From internal tool to $50k MRR

Stas Kulesh started an agency, built an internal tool for it, then turned that tool into a $600k ARR SaaS product. And he aims to do the same with other internal tools.

I caught up with him to understand his approach. We talked about diversification, growth, and long-term customer relationships. 👇

Diversified products

James: You started with an agency.

Stas: Yes, Sliday is the agency. Our main product, Karma Bot, is a Slack bot that started as an internal tool. It helps people voice their words of appreciation toward teammates while providing performance reports for managers.

James: How’s it doing?

Stas: Currently, Karma Bot has over 15,000 weekly users and generates around $50K MRR from approximately 350 paying companies.

James: You said "main" product.

Stas: Yep, we're also building:

• timebot.chat - A Slack app that allows users to track time within Slack. We built it for ourselves, then made it available to others. It’s making a humble $600 MRR.

• palette.site - A browser extension that generates comprehensive color palettes from any website using algorithms like median cut, material design, and color cube. No AI involved; it's all done locally. It has $400 MRR and lifetime deals bring in around $1k/mo.

• spellcheckfigma.com - A Figma plugin that enables users to check for spelling and grammar errors in their designs. We just started offering $99 lifetime licenses.

James: Why so many products?

Stas: Having multiple products helps us build a diversified business — they provide more stability in life.

James: Any marketing benefits?

Stas: Yes, we cross-promote our offerings.

James: Is there a thread that connects them all?

Stas: Each one targets a distinct need but ties back to our mission of improving teamwork. It's about providing value and creating entry points for customers.

For example, timebot.chat is actually a fork of Karma with the rewards carefully removed. We realized that Karma itself didn't need a time-tracking module in it, so we made an app out of that feature. The simpler, the better.

James: Do you ever wonder if they're a distraction from the product that matters most?

Stas: We're not the most focused tech company out there. Balancing resources across products is tough. But we prioritize our main product, and we enjoy exploring new ideas.

It's about staying focused on our core mission while being open to opportunities.

James: And how do you do that?

Stas: The key is having a strategy and making deliberate choices.

Agency → internal product → SaaS

James: Why did you build an internal product for your agency in the first place?

Stas: I'm cheap. If a dead-simple prototype can assist with the actual job at hand, I will cancel my utility SaaS subscription and switch to the homemade solution.

James: Does this save you a lot?

Stas: timebot.chat doesn't generate a lot of money, but it saves us approximately $6k per year because we aren't paying for Freshbooks or similar services.

James: Should others start with an agency like you did, then use it to build SaaS products?

Stas: Gosh, that's a really difficult question. An agency can be a great way to bootstrap into products, but transitioning from services to products is challenging.

James: How so?

Stas: It's really difficult to dedicate time and resources to product development, ensure a clear value proposition and target market, and build something that can stand alone.

I have a tag on my Trello kanban board: 'Indie hacking!' All new, potentially interesting ideas that become little prototype-making projects get this tag. There is a graveyard of cards marked 'Indiehacking!'

James: How big is that graveyard?

Stas: Only ~5 products out of 100+ survived. Obviously, the stable agency business allows us to fail more, fail better, and learn from that.

James: What have you learned?

Stas:

• Good timing is crucial: We launched our spell checking tool for Figma two weeks before Figma introduced their own built-in spell check.

• Keep it simple. Complex or overly niche products often struggle to gain traction. Since 2020, one of our main tasks at Karma has been to simplify. It was too techy, too geeky, and too inapplicable.

• Iterate quickly: We are always prepared to pivot or adjust based on user feedback and market responses. It's quite exciting to keep up with the dynamic, AI-powered tech scene these days. Refreshing.

• Passion isn't enough: While it's important to build something you're passionate about, this doesn't guarantee success. Market fit is essential. Many of my passion projects failed because I was distracted by the allure of the idea and neglected what others actually needed.

James: So what’s the process?

Stas: In short, we determine if the team can turn an internal tool into a SaaS product. This means shifting from solving our own problems to solving customers' problems on a broad scale.

We need to validate the need, make the tool user-friendly and scalable, and continuously iterate based on feedback.

James: How do you validate demand for an internal tool?

Stas: We operate under the presumption that the needs of our tech company and our team are not unique, and that the market is still large enough for everyone. It may not be the wisest approach.

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Growing to $600k ARR

James: Let’s dive into Karma. How did you grow it to $600k ARR?

Stas: It started as an internal tool: 10 users, 1 team.

When we decided that it had a market, we launched on ProductHunt. That brought us to 100 users and 10 teams.

James: Solid launch.

Stas: Then we got an early foothold on the Slack store with no marketing. That brought us to 120 teams.

After that, remote work was trending and I attended YC Startup School. That led to Slack approaching us and bringing in 200 corporate teams.

James: Not bad. We’ll circle back on that.

Stas: From there, we integrated with TangoCards to provide actual gift cards and establish bonus programs. And we began discussing Karma online through indie marketing.

We also partnered with Microsoft Teams, securing a spot on their store and bringing in 300 more teams.

James: What does indie marketing entail?

Stas: Just promoting things through my personal brand: blog, X, IH and PH communities, Reddit, and HN posts.

We've had several unsuccessful attempts to delegate marketing to third-party agents; it never worked for us. So instead, we've relied on growing markets (getting in early on Slack/Teams helped), plus honest, open, and public storytelling.

James: Any other contributing factors to this growth?

Stas: The Covid era significantly grew the remote work concept, and Karma was the ideal tool for this: 'Remote ≠ Isolated' became our motto.

James: Have you been able to maintain Covid-era growth?

Stas: Post-pandemic, things have slowed down. We started to realize the limitations of chat platforms and commenced the development of Karma for the web. About 350 teams use Karma nowadays.

Securing partnerships

James: How did you secure partnerships with Slack and Microsoft?

Stas: Honestly, partnering with Slack and Teams was relatively easy – both platforms benefit from team-focused apps like Karma. We just built native integrations, pitched a clear value proposition, and nurtured the relationships.

James: Worked out.

Stas: It was a game-changer, giving us access to a huge user base. Plus the credibility.

The Microsoft partnership, in particular, has been key in reaching enterprise customers; after all, Microsoft is the king of distribution.

First mover advantage

Stas: Being early helped a lot too. We were among the earliest developers on both the Slack app marketplace and the Microsoft Teams bot store.

James: How do you make sure you’re a first mover?

Stas: We constantly talk to customers. And I, personally, try to engage in various tech communities and monitor industry trends.

When an opportunity aligns with our vision, we dive in and experiment.

Targeting decision makers

James: You mentioned talking to customers.

Stas: It’s extremely important. Some of our biggest learnings came from our conversations with customers.

James: Like what?

Stas: Our biggest one was realizing the true value of Karma lies in providing performance reports for managers and team leaders, not just making work more engaging for employees.

James: Why was that so important?

Stas: We realized that building a SaaS product requires focusing on decision makers with purchasing power, not just end users. Although employees use the product daily, CEOs, executives, and managers decide on adoption and payment.

James: So you shifted your targeting.

Stas: Now, we aim our product and marketing at team leaders' needs, like performance and culture improvement.

James: How?

Stas: We emphasize business impact, use executive language, provide social proof, and offer top-level support.

Aligning with our target buyers' priorities has made our business sustainable and profitable. While we value end-user experience, prioritizing decision makers is crucial for success.

Ditching freemium

James: Did you use freemium as an acquisition method?

Stas: Originally, users could access basic features for free, but we removed the free tier.

James: Why?

Stas: Free users were draining support resources without contributing to revenue. It was hard but necessary.

James: Did it help?

Stas: It resulted in a 30% increase in revenue and a significant drop in support needs.

James: Any downsides?

Stas: We’re getting 5x fewer installations now. After all, people appreciate complimentary services.

That is resulting in fewer sales leads to chase and a decreasing MRR.

James: Was it the right choice?

Stas: Only time will tell. If the MRR doesn't rebound, we might reconsider introducing a modified version of the free tier, possibly with a 'no support' clause.

It's about balancing accessibility and sustainability.

Lifetime deals

James: You mentioned that you did lifetime deals for a couple of your smaller products. Why did you go that route?

Stas: It seems that everyone's doing it these days. I got inspired by DHH and https://once.com.

James: How did you leverage them?

Stas: It was rather straightforward — we reached out to old members and reactivated them.

Sustainability via relationships

James: You've mentioned sustainability a couple of times.

Stas: Not every business needs to scale rapidly or aim for an IPO. There's value in building a stable, profitable business that supports your goals and allows you to make a positive impact, even if it doesn't follow the typical Silicon Valley growth trajectory.

That’s why I believe in building a sustainable business that provides value to customers and allows for a healthy work-life balance.

James: How do you build a sustainable business?

Stas: I don't want to sound like Michael Scott — our customers are not family — but we do play the long game.

A business relationship with clients is still a relationship. They take time to establish and maintain. Building a sustainable business means creating long-term customer value.

James: How do you do that?

Stas: Focus on product quality, customer support, and continuous, relentless iteration.

Be disciplined and lean with finances, pricing, and team culture (go Karma!).

Have a long-term vision and make strategic decisions.

Treat people as people, not as dead numbers or faceless users. Stay approachable.

And don't be afraid to think big.

James: Where can people find you?

Stas: I'm on X. Or check out Karma, Time, or Site Palette.

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