How We Built A SaaS Solution And Grew It To $3M ARR
Hello. Who are you and what business did you start?
I’m Alex Vishnyakov, CEO and one of the Splynx founders. Splynx is a company that develops and sells its product with the same name Splynx – its SAAS solution for Internet and Voice providers. Our software provides features such as billing, payment collections, integration with accounting platforms, network management, ticketing, and CRM system.
Our customers are small and medium-size ISPs (Internet service providers) worldwide. At the moment our product is used by 750 companies in 50 different countries. Majority of our clients are from English speaking countries such as South Africa, the UK, New Zealand, and Australia. During 2022 we have been getting more clients from the United States. Our ARR is around 3 million USD so far with 50% annual growth. We work on a subscription basis, our ARPU is 320 USD per month.
We have 4 offices with 50 employees today. Headquarters is located in Prague, the second office is in Barcelona, where I live, the support team is in Johannesburg, South Africa and part of our team is in Ukraine. Company was founded in March 2016 by 4 founders – me as a CEO, my long-term partner who became CTO, our first developer who is now head of software development, and a silent investor that assisted us at the beginning of our journey and always gives valuable advice.
What’s your backstory and how you came up with the idea?
Our ARR is around 3 million USD so far with 50% annual growth
I started my career as a networking engineer in 2003 in Prague in a small company that provided VOIP and Internet services. There I spent 4 years, got several Cisco and IT certifications, and then got an opportunity to try project and product management in a software development company. After 2 years working there, in 2009 I decided to found my first business – IP brokerage, a company that buys, sells and helps to acquire IP addresses.
The company was founded by my partner, Ruslan Malymon, who later became the CTO of Splynx. We provided IP brokerage services to over 2000 companies during the first 5 years of existence. The majority of our clients were Internet providers. I had very good relations with some of our customers and they were complaining about existing software solutions on the market. Existing platforms were outdated with poor support, developed in the early 2000th.
So, in 2012 we decided to start a product called Mikrobill, a product that had to become innovative with competitive pricing. We started selling the product on our primary markets where we operated with IP addresses – Eastern Europe and Spanish speaking countries. The pricing model was one-time license fee and a small support fee (the same pricing that competitors provided these days).
After onboarding 100 customers in 1.5 years we found out that the pricing model doesn’t work, markets are quite poor, and each country needs customizations that we cannot provide with our small team. In 2013 we decided to close the company. We stopped sales, fired our developers, and provided very limited support to customers that bought the system.
In 2014, my CTO together with Alex, our current head of software development, started to work on a new product. The platform will be flexible and allow customizations per country. It took them 2 years to write the first version of a new product. Meanwhile, I was invited to South Africa as a network architect to help build a network of a local Internet and Voice provider in Johannesburg. During my stay in South Africa, I understood that the South Africa Internet market is growing, new Internet providers are being created every month and there is a strong need for a billing and CRM platform with network management ability.
The company where I was working as a network architect – Skywire Technologies Ltd (Pty.) became our first client in 2015. We got ideas of how the system should work for the South African market and launched our first version in March 2016. First-year was quite tough because we were only 3 people in the company and had to find customers, deploy the platform and continue developing it. That’s why in 2017 we invited our 4th partner who helped us to finance our growth – we hired the first 10 people – developers, support engineers, and sales managers.
So, Splynx was born after the failure of Mikrobill. Initially, I wanted to call it Phoenix, but then we decided that it was better to not relate to the previous failure. What Splynx means? - is a Service Provider Lynx. This small, nice and clever animal that can leave in different conditions always inspired me.
Take us through the designing, prototyping, and manufacturing of your first product.
The very first version of the product was done as a one man custom development by our CTO for his brother, who had a company Internet provider and needed his billing platform. All solutions on the market were expensive or didn’t provide needed features, so they developed their billing software that was able to get the payments and store basic CRM data about customers.
Based on that software we built Mikrobill. And as I wrote previously, it took us 1.5 years to get the needed experience to understand what exactly customers are looking for and what countries we should focus on. We talked to many clients and all of them had different points of view – what is important and what is not.
Nobody cares about your previous failures, people do care about themselves and their needs, so there is no need to be afraid of making mistakes.
Several times we were convinced by a few of our clients that we respected to development of several features that were never used by anyone else and it was one of the reasons for Mikrobill failure. Of course, we were also checking competition and open source products to understand what is the minimal feature set that is requested by Internet providers to run their business.
These 1.5 years together with my work in South African providers gave us much needed understanding of our clients from the inside. When Splynx was launched, we had very few clients telling us that the platform is missing a lot of features. Majority of things were there. Of course with their basic functionality, but ready to be used by customers.
Describe the process of launching the business.
We launched our business in March 2016 by visiting a local conference of Internet Providers in Slovenia, Ljubljana. Some people knew us already because of Mikrobill products and I remember how nervous I was during that conference. Fortunately, just a few people told us some bad words about the failure, but what was important we got the first 2-3 customers.
Also, we invited our old Mikrobill customers to migrate and start using Splynx. Around 10 old customers were onboarded during the first two months.
The website was launched with the main claim that Splynx is a framework that can be customized for any Internet provider. We took every opportunity to onboard any new customer – developed some additional features, made customizations, etc. That was slowing down us quite a lot during the first year of existence.
I was always afraid of taking loans or money from people in the early beginnings. That’s why we invited our investing partner only after one year of existence when we saw that product is in demand and the only thing we need is to scale. We sold 20% of our company to my friend from South Africa, for who I worked from 2014-2015. The investment was around 200,000 USD and it allowed us to cover all needed costs during the second and third years. We came to black numbers only after 3 years of being in this business.
The main lesson that I learned during the launch is that nobody cares about your previous failures, people do care about themselves and their needs, so there is no need to be afraid of making mistakes.
Since launch, what has worked to attract and retain customers?
Me and my CTO were always focused on continuous improvements. I am not talking just about the product itself. Each department should perform every day a bit better than yesterday. I am in charge of Marketing, Sales, Deployment, and Support of our software to customer businesses. So from my perspective, I always track the performance of each department and try to improve it a bit every day and every week. And the most important is to hire people who will share this idea of improving, learning, and implementing new things with you.
I think sometimes is very good to not follow best practices if we talk about people and trust our internal feelings. I was running our marketing myself for a few years and was struggling to find a marketing manager who can help me. I read in many articles that for building great marketing you need to hire an experienced manager, so I tried one, second, and third and without visible results…
Our current marketing manager Vlad came with no knowledge of our company, but was very hungry to work and wanted to learn new things. And I believed in him from the beginning, he started as the first-line support engineer, then I took him to assist me with marketing, paid him for a few expensive SAAS and online marketing courses. We were able to get 20-30 leads per month in the beginning, now under Vlad’s supervision, we are at 150-250 leads per month.
We redesigned the website the last year and it helped us to increase our website free trial conversion rate from 2% to 4%. Here is a video where Vlad explains the changes that were done in the website redesign.
I think what helped was to define the targeting person – who are the decision makers and have 2-3 marketing claims that attract their attention. Our customers are small ISPs and they are competing with large telco Operators, so our main motto is – we help small ISPs to beat large Telcos. Do you want to know how? And usually, people from the industry want to know how this is possible to achieve. For technical decision-makers, we have marketing campaigns that focus more on the IT and networking parts of the product, on a feature set. Both worked relatively well so far. But as I said the website redesign was crucial - we increased our conversion two times with the same campaigns and marketing.
One of the successful campaigns in Africa was addressing new ISPs or people who want to start this business – we wanted to teach them how to start getting money and we got many new leads. So, the majority of our messages are not about the features or software but are business oriented.
Example of the campaign:
What doesn’t work – is to fulfill completely all customer’s requirements. We have a feature request website, where people can vote for new features and that we analyze on a monthly basis. Unfortunately in the beginning new companies tend to do all that customer is asking for and this is slowing their growth a lot. After getting bigger we were able to afford to deploy only what the majority of clients are expecting or some innovations we think will bring real value to them.
How are you doing today and what does the future looks like?
Our profitability today is at 40%, I am expecting to grow this number as our operating costs are stable now. We were hiring a lot during the last year, so grew from 30 to 50 people in the company. We had to hire an HR and Finance manager to help us set up all the processes in the company correctly.
Customer acquisition is around 300 USD today, the issue is that we work on a very small market even worldwide, where we have up to 10k potential clients, the majority of which are established companies with their own or competing for CRM platforms that work for ages. That’s why the increasing budget of campaigns doesn’t help much.
We would like to be more active in US and Canadian markets. Our product was losing the competition so far because of the lack of several features and local support. That’s changing now and we would like to get a part of the pie in these two markets.
Through starting the business, have you learned anything particularly helpful or advantageous?
A few things I learned were :
- If a person doesn’t perform well from the beginning it’s always needed to stop working with him during the probation period
- Need to work on the skill of firing people, as it is not an easy task
- Don’t expect that customers will learn about your product yourselves, the deployment process in our business is crucial. That’s why one of the strongest players on our team is our deployment manager Chris.
- Be careful with partnerships – some potential partners and distributors are talking a lot but doing nothing just wasting your time
What platforms/tools do you use for your businesses?
Hurma.work for HR management
Miro for the prototyping and many other things
Splynx.com for own billing, payment collections, ticketing, CRM,
Clickup for marketing task management
Xero for accounting
What have been the most influential books, podcasts, or other resources?
Alex Yanovsky – American/Russian business coach and speaker. Has a large business in Russia he built from scratch and shares his approaches and ideas. He has his business training programs for new entrepreneurs. Really helped us to improve our management skills and in general business thinking. He was inspired and uses the ideas of many famous speakers such as Brian Tracy, Tony Robinson, and others.
Steven Covey’s books helped me a lot at the beginning of my career.
My partner who is a silent investor – older than we are with extensive experience in the IT business, gives us always valuable advice.
Advice for other entrepreneurs who want to get started or are just starting out?
Prepare yourself that the journey will not be easy and don’t give up when the first failure arrived.
But also be careful – don’t ignore clear signs that your business model doesn’t work, accept it and find a way to change it. If anything helps – closing the business is not the end of the life.
Are you looking for certain positions right now?
Yes, we need one or two support engineers in the United States to be able to cover the time zone, as our all offices are located in the Central European time zone.
Where can we go to learn more?
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Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
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