#12 Interviews - Joran Hofman
From Sports Management to SaaS Founder
I have been following Joran for a while as he has been airing podcast episodes with SaaS people mainly related to b2b SaaS growth.
And also, he is very active on LinkedIn.
On our interview, we talked about;
How he transitioned his career from sports management to SaaS founder,
His startup experiences,
His blog about SaaS tools,
How did he start building Reditus,
The importance of organic channels and also podcasting for his company,
His opinions about VC money,
His advice to bootstrappers.
Enjoy!!
Post of the week:
Jason Lemkin from SaaSTR shared that there is a 3rd way instead of bootstrapping or VC-backed. Which is Just Raise One Round.
Certainly, my academic background was in sports management in the Netherlands, essentially commercial economics with a focus on sports business. During my bachelor's program, I had the opportunity to do two sports-related internships that played a pivotal role in shaping my career trajectory.
The first internship took me to Australia, where I worked for a company organizing sports events in Sydney during lunch breaks. It was during this experience that I was introduced to the world of sales. A mentor challenged me to sell one of our competitions to a company, marking my initial exposure to real sales.
For my second internship, I traveled to Indianapolis, USA, where I continued working in the sports industry. However, upon returning to the Netherlands, I faced the challenge of not having a sports network. Despite applying to renowned brands like Nike and Shimano, I encountered fierce competition and didn't secure a position due to not having interned with them.
Consequently, without a network in sports and facing hurdles in landing a role in the industry, I made the decision to shift towards a more conventional corporate job. This shift marked a significant transition in my career, leading me into the realm of corporate sales.
And how about entering the startup space?
Certainly, upon returning to the Netherlands, I initially took on a corporate job that involved cold acquisition, requiring me to make around 60 phone calls per day. The corporate environment was structured with predefined roles, fixed salaries, and clear boundaries. I spent about four to five years in this corporate setting.
Around the two and a half year mark, despite consistently meeting targets, I encountered challenges in transitioning to the next role due to not meeting all the specified requirements. This experience made me question the corporate structure and whether it aligned with my aspirations. Eventually, when I achieved the desired role, I found myself questioning if this was truly fulfilling.
It was at this juncture that I decided to transition into the startup world, seeking the dynamic and entrepreneurial environment that aligns more with my ambitions. I joined two startups in the Netherlands to re-immerse myself in the hustle and innovation that startups offer.
Interestingly, the leap into the SaaS (Software as a Service) realm happened somewhat unexpectedly. Utilizing the LinkedIn apply button, I applied to a job and found myself working in Helsinki at LeadFeeder. This marked my entry into the SaaS domain, and the journey unfolded in a way that, while not entirely based on luck, presented unexpected opportunities.
After your experience at Leadfeeder, did you directly launch Reditus, or did you have any entrepreneurial ventures before that?
No, Reditus is my first real company. However, in my earlier days, while working at a corporate job, I ventured into entrepreneurship by starting a dropshipping pie business. In this business, I collaborated with a bakery to produce the pies, and they were shipped accordingly. It served as my initial foray into entrepreneurship.
However, Reditus is the first significant venture where I fully embraced the entrepreneurial path. I commenced its development while still working at Leadfeeder. This strategic approach allowed me to bootstrap the company by channelling my salary from Leadfeeder into Reditus. This financial structure enabled me to hire a developer and build a product that I believed had the potential to be sold.
How long did the period from starting Reditus while working at Leadfeeder to its actual launch take?
The journey took longer than I initially anticipated. I would say it spanned around one and a half years. Initially, my plan was to quickly build a Minimum Viable Product (MVP) and release it. However, during the development process, as I reflected on my experiences as a SaaS affiliate for numerous SaaS companies (about 80) before Reditus, I realized that the initial MVP didn't align with what I truly envisioned.
Upon discussing it with the developer, the decision was made to start small and build incrementally. However, on the launch day, I recognized that the current version was not aligned with my vision. This realization led to the understanding that if I wanted to achieve my envisioned product, I would need to rebuild the entire thing while having users already on the platform.
You mentioned being an affiliate for around 80 companies. How did you become an affiliate for such a large number of companies? Did you have a blog or another platform?
Yes, I had a blog. While working in sales and customer success at LeadFeeder, I frequently encountered the question of which tools to use. To address this, I created a website called saleslovesmarketing.co. The concept was simple: list all the best sales and marketing tools. The website featured a total of 250 tools and attracted approximately 25,000 organic visitors per month.
To monetize the platform, I applied to various affiliate programs, signing up for as many as possible. However, managing multiple programs became challenging. Logging into separate portals for each program made it difficult to track earnings and performance. Additionally, some programs would cease without notification. Faced with these issues, I realized the need for a better solution, leading to the development of Reditus.
It took almost two years to launch the product, and you mentioned an AppSumo deal as part of your strategy. How did that contribute to the growth, and what challenges did you face with the one-time fee model?
Yes, it did take almost two years to launch the product, and during that time, we focused on the MVP and began selling. We started with the SaaS side of the marketplace, convincing SaaS companies to set up an affiliate program. To attract them, we ran an AppSumo deal, offering a lifetime deal. While I have mixed feelings about this approach, it did bring in users and revenue.
The AppSumo users, being willing to pay but not the full price, presented challenges. Their commitment level was lower as they opted for a one-time fee, making them less engaged clients. However, the deal helped us gain revenue, users, and live affiliate programs in the marketplace.
After quitting my job in February 2022, we started selling normal packages. This revealed core issues in the product, with buttons not working correctly due to mixed back-end and front-end code. To address this, we decided to undertake a significant core update, bringing in a co-founder committed to building a solid product. Over six months, from summer to June of the following year, we rebuilt the core. Finally, we launched our product on Product Hunt, marking a significant milestone in reaching the point where I wanted to be after a long journey.
You mentioned having paid users outside of the AppSumo deal. Can you provide some insights into your current customer base and the recurring revenue you have built over the years?
Absolutely. The AppSumo deal took place around three years ago, and since then, we have successfully built a customer base with recurring revenue. We currently have paid users who contribute to our revenue stream. The focus has shifted beyond the initial AppSumo users, and we continue to grow and engage with a more diverse customer base.
Starting as a bootstrap, did you initially rely on personal savings? It sounds like you managed to leverage stock options from a previous company. Could you share more about how you financed the early stages of your startup journey?
In the initial stages of bootstrapping, I did rely on personal savings to support the development of Reditus. Additionally, I had stock options from a previous company, which had been acquired. These stock options became vested, providing additional financial support for the startup. While the decision to leave the company may have affected the final amount, it played a crucial role in funding the early phases of Reditus.
Bootstrapping offers the advantage of independence, allowing us to set our own pace without external pressure to grow rapidly. However, the struggle to meet financial needs and ensure profitability each month can be challenging. While I appreciate the freedom of bootstrapping, I also see potential downsides.
I am open to exploring other funding options, especially considering my growing network. A community round, involving smaller investments from individuals in my network, could provide not only financial support but also smart money—investors actively engaged in our journey. This approach aligns with the idea of staying capital-efficient, focusing on profitability, and leveraging a supportive community rather than following the traditional VC route.
So it's not just, I guess, purely money, but it's more so smart money where people are, a lot more people are invested in. Like I had, for example, Nathan Latka and Andrew Gazdecki, all those guys on the podcast and they definitely say, of course, bootstrapping is the way to go.
But they also mention that, they kind of say like bootstrapping is also where you get a bit of funding at the beginning to go through that journey. And then you go bootstrapped further. Like one thought I have I think should we just raise a little bit money now in a community round where it's not I guess like fully vc, and then go further basically with the way we are going like really capital efficient focus on profitability and then keep growing.
So, while I value bootstrapping, I'm not entirely against the idea of seeking some funding, albeit in a manner that aligns with our principles and goals.
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And also, Joran, regarding your growing stories right now, I'm just wondering which funnels you focus on. I mean, SEO pay that because on your side right now, the money is so valuable, right?
I mean, you need to spend your money so wisely and which channels you focus on regarding to acquire some leads, regarding to get some customers on your side, which one works well.
At the moment, we purely have organic channels running and purely inbound. I do the podcast, and we have a lot of content. Also, we're helping SaaS companies set up an affiliate program, right? They link back to us, and we start getting some people asking, "Hey, what is this? I'm going to check it out as well." That's working.
I think what's really working nicely is that people start recommending us as well. We're building up our own affiliate program. At the moment, it's purely inbound. It doesn't mean that I'm against paid ads or running outbound campaigns, but I don't think we were ready for it.
We're redoing our user onboarding, redesigning our website, and relaunching user onboarding emails. We will probably start running paid ads and doing cold outreach, but that would be in a month and a half when we have the foundation set. I want to have it semi-automated so that once we turn on that money tab, it's not going to put more pressure on me if that makes sense.
And you mainly publish contents in English, right? Not in other languages.
No, purely English, only English.
The reason why I ask this is because, Joran, I talked to another bootstrapper guy, and he was also focusing on creating content in his own local language, Polish. There might be a huge competition in English, but in your own local language, the competition might be lower.
He was getting leads from his local language content, and the MRR generated is the same from both languages. Are you planning to launch some contents in other languages as well?
We're not, and the reason is that I'm in the Netherlands, and a lot of people here speak good English. We're focusing on B2B SaaS companies who want to go global and don't want to purely focus on the Netherlands. My assumption is that they do things in English as well, and they want to grow outside of the Netherlands, and that's where we help them. That's why we don't do it in Dutch, besides my time, because it would be too much work.
And right now, how many employees do you have at the moment?
For the content and development parts, we have three people working full time—myself, a back-end developer, and a front-end developer. Additionally, we hire an agency for content creation, including strategy and writing. For the podcast, I also hire someone to manage it. So, it's three full-time employees and a few part-timers, including advisors for competitor relations and affiliate recruitment.
And at the moment, are you still using your savings, or are you ramen profitable?
We're not profitable, so I still use my savings. However, we've started selling services alongside our product. The services income, combined with product revenue, sustains us for the next two months. From early January, we plan to launch a productized version of our services with a paid beta offering. If successful, this could provide additional revenue to sustain us for another three months. It's a strategic approach to ensure the product pays for itself as my savings are running out.
So I'm just wondering about the benefits of podcasting on your side. How do you feel about podcasting? Is it useful for your business or just for your friendship or learning something new? How does it go on your end?
Yeah, I think we definitely get benefits from it. I started out with a bit of selfish motivation, seeking help from industry experts. Recording and sharing those conversations, I built a network of high-profile people. Having guests like Wes Bush, Sean Ellis, and Kevin Dorsey on the podcast is valuable for future collaborations. It opened doors, allowing me to speak at events like B2B Rocks in Paris. Nathan Latka also invited me to speak at SaaS Open in March. The podcast builds trust and authority for Readiness, and it serves as a marketing channel with over 13,000 plays, potentially generating revenue to stay bootstrapped. It's a valuable tool for visibility and networking in the industry.
For bootstrappers, what advice would you give, considering the challenges of bootstrapping?
Embarking on the bootstrap journey requires preparation for its inherent challenges. Anticipate that timelines might extend beyond initial expectations. Perseverance is crucial during moments of doubt, recognizing that setbacks are part of the entrepreneurial experience. It's essential to maintain focus on the ultimate goal that prompted the startup's creation.
Managing financial aspects is paramount; consider covering costs through side projects or offering services related to your product. A hands-on approach is advised—actively engage in various tasks to understand client needs and iteratively enhance the product. For those fortunate to have savings, leveraging them can provide a buffer during early stages.
However, if savings are not available, explore the potential of offering services that align with your product's expertise. Many successful companies have emerged from agencies or service-oriented backgrounds, evolving into product-focused entities. By aligning services with the product's core, not only can revenue be generated, but valuable insights and network growth may also occur.
So, you're essentially suggesting becoming your own client by productizing services. Could you elaborate on how this approach benefits your business?
Absolutely, by transitioning services into a software solution, you essentially become a user of your own product. In the context of recruiting affiliates, which was initially a labor-intensive service, turning it into a software solution streamlines and automates the process. This firsthand experience of using the product for a real client enables you to identify pain points, areas for improvement, and automation opportunities.
As you encounter challenges in the affiliate recruitment process, you gain insights into making the solution more efficient and scalable. By addressing your own struggles, you enhance the product's functionality, ensuring it aligns seamlessly with the needs of both your clients and your internal operations. This iterative approach not only refines your product but also positions it as a valuable asset that meets real-world demands.
Is there anything specific you'd like to add that we might have missed in our discussion?
Absolutely, for bootstrappers, creativity is key. Avoid blindly adopting strategies used by funded startups and focus on cost-effective marketing channels. Regarding the podcast, it's a powerful tool for leveraging others' networks. By featuring guests with substantial followings, you tap into their audience, creating a positive ripple effect. For instance, guests with significant LinkedIn followers can amplify your reach. So, the advice would be to identify individuals with access to your ideal customer profile and explore ways to leverage their networks for mutual benefit.
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