Riding Out Failures to Bootstrap a $220k/mo SaaS Company

Hello! What's your background, and what are you working on?

My name is Peter. I’m from Slovakia and am the founder and CEO of Mangools. I started programming when I was about 12 years old, and was immediately captivated by the fact that, with very little money, I was able to create something that had the potential to attract the attention of thousands of people all around the world.

I always wanted to have my own online product, ideally a SaaS product, backed by a small team of highly talented people. So I started to develop various “projects”, and began creating fully functional prototypes by myself. They were not always the most beautiful or best coded apps, but they worked and I was able to launch them relatively quickly. Most importantly, I was able to do this with no external investments and at no cost to myself, other than time. To be fair, it was a lot of my time, and “missed opportunity cost” is an expense that shouldn’t be overlooked. But you get the idea.

Regardless of cost efficiency, I was launching one failed product after another. Because none of my products were turning a profit, I had to do freelance work for clients on the side in order to keep the lights on. I’ve never been a huge fan of trading my time for money to work on other people's project, I much prefer to profit off of something I’ve built myself.

Just as I was beginning to think I would never see homegrown success, I created KWFinder, a simple, easy to use keyword research tool. The first version was ready within a month, and I published it on HackerNews and Reddit, just like many other projects before it. Except this time, the feedback was surprisingly positive. With that, the journey began!

What motivated you to get started with Mangools?

Like so many indie hackers, I built a product to solve a problem that I myself was working through at the time. Quite simply, I needed a tool for keyword research so that I could find popular niches with low competition. There were already multiple tools at that time, but unfortunately (or luckily), I didn’t like any of them. They were either ugly, unusable, or not mobile friendly.

Not finding anything that suited my needs, I decided to create my own web-based, simple keyword research tool.

What went into building the initial product?

It was really simple. I created the first version within one month based on an ugly spaghetti code, though it was admittedly pretty buggy. Regardless, people liked it. What’s more, some of them said they would be willing to pay for it! So I got to work, and two months later I launched a much improved and more stable version.

Over the the next 18 months, my humble project reached $5,000 in monthly recurring revenue, with very little maintenance needed.

Certain events in my personal life led me to make some big changes in my professional life. I decided that I was no longer going to work on projects I didn’t enjoy just to get a paycheck, I would only work on things I was truly interested in and passionate about. Maybe a little naive, but I felt good about it. I cut my contracting work with clients immediately (sorry guys!), and I started to work solely on KWFinder. Soon after that, Frantisek and Martin came onboard.

How have you attracted users and grown Mangools?

A good product sells itself, and I knew that I had a good product. All it really needed to get off the ground was a catalyst — something to get it into the hands of a few users who could start to spread the word. And that’s precisely what that first wave of self-promotion on HackerNews (ShowHN) and Reddit did. After that, the popularity of the tool grew organically. I received a lot of positive feedback, and users wrote reviews and recommended it on forums and Q&A sites.

To boost growth even more, I created an affiliate program shortly after launch. Having some experience as an affiliate, I designed it to be super easy to join and start making money. There is no initial approval process or complicated sign-up form. Instead, we developed an internal process that helps us identify any harmful behavior by bad actors so that we can quickly and effectively eliminate it. To this day, the affiliate program is our best marketing channel, generating about 10% of total revenue.

I really didn’t do any marketing during the first two years. The tool grew more or less organically, and went from $5000 within the first 18 months to $25,000 in MRR at the two year mark.

Maros, who is now our head of marketing, joined us in August 2016. We kicked off a bunch of different marketing strategies and tested multiple marketing channels, the most important one being our content marketing. We produce regular blog posts and specialized content units, such as an SEO guide. Even though they are not bringing any significant traffic, our content channel helps us create relationships and build trust with our audience.

What's your business model, and how have you grown your revenue?

Our business model is based on a freemium pricing strategy. I think that “free” is the best marketing technique ever devised. Sure, it attracts the “forever-free” users, but it also attracts a lot of attention and word-of-mouth recommendations that end up turning into revenue.

Payments are collected through PayPal and Braintree. Our company is based in Slovakia, so Stripe is not available for us.

We eventually reached a point where we wanted to drive even growth a little more aggressively. We wanted to be strategic and intentional about it, and wanted to utilize our existing audience as a resource. More importantly, we wanted to diversify our revenue stream. We considered KWFinder to be too specialized and therefore too vulnerable to potential market fluctuations.

Taking these things into consideration, we decided to build helpful tools for our customers that they could use for their day-to-day SEO tasks. Over the next two years, we launched SERPChecker, SERPWatcher and LinkMiner. Even though these tools were branded and run separately, they functioned synergistically with KWFinder and with each other.

Our business model is a departure from that of Moz or Ahrefs, the biggest players in the SEO tools industry. We do not want to create one robust, all-in-one SEO tool. We want to have separate, simple, and highly focused tools that are related, but ultimately autonomous. In order to achieve this and maintain some order, we created Mangools, the brand which covers all of our tools and provides a central point for billing and support.

This approach has its pros and cons. While it’s harder to rank separately for each tool in Google, it’s easier to communicate the purpose and benefits of each tool since they are distinct. Separate tools also bring simplicity and ease of use — qualities we held paramount when designing them.

Pro-tip: Be careful when making changes to your pricing. As mentioned in various case studies, doubling the price does not always result in double the revenue.

What are your goals for the future?

The goals have remained the same since day one: making our business more robust, and making our tools better, while maintaining their simplicity and ease of use. We’re currently planning out how to continue to grow through acquisitions. We are looking for small online SaaS businesses, which would (in the best case scenario) work synergistically with our current toolset.

To give our customers even more value, we are adding SiteProfiler to our portfolio of SEO tools.

What are the biggest challenges you've faced and obstacles you've overcome? If you had to start over, what would you do differently?

The only thing I would probably change is that I would have stated to work fully on this project sooner. I lost almost two years by continuing to take on contracts that I didn’t enjoy instead of focusing full-time on this project. It was profitable from the beginning, and I easily could have made the switch just a few months in.

Have you found anything particularly helpful or advantageous?

My ability to do everything is both my strength and my weakness. Though I was able to launch a product very fast, by myself, I was not able to scale it out because I was unable to delegate any work to free up the time I needed to push growth.

That changed when Frantisek, our designer, and Martin, our developer, joined me in March 2016 to help create a new version of KWFinder. The impact was huge. Since then, a few other people have joined the team and Mangools continues to grow at a steady rate.

What's your advice for indie hackers who are just starting out?

Each person is unique and every success story requires a unique recipe. That is why a simple replication of someone/something else rarely works. Stop reading blogs, listening to podcasts, analyzing everything and waiting for the next billion dollar idea. You are just losing time. All the knowledge you’re storing up for that next great idea is worthless if you never put yourself in a position to apply it. Without action, it means nothing.

Just start. You have to try. Do anything — try to improve something or create a tool you really need for yourself. You will learn through the process. The new ideas will come. If you fail, try again. And fail fast. Because you will fail, at least at first. :)

I’m a believer in the brute force approach. After all, it worked for me.

Where can we go to learn more?

If you want to learn more about us or SEO, check out our Mangools blog.