How We Launched A $195K/Month VoIP Business Phone Service

Anna Miranchuk

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Published: April 5th, 2021

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Anna Miranchuk

Founder, MightyCall

$195K

revenue/mo

Founders

Employees

MightyCall

mightycall.com

from Seattle, WA, USA

started October 2012

$195,000

revenue/mo

Founders

Employees

Discover what tools recommends to grow your business!

social media

Twitter

productivity tool-icon

Discord

payments

Recurly

analytics

MixPanel

Discover what books Anna recommends to grow your business!

The Mom Test: How to talk to customers & learn if you... Rob Fitzpatrick

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Hello! Who are you and what business did you start?

Hello, my name is Anna Miranchuk and I’m the Product Manager of MightyCall. At MightyCall we sell a B2B hardware-free VoIP business phone service targeted to small business owners and entrepreneurs who are just getting started, from side hustles to brick-and-mortars and everything in between.

We sell different tiers of service, usually priced between $30 and $100 per month. The differences in tiers boil down to the number of VoIP features and talk minutes included, with our $50 plan being the most popular. As of January 2021, we currently bring in just over $200,000 a month and have grown our user base to over 6,000 small business owners and 25,000 active users.

how-we-launched-a-195k-month-voip-business-phone-service

What's your backstory and how did you come up with the idea?

As you probably noticed above, I did not say I was the founder of MightyCall, because I’m not. I think MightyCall is probably in a unique spot compared to most companies highlighted here because it wasn’t an “aha” idea that came to any one person that got us started.

In reality, MightyCall spun off of Infratel, one of those large tech companies that not many people know about, but are influential in the market. Infratel, which ran a successful telecom/phone system service for call centers and, seeing the small business phone system market emerging, wanted to expand and see what would happen, so they created MightyCall.

I was hired as a technical writer when the MightyCall offshoot began in 2013. At the start, we only had 9 employees (including myself) assigned to the company. Alex Uchinov was the original lead for MightyCall, but after a few years, he decided to step away from the company to pursue other opportunities. After Alex left, Dmitry Lephikov was brought in to be CEO, and he remains in that position today.

For me, I had been out of college a few years when I was hired by MightyCall. I’d bounced around a few uninspiring jobs before landing here, and although I was capable of doing tech work, I didn’t have any specific expertise about VoIP or telecommunications. I do think the 9 of us saw the potential in the market and what we were trying to build and had high hopes for what we could build, so that was what made this job different from my others.

Take us through the process of designing, prototyping, and manufacturing your first product.

In retrospect, I’m shocked at the limited amount of daily attention Infratel gave to MightyCall in the early years. They generally let us test ideas out, which I don’t think a lot of big companies would allow nowadays.

There is a lot of customer turnover in VoIP so there are lots of chances to get customers that are unhappy with their current providers.

MightyCall was an adaptation of Infratel’s technical base, so our foundation worked well, but regarding the phone features and add-ons for the service, our little team had complete control over that.

The problem was, almost all of us had limited experience, so we didn’t know exactly what to do when it came to designing the interface and features. We looked at the big players in the industry, but we quickly realized we couldn’t mimic their output because we didn’t have the manpower. That led us to offer pretty basic VoIP stuff in the beginning, just like an auto-receptionist, voicemail, and the ability to answer incoming calls.

We were really missing a guiding vision in the beginning; we ended up just chasing something because I think that’s what a lot of people think is expected of them. Now that we’re on firm ground I realize how fortunate we are because usually, a business situation like ours doesn’t end up going well.

Describe the process of launching the business.

Our launch was somewhat underwhelming because we didn’t identify a proper target market. We were all just giddy that we had the chance and this really powerful VoIP technology that had been adapted for small business, and I think we expected enough customers to flow in immediately.

We hadn’t done the legwork to spread the word to the right people though. Call centers, which used the original tech, didn’t have much connection to small businesses so we just completely missed our target market. It was as if a great ice cream business tried to open a burger restaurant because it heard burgers were on the rise, only to neglect that the surrounding community was largely vegetarian.

Of course, we had a website on a standard early-decade layout, but it didn’t draw much traffic in the beginning, even with some SEO. Infratel was supportive financially in those early years, making sure the company stayed afloat, but the actual profits we were making weren’t enough to cover the whole operation until several years into the company.

Since launch, what has worked to attract and retain customers?

The first two to three years of the business were slow going, but eventually, we managed to find the spark we needed and find some real success.

A large part of that, in my opinion, was just the personal and professional growth a lot of us had as time went on because we did have the freedom to learn and experiment. Me, personally, I went from a simple technical writer to the Product Manager. Now I have the final say on everything that happens product-wise, and I’m always in the room for key financial decisions.

You (and any workers you have) really need to be 110% prepared before starting a business, because a few rough early months could shut you down quickly.

If you’d told me that back in 2013, I would have fainted from that kind of pressure, but here I am, and here MightyCall is, doing well. I think the main lesson from that is to trust your staff, especially the ones you hire in the beginning. Everybody’s on the journey together, not just the founder, and as long as they aren’t making blatant and catastrophic mistakes, every employee you have could turn into a diamond in the rough with enough time and support.

On the technical side, we were finally able to expand our team and as a result, add more to make the product better. Again, it was pretty bare-bones in the beginning, so there’s only so much you can do if you’re selling against superior products. You don’t need to be the best out of the gate, but if you know how to improve, have the will to improve, and can focus on a niche (if your industry is big enough), then you’ll have time to get things right.

As we expanded our feature set and felt more confident that our product could compete we massively increased Google ads and SEO. There is a lot of customer turnover in VoIP so there are lots of chances to get customers that are unhappy with their current providers. We of course do Facebook and Linkedin ads and keep up a social media presence, but that has never created massive conversion for us or our industry (from what we can tell).

The other thing that really has worked for us is listening to our customers. We were so focused on new customers in the early years that we missed the chance to get so much invaluable feedback. That all changed in 2016, when we invested in team members to specifically monitor and reach out to current customers for feedback and usage trends so we knew exactly how people were using the service, and therefore, how to change it for the best.

Having a great business idea is one thing, but you can’t force it through sheer will and ego alone. You have to be fully in sync with your customers from the start because you will learn so much and be so surprised by how different a product’s reality is from what it was in your head.

How are you doing today and what does the future look like?

We’ve seen around 60% year-over-year growth since 2017, with gross margins falling between 60 and 70% during that time. Our customer acquisition costs land anywhere between $60 and $95 depending on the target, but the ratio of our overall lifetime customer value to customer acquisition cost is 4.5, so the majority of customers we attract to the service use it for over half a year.

Considering our industry, we don’t do much email marketing or social media ads, preferring to just keep a presence as a helpline to our current customers to reach out over more channels.

Our staff has grown to over 75 people from the original 9-person team, and we hope to add more talented folks to the team as we develop more features for the system. We thankfully were not affected much by COVID-19, so we’re aiming to double our growth in a calendar year, targeting either 2021 or 2022 to accomplish the feat.

Through starting the business, have you learned anything particularly helpful or advantageous?

We were not adequately prepared for the size of the task when MightyCall was started. Our focus was so result-driven at the start that we probably missed out on a lot of development ideas from feedback and chances to attract customers while the VoIP industry was exploding in popularity.

I know it’s clichéd, but you (and any workers you have) really need to be 110% prepared before starting a business, because a few rough early months could shut you down quickly. A lot of services and tech companies are guilty of trying to get by on the idea alone, assuming since they have some money or funding that more are sure to come, but that isn’t always the case.

Luck and timing do help. I can’t imagine where MightyCall would be if we hadn’t lucked into hiring some amazingly talented people who came our way during their job search. Very few companies attract candidates on their company name alone, so hiring good capable people who are easy to work with is so important. All that always brings me back to the same message: trust and support your workers. They are—even more so than the idea—the company.

What platform/tools do you use for your business?

We use a ton of tools for the development process, but they are all pretty in the weeds of our industry. Some tools of note overall are Atlassian, Mixpanel, InlineManual, Discord for inner-team communication, Recurly for billing and AWS for security.

We don’t need to rely on a big CRM since our system, MightyCall has CRM capabilities. We have so many tools that if it’s not for technical development, we usually opt for ease of use. Discord is simpler and more flexible than Skype, Recurly is very straightforward, Mixpanel has an amazing and intuitive display, etc.

What have been the most influential books, podcasts, or other resources?

Not to be too clichéd, but Entrepreneur.com has so many great articles. I have always enjoyed seeing case studies of small businesses and guest posts telling success stories to keep myself motivated, even if I’m not on the business end of things.

I also want to mention The Mom Test by Rob Fitzpatrick, which was a book our boss encouraged us to read to simplify the selling process when we were starting. I think the book and MightyCall actually both debuted around the same time, so it was a hot topic.

Advice for other entrepreneurs who want to get started or are just starting?

Don’t quit your day job. At least, not at first. A lot of products and services would do well with a trial run and a substantial one. If you want to make your own business and have it support you, you need to be guaranteed that it will survive.

Don’t be ashamed to take 6 months to test it out. Don’t fall victim to impulse or small sample size. Yes, working your normal job and managing a side hustle will be a ton of work, but entrepreneurs typically work way more than 40 hours a week anyway. If you love an idea and believe in it, then it is worth committing your life to it, but you should be sure about its financial potential before marrying it.

During that trial time, researching the market should be your priority. Your idea isn’t the foundation for future business success after all; your idea’s position is the market is what will make or break it, so you need to know exactly how the market works and where the pieces go to find your niche. Just chasing money, customers, and ideas doesn’t work.

Are you looking to hire for certain positions right now?

As we keep growing, we’re in constant need of talented new people to join our team. We’re currently in the market for full-time mobile app developers, particularly on the iOS side, as well as frontend software engineers. It’s all paid, full-time work with benefits and the usual software development kind of tasks.