Chat Node

How 2 Founders Bootstrapped & Sold AI SaaS for Six Figures in 12 Months

Monthly Revenue

$10K

Built in

60 days

Founders

Employees

3 (est.)

Profitable

Yes

Days To Build

Year Started

2023

Customer

B2B & B2C

Founders

Employees

3 (est.)

Profitable

Yes

Days To Build

Year Started

2023

Customer

B2B & B2C

Who is Thomas Agarate?

Chat Node co-founder Thomas Agarate is an experienced data engineer with a strong background in AI, who hails from Portugal. Before Chat Node, he engaged in multiple small-scale AI projects and leveraged his technical expertise to build successful SaaS products.

What problem does Chat Node solve?

Chat Node solves the problem of customizing AI chat systems by allowing businesses to train chatbots on their own data, making interactions more relevant and specific, thus enhancing customer engagement and support efficiency.

How did Thomas come up with the idea for Chat Node?

The idea for Chat Node emerged when the founders noticed a growing interest in AI tools and micro SaaS products. A key inspiration came from observing the success of an early AI chatbot builder, Chatbase, and seeing the potential for developing a similar service. With backgrounds in data science and engineering, the founders felt equipped to tackle the challenge, deciding to leverage their skills in AI and marketing to create a new and improved version.

Instead of spending excessive time perfecting the concept, they quickly built a minimal viable product (MVP) in about a month, prioritizing speed and functionality. They focused on essential features that users could test and provide feedback on, using this feedback to refine and improve their product. The founders also encountered technical challenges, such as ensuring the product could scale and handle user feedback effectively, prompting them to hire help for customer support to stay focused on development.

Key lessons from their journey included staying responsive to user needs, involving users early in the feedback process, and validating the business proposition through platforms like Product Hunt. This approach allowed them to learn quickly and adapt, ultimately leading to a product that met market demand and positioned them for a successful business venture.

How did Thomas build the initial version of Chat Node?

The ChatNode team rapidly developed their MVP in under two months, prioritizing speed and functionality over perfection to gather early user feedback. They used a tech stack that included Python with FastAPI for the backend, Svelte and TypeScript for the frontend, and incorporated tools like Pinecone for vector storage and OpenAI for AI functionalities.

The initial version was built using “dirty code,” focusing on essential features and shortcuts—like directly using Stripe checkout pages instead of integrated UI elements—to expedite the launch process. Despite challenges such as maintaining code reliability and handling a sudden spike in users post-launch, the experience of building ChatNode entailed a fast-paced, iterative approach that emphasized learning from user interactions and feedback to improve the product continuously.

How did Thomas launch Chat Node and get initial traction?

Product Hunt

ChatNode launched its product on Product Hunt as their initial strategy to attract early users. The team picked an optimal weekday, Tuesday, known for high traffic, to maximize visibility. Within a week of launching, they achieved a position as the second product of the day and gathered significant traffic and attention.

Why it worked: Product Hunt is renowned for its ability to drive traffic to newly launched products rapidly. By choosing a high-traffic launch day, ChatNode was able to gain visibility and attract nearly 1,000 monthly recurring revenue (MRR) within the first week, validating the product and garnering early feedback from active users.

AppSumo Launch

ChatNode strategically launched on AppSumo, a platform known for promoting and selling digital products. By offering a lifetime deal, they tapped into a large community of enthusiastic early adopters, making more than six figures in net profit within just two months of launching on the platform.

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Why it worked: AppSumo's community is interested in discovering and investing in innovative products. This provided a huge influx of users and valuable feedback, further validating the business model. ChatNode successfully managed to engage a new audience, expanding their customer base rapidly and significantly boosting revenue.

Leveraging AI Directories

In addition to these platforms, ChatNode utilized AI directories and partnerships with small Facebook groups and influencers to spread the word about their product. They aimed for visibility across multiple free or low-cost channels, further embedding their presence within their target audience's ecosystem.

Why it worked: By listing in AI directories and engaging micro-influencers, ChatNode was able to amplify their outreach without significant spending on ads. This approach allowed for organic growth and community building, enhancing product awareness and credibility among potential users who were specifically interested in AI solutions.

What was the growth strategy for Chat Node and how did they scale?

Product Hunt

ChatNode leveraged Product Hunt for an initial launch, which brought substantial traffic and early users. They strategically chose a weekday, particularly a Tuesday, which is known for higher traffic, and finished second on the platform. This allowed them to receive significant exposure and a dedicated user base, achieving nearly $1K Monthly Recurring Revenue (MRR) shortly after launching.

Why it worked: Product Hunt is a platform frequented by tech enthusiasts and potential early adopters. The timing and quality of the launch played a crucial role, as it provided visibility and credibility, driving organic interest and engagement from a community eager to explore innovative products.

AppSumo

ChatNode's subsequent launch on AppSumo led to unexpectedly high inbound traffic and over six figures in net profit within two months. AppSumo allowed them to offer a lifetime deal, providing access to the platform but requiring customers to use their own OpenAI key, thereby managing long-term operational costs.

Why it worked: AppSumo has a large and dedicated audience of tech-savvy buyers willing to test new tools, especially those offering lifetime deals. This platform not only accelerated their customer acquisition but also provided valuable feedback due to the users' early adopter mindset, enabling rapid iteration and improvement of the product.

AI Directories and Community Engagement

Beyond Product Hunt and AppSumo, ChatNode was listed on several AI directories, many of which were free or low-cost to engage with, helping them maintain visibility across various channels. They also built a Discord community for user interactions and insights.

Why it worked: Listing in AI directories increased exposure among niche audiences specifically interested in AI tools, while building a community on platforms like Discord provided direct, continuous engagement and feedback loop with users, fostering loyalty and encouraging word-of-mouth referrals.

Google Ads

ChatNode effectively utilized Google Ads to maintain and grow their user base post-initial launches. Emphasizing simplicity, they targeted keywords related to their product, achieving a Return on Investment (ROI) of 2.5 to 3 times the ad spend.

Why it worked: Google Ads provided a straightforward way to reach potential customers who were actively searching for solutions like what ChatNode offered. With a clear understanding of their customer lifetime value, they could afford to invest in ads that might initially seem costly but yielded significant long-term returns.

What's the pricing strategy for Chat Node?

Chat Node employs a tiered pricing strategy with limited free options, offering paid plans starting from around $19 per month, focusing on extracting value through product differentiation.

What were the biggest lessons learned from building Chat Node?

Launch Fast and Adapt: The ChatNode team emphasized the importance of launching quickly with an MVP and iterating based on user feedback. This approach allowed them to refine and improve their product rapidly.
Avoid Perfectionism: They learned that over-engineering an MVP is counterproductive. Focus on functionality, release quickly, and let user feedback guide improvements over time.
Implement a Pricing Strategy Early: ChatNode understood the importance of having a pricing model from the start. Offering only a free version is unsustainable; pricing should reflect the product's value.
Leverage Launch Platforms: Their strategic use of platforms like Product Hunt and AppSumo was crucial for gaining exposure and user growth. Choosing the right launch day and platform can significantly impact initial traction.
Embrace Seasonal Downtime: They recognized the B2B market slowdown in summer and used this period for planning and preparing for a stronger push post-summer, acknowledging the importance of understanding business cycles.

Chat Node Acquisition: How much did Chat Node sell for and what was the acquisition price?

Chat Node achieved a six-figure exit within 1.5 years, leveraging AppSumo for a significant user influx and was sold through Acquire.com in June 2024.

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