From 0 to Sold: The story behind bootstrapping my first SaaS business.
Anton Fenske / October 21, 2022
7 min read
Hello, I'm Anton. Most of my professional career I spent working as a software engineer and engineering manager in the fintech industry.
Like a lot of people in the software engineering world, I dreamed of building a profitable SaaS business.
This blog post describes the two years it took me to build, run, and sell my first bootstrapped business, DevSkills.
A Little Bit About Me#
DevSkills was born out of my experience with contributing to interview processes for the companies I worked for. During this time, I realized how difficult it is to put together a reliable tech interview process.
As part of my previous blog posts, I described my entrepreneurial journey's first three seasons and how I got started building DevSkills.
As a follow-up to the original post, I will share how my DevSkills venture progressed along with the learnings I gained along the way.
Season 4: The Mvp Stage#
As I had to start from scratch, getting the first beta customers was my top priority. To increase visibility, I published an "I'm starting a business" post on LinkedIn and asked some of the people I knew in DM to react or share it.
As a result of the post, I landed the very first conversations that led to a handful of early-bird customers receiving access to what eventually became DevSkills. To compensate for all the missing features I focused on providing premium-level support, which was greatly appreciated by my early customers.
The strategy was to "build in public", i.e. to write what I do, land more conversations via people discovering my posts online, and keep landing new customers.
To get enough confidence in DevSkills being a viable business idea, I set a goal for myself to earn USD 2000 in the first 3 months working on DevSkills. With five customers who purchased early-bird licenses, I was able to accomplish that. So I continued grinding.
Season 5: Stepping up the Game#
Having received validation at the previous stage, the next step was to increase the pricing to match what a B2B SaaS would normally charge.
Two quiet months followed when I didn't manage to land any new clients.
Until one day a well-known Swedish company came along and after a couple of meetings purchased their yearly subscription.
Then more companies started showing up. One of the next big wins came when one of them dropped an established competitor, and the other did a detailed comparison of multiple platforms, ending with DevSkills as their platform of choice.
In addition, these new subscriptions provided a consistent in-flow of quality feedback on which I kept improving the platform.
Throughout this stage, I kept adhering to the same "build-in-public -> inbound sales -> improve the product" loop, which kept generated new customers.
Season 6: Streamlining the Operations & Delegating#
As a result of the increased usage of the product, I had become the bottleneck at this point.
The org chart back then looked like this.
The demand for new product features increased, along with customer support, and we were under pressure to strengthen our content marketing efforts.
To help someone who has never worked on DevSkills before quickly get up to speed, I isolated the repetitive processes and documented them.
The next step was to delegate different parts of work to part-time consultants. My first step was to onboard software development consultants and refine our processes. I then delegated other tasks.
Here is the updated org chart.
Having a documented process and automating some repetitive tasks enabled me to spend more time on product management and sales.
The Acquisition of Devskills#
One day folks from Alva Labs invited me out to lunch. As one of our very first early-bird customers, they experienced every iteration of our product from its inception.
During our chat we talked about their journey of conquering the personality and psychometric assessment space. They also shared that they had felt it was time for them to expand beyond their current product offering and, in particular, focus on developer hiring.
During that lunch, they suggested joining our efforts and incorporating DevSkills into Alva.
I along with Alva's team bounced a large number of outcomes over the next few months. In the end, we arrived at an agreement that felt reasonable to both parties.
In the course of building DevSkills, I encountered a variety of situations I had never experienced before.
Here are some things I learned from that experience.
Consistency Is Key#
The consistency of quality service became crucial once I started getting customers. Showing up every day during these two years to help my customers solve their problems (through support, continuous product improvement, etc.) was essential.
As a business rule-of-thumb, keep doing what works and avoid what doesn't. But how can you know in advance what will work? My experience is that there is no shortcut, and it probably took me a dozen failed experiments before I better understood what worked for me. After failing several initiatives, I became more comfortable with trying new things and moving on when they didn't work.
Mrr Is Crucial but Don't Overthink It#
Subscription-based SaaS businesses rely heavily on MRR as one of the key metrics that determine their valuation.
The reality is that "hockey-stick" growth has not been my experience over the last two years. Considering DevSkills had to prove itself as reliable, and the seasonality in the hiring field, the MRR graph looked rather irregular, which I was beating myself up about regularly.
However, when the acquisition time came, DevSkills was lucky enough to get a 10x better valuation than a regular bootstrapped SaaS thanks to the buyer's intent for a strategical acquisition and the fact that we built a high-quality product that our customers loved.
So I feel confident to say that my early decision to place a high priority on product quality was the right one.
Eliminate Uncontrolled Churn#
It is a disaster for subscription-based SaaS to have uncontrolled churn. So from the very first customer, my goal was to learn as much as possible about their needs and to retain them for as long as possible. That of course came at a cost of sacrificing faster growth.
Despite this, I believe the decision was the right one since it allowed me to better understand our ideal customer profile and their key pain points which in turn led to them sticking with us for longer.
Hire at the Right Time#
There was a slight feeling I was still too early when I hired my first software development consultant. However, I'm glad I did, because that led to the process of delegating other functions as well, which improved our product offering, as well as forced me to level-up multiple business processes.
Bootstrapping DevSkills has been an incredible opportunity to create a business that solved a real problem. Throughout the process, I learned a great deal and feel ready to take on more.
The next venture I will be undertaking is leading the developer hiring domain at Alva, effectively continuing what I started with DevSkills. It'll be exciting to see where it takes us.