How We Took on Slack (and Lived to Tell About It)

How do you compete with one of the biggest names in your industry—and with a brand new product? Three years ago, we launched Chanty, a SaaS application for team chat. This was nothing new. Thousands of apps are born and die each year. There was one difference—we were going against Slack, the giant that is […]

The post How We Took on Slack (and Lived to Tell About It) appeared first on CXL.

How do you compete with one of the biggest names in your industry—and with a brand new product?

Three years ago, we launched Chanty, a SaaS application for team chat. This was nothing new. Thousands of apps are born and die each year. There was one difference—we were going against Slack, the giant that is the SaaS role model. Call it bold or stupid, but we had our work cut out for us.

Three years later, we’ve faced a series of challenges. We solved some of them. We’re still struggling with others. Here’s that story.

Why compete with Slack?

When we first thought about launching a SaaS in the team chat space, we had a major decision to make. We could either grab a slice of the established market or carve out a new one (e.g., a team chat app for accounting companies).

A couple of factors influenced our decision:

  1. We wanted to stay bootstrapped.

We didn’t want to be guided by someone else. We had that luxury—we had three other profitable companies (focused on web design and development) when we decided to launch Chanty. Chanty was, at its outset, a fun side project.

  1. We wanted to spend money on product development, not market research. 

Because the idea of a team chat app was already validated, we had our target market right in front of us. We had a major competitor, too, but Slack had already done some of the heavy lifting by popularizing the idea of a team chat app.

Identifying a new market could have taken months and lots of cash. Instead, we saved most of that money for product development. We did do some research, primarily among our clients and some colleagues in the SaaS world. But our main guideline was to create something that worked well for us.

We had used Slack—and lots of other messaging apps—but they were either too complicated, lacked audio and video calls, or forced us to upgrade immediately. We also wanted a built-in, easy-to-use project management functionality.

Still, to make it in such a competitive field, we had to stand out. Even before we started, we constantly got asked the same question: “How is your product any different from Slack?”

Differentiating our product

chanty beta invites.

In the early days of the app, we asked a few questions during sign-up. Primarily, we wanted to know if a user had switched from another team chat app and, if so, why they switched to Chanty. This gave us a plethora of good ideas.

We also found out why people switched from Slack, which became the first of two ways we sought to differentiate our product.

1. We solved a primary pain point for Slack users.

The first way we positioned ourselves was to go after the biggest pain point for existing Slack users—that 10,000 message limit in Slack’s free plan. We decided to have an unlimited message history in our free plan, which became a main reason why people switched.

chanty beta invitation.

That hasn’t been the main reason why new people sign up for our app, but it’s been the primary way that we’ve “stolen” Slack users. Offering unlimited messages in the free plan got immediate results, and it was one of the main reasons that we got our first 100 users within a few days of our launch.

We realized that these Slack users weren’t likely to convert to paid users right away—our free plan solved their primary pain point. Some, of course, figured out that an unlimited message history means that they can continue using Chanty for free forever. We have a number of teams like this, but they’re the minority.

So how could we get the rest to upgrade?

We tried providing audio and video calls (and other features) in the paid version only. But almost no one upgraded to a paid plan because of features, which were nice-to-haves, not necessities. Our app usage data showed that most people used the chat function only—and that a good chunk of teams had more than 50 users. 

We realized that the only way to incentivize an upgrade from the freemium plan—without undermining our “unlimited messages” differentiator—was a cap on the number of users. This fit with our app’s adoption: A smaller team would sign up and decide whether it was worth upgrading for the entire company.

We settled on a limit of 10 users for our free plan, which has become the primary way we move people from freemium to paid users.

2. We were the affordable option.

The second way we positioned ourselves was with price. Many SaaS applications charge customers based on the number of seats, which isn’t that much for a landing page tool (often just a single user). But the costs for that model scale quickly for team communication apps—they work only if everyone’s involved.

So, if you have 300 employees, the difference between $7 per user per month and $3 per user per month means spending $2,100 per month instead of $900 (or more than $13,000 per year).

Our research found that it’s mostly new users who are attracted to the price (i.e. those who have never used a team chat app before). Users from Slack (and other apps) rarely switch to our app because of the smaller price tag.

So, we decided to have the most affordable plan out there, at $3 per user per month. The low price point became the way for us to differentiate our product for new users who were less willing to make a financial commitment on a new system of communication.

chanty pricing page.

Going after new-to-chat users also meant that we needed to be extremely user-friendly. For novice users, Slack (and other team chat apps) can be intimidating. We made our sign-up process and onboarding as simple as possible—you can get an account with an email, invite colleagues by adding their emails, and do just about anything in a couple of clicks.

Our positioning split our user base almost evenly between people who came from competitor apps and those who had never used a team chat app. That’s added a challenge: Our marketing—and product development—have had to address both target markets.

Creating and scaling a marketing plan

Our existing web design and development agencies had gotten most of our clients through word of mouth. When it came time to market our SaaS product, we had zero knowledge of other channels.

Getting through the first couple of months was really difficult—we were mostly developers and designers.

The first (and failed) attempt

We started with some clumsy PR—badgering our clients to mention us in their content in exchange for some free work on their websites. Needless to say, those efforts sucked. Plenty of clients ignored us.

As we considered other options, we ran into roadblocks:

  • We didn’t have a big budget to snag Slack’s customers through paid advertising.
  • Email marketing wasn’t an option since we didn’t have a big mailing list.

SEO and organic acquisition became the logical choice.

A simple organic strategy, with a twist

Our strategy was straightforward:

  1. Use content to get readers.
  2. Turn readers into app sign-ups.

There was one wrinkle: We wanted people to convert directly from reading our content instead of capturing their emails and showering them with drip campaigns until they converted. We didn’t want to be known as a pushy, annoying brand—we wanted motivated users, not reluctant ones.

That desire influenced our content (beyond the standard inbound marketing mantra of “be helpful”). We knew we’d need to go more bottom-of-funnel with our keyword research.

We wrote a lot of articles comparing team chat apps (Slack, Flock, Fleep, Microsoft Teams). We used each tool before we wrote about it and, in our reviews, highlighted strong and weak points.

Because we had no stake in, say, whether Slack was better than Flock, we published some of the most unbiased app reviews in the category. (There was an added benefit: We got to do competitor research at the same time.)

The decision to target branded competitor keywords hasn’t changed to this day. Organic traffic is our top source of new leads and customers, and the primary reason why Chanty has 10,000 active users today.

That said, getting new users via organic traffic took quite a while to pay off; it was at least six months before we started seeing results. But those results have been the primary catalyst of user growth.

organic traffic to chanty.

The most valuable topic we’ve hit on so far? “Slack alternative.” It has thousands of monthly searches and high intent. We’ve doubled down on posts like these:

  • Skype alternatives;
  • Discord vs Slack;
  • Slack competitors;
  • Microsoft Teams vs Slack.

We also found a way to make our content more competitive in search: Guest blogging to build links to articles with the highest potential for conversion. 

Guest posts to make content more competitive

In the beginning, we had abysmal results with outreach. Sending out emails en masse and just changing the recipient name and company didn’t work. Once we decided to write personalized emails one by one, we got drastically better results.

Over time, we perfected our pitch, which helped us graduate from getting posts on good blogs to great ones. (At one point, we realized that we had done more than 100 guest posts in a single year.) We ended up getting featured on sites like Hubspot, Entrepreneur, Marketo, and many others.

referring domains to

A few guidelines that worked for us:

  • We reached out only to blogs that covered topics closely related to our product: SaaS, marketing, productivity, team communication, etc.
  • The blogs we reached out to had to have a Domain Authority (DA) of at least 40. As our own DA increased, we upped the lower limit. 
  • We checked the website’s traffic before we sent a pitch. A website with a big DA and little to no traffic smells like a link-building scheme.

We did all of this with two people. One was an outreach and link-building manager, whose job was to build a database of relevant blogs and get in touch with their editors.

The second was a dedicated writer who had a firm grasp on a variety of topics. (If we had scaled this approach, we would’ve needed to hire another writer first. We always had more pitches accepted than we could complete.)

Sometimes—as happens to everyone—our guest posts got rejected. It was rarely because the article was flat-out bad; the editors just didn’t like it for one reason or another. In almost every case, we got the article published on another blog with minor changes.

(One note: If you tell the target website’s editor that you already have a finished article, they’ll see right through it.)

Scaling the model 

Guest posts also opened the door to expand an initial partnership. For example, with each new guest post, we had an opportunity to cite past partners’ content.

We asked those partner CMOs and content heads if they would include us in their upcoming articles—and let them know that we would do the same. As a result, we multiplied our efforts, just by reaching out to a few partners.

The risk of relying on a single channel

More recently, we’ve again tested other tactics, such as paid ads, but the ROI hasn’t been nearly as good. That’s a liability. When SEO is a major part of your lead generation strategy, one algorithm update can undo years of work.

An algorithm update that rolled out at the beginning of November 2019 cost us 20% of our overall traffic—including a drop in rankings for a few really important pages.

rankings drop.

We’ve also tried to diversify our efforts with our Facebook group. We stay in touch with current and potential customers and answer their questions. We also use it to encourage discussion about team communication, to announce new features and releases, and, in the end, to have some fun. 

The Facebook group currently has a little over 600 members. We send out the link to the Facebook group as part of our onboarding email sequence, so it’s comprised primarily of active users. Creating the group was fairly easy, but keeping it active takes a few hours every month.

chanty facebook group

Finally, we’ve added a simple pop-up for visitors to join our newsletter and, over time, created a series of ebooks, each with its own opt-in form.

That’s helped us go after new users. 

A new challenge: going after a niche that isn’t looking for us

Publishing product comparisons has worked well to attract users already looking for an app. But we also wanted to attract and convert those who had never considered a team chat app—small businesses, organizations, non-profits, etc.

We needed to convince them to give team chat apps a try—and to use Chanty first. This generally was easier than taking Slack’s customers.

This gave us a two-tiered content marketing strategy:

  1. Articles to convert people actively looking for an alternative to something they’re using.
  2. Content to appeal to people who were problem- but not solution-aware.

To capture the attention of the second tier, we write about the importance of communication, collaboration, work-life balance, productivity, and similar topics.

These pieces have helped shape the Chanty blog into what it is today. 


Our journey is now three years in the making. We recently reached 10,000 active customers, but it feels like we started just yesterday.

While there are still major breakthroughs to make, getting 10,000 people to choose us in a market heavily dominated by one company already feels like a major victory.

The post How We Took on Slack (and Lived to Tell About It) appeared first on CXL.

What 15 CEOs Learned Building Top Agencies

I asked more than a dozen successful agency CEOs to share how they’ve navigated critical moments—getting started, landing (and keeping) clients, scaling teams, and marketing their agency. Spoiler alert: It all comes down to people. Professional networks are the starting point (and growth engine). The familiar name of an agency CEO is a proxy for […]

The post What 15 CEOs Learned Building Top Agencies appeared first on CXL.

I asked more than a dozen successful agency CEOs to share how they’ve navigated critical moments—getting started, landing (and keeping) clients, scaling teams, and marketing their agency.

Spoiler alert: It all comes down to people.

  • Professional networks are the starting point (and growth engine).
  • The familiar name of an agency CEO is a proxy for trust.
  • Scaling a people-intensive business requires hiring and retaining exceptional talent.
  • Client retention hinges on relationships—and the people who maintain them.

Here’s how they’ve done it—and what they’re still working on.

From individual contributor to agency owner

“I’m your stereotypical great independent contributor who was fantastic at the work and then ended up running a business,” recounts Michael King, founder of iPullRank. He isn’t the only CEO whose individual consultancy grew into an agency.

For many, that transition was possible not just because of quality work but because of a network built over a career. Bill Sebald of Greenlane Marketing explains:

bill sebald.

Bill Sebald, Greenlane Marketing:

“I had a network of people I built through previous jobs. I spent many hours building those relationships by being kind and helpful.

But I always let people know what my special powers were. In this case, I was a pretty good SEO. So when I went solo, and people in my network needed SEO, they naturally thought of me.”

WiderFunnel’s Chris Goward had a similar experience:

chris goward.

Chris Goward, WiderFunnel:

“Before I started WiderFunnel, I had worked for many large enterprise brands in my ad agency days. I had actually won an innovation award for planning a hugely complex, digitally printed, dynamically personalized direct mail catalog campaign for Tourism British Columbia as a client.

When starting WiderFunnel, I parlayed the experience, insights, and connections at that brand to bring them in as WiderFunnel’s first client.”

Those nascent networks—nurtured through speaking events, writing, and social media engagement—can grow into a personal brand capable of bringing in not just a client but that first whale of an account.

“I got my first big client simply by announcing I was starting an agency,” recalls Siege Media’s Ross Hudgens. “I was only able to pull this off by putting in work to build a personal brand, though—that made the risk lower for them.”

The formula has worked for others.

Landing that first big client

In 2011, “I was speaking at Mozcon in Seattle,” remembers’s Stephen Pavlovich.

I noticed that Facebook’s director of growth was speaking at the same event. So I quickly changed my deck the night before to use some examples from Facebook. Long story short…

If that experience seems serendipitous, only a slightly more structured approach worked for others, like Distilled’s Will Critchlow:

will critchlow.

Will Critchlow, Distilled:

“We got a referral to a pan-European hotel chain back in about 2007 after doing some highly visible and reference-able work in partnership with Moz (SEOmoz as they were back then).

It was a retained piece of work where each month was worth about as much as our biggest projects had been in total up to that point.

I remember finally closing them in an hour-long call on a Sunday afternoon. I remember it because I made that call from my mobile phone internationally to Spain, and I’m very glad it was successful because it cost a fortune.”

It doesn’t take a prominent speaking gig or compelling research study to land big accounts. The common thread? A genuine interest in helping marketers. 

Samantha Noble of Biddable Moments used a training course:

samantha noble.

Samantha Noble, Biddable Moments:

“My biggest client has come off the back of a PPC training course that I run.

The marketing manager of the company attended the course and then got in touch to ask me to audit their Google Ads account. Following on from the audit, they asked me to take over the management of the campaigns.”

André Morys of konversionsKRAFT offered companies a free experiment:

andre morys.

André Morys , konversionsKRAFT:

“In the early days of A/B testing, we made the first experiment free.

One of those was a 12% uplift for an insurance company. Out of that result, we created a client with more than €5 million in revenue.”

Sebald developed tools:

bill sebald.

Bill Sebald, Greenlane Marketing:

“We created some free tools that solved SEO problems. (Some are still online today.) These tools got mentions in all of the industry trades, at conferences, in SEO groups, and so on.

The original intent was just to create some cool stuff to give back to a very generous industry. I assumed it would have some kind of branding halo effect, but the good press was really more than I expected.”

Others, like Goward, won the attention of big brands not from industry inspiration but, rather, ignorance:

chris goward.

Chris Goward, WiderFunnel:

“When I started WiderFunnel in 2007, I didn’t know of any other company doing what we were trying to do.

That naivety saved me from blindly copying the model that everyone else was using at the time. I literally started with a blank piece of paper and designed the process and methodologies that would get the best outcome for our clients.

Maybe that’s gotten me into trouble in some cases, where I’ve had to reinvent things that had already been figured out, but I think it netted out to be a benefit for our innovation.”

John Ekman of Conversionista took a similarly contrarian approach:

john ekman.

John Ekman, Conversionista:

“We chose to try to help everyone. So we created a range of services, ranging from free webinars and blog posts to consulting services costing millions. And for everyone who contacted us, we always had some way we could help.

Let me give you an example. This one guy, let’s call him Lars, was an ecommerce manager at a small sports store. He had almost no budget and very little competence to be a buyer of our services. He came to a lot of our webinars; he read all our blog posts.

He contacted me and wanted me to comment on questions and ideas he had. We spent a lot of time on this guy. And there was nothing we could sell him. By normal standards, this is stupidity.

Guess what happens? Lars gets a new job. He becomes the CEO of a much bigger online sports retailer. And guess who he calls the first week on his job?”

A similar investment paid off for Animalz and its founder, Walter Chen:

walter chen.

Walter Chen, Animalz:

“We had done great work for a small but highly connected client. That person referred us to a former employee there who had just returned to big company life.

We got a great reference, so the sales cycle was extremely short, maybe one call and one email. We kicked off as quickly as we could, and they became a marquee customer of ours and one of our biggest success stories.”

There are traditional approaches, too, like the one King employed to win his first big client:  

Michael King.

Michael King, iPullRank:

“I badgered them for a full year until they invited us to an RFP. Then once the RFP came out, we offered a more compelling take and won.”

Or the simplest option, from Seer Interactive’s Wil Reynolds: “I knocked on their door.”

Winning big accounts isn’t just to add a logo-trophy on the homepage. There are other benefits, as CXL’s Peep Laja explains:

peep laja

Peep Laja, CXL:

“As an agency, it literally pays to work with larger companies. It’s the same amount of work but much more money.

The impact for the client will be much bigger, too. A 10% relative increase in conversion rate for a large site makes them millions—but gets you fired with a small client (as that’s nothing for them in absolute dollars). Because the ROI will be better for larger companies, they will be happier with you and refer you more business.

Larger companies also have budgets, so the people sending you money are removed from ownership. Paying your invoices is easy. In small companies, the owners often feel it’s their money and squeeze whatever they can out of you, resulting in scope creep.”

Big success means a new challenge: scale.

Scaling people, processes, and financial acumen

There’s an old joke: How do porcupines mate? The answer: carefully. The same, it seems, applies to scaling.

“If you try and scale too quickly,” cautions Noble, “all your processes and way of working gets left behind.” Scaling is a people challenge: hiring the right ones, getting them up to speed, building career paths for them, and keeping them around.

It’s a challenge that’s difficult to anticipate, admits Goward:

chris goward.

Chris Goward, WiderFunnel:

“In the early days, I knew everyone and had a really solid pulse on the mood, productivity, and challenges. As we’ve grown, I’ve had to implement different reporting and communication structures.

The most important thing to never lose sight of when scaling, though, is hiring quality.”

1. People

“One of the hardest parts of building an agency is hiring,” agrees Talia Wolf of GetUplift:

talia wolf.

Talia Wolf, GetUplift:

“Not doing the work itself, not even getting good clients—the most challenging part of building and scaling an agency is hiring valuable people.

Skills and techniques can be taught, but passionate, dedicated people are extremely rare to find.”

Nor, in most cases, is keeping those people around a financial issue. “It’s rarely about the money for people,” adds Wolf. “It’s mostly about continuous growth and a sense of achievement.”

Defining “growth” can take several forms. Wolf has given every team member a niche to own:

talia wolf.

Talia Wolf, GetUplift:

“Their job is to learn, read, experiment, and research the field and test it on their own clients. Then they need to present their findings to the team, and they become the go-to person on the matter for everyone else.

The result: Each team member becomes the in-house expert in their own field; they can review their team member’s work; gather reports; and train others within the company, giving people a higher sense of responsibility and purpose.”

The sense of purpose, Reynolds learned, may require explicit acknowledgement:

wil reynolds.

Wil Reynolds, Seer Interactive:

“Giving people titles allows them to track progress in their career—that was a shift that I think helped a lot, maybe not with retention, but I underestimated its importance.”

A team of expert analysts may also need development paths outside of management, something Brian Forrester of Workshop Digital discovered:

brian forrester.

Brian Forrester, Workshop Digital:

“We learned the hard way by promoting team members who weren’t ready, not providing good training (for new leaders or teams), and not providing a clear path forward.

I was so busy in the weeds doing the work in the early days, I didn’t have time (and perhaps enough experience) to look for natural leaders, provide training, and spell out what the future looks like for team members.”

For Forrester, the solution was a process:

  1. Defining paths forward to identify necessary skills for each role.
  2. Using the list of skills to create Individual Development Plans for analysts to move from junior to senior roles.
  3. Adapting those plans to inform hiring and train new employees so they can take on client work as quickly as possible.

A final component, adds Forrester, has helped spot analysts who might excel as managers:

Building management pathways into career advancement for certain team members who are interested—and giving those team members exposure to some of the management concepts early—has been hugely successful.

As Chen details, exceptional managers, in turn, are critical to agency profitability: 

walter chen.

Walter Chen, Animalz:

“Most agencies generate profit based on leverage of labor. The ratio of, e.g., managers to people on the ground could be 1:5 or 1:8. The bigger the spread of the ratio, the more profitable you can be.

The biggest mistake I’ve seen is trying to push this ratio too far. You try to do too much yourself, and you don’t trust the team with enough.

A couple years ago, we hired three people and paid them $100k+ to build this management layer. They were experienced folks who had managed people, built teams, etc. It was a big risk at the time, and it wrecked havoc on our profitability.

But with them, we’ve scaled revenue by several millions per year and set the stage to scale farther.”

2. Processes

Johnathan Dane of KlientBoost built his team’s processes by codifying then refining his workflow:

I’ve made the infrastructure to have a system work before I hand it off.
Then I audit the system over time to make sure it still produces the same or better results.

And yet, notes Sebald, the temptation to scale quickly—often to meet demand—introduces potential problems:

bill sebald.

Bill Sebald, Greenlane Marketing:

“Scaling is something I think about constantly. And, it’s something I’m not very successful with. But I’m fine with that.

In my field, many agencies try to scale their company by giving clients the same thing. If you are a kitchen that only makes soup, and all your customers only get soup, then you can cut back on creation and training expenses. Thus, you are scaling your output.

You can collect revenue on the ‘product’ and less on the service hours—things like putting a client on autopilot for PPC, or putting a client into a ‘maintenance mode’ for SEO.

But I think that scale hits a point of diminishing returns much, much sooner.”

Where’s the balance? King has experienced both sides—overbearing processes that restricted analysts and the flawed assumption that work would get done the right way without them:

Michael King.

Michael King, iPullRank:

“I worked at five different agencies, and we only had process in one of them. In that one, I felt like process was more of a constraint to creative problem-solving, so I never respected the value of process.

However, since everyone doesn’t care to take ownership the way you do, process is everything.”

Another challenge? You can’t scale people and processes unless you scale financial management, too.

3. Financial acumen

“Before I started working for myself,” says Noble, “I understood bits about the financial and tax side of running a business, but flashing forward two years, I know so much more than I did previously.”

Financial expertise is something agency founders, Sebald included, wished they had picked up earlier in their careers:

bill sebald.

Bill Sebald, Greenlane Marketing:

“It’s incredibly valuable to get your head around the legal and tax items before you start focusing on clients. I knew there’d be a learning curve, but didn’t realize it was such a steep one. We jumped right into client work, which is already a ton of work.

I would have been better suited choosing a business lawyer and accountant with startup experience and asking for more hand holding. We didn’t have a rocky start by any stretch, but we could have had a quicker start.”

Good financial management may even slow company growth, as it did for Reynolds:

wil reynolds.

Wil Reynolds, Seer Interactive:

“I turned away a lot of business to keep our team small, so once I decided to start hiring over that 10-person threshold, I knew I had a sustainable business because for two years I was turning away enough business to double my team.”

Pavlovich echoed Reynold’s caution: 

stephen pavlovich.

Stephen Pavlovich,

“It’s easy for an agency to scale the team to match today’s workload without keeping a close eye on tomorrow. You can come unstuck and find yourself losing money quickly.

Aim to build your business with retainer-based contracts (rather than one-off projects), and use freelance/overflow resources instead of hiring during the ‘peaks.'”

The structure that helped Hudgens was a revenue-per-analyst calculation:

ross hudgens.

Ross Hudgens, Siege Media:

“I was really profitable the first few years, then had a year where I wasn’t because I hadn’t thought this through.

I was able to correct for it, but wish I had done more revenue-per-employee type adjustments earlier.”

Those calculations can be complex. There are confounders: “The bigger the client, the lower the likelihood that they pay on time,” says King.

The temptation to offer a full array of services can similarly undermine stability, King continues:

Michael King.

Michael King, iPullRank:

“We, historically, focused on a more comprehensive series of services because I felt as though doing strong SEO required it. However, it required that we hire a FTE person for one project and then try to get more of those projects.

That is far more difficult than limiting yourself to a small series of services with a small set of repeatable processes.”

Ultimately, scaling requires greater financial stability—something referrals alone won’t bring you.

Marketing an agency that’s lived off referrals

“Doing great work for clients has been our single best strategy,” says Reynolds. “That builds trust and word of mouth.”

The value of referrals isn’t news to agency owners—nor are the risks of a live-and-die-by-referrals strategy. As Laja explains:

Referrals are great, but you don’t control the inputs or outputs. If there’s a slow month due to seasonality or whatever, you can do very little. You can’t wait harder for referrals. 

Among the other options, what doesn’t work? Paid ads, apparently.

  • “We tried some boosting of our content on Facebook. I’m still not convinced that did too much for us.” (Hudgens)
  • “Ads for clients (haven’t really tried to be honest). We’ve done lots of paid on Facebook for our lead magnets, courses, etc., but not for ‘landing clients.'” (Wolf)

To be fair, Dane argues that a half-hearted commitment to campaigns often explains their failure:

johnthan dane.

Johnathan Dane, KlientBoost:

“So many agency owners go surface-level deep on referral marketing, content marketing, paid social ads, etc., for themselves and stop when results aren’t there.

We decided to compete with agencies that offer SEO/content in that realm that have been at it 10 years more than us, but I wasn’t convinced their execution was correct.

Four years later, we have stronger domain authority than them and get over 600 inbound leads per month.”

As you go beyond word-of-mouth, says Hudgens, inbound marketing is a natural fit:

In general, you are competing on knowledge in most areas, so by standing out with that you are, by default, showing you are worth hiring.

Laja agrees: 

peep laja

Peep Laja, CXL:

“Agencies are in the business of expertise. You need to demonstrate it, all day every day. Content marketing and social media are ideal for this, yet so few are gung ho about it.

Yes, it’s hard. The competition is nuts. You need to stand out, be different, be bold, have a point of view. You need content volume and consistent quality. It’s tough. But your business depends on it.”

Too often, Chen says, agencies get stuck:

walter chen.

Walter Chen, Animalz:

“I’ve tended to see agencies follow a growth path that looks like this:

1. The initial clients come from your professional network. You know some people who need help, and you help them.

2. You do good work, and you start getting customers through your professional network and word of mouth. Your successful clients tell other people about you. You bring those folks on as clients.

The problem with #1 and #2 is that they’re both based on the agency founder doing sales. I’ve seen many agencies stall because sales are so dependent on the founder that they don’t have time to think longer term about how to set up the agency for growth.

They never get to #3, which is when a third-degree connection or beyond visits your website, talks to you, and then buys your service. That’s when the founder can really disconnect from sales and the business can scale.

The best way I’ve seen for agencies to do #3 is to do content marketing. That’s because content marketing for agencies is basically an extension of #1 and #2—telling your success stories in a scalable form of media (i.e. blog post, video, etc.).”

The long-term value of inbound marketing was a common refrain:

  • “The most effective thing for us has been content creation at the edge of thought leadership for our space and public speaking. We haven’t seen much measurable impact from anything else.” (King)
  • “We have two in-house, full-time writers and an outsourced team of writers. We also have an in-house, full-time person running our podcast (another form of content) and an in-house, full-time videographer (another form of content).” (Dane)
  • “Our business grows mostly from all the content we create, and I’m producing content nonstop.” (Wolf)

The strength of inbound campaigns is a perfect fit for CEOs like Ekman, who love that work far more than the traditional wine-and-dine strategy of client acquisition:

john ekman.

John Ekman, Conversionista:

“To be honest, I wasn’t really great at that.

Instead, I focused my efforts on building thought leadership. I spent an insane amount of time pitching myself to conferences, writing blog posts, pitching to journalists, etc.—just to build the image and the idea that I was the top dog.

If you build thought leadership in the category first, you can, more or less, build any business or service on that. But if you try to build the business and the consultancy service first (without the thought leadership), you are going to struggle—getting clients, closing sales, pitching new clients, etc.”

Even if speaking isn’t a natural fit, contends Pavlovich, that doesn’t make it less important:

If you’re the founder, you have to be out speaking and networking. That wasn’t a natural fit for me, and still makes me uncomfortable, but it’s been crucial to our growth.

That’s not to say that a single speech will change your agency. “Speaking at events has rarely delivered clients for me,” says Wolf.

The benefits, Noble explains, are often downstream:

samantha noble.

Samantha Noble, Biddable Moments:

“Speaking at conferences and events is by far one of the best ways I have found to promote the agency, although it isn’t just about speaking at the event—the networking with other speakers, the organizers, and the attendees is what really matters.

Conference speaking doesn’t necessarily drive immediate leads for a company; you tend to find people reach out months later who may have seen you speak.”

Of course, once you’ve put in the effort to win clients, you want to keep them around.

Keeping clients around (so you can step off the treadmill)

“Agencies are hard to run,” concedes Pavlovich. “Without wanting to state the obvious, to grow you have to win/retain more clients and lose fewer clients than you did before. At times that can create a relentless treadmill.”

The key to keeping clients around? It’s not results, says Wolf:

talia wolf.

Talia Wolf, GetUplift:

“If you don’t know your client, connect with them, and understand their personal desired outcomes, you will lose the client.

I’ve had cases where I’ve delivered 10X the results my clients were expecting, but something wasn’t working well in the relationship, and it just didn’t work out.”

Pavlovich agrees: 

I used to believe that our work and results would retain business. It does—to a degree—but it’s probably less important than your client relationship.

While “building relationships” is a soft skill, there are tactical steps to support it, says Noble:

Picking up the phone rather than emailing is one thing I try and do. You can build a relationship with your clients much easier over the phone or in person than you can on an email.

As Goward notes, hiring good people—not just talented analysts—can go a long way:

chris goward.

Chris Goward, WiderFunnel:

“As the leader of a services company, your quality of life is determined by the type of people you hire and the type of clients you bring on. We have such a smart, dedicated, friendly, driven, fun team that every day is an interesting adventure.

That’s the feedback we hear from our clients, too. They tell us they look forward to their weekly meetings with our team—that it’s often their favorite meeting of the week.”

It’s difficult to incentivize team members to build that rapport, Dane learned:  

We gave higher commission percentages to our account managers, hoping that rising and falling with the company revenue would make them more aggressive to want to keep clients—still didn’t have the impact we hoped for.

Not every client relationship will work. Indeed, it’s easy to fail at the outset. One of Wolf’s keys to retaining clients is to “only bring in clients that are a good fit for our service.”

Part of “fit” includes a client’s ability to execute on recommendations. To help solve for that, King says, analysts at iPullRank now write “Jira tickets and include them in our SEO site audits. That way, we cut down on the time it takes to get into the dev queue.”

It helps solve a problem that Hudgens has seen derail his agreements: “The thing that has hurt us has been saying yes to work we couldn’t properly fulfill.”

In rare instances, Hudgens adds, they’ve given refunds or extra time and attention—a salve to retain clients while an agency improves client fit or strengthens existing relationships. 


There’s a final thread that’s gone unmentioned, though it was implicit in so many responses: humility.

When I asked, “Compared to when you started your agency, which of your skill(s) have improved the most?”, the answers had a constant—there was so much room to improve:

  • “Financial acumen went way up, but I still suck at it :)” (Reynolds)
  • “Definitely management. I still feel like a beginner, but I also look back on some of the mistakes I made, or things I didn’t know to do in the early days and cringe. I hope to look back on today some day and cringe, too, because I have improved so much from where I am now.” (Critchlow)
  • “Leadership. Hands-down. But I’ll still be learning that for the rest of my life.” (Sebald)
  • “Self-awareness. I now know more than ever that I still have a lot to learn in all areas.” (Goward)
  • “I understand that the things that motivate me aren’t necessarily what motivates my team, and the whole thing is to identify what motivates them and leverage that to help them improve their performance. However, I still feel like there’s a lot for me to continue to learn in that area.” (King)

For successful agency owners, humility sparks motivation, even though there are few quick fixes to look forward to:

ross hudgens.

Ross Hudgens, Siege Media:

“Overall I think everything slowly levels up as you get more experience—’game reps.’ We’ve learned how to hire, how to fire, how to do sales, etc.

It’s the 1% improvement every day over seven years that allows you to get to the next place.”

If that sounds exhausting, it is. “You don’t ever switch off,” says Noble, “You are constantly working!”

“Running your own business means you’re working 24/7,” confirms Wolf. “You sleep, eat, walk, and talk work—especially when you have employees and you’re paying monthly salaries. The stress is 10X stronger, and every dollar matters.”

But then again, Wolf offers, “I can’t even imagine going back to working for someone.”

The post What 15 CEOs Learned Building Top Agencies appeared first on CXL.

How Much Do SaaS Companies Spend on Their MVPs?

Eric Ries once described the minimum viable product (MVP) as a version of a new product that allows a team to collect the maximum amount of validated learning about customers with the least effort: Instead of spending years perfecting our technology, we build a minimum viable product, an early product that is terrible, full of […]

The post How Much Do SaaS Companies Spend on Their MVPs? appeared first on CXL.

Eric Ries once described the minimum viable product (MVP) as a version of a new product that allows a team to collect the maximum amount of validated learning about customers with the least effort:

Instead of spending years perfecting our technology, we build a minimum viable product, an early product that is terrible, full of bugs, and crash-your-computer-yes-really stability problems. Then we ship it to customers way before it’s ready. And we charge money for it.

The reasoning behind releasing an MVP is simple: The longer companies wait to release it—and the more money they spend building it—the riskier their product becomes.

An MVP released at the right time that’s had just enough money spent on it will also reduce a company’s return-on-risk and help with cash flow down the line. 

For this article, we asked 14 SaaS CEOs a simple question: “How much did you spend on your MVP before you had your first dollar of revenue?”

The answers ranged from $0 to $1 million. Let’s take a look at who spent what. 

1. Rejoiner spent $0 on their MVP.

rejoiner dashboard.

Rejoiner, an email platform for ecommerce sites, began as a side project. Mike Arsenault and his two co-founders—all with technical backgrounds—built their MVP while working full time for other SaaS companies.

“We didn’t spend any real cash prior to getting our first paying customer,” recounts Arsenault. “I’ll actually never forget it. It was, and they paid us $199 per month.”

“We also got lucky and qualified for some startup benefits with companies like Rackspace, who covered our infrastructure costs for the first year,” continues Arsenault.

“We did spend a lot of nights and weekends over the course of six months getting the first version of the product working, so there was definitely an opportunity cost there.”

Running comparative calculations, Arsenault figures that “two senior engineers plus a product manager/marketer for 40 hours per month, times 6 months, would be 720 hours to get to our MVP. At $150 per hour, that’s a little over $100K we would have had to invest if we had outsourced.”

Presently, Rejoiner serves about 150 direct-to-consumer brands, including well-known companies like Hydroflask and Titleist. Their typical client spends between $2k and $5k per month.

2. Envoy spent $0 on their MVP.

Envoy builds “workplace experience products,” including a visitor management tool for iPad-based check-in, and delivery management to organize the onslaught of personal packages coming into the office.

envoy dashboard.

An engineer by training, Founder and CEO Larry Gadea built the MVP of Envoy’s first product, Visitors, by himself using only free versions of software. “I was fortunate that the first product I built proved to be successful,” Gadea concedes.

The MVP took around four months to build, during which time the company earned no revenue. Gadea leveraged his connections in Silicon Valley to seed viral distribution of the product, which, in turn, generated the revenue to hire engineers and scale the company.

Today, more than 100,000 people use Envoy’s Visitors product at over 13,000 workplaces in 72 countries.

3. spent $1k on their MVP. is a SaaS tool that companies can use to assess engineers before they hire them. saas tool.

It’s now used by companies like Apple, Vimeo, and GE in their recruitment processes. The company’s CEO, Nathan Doctor, says’s MVP was built over a single weekend. It cost less than $1k to build, and they released it in 2016. 

Doctor says the company had its first customer on the Monday after their MVP was released. They then spent the first year qualifying the product and testing out their revenue model. 

Their growth since their MVP release in 2016? now has 350+ customers who spend between $6k to $17k a year to use their software, depending on the size of the company. A $1k MVP built over a weekend now brings in $2.5 million in revenue a year. 

4. Socio spent $9k on their MVP.

Socio is an event-management platform that helps companies launch custom apps for their events.

screenshots from socio.

Now, companies like Google, Microsoft, and ICAO are among Socio’s growing base of 400+ customers. The company’s co-founder and CEO, Yarkin Sakucoglu, says Socio’s MVP was built for just $9k.

Sakucoglu says he got Socio’s first 10 customers by cold emailing event planners he found on LinkedIn. He searched and pitched planners who worked at companies with 500+ people and closed $200k himself before he made his first sales hire. 

And what about Socio’s numbers after its $9k MVP? With a growth rate of 225%, Socio is now making $133k+ in monthly revenue. 

5. Vested Technology spent $17k on their MVP.

Vested Technology is a recruiting-automation platform that works alongside teams to identify, engage, and hire passive candidates. 

bested technology saas demo.

Prior to his role at Vested Technology, co-founder and CEO Akash Srivastava worked on Wall Street. He spent $17k to launch Vested Technology’s MVP. 

With just 30 customers, the SaaS product is now pulling in $36k a month, and each customer has an average revenue of $1,200. 

6. spent $20k on their MVP.

Justcall is a cloud phone system that sales teams can use to make calls using local numbers. interface.

Justcall’s Founder and CEO, Guarav Sharma, is a chemical engineer by trade who just happens to love writing code. He already had two exits before he created Justcall, selling his last business to The New York Times.

His latest company was launched on Product Hunt at the end of 2016. They landed their first customer the following March. Sharma says the first line of Justcall’s code was written about four months before the MVP, which was launched for roughly $20k. 

Now, the fully bootstrapped company is turning 60% of its demos into paid customers and hitting $2.5 million in revenue a year. 

7. Pixlee spent $40k on their MVP.

Pixlee is a visual-marketing platform that helps companies connect with influencers. 

pixlee interface.

Co-founder and CEO Kyle Wong, who was featured on Forbes’ 30 Under 30 List, says the company’s MVP was built using “sweat equity.” It was launched in 2014 for $40–50k, and Wong says that he and his co-founders paid themselves only minimal stipends in the beginning. 

Now, 500+ brands use Pixlee, and the company pulls in monthly revenue figures of $1.5 million. They’ve spurred growth, in part, by charging for usage—not seats. 

8. Wigzo spent $80k on their MVP.

Wigzo is an AI cloud automation tool that ecommerce merchants can use for personalization, analytics, and advertising.

wigzo demo interface of saas tool.

The company started coding the first version of their MVP in August 2014, which cost Wigzo $80k. For seven months, they didn’t have a single customer; the company brought in their first dollar of revenue in March 2015. 

Since their launch, the company has focused on two core audiences: Small businesses earning between $2 million and $20 million in revenue, and enterprise customers earning more than $20 million.

Wigzo’s customer payback period is on the higher end of the scale (18 months), and each customer costs $7k to acquire, due mainly to the company’s focus on acquiring enterprise customers.

Wigzo’s CEO, Mohd Umair, says that since their launch just over four years ago, the SaaS now has more than 600 customers and is making $240k in revenue a month. 

9. Hotjar spent $140k on their MVP.

Hotjar is a suite of tools that offer “behavior analytics” on site users—mouse tracking, scroll tracking, etc.

CEO David Darmanin shared a breakdown of costs during the company’s first year, when it rolled out a public beta. Most of the money went to employee wages and, to a lesser extent, advertising:

hotjar breakdown of first-year expenditures.

Since Hotjar released that beta in late 2014, the Malta-based company has grown: It now has nearly 100 team members and is used by over 350,000 organizations in 184 countries.

In addition to a freemium version, its paid tiers range from $29 to $589 per month, based on the number of pageviews tracked per day.

10. CXL Institute spent $200k on their MVP.

CXL Institute offers online training for digital marketers from top industry practitioners.

“CXL started as just a blog—and just me—in 2011,” recounts CEO Peep Laja. “That same year, I started a web development and CRO-focused design agency. In 2013, we stopped doing all web development work and focused 100% on conversion optimization.”

With the company already in the business of expertise, building a training platform was a logical next step to scale revenue. In early 2016, Laja put together a new team, and the CXL Institute MVP launched in May 2016. “I think my cost—office, salaries, and everything else—was about $40,000 or $50,000 a month.”

screenshot from course on google tag manager.

“The start was rough, and we almost went out of business,” notes Laja. “We made only about $25,000 in the first month.” The revenue kept dropping each month after that, for four months in a row. “One month before running out of money—we’re bootstrapped and were using agency profits—we managed to turn the sinking ship around with constant user research and nimble action.”

By 2017, CXL Institute was profitable but unstable—monthly income levels varied by as much as 2x. The following year was more predictable, with about $1.4 million in revenue, and, this year, the company is approaching $2 million in annual sales.

(Laja currently has another product, Copytesting, in beta. So far, he estimates that they’ve spent about $65k on the MVP.)

11. Ambit spent $250k on their MVP.

Ambit provides companies with conversational chatbots, which they refer to as “digital employees.”

sample chat from ambit.

The product was developed three years ago by CEO John Comrie, and Ambit’s MVP was built at the end of 2016 for $250k. Comrie said the main cost behind the MVP was developer talent; the founder’s time was also factored into the cost. 

The product morphed from a coaching bot to the platform offering it is today. The reason for the pivot? Ambit decided that the bot space was too constrained, so they opted for a platform-based product instead. 

Now, the product serves 18 customers, each of which cost $50k to bring on board. However, Ambit’s monthly revenue numbers are now $250k, matching the cost of their MVP.

12. UberFlip spent $300k on their MVP.

Uberflip is a “content-experience platform” to help companies create content for every stage of the buyer’s journey

uberflip demo.

When the company morphed an earlier product and built Uberflip’s MVP in 2011, it cost them $300k, with no capital—and a lot of sweat equity.

The company started bringing in revenue in 2012. CMO Randy Frisch says Uberflip was initially selling to content-marketing managers. The company later changed its focus to sell a “content experience” to higher-level marketers instead.

Fast forward to 2019, and the company has raised $32 million in capital, with monthly revenue numbers of $1.3 million from 500+ customers. 

13. Rallyware spent $500k on their MVP.

Rallyware is a performance-enablement platform that embeds workforce training in daily workflows. 

rallyware homepage.

The company wrote its first line of code for their MVP at the end of 2012. By the time it launched, the investment had risen to $500k. Rallyware CEO George Elfond says the company hit $3 million in annual revenue in 2018, and they’re on track to double that this year, with a customer base of just 50.

Elfond anticipates that, next year, the company’s annual revenue will crack $12 million. Oh, and they wouldn’t sell to Salesforce for $10 million. 

14. Loop Email spent $1 million on their MVP.

Loop Email offers to “transform your email into a powerful business hub.”

loop email interface.

Before the company earned their first $1 of revenue, they had spent $1 million building their MVP. Despite raising $5 million to date, the company’s CEO, Bostjan Bregar, says the company is burning $130k a month. 

At the time of my interview with Bregar in July, the company was making $40k a month, with a customer base of 100. 


When it comes to MVPs, there is no one way. 

Spending more isn’t always better. built their MVP in a weekend for under $1k, and now they’re earning more than the company that spent $1 million.

Wherever you’re starting, success or failure hinges on something other than your MVP budget. 

The post How Much Do SaaS Companies Spend on Their MVPs? appeared first on CXL.