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85 Comments

AMA - Bootstrapped my SaaS to $265k ARR in 12-months

Hey everyone!

I’m Andrew Gazdecki and I’ve been an entrepreneur for longer than I can remember. I like to build stuff, mostly companies, and try to tell a story that goes beyond what the company does to how it’s changing markets. Really like to talk about all things SaaS, specifically growth strategy.

What am I working on?

A startup acquisition marketplace called MicroAcquire helping bootstrapped entrepreneurs meet potential buyers without any commissions or fees.

MicroAcquire (https://microacquire.com/) today is currently...

  • $265,000 in ARR
  • profitable
  • growing 30-40% MoM,
  • 200+ successful acquisitions
  • 40,000 registered users
  • run by myself as a solo founder

All within the first 12-months. Which is kind of crazy!

Before MicroAcquire, I bootstrapped another SaaS startup called Bizness Apps to over $10 million in ARR and exited to a private equity firm in 2018.

So hoping to help fellow bootstrappers with any questions about building and scaling SaaS startups on a budget... marketing, sales, branding, positioning, pricing, hiring, etc throw it at me!

I'll either have a good answer or a mistake I've made for you to avoid. :)

AMA!

  1. 4

    Hey Andrew, I'm interested in your marketing strategy. You mentioned referrals and word of mouth but that's a bit vague, could you tell us more?

    1. 4

      Sure - the main thing I do is talk to a lot of people.

      Buyers, sellers, VCs, investors, accelerators, sharing on social, and more. I try my best to build real relationships with users of MicroAcquire which creates a flywheel effect because people are more likely to refer you if you have a personal relationship.

      Also, don't be afraid to share or build in public. That has been a lot of fun for me as well and helped MicroAcquire grow by creating trust within the market.

      1. 1

        Hey Andrew, how do you go about finding potential users of MicroAcquire to build r/s and what do you mean by the flywheel effect?

        Would love to get an insight into how your funnel works; of how you move a complete stranger to a converted user?

        1. 3

          So at the very beginning, I ran a cold outbound email campaign to buyers in the market and also founders - asking if they'd be willing to sign up.

          Got enough so the marketplace wasn't a ghost town.

          Then launched on Product Hunt and got #1 Product of the Day. That led to over 1,000 sign-ups and it's just been growing from there.

          1. 1

            How did you determine who to email?

            1. 3

              Just needed "Founder" or "CEO" in their title.

              This is called understanding your "ICP" or "Ideal Customer Persona". I needed to reach out to founders look to sell so the founder and owner of the company was the best person.

              As for buyers, I looked for "private equity" or "corporate development" in their job title. These are people typically looking to acquire companies.

  2. 3

    Hey Andrew - is there a market for IP-only projects? Let's say someone starts a SaaS, bootstraps it, builds the software to 98% completion, but then can't get traction with clients and loses interest in the startup. Would a project like this have any value to someone? If yes, how would someone go about selling it?

    1. 4

      The problem with IP-only projects is that they are usually valued at peanuts because no one wants to pay for your 6+ months of effort without customers. You as the developer may feel emotionally attached and expect big numbers due to the blood and sweat you put in it but the fact is that unless the IP is very specific to someone's own needs already, they would offer peanuts and rightfully so because the value is in the business which needs customers. Let's talk an example.

      Let's say your hourly rate as a developer is at least $50 (I am going very reasonable and moderate here). You took 6+ months of working part time to build a product, just the IP. Say you spent 20 hours a week and give or take , you spent 25 weeks. That is 500 hours and at $50/Hour, you are looking at $25,000 of your time. It is very unlikely someone will pay 25K for the IP unless it is specifically in a domain someone is interested in. So is it possible ? Yes. Is it likely. Very low chance.

    2. 1

      Hey there - so MicroAcquire focuses mainly on revenue generating SaaS startups, so you'd need to look at other marketplaces like Flippa. You could also share this within Facebook groups or on Twitter to garner interest.

      There is definitely a market for well-built software projects without customers, but I'd recommend trying to find even just a few paying customers as your exit price will be much more meaningful, and much easier to find a buyer.

  3. 3

    Hey Andrew!

    In your experience, what's the most you've seen a small MRR business ($5-10k MRR) sell for?

    • Do things like their social presence + newsletters/data add a considerable amount to the final acquisition price?
    1. 1

      Hey Karan - I've seen these companies sell for as high as 3-5x ARR but it really depends on a lot of factors such as...

      • free trial conversion rate
      • customer churn
      • # of support tickets
      • clean source code
      • customer reviews
      • ARR growth
      • years in business
      • profitability

      As for your other question, social presence and newsletter subscribers can absolutely increase the price if the buyer feels there is an opportunity to grow current revenue with these channels.

  4. 2

    Hey Andrew! I absolutely love MicroAquire. My brother in law is dreaming of owning a franchise when he retires and I keep trying to convince him to buy a SaaS. I used your site as an example.

    Also of note, I tried to sell my last company, Graphite, on MicroAquire. So I have experience both as a browser and a seller.

    With my current side project, I don’t intend to sell, but I have learned to plan ahead. So my question is: Do you have tips for solo entrepreneurs to help set their apps up for a better chance at a successful sell on a platform like yours?

    1. 1

      Hey thanks, your support means more to me than you know!

      As for your question, absolutely! Check out this free collection of SaaS acquisition eBooks I put together: https://gumroad.com/l/SaaS-acquisition-eBooks

      The thing I'd focus on the most though is growth, here's a collection of eBooks related to SaaS growth strategies too: https://gumroad.com/l/SaaS-growth-strategies

      Congrats on all your success! Rooting for you!

  5. 2

    How do you help manage churn if a business in a high value niche changes to a new owner with lesser understanding of how to run a business in that space?

    1. 1

      Hey Ben - that's a tricky question and I don't think I have a perfect answer here aside from creating processes for the new buyer to easily manage. If your business is highly dependant on you personally, it will be hard to convince an owner to acquire it. The more removed you are from the daily operations of your business by delegating to your team, the better.

      1. 2

        Nice, thanks for that. You see a lot of people talking about building a personal brand but that needs to get separated whenever you sell a business right. Unless you are Dick Smith.

  6. 2

    I'm curious to your thoughts on 'community SaaS', as in SaaS for community builders (such as a Discord app). Are you seeing any increasing traction in this area or is it pretty early days?

    1. 3

      Hey Charlie - I think communities are one of the best ways to grow a SaaS (more specifically marketplaces) but it's important that you have engaged users who can learn from each other.

      MicroAcquire has a community of about ~1000 members that discuss deal terms, feedback on the marketplace, new features to add, help educate each other if interested in acquiring small SaaS companies, and so much more.

      Long story short, I'd invest heavily in community and make it part of your brand. Start a movement around whatever you're doing.

      1. 2

        Totally agree - apologies, let me rephrase. Have you noticed any patterns of SaaS products focused on community builders through MicroAcquire? e.g. analytics tools for Discord/introduction bots for Slack etc

        1. 2

          Absolutely! I see a lot of people building, selling, and acquiring apps for the Slack ecosystem. There's also a number of communities that have been acquired on MicroAcquire as well.

  7. 2

    Congrats Andrew! This is great work.
    I'm curious what were the legal challenges going through your mind as you built this out? Knowing myself I would have come up with excuses to not work on this by thinking: 'What if I become liable for any bad faith sales? What if a someone sells a fraudulent product and the aggrieved party comes to me to refund blah blah?'

    1. 2

      Great question - short answer, hire a great legal team. Don't go cheap on terms of service and privacy policy. Protect yourself from personal liability via LLC or corporation. Then provide a great service and deliver on your brand promise. At MicroAcquire, we simply connect founders with potential buyers, simple as that.

      1. 1

        Awesome - yeah I think that's a good balance of protecting yourself against any downside without letting fear paralyze you :)

        1. 2

          I think another piece of advice I'd give you...

          Ask yourself instead, "What if this works?"

          Then go for it! You never know until you try.

  8. 2

    Hi Andrew,
    Have you seen any $0 MRR bussiness sold on MicroAcquire? For example small freemium projects with very small userbase and currenly not generating any revenue. Are they even accepted to your platform?

    1. 1

      Hey Augasur - there's been a few but not too many. MicroAcquire doesn't list too many pre-revenue startups. I usually tell founders to keep pushing forward and acquire a few paying customers before selling.

  9. 2

    Do any of the listings ever become "Non-premium" and therefore available for users without a premium subscription to contact the seller?

    1. 1

      Hey Alex - no, I've made the decision to move to premium only because it dramatically improves the sellers and buyer experience.

      Often people would create accounts and request info for every startup, wasting founders' time. You can still view all the details of startups for free and also free for founders looking to sell.

      1. 1

        Makes sense as a way of filtering down to serious buyers. It seems most the listings are expensive enough where potential buyers wouldn't think twice about a $300-400 subscription.

        From my perspective, it would be nice to have an option to enquire about low MRR, 'open to offers' listings, without paying the full subscription price up-front.

        I wonder if subscription tiers would work? So you could charge more for access to high value listings, and have a cheaper option for the lower value listings.

        1. 1

          Ah maybe in the future, but one thing about startups...

          When things are working, keep doing more of what's working. :)

          Really appreciate your support and feedback Alex!

  10. 2

    I had a cheap flights newsletter for nomads 2 years ago. I have over 1,000 people on it but some buyers have been sceptical since it needs a bit of rekindling. I've still got the landing page assets in carrd and the domain is available. Is this worth anything?

    1. 1

      Hey there - there's definitely a market for newsletters.

      Feel free to list it on MicroAcquire and I'll check it out. Hard to estimate the value of the newsletter without more details but definitely has some value to someone.

  11. 2

    Hey Andrew, Congrats!

    What would you say was your number one traffic/customer acquisition avenue?

    Thank you!

    1. 1

      Hey there - mainly referrals and word of mouth at the moment.

      But am testing a number of paid marketing campaigns soon.

      1. 1

        Hey Andrew :) You did a great job so far! Can you distinguish any paid acquisition channel that turned to be effective?

        1. 1

          Hey there!

          Too soon to really tell how effective paid acquisition channels will perform for MicroAcquire but I'll share an update once I've run a few campaigns.

          1. 1

            That would be really nice, thanks! :)

  12. 2

    First off, thanks for organizing this AMA! Sharing the experience of what you’ve gone through is invaluable for those of us who are still trying to figure it out.

    Here comes my question.

    Imagine you’ve landed a few sales with your new product using your personal network but then the growth stalled. How would you go about generating a flow of new customers (preferably with low touch sales)?

    1. 3

      Hey there - really great question.

      I would talk to EVERY customer you currently have, look for similarities in their use cases of how they're using your product, ask them for referrals, ask them for testimonials for social proof. Focus on building your brand and "closing the credibility gap".

      More on this here: https://www.saleshacker.com/close-credibility-gap/

      1. 2

        Thanks for sharing these tips. 🙏 I glanced over the article but I feel like I need to read it through.

        Will continue from here. ✌️

  13. 2

    What is your tech stack for MicroAcquire? Is this something that could leverage NoCode?

    1. 4

      I built MicroAcquire entirely custom. You can absolutely build marketplace with NoCode tools like ShareTribe: https://www.sharetribe.com/

      MicroAcquire mainly runs on Google Cloud and React.

      1. 2

        awesome thank you!

  14. 2

    Congrats on your massive success! Is the only way you're making money the $300 yearly premium membership? I see you don't take a % of the sale.

    Do you think this would work for Ecommerce sites too?

    1. 1

      Hey Mike, yup just the yearly premium membership. No % of sale, commission, or fees. It's 100% free for founders to sell their startups on MicroAcquire. :)

      As for the membership, it's currently $290/year but increasing to $390/year March 1st. I recommend all founders raise pricing if delivering a lot of value.

      As for eCommerce, there are actually quite a few listings on MicroAcquire but my focus is mainly SaaS. Over time, I can see us expanding into all types of startups.

      1. 2

        That is seriously impressive and such a major win for the startups! How do you plan on forecasting your MRR without a subscription model?

        1. 1

          Good question!

          I'm consistently adding $50-$60k in new ARR each month.

          So over the next 10-months, that's ~$500k in new ARR, which I can hopefully accelerate and end the year at $1 million ARR.

          That's my personal goal for the year.

          1. 2

            Remarkable! Congrats again!

  15. 2

    Hey Andrew -

    Can you see a niche for Google Spreadsheet add-ons?

    Thanks!
    Ed

    1. 1

      Hey Ed - absolutely!

      Google Spreadsheets is one of the most widely used pieces of software, I use it almost daily. If you create a solution for a common pain point for those using Google Spreadsheets, you have a large potential customer base available from day 1.

      I would go as far as saying ideas to streamline common tasks currently done in Excel or Google Spreadsheets are really large startup opportunities.

  16. 1

    I like your website, although I don't understand why you call it a SaaS. With all due respect, this is an information website, not a Software you sell as a Service. Anyway:

    I see that 100% of the businesses for sale all listed as a "Premium startup" businesses. In order to just check those websites, I need to pay $300 per year. I don't see how this is fair. Sorry. Just my opinion :)

    I've already read your comment below that you decided to just have everything under "Premium". Didn't you have any complains about that?

    Your website is like Flippa.com which I use for years. Did you have that in mind when building microacquire.com?

    Good luck with your website.

    1. 1

      Hey there - appreciate the feedback. Agreed, technically it's a marketplace, not SaaS but since the business model is subscriptions and I track ARR, close enough.

      As for premium, surprisingly all users celebrated the change with just a handful of complaints.

      Serious buyers were missing great acquisitions and serious sellers were being spammed by buyers just looking around so it made the experience better for everyone. MicroAcquire's growth has kinda exploded since the launch of premium.

      You can still view all the details of startups for free and also free for founders looking to sell but to actually contact sellers for more info, premium membership is required.

  17. 1

    Sounds like a well thought business idea.

    Where did you get your first 10 paid customers?

    1. 1

      Good old fashion reaching out to potential customers for feedback.

      1. 1

        Sounds cliche, lol.

        How did you come up with a list of potential customers then?

  18. 1

    Hey Andrew,

    congratulations!

    Quick question: do you only allow SAAS businesses on your platform?

    On Flippa and Empire Flippers there seem to be tons of websites with business models based on affiliate / Adsense / classic advertisting.

    I was just wondering if you were ever going to consider adding this kind of businesses and why yes/not.

    Thanks a lot

    1. 1

      Hey thanks, appreciate the support.

      I think affiliate / content websites are great acquisitions, but they don't really get me excited. So MicroAcquire will always focus mainly on SaaS because it's what I know and understand.

      Basically, it's where I can add the most value to entrepreneurs.

  19. 1

    Hey Andrew, I'm a MicroAcquire subscriber. I got in right under the 100 dollar bump gun. :) What you are doing is such a great idea/tool. And I do love your revenue model. I am a founder of a business that sold, and now I am at a point where I am in the beginning stages of building something that might now work. I look at your sight and I can find things that have a little bit of movement. A glimmer that it could work. There are others that are well along the way, but cost is much higher. Seems like less risk if the business is priced correctly. Good job and thanks!

    1. 1

      Hey there - thanks so much for the kind words and support!

      Means a lot to me. Glad to hear you're enjoying MicroAcquire!

      Definitely check out these free SaaS acquisition eBooks I put together: https://gumroad.com/l/SaaS-acquisition-eBooks

  20. 1

    Another question - did you put any of your previous money from your exit into this?

    i.e. could someone achieve this starting from zero?

    1. 1

      GREAT QUESTION!

      I've personally invested probably $200,000+ into MicroAcquire. I was Chief Revenue Officer at another startup leading their sales and marketing team so basically just invested my entire salary into development.

      Once we closed the Series-A (https://techcrunch.com/2020/06/26/automating-payments-for-the-corporate-sales-force-leads-to-a-10-million-windfall-for-spiff/) I hired a replacement for myself and resigned.

      That's when I started focusing on MicroAcquire full-time because I had enough traction to feel comfortable taking the leap.

      The lesson here is sometimes your employer can be your best source of funding/investor, you keep 100% of the equity and ownership.

      1. 2

        Thanks for the transparency!

      2. 1

        Love this answer! I'm curious to know what the $200,000+ was used for? Could you have built MicroAcquire with <$1000? I am looking to build a members-only marketplace for small business in a specific country.

        1. 2

          Hey Richard, you 100% could spend far far less building a marketplace. I built MicroAcquire from the ground up but you could use a platform like ShareTribe: https://www.sharetribe.com/

          1. 1

            Thank you for replying! Sharetribe looks good. What are your thoughts on other alternatives (i.e WordPress, Webflow etc.)? Stay away from WP?

            I want to keep my membership size small (<1000) and rely on my expertise to charge a premium. Something like - https://www.vantrumpreport.com/

            What would you do differently if you were to start again with only a goal of $10k MRR? (Members-only marketplace)

  21. 1

    Thanks a lot for creating this thread. I came a little late but by just looking at your answers, I learned a lot!

    Here is a quick summary for everyone:

    • Main thing he does is to talk to people and build relationships. People are more likely to refer you if you have a personal relationship.

    • He'd invest heavily in community as a part of a brand. Start a movement around whatever you're doing. Help users to engage and help each other.

    • At the very beginning, he just built MicroAcquire as what he believed should exist, then cold emailed to people and launched on ProductHunt to get initial user base.

    • There were companies sold for 3-5x ARR, depending on: conversion rate, churn, # of support tickets, clean source code, reviews, ARR growth, years in business, profitability. Social presence and newsletter also helps if they can convert.

    • Talk to every customer you currently have, look for similarities, ask for referrals, ask for testimonials Focus on building your brand and "closing the credibility gap".

    1. 1

      Great summary!

      I would highlight talk to customers even more, even when they don't need to hop on a call ask anyways. Ask for feedback, ask for intros, ask for help. The better you know your customers and the better your customers know you, the better.

      People want to work with companies they like so aspire to be that brand in the space.

  22. 1

    It’s nice that you have achieved this by yourself alone. You aren’t asking for feedback but anyway...

    With this level of revenue you are allowed to think big and scale this thing up. Not jist to make it bigger but to make sure it can potentially survive “you”.

    Setting more ambitious goals can allow you to eventually sell the business that allows to sell businesses (what a paradox!) or even have a team running it for you while you start new ventures if that is what makes you happy.

    Congratulations for the huge achievement!

    1. 1

      Thanks so much for your support, it truly means a lot to me.

      I have some big plans for MicroAcquire, I want to build something as meaningful for the startup community as say Product Hunt was for discovery or AngelList was for startup investing.

      MicroAcquire's goal is to help 1,000+ entrepreneurs become millionaires by getting acquired on the marketplace without having to pay any fees or commissions to brokers.

  23. 1

    hey Andrew, really great thing you've got going there, congrats! I wonder though if there is also a market for something slightly different...

    I appreciate what you've already said here about needing some traction/clients before there is really a market to sell the business. The other side of the coin for founders is obviously giving away a minority share by raising traditional investment.

    But do you feel there could be a market for something half way. Someone below said "Let's say someone starts a SaaS, bootstraps it, builds the software to 98% completion, but then can't get traction". And I'd add to that "or is a builder and simply doesn't have the skillset or desire to do the growth phase". They simply want to move on to the next idea.

    The traditional answer is to find a sales/growth cofounder. But that is not always simple and I think, if many builders are honest, they work best alone rather than find cofounders and prepare for a 10 year slog under the watchful eye of VC's. And the idea of finding VC's leaves many indie hackers in a cold sweat ;-)

    If many indie hackers are left to it, they have incredible vision to come up with ideas, validate them (admittedly a skill they failed to do a few years ago but are now learning to do more/better) and then build out the core business, processes and operations.

    So are there people that would work with great builders where the buyer takes a 'majority' stake, leaving the builder with a small minority share and perhaps a part-time short-term role in maintenance/handover and continuing to offer a bit of the original vision. But from here on the business belongs to the buyer who has the team, expertise, belief and desire to take it through the early growth phases and beyond.

    Sure, the builder is not going to net a big pay day, although given most can create incredible solutions in a month or so, then we're not talking about much to help them cover costs.

    The founders have the vision to see that their remaining 5-10% stake could one day be worth a lot more than '100% of diddly-squat', which is what many are left with when they shelve their ideas. Builder's shelves are creaking under the weight of amazing ideas looking for people to take them to the next stages!

    1. 2

      Hey Steve - this is a really great idea and I agree with you.

      I can 100% see MicroAcquire evolving way beyond just acquisitions.

      Stay tuned! :)

      1. 1

        cool, v. excited to see what comes.

  24. 1

    Hey Andrew congrats on your success. As someone who’s relatively new to this community I find myself always wondering about the “paperwork” and legal aspects of this kind of thing. My question is - how do you manage the legal requirements of a company bringing in so much revenue? Even just for the site with its privacy policy, cookie policy, formation and management of the business entity, etc? Would you mind sharing more about that? (I did not actually see a cookie policy on your site but I’m just lumping it in as a hypothetical portion of my question if that’s okay 😅)

    1. 1

      Hey there - I have like 2 legal firms I work with.

      These are relationships from selling other companies but you can easily find a good attorney here: https://www.upcounsel.com/

      I recommend not going cheap on accounting or legal help because it can be much more expensive in the long run.

  25. 1

    Love your story, and love Micro Acquire! Would love to know how you got started, what we’re your biggest pain points and how you overcame them? How did you get you first customers with no existing listings on the site?

    Thanks so much for sharing

    1. 1

      Hey there - great question.

      Answered in other comments above and below. :)

  26. 1

    Thanks for doing this - this is great. Let’s go back to before you even started cold outreach. How did you know there was a need that you obviously eventually tapped into.

    Second question: you said you cold emailed buyers. How did you identify potential buyers?

    Third question: Do you focus on one side of the market over the other? Like if you list it, they will come. Or do you spend most time pretty evenly.

    1. 1

      Sure thing... so first question, how did I know this was a market opportunity?

      Candidly I didn't, I've mentioned this in a few podcasts. See here: https://youtu.be/Ard_a9dgiho

      I just felt MicroAcquire needed to exist for founders and wanted to build something really meaningful for the startup ecosystem. I personally felt MicroAcquire needed to exist, so I built it myself.

      Cold emails, just grabbed a data pull from ZoomInfo, you can search like startups of a certain size and some other criteria.

      How I spend my time? Both sides are important and both sides are growing really fast so I spend my time equally between the two.

  27. 1

    How did you get to be so cool? 😎

    1. 1

      LOL - appreciate you Davis!

  28. 1

    Thanks for doing this, Andrew! Big fan!

    Looking at the numbers it's clear that MicroAcquire is already a clear winner. At what point did you know that it was going to work? With Bizness Apps, was there a moment/statistics/feeling when you knew it was going to work out?

    Quitting isn't always a bad thing, but identifying winning ideas to stick out or losers to jump ship is a bit more of an art than a science. Any tips?

    1. 1

      Hey there - I'd say I knew MicroAcquire was a winner when I had to turn off manually verifying users because they started signing up so fast. This happened about 30-days after launching on Product Hunt. When you find product-market fit, you can feel it because the amount of work to keep up creates an entirely new set of challenges.

      1. 1

        @cerealbuilder I'd concur with Andrew, it happened to me once many moons ago - sadly not since, but hey, there's still time ;-)

        It's something that no fancy management report will tell you. You just feel the force as orders pour in, creating an energy like nothing else.

        You just know!

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