I Built A $1.5M/Year Data Leak Deterrence SaaS

Sergey Voynov

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Published: April 1st, 2022

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Sergey Voynov

Founder, G-71

$10K

revenue/mo

Founders

Employees

G-71

g-71.com

from New York

started April 2019

$10,000

revenue/mo

Founders

Employees

Discover what tools Sergey recommends to grow your business!

reviews

Product Hunt

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Twitter

productivity tool-icon

Jira

Slack

sales

Salesforce

Discover what books Sergey recommends to grow your business!

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Want more updates on G-71? Check out these stories:

1. Update: We Lost Our $2.2M ARR SaaS Business, Rebuilding Now (2023) ➜

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

Hi! I’m Sergey, a serial entrepreneur in the booming cybersecurity industry and the founder of G-71 with an annual turnover of almost $2 million. I have been working in IT since 2001. I started as a consultant and project manager, then worked as a top manager of several international companies. Today, more than 110,000 people use solutions developed by my companies.

My main business is a New York-based data leak deterrence software company, G-71, that created the state-of-the-art information security solution LeaksID to deter leaks of sensitive documents in addition to the DLP systems and to detect leak sources in the case of an incident. In 2021, G-71 went through the Alchemist acceleration program and launched a cloud-based solution.

Our solution LeaksID uses a patented algorithm (U.S. Patent No. 11.120.520) that applies invisible anti-leaks marks to all your documents and converts them to PDF format. It works even if the data is stolen by taking a photo or in hard copy form. You can try it yourself using our platform for free.

Imagine, each time a user accesses sensitive data, LeaksID displays a unique copy. From one page of text, LeaksID can make 27,000 copies for every person on Earth - that's 205 trillion unique combinations. We made LeaksID available both for private and corporate use. Clients can view, share, download, and print protected documents and identify the leakage culprit in the event of illegal publication.

If Quentin Tarantino had used LeaksID when handing over the script of The Hateful Eight, he would not have had to sue the online publication, Gawker because he could have discovered the source of the leak in less than 10 minutes.

i-built-a-1-5m-year-data-leak-deterrence-saas

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

It was in one of those large companies that I first encountered a document leak through photography. A new CEO and a new team joined the company — and, as usually happens in large corporations, many employees didn’t quite like the changes. They had access to confidential company information, and someone started taking pictures and leaking them.

The leaks put the CEO’s reputation in question by distorting the situation through the subjective interpretation of internal documents: they were taken out of context and given a different meaning. There was no way to cure the situation.

At that point, I realized that I needed to prevent leaks like these; there were ideas on how to do it. And very soon, it became clear that this is a global pain and the need for this is everywhere as many customers are suffering. Such leaks have been prominent from the beginning, from the inception of electronic document management, and everybody has needed a solution to this issue for a long time. It was obvious that it was going to sell. That's how electronic document labeling came about.

The world keeps moving, the economy is running – you just have to go out and do something.

I have been in this business for 20 years - I have managed software development, put IT systems in place, been an IT director, so I felt like a fish in water in this industry. As the head of IT at a large company, I needed such a product myself and looked for it on the market.

When I found a company trying to create such a product, I started working with them first as a customer, putting their technology to use in the corporation where I was working at the time. After the solution proved to be effective, reducing document leaks by 100 percent, I realized that this labeling technology had great potential. And there was no need to push the concept, no need to prove anything. After all, here it was, a finished product, all that was left was to adapt it to the customer.

So, I decided to join the company as Chief Visionary Officer, giving up my career to join a company that wasn’t doing effectively at that moment. I decided to leave the corporate world, even though I was the IT director of a large corporation, but I believed so much in the product that I never doubted for a second that it would succeed.

Then my partners and I bought out a stake in the company, and I became a CEO and focused on its development. We immediately increased our sales and grew steadily on this revenue without attracting any investment, venture capital, or otherwise. This is not a classic story for a venture capital business, but it worked for me.

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

At first, we were just a company doing many different things at once. We played the role of a classical integrator, implementing other systems and developing our expertise related to our product and the main vendors.

For example, we had very strong expertise when it came to IBM solutions. So we had a systems integrator consulting business. But we also had our product. But since we did not position ourselves as a vendor, we did not actively sell this product.

At a certain point, we said: "That's it, we're not a consulting company anymore. We are a vendor now.” We stopped all activities in this area, removed the entire consulting component from our business plan, and focused on one technology we developed and patented.

When you run your own business, there are no formal or informal tasks. All avenues are open in front of you, you have a full range of possible solutions.

Using that technology, we developed a product and began positioning ourselves as its vendor. The sales model changed. The company's internal model also changed because we began to create our own sales channels.

We found distributors and partners who added our solutions to their portfolio. Because of the change in focus, we started collecting customer feedback related to our technology. Our focus was on the product, not on the opportunity to make money.

In terms of creating the product, it was a very logical story: idea – development – product. There was the development team. That's how the product came to be: we created an adaptable, specialized yet customizable product. Then we created a universal solution and upgraded it to support different integrations, formats, and so on. We're adding functionality and working on performance, and it's an ongoing process.

And because our labeling method is unique right away that we needed to patent it because there was nothing like it anywhere else.

We went to the U.S. patent office, to a famous law firm, to patent it. They warned us that it would be expensive and take a long time. The costs were clear, and we were also prepared for the fact that it wouldn't be fast, so we got a provisional patent, which is usually granted for one year.

After that, we applied for a permanent patent and prepared to wait three or five years. However, something amazing happened: our lawyers contacted us, saying, "Look, our researcher hasn't found anything similar to your product. So all indications are that you've come up something unique." We got a permanent patent within one year. And we've heard more than once from our lawyers and partners that it's the rarest of cases to get a permanent patent within a year.

Describe the process of launching the business.

In 2019, we launched G-71 in the US: we registered immediately, came up with a name, a logo, and made a website. And already in 2021, we grew to $1.6M in revenue with our solutions.

Although we are just starting to scale them up, we are now already able to support the infrastructure, operations, and so on with our own money. Although we would welcome so-called smart money that would help us become a unicorn faster through advice and the reputation of investors.

Going back to the monetization model, we were able to close all of our business development costs either from the first sales. Then, in the early stages, we managed to attract some money from the Alchemist accelerator. All the profit that we had was reinvested. In 2020, it was $1.2 million; now, it's $1.6 million. And we continue to reinvest all of the proceeds in product development, recruitment, and so on.

Product Hunt also helped us a lot in our business development. We created a new product – a free converter for document protection, which everyone can access – and immediately put it on the site to get feedback.

Actually, what Whatomewhat rudimentary cloud product that we repackaged into a platform for the storage of sensitive documents. There was also a lightweight option where a document could just be converted in the cloud. So, we tested this concept through Product Hunt, and now this product is an incredible success, and thanks to it, we have also reached a wider audience.

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

We tried everything: direct contacts, cold calls, e-mailing, and speaking at conferences. It sounds trivial, but each of these activities helped us find clients. And to retain clients, the best strategy was to meet expectations, to manage their skepticism that ran along the lines of "I don't know if this will help me in my work the way you say it will." And always make sure that the client praises us and is proud of our solution.

We have repeatedly gotten several corporate customers from a single satisfied customer. That is, somewhere in the information security community, someone would tell a colleague how they solved this problem, and we would have our hands full for days. Word of mouth works, the first customers will become your best adopters, and they will advertise you to others.

As we began to scale, we ran into the same problem over and over again. The people in charge of protecting information, or those who need to protect their valuable information, just don't know that this technology exists. And when we tell them about it, everyone is surprised and wide-eyed: "We didn't even know this was possible because we were protecting ourselves in slightly different ways or means."

So one of our main tasks today is to popularize the technology itself. Simply to make potential clients aware that there is a technology that enables you to protect confidential information and documents from leaks using invisible tags, and in the event, this becomes available, almost instantly identifies the source of the leak. After all, to want something, you first need to know that it exists.

Today we are actively working with Influencers, have strengthened our PR team, and are working hard to spread the word about our technology.

Building a good channel to attract and retain customers is quite difficult. You need to clearly understand who your customer is and what they need. In our case, since we are a complex B2B project from the cybersecurity segment, where the user is quick, we are taking the following steps:

We have divided the marketing channels into social media and our own expert blog, where we regularly post long reads with analysis of the market, our segment, and product reviews.

Here are some of the specific marketing channels we use:

Presence in specialized startup communities, such as Indie Hackers (maintaining a company profile page and adding important milestones of project development).

Guest op-eds with the company story in various expert blogs
Referral campaigns, such as writing articles with referral links for bloggers and their sites to collect leads and increase traffic;
SEO is an important tool that we constantly monitor for new opportunities. It's important to constantly check your keywords, check the snippet and your product cards in search engines because this is a great option to increase traffic;
Community marketing – creating a pool of like-minded people on different sites, for example, constant posting on Reddit which can give additional traffic;

Performance marketing, in our case, a launch on Product Hunt.

Speaking in greater detail about the launch at Product Hunt, it was a great hypothesis (which can and even should be practiced in business to find new points of growth) that brought us over 1,900 new users in just a few days, and also launched several perseverations, creating additional publicity for us.

We also made the top 5 products of the day and were ranked #4, and in January 2022, we were shortlisted for the Product Hunt Golden Kitty Awards 2021 in the Privacy-Focused category.

Traffic at launch also greatly exceeded the organic numbers and increased by dozens of times, as you can see from the spikes on the graph: the launch at PH and the publications that followed it.

In terms of retaining customers and keeping them interested, we use email marketing tools, in particular, sending out chains of engagement emails. This is also one of the options for raising traffic and getting feedback from the audience. In the picture below, you can see that the open rate for our emails is quite high.

Our SEO Optimization Process

For SEO optimization, we primarily use the available tools. First of all, when we first started, we made a selection of our closest competitors. We analyzed their titles, checked the keywords in the metadata, and also used the Ahrefs tool, which allows you to do the analysis. Now we use the Semrush tool to monitor both our rating positions and those of our competitors.

The hardest thing about our work is that our technology is unique, which means that a niche and a set of keywords that could meet the needs of the audience have not yet been created. Therefore, we have to analyze words that are close in meaning to our solution.

For example, the basis of our technology is invisible marking, but in fact, watermarks are the most well-known in the market. This is a solution similar to ours, but not the same. But when adapting our site for SEO, we still try to use such words in the right context to hootonce.

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

Today, I can confidently say that it is a profitable business, and I look to the future with confidence. We finished 2021 with $1.6 million. Moreover, in 2021 we launched many projects to be implemented in 2022, and this will dramatically change the figures, increasing sixfold the revenue and turnover, according to our estimates.

I hope that this year we will also close an investment round with several investors whom we want to be part of our company – and use this money to scale.

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

The first thing I regretted when I started this business was not getting into it much earlier. It is such a unique and interesting experience, and every day I face new and interesting challenges. I realize now that it would have been great to start much earlier.

There are no formal or informal tasks when you run your own business. All avenues are open in front of you, you have a full range of possible solutions. You feel like some kind of celestial being, when you can do anything you want, you're not limited by anything but the law and the generally accepted norms.

It's an extremely interesting experience. This is not a corporate job where you have a sector, a task, a framework. Business is ample can starve today and feast tomorrow.

As for bad habits, I need to get rid of hyper responsibility and constant attempts to control everything – that's what I'm struggling with right now.

As for mistakes, we had them by choosing not quite the right partners when their lack of reliability cost us some contracts.

There were also mistakes in hiring unsuitable people, and we had to change the team significantly. When I say ‘significantly,’ I mean that I changed the entire sales department three times.

I saw that for some reason, sales were not going as well as I would have liked, and the reason was in the people: they either misunderstood the tasks or quickly succumbed to their initial success. I've learned to break up with ineffective people quickly. That's it.

What platform/tools do you use for your business?

We use Salesforce, Jira, Confluence, Slack, and messengers. This creates an ecosystem of products that enables you to establish any business processes in the company.

Take client services, for example, which is associated with the registration of all user requests, recording them, and so on: for this, a separate CRM system is used.

The software development process is built using the classical methodology of agile, and it is also all managed in certain systems that have a backlog and so on.

The financial department, of course, has its financial system. So, I would say we pretty much use the same platforms/tools as everyone else.

Also, we have a motivational tool. Since the team is already quite large, it’s very important that each team member feels that they are contributing to the company and its development and is aware of our achievements.

To that end, we have hung a bell in the office, and every time we receive money from the clients, we ring that bell. It rang almost every day in December, and it was very inspiring, bringing the team together and energizing it to win more.

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

My daughter recently gave me a book called Nixen: The Dutch Art of Doing Nothing. The hidden message was quite clear actually: having started a big business, I have been lost to my family. And I now need to re-learn how to live an ordinary life. That is to say, a small amount of slacking off won't hurt me.

On the contrary, I must make sure there’s some slacking. Otherwise, it will only get worse. That's why people close to me now slip me books like The Art of Doing Nothing or Burnt Out or something like that. Well, well, it's hard to disagree with them.

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

The main advice is to do it! I am not stingy with inspirational words when I meet people who say, "I have such and such an idea," but for some reason haven’t come around to bringing it to life.

The main question is why? Why don't people create, try and try? Because people often imagine a scenario of failure ahead of time.

That is, many people even see the ultimate success but do nothing to achieve it because “it will be difficult and hard,” although that’s not a given fact. This stops us – and we need to get this thought out of our heads!

The world keeps moving; the economy is running – you just have to go out and do something. Look around, repeat, do it, apply to accelerators, create! When I talk about my experience or introduce people to this startup crowd, when I tell them, “Go for it!” – I see how people’s faces light up.

In the last quarter of 2021, I coaxed one of my competitors like this, "Why don't you think outside the box, what’s keeping you stuck on the local market, why aren't you doing it globally?" I saw his eyes lit up when I said those words. So, do it, have fun with it!

Are you looking to hire for certain positions right now?

We are looking for Business Development Managers and would welcome strong sales professionals to our team. Job vacancy and details.