few customers I had. By talking a lot to them, doing sometimes also calls on the phone and really engaging with those few users I had, allowed me to really understand much better what they are actually doing there in their business.

Then another pattern I discovered a little bit later is that while Mailparser's actually used by say, real estate agents or e-commerce stores, or marketing agencies and so on and so on, the user implementing it is mostly an IT consultant. The question now is, is my target customer actually the end user using this or paying for it to automate his business, or is my target customer the IT consulting setting this up for them. Those are the insights you just gain when you are on the business for couple of months at least and then slowly you are getting a better picture of your customers.

Courtland Allen 0h 25m 0s

That's one of the biggest reasons why it's important not to quit early. Because, like you said, if you keep working on your business for months or years, you will inevitably talk to a lot of customers and find out more about what's causing them to buy, what kinds of problems they have that they need solved that you can solve, what's causing them not to buy, et cetera. Your chances of digging yourself out of that trough of sorrow, are much higher. At what point did you decide that, okay, Mailparser's doing well enough that I can quit my job and work on this full time?

Moritz Dausinger 0h 25m 31s

While creating Mailparser I was a consultant for another company, and so I was basically already in the position that I had my company set up and had an account and all this kind of stuff so the switch was basically just saying, I stopped consulting work, and I going to start doing full-time Mailparser now, so the barrier was already much lower.

And it was at a point where Mailparser was really growing of demands, of demands without much effort to a point where I would say it was maybe not enough to live from it, but close to it, and as it was growing linearly during the last months, I thought okay, there's no risk in just trying it. This was the point basically when I thought okay, I cannot ignore that anymore, it's not a side project anymore, there's something going on and I really would like to try it, how far I can go with it.

Courtland Allen 0h 26m 28s

Were there any challenges to being an entrepreneur outside of the United States? When I read articles online and look at advice for entrepreneurs, it all seems to be pretty US-centric, or sometimes even Silicon Valley centric. Where were you when you were building Mailparser?

Moritz Dausinger 0h 26m 43s

I'm based in Paris. I'm originally from Germany, but I moved to France five years ago, and when I started Mailparser, and the business before, by the way, which I started with a French co-founder. Both of them were launched in France.

There's this cliche that France is not an entrepreneur-friendly country, but I have the feeling this is changing massively at the moment. There's a huge wave of young talents who want to start their own company, create a startup. The state and the government is actually helping those people a lot. It's really easy to get some, like really easy. You still need to have a what it takes, but still, it's easy to get some kind of first credits, which is basically for free, which you can or cannot pay back from the government.

Then there's also the unemployment insurance which is also a big help for a lot of people when they're starting out. So they get basically over two years. I don't know how much of their salary, but a big percentage of their previous salary paid over two years and then during those two years they can try to build their company.

I think starting a project is actually, I don't feel like there are any kind of things hindering people in France or in Europe in general to start their business. The problem might be at the later stage, where you have, for example all those really fast growing huge startups in the US, like AirBnB, Uber and so on. While, in Europe there are less of them. Apparently there's something going on which makes it more difficult to grow to a really big stage, but to be honest, this is not the business I'm in for.

What I'm doing is more or less like a traditional software company. Saying, okay I have one or two products, and for launching this kind of company, Paris was a great place.

Courtland Allen 0h 28m 57s

Did you find that you had a lot of support among people in your community or were you kind of alone where your friends and family have no idea what you're doing?

Moritz Dausinger 0h 29m 9s

I was already working in the startup space for a couple of years, so I had a good network here in Paris. I'm still exchanging with a lot of people who are based in Paris, so I think I was lucky enough to have a good backup in terms of professional network. For the family, really great supportive wife, parents are also supportive, so I got really lucky there, I think.

Courtland Allen 0h 29m 36s

I think that's so important. I talked to so many people who want to work on something, but when they start, nobody in their immediate vicinity has any idea what they're doing. It's hard enough as it is to start a business and stay motivated, especially when things might not be going perfectly according to plan. But when everybody around you is like, what are you doing, go get a real job, it just makes it that much harder to stick with it. That's one of the reasons why it's so appealing to live near some sort of startup hub.

Moritz Dausinger 0h 30m 1s

I think that's totally true. For example, right now I'm working as a solo founder. In theory, I could stay at home and working from home, but what I do is I go to a co-working space for several reasons. It's much better to work here for me, I like to go out of the house, and I like to separate geographically where I work and where I'm having my leisure time.

But, one of the big reasons as well, and that's especially true in a big city, that you see a lot of other people doing basically the same stuff you do and by seeing that, it becomes normal. If I would be, for example, super isolated and not having anyone to talk about this kind of stuff, I would probly ask myself, what am I doing there. Is it really worth it to quit my job, live on a budget for a couple of months and pushing it and pushing it. By seeing other people doing the same kind of stuff, it really helps and it gets normal in a way.

Courtland Allen 0h 31m 3s

Yeah, I completely agree. I live in the middle of San Francisco, and it is crazy motivating to be surrounded by so many other people who are also working on projects and startups and launching businesses. I want to get into how Mailparser grew to the point where you were able to sell the business and also what led you to start Docparser. Why don't we jump in at the point where you had just quit your consulting job to work on Mailparser full time. What kinds of tactics did you use to grow Mailparser and even dive into some of the specifics on things you might have tried but didn't work.

Moritz Dausinger 0h 31m 34s

When I went full time on Mailparser, I think in the first two to three months, I was improving a lot of stuff in the yeah because before that it was a side project and I never had enough time to make it really good looking and all this kind of stuff, so I put a little bit of effort first in the product and when I had the feeling, okay, now it seems to be some kind of in a good shape then I decided it's time to really boost the customer acquisition.

But, again I had really zero ideas about how to actually find more customers. At the same time I also felt like I'm really busy all day long with customer support, fixing bugs, adding new features and so on and so on. I thought okay, now's the time I need to hire. I need to get other people on board.

The first step I did was actually getting a customer support teammate. I got really lucky there, Joshua's an excellent guy. He took so much away from my daily operations, and it freed up so much time for me, which then gave me the time to write a couple of blog posts, write down some ideas. Thinking about what is interesting for my customers, trying to better understand what they maybe search for, and so on.

A couple of weeks later then, I think it was beginning of 2016, I was able to hire Tom, who helped me with the marketing and growth and so there again I got super lucky. Tom is an ex Senior Executive in Marketing, but he's right now traveling the world with his family, so he was all in and said that's a great project, I want to work with you together on that. And he basically taught me a lot of stuff like how to approach B2B sales, because this was something I didn't know before.

We tried a little bit of different things, a little bit of paid acquisition, a little bit of cold outreach emails. However, what worked in the end was content on our own website, like on our own blog. On the website, and on the blog.

What we did on the website is we added lots of customer testimonials, we added a lot of use cases, so basically we made sure that whenever a prospect lands on our website, he finds himself and he knows that Mailparser is a good solution for him. That was the really crucial part to create a lot of content about use cases, all this kind of stuff. And then, we created a couple of articles on our blog with a goal to just attract a lot of traffic from Google.

Basically, we have two types of articles. One type is very, very specific talking about exactly the problem our software solves, and then there's another type of article which is a little bit related to our topic, but not really the same thing. For example, Mailparser is about getting data out of emails. One article which works really good for us is talking about how to automatically forward emails inside Gmail. That's another topic. But the idea is a guy who is interested in automatically forwarding certain emails in Gmail, it's probably a guy who has a lot of emails going on, so maybe he's also interested in our software. So, those are the two type of blog posts which worked really good for us in the beginning.

Courtland Allen 0h 35m 23s

So, two questions. How did you find Thomas and Joshua, and were you making enough money at the time that you found them to pay for their salaries out of your profits or did you have to dig into your savings?

Moritz Dausinger 0h 35m 34s

I found both of them on Upwork, and that's why I think I got really lucky because it's not obvious to find really good guys on Upwork. Both of them on Upwork were actually new on the platform, so they were not what I would call a typical Upwork freelancer who is just doing one project after the other after the other after the other. Both of them were pretty new to the platform, and open for all kind of missions, like all kind of arrangements.

Basically I found Joshua there and we had an interview and I knew right away I want to work with him. And then, I don't know, we had some kind of discussion around how many hours he wants to work and how many hours I can pay him in the beginning, because I wasn't able to pay him a full time position. I think we said like 10 hours in the beginning. This was, at the time where maybe Mailparser made, say $6,000 MRR. So, it definitely meant that I was paying myself much less because I was paying this money to an employee. So it was some kind of bet on the long term, and the same was with Tom.

When I found Tom, it was the same thing, it was some kind of big amount, like in regards to what the software made every month, but it was some kind of long term bet that I thought okay, if I want to grow and grow more, then I need to cut down there. Meaning, I'm not paying myself that much. This is what for me is bootstrapping a business is, you are having restraints around money, so you need to figure out where is it worth it spending the money.

Courtland Allen 0h 37m 29s

Exactly. At what point did you start to see the returns on that investment?

Moritz Dausinger 0h 37m 33s

Well, with Joshua, I think I saw it right away because he just freed up so much time in the beginning. It was like okay, I hired him for 10 hours. That means 10 more hours for me, more or less.

Also, due to the fact that he was doing support before for also very technical B2B company, so he was really up to speed really fast. And so, there I thought okay, that was a really clever move because now I have much more time.

With Tom, it was the other way around because Tom taught me a lot of stuff and we were brainstorming around where should we go with the marketing, what could we do. It was less obvious in the beginning because it added just a lot of work and as it is always with marketing it's very very difficult to measure.

I mean, with all the tracking tools you have in place, I'm not so sure if, especially on a small scale, if you can really say okay, this much dollar spent, this much dollar earned. With Tom it was even a much bigger bet, but then if you, a couple of weeks, or a couple of months later, you see okay, look there are actually customers coming in, they are converting through the content which we created, then you go into the mindset of saying, okay that was also a good move.

Courtland Allen 0h 38m 50s

What was your business model at that point? Were you just straight up charging customers a monthly fee to use Mailparser?

Moritz Dausinger 0h 38m 57s

Yeah, exactly. Mailparser is targeted to I would say, small business, medium sized business, but also some bigger groups. The pricing starts with $25 per month, $50 per month, up to, there are customers paying several hundred dollars per month.

Courtland Allen 0h 39m 19s

Someone wrote an article a little while back where they went through every interview on Indie Hackers, and they tried to extract a lesson, or a bunch of common lessons that they could pull out of all of the interviews. By far the number one most oft repeated lesson was to raise prices. I think it was found in 19 different interviews. Did that play at all into how you grew your revenue with Mailparser?

Moritz Dausinger 0h 39m 40s

I saw that article, I really really liked it. I thought it was a really cool idea. Definitely did the same, yeah.

I think when I started out, it was like $9 per month or something like that and I think my biggest costs are support. When I get a new customer, I need to try to figure out is it worth it supporting this guy that much, because if he pays me 10 bucks a month and he stays let's say six months, so I'm earning $60 with him.

But if he writes, say, 10 emails to our support staff, then it's just a zero gain. I think it's really important that you try to understand your numbers a little bit, and to say okay, this kind of product, it's very support-intense, very high-touch, so actually we cannot offer it that low. I mean, if you are having a funding and you have the ability to hire lots of people in advance, all this kind of stuff, then you can do it but if you are bootstrapping, I think you need to make it work right from the beginning.

Also one reason why I raised the price is because I said the customers I want to have, the customers where I'm happy with and the customers which are the most happy are this kind of customers, and for them paying $25 per month is really a no-brainer. Raising the prices is not for me just about earning more money, it's just about positioning your product inside the market.

Courtland Allen 0h 41m 14s

Do you think if you could go back to the beginning knowing everything you know now, you would immediately start charging $25 a month? Or do you think it was necessary to start with a lower price to start bringing in your first customers?

Moritz Dausinger 0h 41m 25s

I think having low prices in the beginning allows you to get much more leads into the software.

Also your software is likely to not be that good, because it's very new and you will have a hard time as a nobody justifying that people should pay you $100 per month, that's really difficult, I think.

And I think, especially with B2B SaaS applications, when you're bootstrapping, your product evolves together with your company, it evolves together with your brand, and it, everything evolves together and so it's, for me, some kind of natural process to climb up a little bit in the market and to find your spot in the market where you say I can totally justify charging 25 bucks per month for this kind of product.

Before that it would have been probably a ridiculous idea, and if I would have done it before, people would probly have said, no way, I don't know who this guy is, I'm not paying him $25 per month.

Courtland Allen 0h 42m 35s

You eventually ended up growing Mailparser into a much bigger and more profitable company, and then selling it. Give us a sense of why you decided to sell Mailparser and work on Docparser instead. And also, how big Mailparser was when you decided to sell.

Moritz Dausinger 0h 42m 49s

To give you a little bit of background, I launched Docparser mid of 2016. I launched Docparser because I had more and more customers asking for document processing, so I thought it's a good idea to launch a second product.

Yeah, Docparser took off a little bit as well, and it was fun developing it, much more challenging than I thought, in terms of technology. So I found myself at a point, end of 2016, where I had a really good running B2B SaaS, which was Mailparser, and a new software which I really wanted to develop much more and which I liked a lot, a new shiny thing, which was Docparser.

As I'm a product guy, I enjoyed much more developing the new product. Mailparser was really big and I think I hit like around 30k of MRR at that time. The decision was to be made, do I hire now more people, do I hire a real team around Mailparser, making this some kind of bigger operation, meaning five people or maybe 10 people one day around it. Or, is there a way for me to continue what I'm doing, what I love doing, building a product, staying in a small team, and find somebody who would take over Mailparser.

So I decided to go into this direction that I thought okay, Mailparser is, in terms of features, a very stable, very developed product. The next steps for Mailparser are scaling the team around it, scaling operations. This is not something I would like to do right now. It's also just for personal reasons, having young children, a young child, second kid on the way, and so on and so on.

So, I thought, if I could find somebody taking this over, and I can grow and build up the Docparser product, that would be the perfect scenario for me. This is how it turned out in the end.

Courtland Allen 0h 45m 8s

It's pretty cool to be in the position where you start a company and then start another company right after that first one succeeds so to speak. Can you tell us about the launch of Docparser and whether or not your experience of Mailparser made growing and marketing and selling Docparser any easier?

Moritz Dausinger 0h 45m 25s

Well, in the end, I think I did the same journey of Docparser, meaning launching very early, trying to get people into the door, developing the product around the feedback they give me. And then, I changed the product a lot during the last month, based on this feedback. And now I am coming to a point where I say, becomes more stable in terms of features, I think I've found a little bit the product market fit.

Now would be a good time to really put more efforts into marketing. So I think I did the same journey there, however, things were much faster. Easier to get people into the door. In the beginning, I was able to do some emails to the Mailparser customer base. I knew already a couple of people. Putting up the Zapier integration was much more easy. All this kind of stuff so more or less the same process but supercharged.

Courtland Allen 0h 46m 27s

What would you say are some of the biggest lessons that you learned and challenges that you overcame in growing Mailparser and Docparser?

Moritz Dausinger 0h 46m 35s

I think the biggest challenges were in the beginning when you need to juggle around between, I don't know, like developing the product, customer support, bug fixing, and so on and so on and then if you're a developer, it's really easy to completely forget about marketing.

When you are alone on your product, this is really the time where you have so much things to do and it's so difficult to decide what to do. Once you're at the point where you can hire, it gets different. It's not more easy, but it's different.

It's incredible how big a difference it is if you have good people on the team and I don't know how much faster you can go when you're working together with good people. Getting to a point where you can actually hire somebody, that was a big struggle. Then finding some good, good profiles is also a huge struggle. I got lucky there and I'm super grateful for this.

Then still, even if you have a team in place, I think the least fun part for me is being a solo founder, to be honest. I love covering every aspect of the business. I like to code, I like to put my head into marketing a little bit and I like to do some sales, all this kind of stuff. I like that, but I think on the next project, I definitely would go for looking for a co-founder.

I think it's a huge value to bounce some ideas around with somebody who is as much into the business as you are. Because, even if you can outsource some task and get a team around you, they are not the founders, they are not thinking about it 24 hours a day. They are not getting up in the morning, and thinking about the business, going to sleep, thinking about the business. This, I think is something only the founders do. Yeah, so that's I would say the most challenging things to juggle the resources and come to a point where you can build a team and then still stay motivated as the solo founder.

Courtland Allen 0h 48m 43s

It's really cool that you're a serial entrepreneur who build Mailparser and sold it, and who's now running Docparser, and now you're sitting here talking about moving onto the next thing already. What are your goals with Docparser and how will you know when it's time to move on to the next thing?

Moritz Dausinger 0h 48m 57s

That's an excellent question, and to be honest, I don't have a real answer there ready for you. What I know is that with the buyer of Mailparser, I found somebody who is capable of growing the product and bringing it to the next level.

It's a small private equity kind of thing in Canada, they're called SureSwift Capital, and what they basically do is buying mid-sized SaaS businesses, and they have an awesome team in place and try to put them on the next level. With that in mind, I could imagine that I, one day, also transition Docparser to their team. That would be, I think, a great thing to do for me.

But this is on a time scale of several years for me, and so until then, I think my immediate goals would be to develop Docparser maybe to a team size of four to five people, make it really stable in terms of features, better understand what my customers are and then like make it a more stable business and I think there I'm looking at a time frame of one or two years, maybe three years. And after that, who knows.

As I said before, I think for the next project I would like to join a bigger team again, because that's something I always enjoyed doing.

Courtland Allen 0h 50m 24s

There are a lot of different philosophies around entrepreneurship, and how to grow your companies. A lot of people swear by Eric Ries, and the lean startup. And I've noticed a lot of people, recently, putting a lot of stock into Nir Eyal's book. I had him on the podcast recently. He wrote Hooked, How to Build Habit Forming Products. Are there any schools of thought that particularly appeal to you and helped you build your companies, or are you more of a person who likes to learn on the job and figure it all out from your own experiences?

Moritz Dausinger 0h 50m 52s

Well, I'm definitely somebody who's learning by doing. I like to read a lot, and I'm reading a lot, online and blog articles and all this kind of stuff, but I think every story is different. Every startup is different, and stuff which might have worked for other people might work for you as well, but maybe it doesn't.

So, what I like to do is always try it out, like with minimal effort. Well, not with minimal effort, but like to try out an idea without over-engineering things too much. I think this is the school of lean startup a little bit. I'm definitely doing this every day when it comes to marketing, when it comes to sales, when it comes to product development.

I think about where I would like to be, and where I think I can imagine this to be. But I know it's such a huge effort to do that, so what I'm trying to do is to take the very first step, and I think done is better than perfect, so it's much more important to get going, test your idea, write a couple of blog posts, see if you get some traffic. All this kind of stuff. So I think that would be the school of lean startup.

And right now, I'm looking into a book which is called Who, and it's about hiring. Because I think this is still an area where I need to learn a lot, where I struggled also a lot, like hiring, making the repeatable process to hire really good people around you. I'm looking forward to learning more about that topic.

Courtland Allen 0h 52m 38s

Awesome, I think that is great advice and also a great place to end the episode on. Can you tell listeners where they can go to find more about you and what you're working on?

Moritz Dausinger 0h 52m 47s

Yeah, sure, I'm on Twitter, @mdausinger. I'm on LinkedIn, just Google my name, and you will find me.

Courtland Allen 0h 52m 59s

Alright, Moritz, thanks so much for coming on the show.

Moritz Dausinger 0h 53m 1s

Thank you so much, it was a pleasure.

Courtland Allen 0h 53m 4s

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