"Selling my business was a mistake.”

Micha Mazaheri launched a SaaS-style Mac app into an uncontested market way back in 2013. Competitors eventually came out of the woodwork, but he still managed to grow it to $50k/mo with almost no marketing.

Then he burned out and sold his company — which he regrets.

I caught up with him to hear about his journey and find out what he learned along the way. 👇

Taking a dip in a blue ocean

James: How did your indie hacking journey begin?

Micha: I started Paw, a Mac application that helps developers test APIs (REST & GraphQL) in 2013. Back then, Postman, Insomnia, and other similar tools we see today didn’t exist.

It was a blue ocean. Paw was actually the first of all these apps.

James: Blue oceans, wow. Does such a thing still exist?

Micha: Of course! A lot of business opportunities that existed 10 years ago have already been seized. But there are lots of new ones — lots of new “blue oceans”.

As they say “the best time to plant a tree was 30 years ago, and the second best time is today”.

James: How do you find them?

Micha: You have to start with a problem. What’s a clear problem you’re having or witnessing others have? Then, check if there are any good solutions for this problem.

Maybe there are some, but they aren't easy, convenient or affordable? That's okay too.

The biggest risk is in creating solutions for problems that don’t really exist.

James: What opportunities are you currently seeing?

Micha: There’s been a shift in VC investments, which I think is very much justified and good. Software cannot solve all the problems the world faces, so there are new market opportunities in fields such as biotechnologies, education, energy, and, of course, AI.

That doesn’t mean that indie projects will have fewer opportunities. Software will probably remain the best and easiest way to create and grow a company alone (especially when helped by AI). But we should keep in mind that our potential customers may be in new fields.

Finding organic growth

James: What happened after launching in that sweet, sweet blue ocean?

Micha: A year after launching and working on it part-time, Paw started taking off quickly. I didn’t do much marketing. Word of mouth and organic growth was working. It soon was making $10K monthly, but that wasn’t recurring revenue.

James: Why not?

Micha: It was made of net new sales (old school software licenses).Originally, Paw was priced at $9.99 but quickly was increased to $19.99 and then $29.99. Each major release came with a price hike, however, upgrading was always free.

James: How did you make organic growth and word of mouth work?

Micha: This is both an admission of failure and a bit of a brag: I really didn’t do much besides focusing on building a good quality product.

I believe that people will naturally speak about your product to colleagues and friends if they really like it. We all do it: We’re excited to share the cool new tools we've found with developer friends, and we also rant about the products we hate. Word of mouth spreads quickly.

James: What goes into a good product, as it relates to organic growth?

Micha: What I would always try to do is:

• Have an absolutely stunning landing page. You must look extremely professional.

• Website and other marketing materials should be straight to the point. I think that’s true for all businesses, but even more so for indie projects. Make sure a visitor immediately knows what your product is and why it’s better. The enterprisey website with a “Solutions” menu and “Contact sales” buttons is so irritating! Some projects such as “StageTimer.io” are great at this, because their name describes the product.

• Create a brand. Don’t be just a product, be a brand, be a company. Have a beautiful logo.

• Have at least a free trial (maybe no free plan, but at least free trial). I think, here, I disagree with Pieter Levels, who recently tweeted to “nuke your free plan”. As a growing business, you have to trade revenue for growth. Once you’re big (Levels big), you can afford to “nuke your free plan” to drive even more revenue.

• And of course, have “Share on X” buttons, collect emails, and send occasional (rare but newsworthy) newsletters.

James: Did you use any non-organic marketing tactics that worked along the way?

Micha: I did use one. I had free giveaways in exchange for retweets. One day a year, people would get a free license if they retweet. That worked really well and I got thousands of retweets. Of course, no revenue here, but that helped spread the word really fast.

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Entering the B2B space

James: What happened next?

Micha: After revenue grew a bit more, I hired a team of 3 developers, while paying myself minimum wage.

James: Why minimum wage?

Micha: Why not! You need to start scrappy, do more with less!

I wanted to put the revenue into hiring people. And as the founder, it was important to sacrifice my own comfort and take risks.

Plus, as a company owner in Europe, paying yourself a salary is very expensive tax wise, so it’s better to optimize for later dividend payments.

James: What did you do with the new hires?

Micha: We worked on Paw for Teams: a syncing service for Paw allowing developers to sync work across their team. It was no longer a personal tool with a one-time fee license, but instead, a subscription service with room for revenue expansion inside an account.

James: How did you validate demand for this new feature/tier?

Micha: It came as a rather natural progression. As an API client, developers would use Paw on a daily basis and many users were requesting a way to synchronize data between users. We had users put their Paw documents in Dropbox folders to share them across the organizations, so users were eager to have a more reliable and native solution.

We went for a very stable, and quite frankly overly complex solution, that allows users to sync data, create branches, commits, keep full history, like in Git. That was a massive engineering challenge on which we worked for months.

James: Did it pay off??

Micha: It initially took time to take off, adoption was initially low, probably due to early bugs. But in the long term, it was an enormous win. Switching from licenses (B2C) to recurring subscription revenue paid by companies (B2B) was a game changer.

Burning out and quitting

James: So the company is doing really well at this point.

Micha: After 4 years, it grew to around $50K MRR. I got burnt out and decided to move on.

James: What made you burn out?

Micha: Looking back and knowing a bit more about entrepreneurship today, I think the question isn’t, “What makes you burn out?” but rather, “What can you actively do to avoid burning out?”

It’s just so easy to get burnt out as a founder.

James: For sure.

Micha: As indie founders, I think we have it a bit better than others. Being bootstrapped, we don’t have investors or a board to deal with. And we spend less (as we didn’t raise capital), so it’s easier to balance revenue and sales.

I’m not saying it’s easy, but the pressure on the shoulders of venture-funded founders is much greater.

James: Other than remaining indie, how can we avoid burnout?

Micha: A few things I think we can all do are:

1. If you’re on the verge of quitting, just take a full month off. What can be worse than quitting? Better to abandon the ship for a month than forever. And a month away from work can give you a lot of perspective.

2. Spend each weekend away from work. Personally, I keep my weekends full of activities, hobbies, and meeting friends. Best to disconnect from work.

3. Hire contractors for the tasks that are relatively easy to delegate. Customer support really comes to mind. And having a virtual assistant can also be greatly helpful.

Acquisitions and regrets

James: So how did you move on from Paw?

Micha: I stopped working with a team and accepted that my business would probably die out with time. But it kept growing around +20% year over year, even though I was working on it less than a couple of days per month.

That proved to me that there's a huge "inertia" component in business development: When you create something new, you'll reap the benefits later, and for a long time. On the contrary, when you stop shipping features, stop innovating, release bugs, etc., the revenue loss (churn and reduction in growth) may show a lot later.

James: So you coasted.

Micha: Yes. Then, a strategic acquirer reached out at the right time and after months of legal paperwork drafting, we signed the deal.

James: Can you share the acquisition price?

Micha: Unfortunately, I'm not allowed to share the price. I can say however, that it was a rather typical SaaS acquisition.

James: Are you glad you did it?

Micha: Looking back, I think selling was a mistake.

Unfortunately, the acquiring company seems to be in a challenging situation. It laid off 82% of its staff last year according to TechCrunch. And the founding CEO was replaced by the newly hired CFO, which made me think that the board wanted to get the company ready for a “flash sale” — a sale well below the last fundraising valuation, just so the investors can get their cash back.

James: That'd be tough to watch.

Micha: Today, my opinion is that as a bootstrapped founder, you have little to win in selling. As an indie, you probably own 100% of your company, and a SaaS company is likely to have 50-80% profitability. You basically own a money printing machine. Don’t sell it!

Work on something else or take a sabbatical while the business is on autopilot.

James: And if someone does sell, any tips?

Micha: A revenue multiplier less than 8x in cash makes no sense if your SaaS is growing, even a little bit. Think about the future cash flow you'll get. I like the DCF (discounted cash flow) valuation method.

James: Why?

Micha: It’s rather ironic. I really am allergic to bureaucracy and old school business mindsets, but in this environment of skyrocketing valuations, it’s sometimes good to go back to the basics.

In 2022’s Silicon Valley, you’d go to Sand Hill Road and approach VCs with a pitch deck only, claiming that you’ll capture billions in future annual recurring revenue for a SaaS that doesn’t yet exist. You’d raise a pre-seed round at a $10 million valuation with no product and no revenue. That’s nuts.

The old school way to value a business is discounted cash flow (DCF): You estimate how much profit the business will make in the future (from now to infinity) and discount it based on interest rates, which makes a lot of sense. You buy a business for the money it will likely give you in the future, minus what your money would have given you if you lent it to governments or central banks.

Now, think about this as an indie entrepreneur. If you run your own successful business that generates tons of profits each year, why would you sell it for anything less than the money you’ll get for it later?

Finished software

James: You mentioned that your product was able to go on autopilot. How did you make that possible?

Micha: I think SaaS is an excellent system for revenue generation and value creation, but it has led to unsustainable extremes in the form of constant updates.

That’s why I like the idea of a “finished software” (as discussed by DHH).

James: Tell me more.

Micha: It’s a point against constant iteration and change, the need to always ship updates. Before SaaS, software was sold as a one-time purchase, historically on a CD (or floppy disk). Customers would expect the purchased software to be stable and wouldn’t expect an update until perhaps a year later, for which they would have to pay for the upgrade.

Software companies would make money for each upgrade, as opposed to SaaS where customers pay each month/year and expect constant updates at no additional cost.

SaaS is much better for companies, with predictable recurring income. It’s also arguably better for customers, as they get bug fixes as soon as they are ready (no need to ship floppies!).

But it has created a strange expectation of constant monthly or weekly, if not daily, updates.

James: And that isn't necessary?

Micha: As founders and software designers, we are now conditioned to think that we must ship updates; otherwise, our customers will think the company is idle, neglected, and perhaps even dying.

But as solo developers, or small teams, I think we should be even more mindful of this tendency. We should consider that the current state of our products may already be enough, and stop shipping updates.

Product intuition > code

James: What's something you've learned along the way that indie hackers need to hear?

Micha: As an indie hacker, I think product intuition is more important than coding skills.

James: How so?

Micha: An amazing UX and product-market fit with average code quality will have much greater chances of success than a top quality codebase with average UX.

James: Does that apply to MVPs or should UX play a role later?

Micha: This might be an unpopular opinion, but UX should come first and should be included in an MVP.

If your product is clunky, if the learning curve is too steep for users, if it looks like a prototype, why would users stick with it? Even if you fix it later, those who have tried the product when it was clunky will have a bias against it.

The focus should be on bringing a very polished, professional product to market. Being indie isn't something to brag about with your customers. Don’t lie, but show yourself as a professional, reliable, established company.

James: Does that apply to every type of product?

Micha: No, like everything else, UX is relative to your product. Paw was a productivity tool, I was selling convenience and time for busy developers. Having a great UX was key. People paid to save time.

James: So you took your time with your MVP?

Micha: Yeah, I ignored the "ship your MVP as fast as you can" advice. I took pride in building a product that I believed to be "finished" and beautiful, and I think it has played a big role in two ways:

1. It was a huge motivational factor. I wasn't building for others or for money, but for myself. I was greatly inspired by the Apple philosophy of building in secret and releasing only when it's ready.

2. It created a reputation of quality for the software and the company.

The obvious flip side is that I didn't get to experiment much and probably wasted a lot of time on building features that weren't important enough.

Today, I would rather find a good balance. Build with pride and love, but be sharper on what makes sense business wise.

James: Can "product intuition" be learned?

Micha: Yeah, I think I gained product intuition and product design skills by building a lot.

James: How?

Micha: It’s probably a matter of balance between three things:

• Listen to your customers and understand their needs. Henry Ford famously said “If I asked people what they wanted they would have said a faster horse”. So listen, but what matters is what you do with their feedback; not the “raw” information you get from people.

• Be data-driven. Without analytics, you can’t drive your product and business.

• Be an artist. Everyone can listen to customers and read data, what you do with it, is your signature. That’s why I like to think of building products as an art, something you do that makes you proud. I want to believe that this is perceived by the users when they interact with the product.

Focus on your weaknesses

James: Any parting advice?

Micha: Do more of what you don’t know about — work on your weaknesses more than your strengths.

If you’re an engineer, spend less time on coding; more time thinking about your product vision, listening to your customers, and polishing your marketing materials.

It’s cliché, but most developers will spend days refactoring code, thinking it’s top priority to do so, while the product may be unusable due to poor UX.

James: Where can people find you?

Micha: You can subscribe to my series on IH or find me on Twitter.