#21 - From an agency owner to SaaS co-founder
Challenges of bootstrapping, benefits of owning a web development agency
2 months ago, Vlad Lugovsky shared how they competed with VC-backed companies in a competitive space by bootstrapping on Reddit and this post really got my attraction.
After that, I got in touch with Vlad through LinkedIn and thankfully he accepted my interview request.
In today’s interview, we talked about;
how challenging it is to compete with VC-funding companies by bootstrapping,
their best practices to generate leads,
how their journey started as a SaaS business,
what are the pros of owning a web-development agency,
is it something reasonable to focus on two things at the same time,
Enjoy!
So I found your profile on Reddit and also I got a chance to check your LinkedIn profile. So you had a great story and we would like to get more details regarding your story today. But first of all, can we get some details about your background?
Vlad:
Yeah, sure. So, I started as a software engineer. During my time at university, I started to work at a large software consulting company, which basically provided software development services. And I quite fast started to talk directly to the clients.
So take more responsibility. Let's see. And this is what I liked. And then when university was coming to an end I started to think about what I want to do. And the most obvious choice was to start something myself. And I went freelancing.
So this was the first step for my ventures to start and by freelancing, I was able to increase my salary quite significantly. And, I started to save money.
I don't know why at that time, I was thinking, hey, maybe I can buy apartments for myself, you know, to start the serious life with a wife and kids.
But then, I started to think that freelancing is also the question of scalability. So if you're great, you start thinking you can only sell your hours. Right. And then I started to think, how and what can I do? So I thought that the most obvious choice was to open some kind of consulting business, start hiring more people because I was able to find some clients.
I would love to build some product right away, but for building products, you need some money. And you can't save enough to build some decent product, unless it's some kind of small product.
More or less big. So I started a company called Akveo and that company provided software development services for different clients in the United States and Europe. At that time, we made our products open source and open source was a great channel for us to bring new clients.
For instance, one of our admin templates, NGX admin, was the Angular admin dashboard and we published it using MIT licence on GitHub. This was a great way for us to bring a lot of new clients at that time.
So Akveo is the company you focus for generating revenue, but it's like a consultant job, right? It's not like the thing that you have been doing right now. It's like right now you have been offering SaaS services through your solution. But before it's like a web development agency, right?
Vlad:
Exactly. Web development agency. And as I mentioned, since we published this open source admin dashboard, we built a lot of admin interfaces for our clients.
And this is where originally the idea of UI Bakery was born. So why don't we allow our clients a way to drag and drop interfaces they want themselves. Because eventually we understood we're doing the same job over and over again. So we started to build some kind of internal process type, which eventually was a technology.
But at some point we separated UI bakery into a separate company. And at that time I was already running Akveo for seven years. It was around 100 people. And I wanted to start something new because just like a usual employee, you want some fresh start and working on the product was a good thing for me.
So this is why we kind of decided to step down from the management and just move completely to UI bakery. And basically this is how it is.
So I'm running UI bakery right now.
How was the process there with that? To be honest, it should be hard because as you said, for your previous company, you have a hundred employees, you are one of the managing directories there.
And I assume you have been generating a good amount of revenue and you have a good amount of salary. And after a while you are saying that, okay, it's okay for me. And I'm going to focus on a new project, no revenue, no subscriber, no transaction focusing on that. I mean, how did you feel at that time?
How did you get that decision? Did you have any savings before getting that decision?
Vlad:
Well, obviously I had some savings, at that time, though they were not significant. historically we were always investing like everything that we had in growth.
And what I especially didn't like about the consulting business is that it's not really scalable, it really depends on how many employees you have. And I wanted to start something big. So it was a risk of course, but what I also understood was that if I won't try that, the product would eventually fail, because it's always about the focus.
So you can only focus on one thing at one particular time. And I was trying to push the consulting business and at the same time, I wanted to push the product company and it was not working. And, it wasn't working mainly for this reason.
Because you make decisions which you think are good for both companies. But when you look from the perspective of every single company, these are bad decisions. And the example is for instance; we were at the strategic session and then we made a goal for both companies, something like we want to build and you know provide services in low code and no code something like that.
Just kind of unclear vision for any of the companies.
So do we focus on building it? Do we focus on providing services? So it's not and eventually when we kind of separated all the things and I kind of started to focus completely on UI bakery.
Yeah, it was hard initially kind of to get from like zero to one but you know it's eventually with dedication and it was possible.
Yeah, it was hard initially kind of to get from like zero to one but you know it's eventually with the dedication and it was possible.
And it's like five years right now, right? When I checked on LinkedIn, UI Bakery is like five years old right now.
Vlad:
So, we consider the birth date of UI Bakery when technology eventually was born, but I would say that the current version of UI Bakery is from 2021, so two to three years.
And how is the current situation right now for UI Bakery? How many employees do you have? You are also in a competitive market when I check it from your LinkedIn posts, you mentioned that you have some competitors like VC fundings and how it's feel like to be in that environment because you are bootstrapping.
Vlad:
Well we are 12 employees and we are profitable. So these are our main achievements for the previous year and we kind of started to slowly hire just because we need to be careful. When you hire people you need to be sure that you're still profitable.
With regards to our competitive landscape, at the times it was really hard - especially in 2021 and 2022 - you read all the time that another company raised like 40 million.
We were thinking that we're going to be dead in a couple of years. But then, like the customers, they choose the products not because investments and investors.
There's a lot of customers who evaluate the products in different kinds of conditions.
And they want to find the team that delivered because some of them know that even if they are VC funded they might be gone in a couple of years or since they are VC funded they would be always hunting for more revenues. And if at some point every customer, like that particular customer, would not become not really interesting to them.
They would just easily kind of like stop providing good support and just build features for that customer.
Our strategy is slowly, but surely; we don't have many customers.
This is around 150 and we focus on closing their problems.
Subscribe to our newsletter:
To receive weekly interviews,
To get the latest updates about SaaS Bootstrappers.
So you try to be engaged with what they are building and adjust your featured map based on their needs. And you are more proactive, right? I mean, this leads you to be more proactive, I guess.
Vlad:
I don't think it's about the proactive support. It's more like just because we don't have a lot of money in marketing, in advertisement, and you can’t get a lot of leads and a lot of customers in a shorter amount of time.
So this is why people eventually take VC money. But then when you get a lot of customers, they are really different. They all have different problems. You need to have really good product managers or the people who are in charge your roadmap.
So that is how they segment all their needs and identify what you need to build and what is needed to really for your target audience and your vision.
And what is needed to build at that particular time, with the essence that you might lose those customers eventually. So in our case, we have less customers, and this is why we also have more focus. Um, so we are not moving maybe as fast as we could with VC funding. However, we are more sure that we are doing the right steps.
So thanks for sharing all of the details by the way. And in that competitive space, it might be hard to focus on product like yours and you mentioned that you have been dealing with them in a different approach and I guess it can be a great advice for bootstrappers.
Just wondering, did you focus on one space, one niche, or you have been offering your solution for every industry right now? Did you do something related to that?
Vlad:
I would say that our solution is cross industry but I think one of the mistakes we made initially was the identification of who our ideal customer is.
So despite the fact that we kind of sell to different industries we understand the person that would get the most benefit from using UI bakery should have technical knowledge. And, so basically this should be a software engineer in some, or personal software engineering background.
And this was really important for marketing activities and for product roadmap.
So, because UI bakery is a platform and with UI bakery, we can build internal applications for customer vendor applications, for healthcare, for manufacturing, for banking industries, you're not limited.
So it provides you the set of components, which are;
- applicable to different industries, but still you need to have some kind of segmentation, at least for a target user. And as in our case, the target user is as I mentioned, software, engineer or engineering background.
Yeah, but it might be better to double down on that, right? I mean, even though going with the horizontal way, you mentioned that vertical can be also useful in the beginning, right?
Vlad:
Yes, vertical absolutely can be useful for the beginning.
Okay, in terms of the growth part of the UI bakery, would you like to share any insights or tips that you achieved?
Vlad:
Well, I would say that we are at the early stage of our growth.
However, what was working for us, the best is organic channels. And, I believe that, if you have the possibility, like if anyone wants to build product on the longterm and build some great marketing strategy, starting investing in the organic traffic is like; it's the best way because in the longterm, it provides the cheapest and the most proficient results.
I guess the best way for bootstrappers mainly because you have been doing your project, aiming it to be like a long term and from the previous interviews, most people say that SEO can be the critical thing from day one.
Vlad:
I'm interested, however, how this would change with the rise of the GPTs, just because, you know, I believe people would use some kind of AI searching giants like OpenAI or others.
But still you know, what I currently see is that they still take this information from the internet.
So like probably it would stay like in a similar way.
Yeah. There should be more creative contents right now. It's like a more informational way. But I think writers need to add something from their side, from their perspective, or do some interviews and get some data from the other people and share it as a storytelling way.
So Vlad, my last question, any advice for bootstrappers around, in terms of your experience, in terms of books you read, in terms of movies you watch, something you have to share?
Vlad:
Well, I believe it's a good way to start with a consultant business. And then once you start talking to your clients and understand the issues to build products from the knowledge that you receive from the consultant business, and then at that point, consultant business can become a source of revenue where you can build a bootstrap company.
So I think if anyone would love to build good products, this is a good strategy.
And you mean after the consultancy business, you have some clients to reach out easily because they had been using your service or other stuff and it might be easy to convince them to use their solution, right?
Vlad:
Yes, exactly. And the main thing is that you have trust with them.
And by providing a service, you can gain trust.
Previous Issues:
Thanks again for reading the interview and don’t forget to share this issue if you want your friends to read.
Reply