How I Turned a Niche Side Project Into A $1.2M/Month SaaS Company

Priit Vaikmaa
CEO, TextMagic
$1.2M
revenue/mo
1
Founders
51
Employees
TextMagic
from Tallinn
started
$1,200,000
revenue/mo
1
Founders
51
Employees
24K
alexa rank
4.9K
followers
614
subs
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How I Turned a Niche Side Project Into A $1.2M/Month SaaS Company

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

I’m Priit Vaikmaa, CEO of TextMagic. We’re a SaaS company that specializes in providing SMS marketing solutions for businesses across the US, UK, Canada, Australia, and Europe.

Our main product offering is our integrated Application-to-Person (A2P) SMS platform businesses use to send texts and deliver marketing campaigns. In terms of our customer base, we’re very diverse - it’s pretty much any business that wants to use SMS technology to communicate with their customers.

We deal with businesses of all shapes and sizes, from one-person operations to SMBs' larger enterprise-level organizations. Our revenue in 2021 was just short of €11 million.

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Priit Vaikmaa, TextMagic CEO

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TextMagic Web App

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TextMagic Mobile App

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

TextMagic was founded in 2001. It started out as a niche side project, operating purely in the UK with limited product offerings. I joined in 2007, and the founder handed over overall management to me later that year.

I’ve always been a geek at heart. I’ve been involved with technology for all of my professional life. It’s hard to describe, but I couldn’t see myself doing anything else. I’m fascinated by how human beings interact with the world around them and how businesses keep in touch with their customer base.

Dream. Have the courage to accept sacrifices in your personal life that will pay off down the line. The first step is always the most difficult one.

Before I joined TextMagic, I worked for Modera - an automotive customer relationship management (CRM) company. The platforms were totally different, but the founding principles were the same - enabling brands to manage their interactions and providing scalable solutions effectively. That’s what it’s all about. How we communicate with the world around us dictates so much of our success in life.

When I joined, I realized our product offering had huge potential. It just needed more focus. It was just a case of making sure that we were keeping in step with technological trends and shouting from the rooftops about how empowering our platform could be.

Take us through the design, prototyping, and roll-out of your first product.

The nature of the SaaS platform demands it be user-focused. That’s what the “as-a-Service” part of “Software-as-a-Service” means. You’re offering an alternative to on-premise or user-managed solutions. When we were developing the software to expand into global markets in the early days, we constantly asked ourselves how it would impact the customer experience. I was fanatical about it.

The most important thing for us was to make a web app, while when I joined the company, TexMagic was just a simple Windows desktop app. Once we’d merged the back-end infrastructure that allowed us to access cellular networks to send SMS messages (which was no small task!), all efforts were focused on the customer-facing environment.

Our front-end design process wasn’t as tightly managed as some others are. I don’t see a lot of value in starting off with a definite vision for how you want a GUI to look and feel - what if you’re wrong? We had a small team of developers, and the overriding theme was usability.

Once we rolled out any changes, it was my job to make sure that we listened to our customer base and didn’t get too attached to any graphical features or functions. I’ve never been the person to think, “XYZ is incredible, and we’re never changing it”. It’s a constant cycle of development, learning, and re-development.

We constantly send NPS surveys to long-term clients and document both positive and negative comments. Our support agents will always follow-up with unhappy customers, as well.

Many features were developed from support tickets sent by customers. If we received a lot of tickets requesting a certain functionality, we would prioritize its implementation.

SMS chat is the biggest feature whose idea came from support. Mobile apps also, SMS Automations, SMS Surveys, Calendar for scheduled SMS, and Zapier integrations were all requested by our customers. Of course, we also look at competitors, but will never develop a feature that clients are not interested in.

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Priit Vaikmaa, CEO at TextMagic

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TextMagic’s Development Team

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

We try to be more than just an A2P platform. We create a lot of educational content (guides, video tutorials:

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For our customer base that helps them to extract value from their subscriptions. This isn’t limited to teaching them how to use the TextMagic platform - we offer practical advice on how to forge fast, efficient communication channels and plan marketing campaigns.

Surround yourself with good people who will provide constructive criticism of the decisions you make and the direction you’re taking the company in. Objectivity is absolutely critical to building a successful organization.

SEO and content creation are another huge consideration. Attracting traffic is an exact science, and we spend a lot of time optimizing our marketing assets and online presence to make sure that we’re appearing as high as possible in search queries relating to our industry. Keywords, paragraph structure, heading tags… it all counts.

We use Semrush and Ahrefs for competitor analysis - to figure out where our competitors are performing better at the domain and page level.

Regarding keyword research, we try to prioritize our SEO efforts based on traffic quality and traffic potential. For queries where ranking pos. 1-3 would be impossible or not bring enough traction we synchronize our organic efforts with our PPC, but we’re also constantly researching those “content gaps” where we can provide more value.

Sometimes, answering a very specific question for a smaller group of users can lead to better results than covering a general topic. From an SEO perspective, the content strategy is split based on keyword intent. Informational content is structured on topic clusters. Our audience loves straightforward guides or templates that they can instantly apply to their business.

We have also developed 40+ tools that we believe provide value to growing businesses. We use some of them ourselves.

Lastly, UX is a huge consideration for us - we are constantly fixing or improving things like page speed, navigation, user flows, etc.

Retention is all about reliability. I think it’s easy to get bogged down in technological details, but customers want software that works. It’s that simple. Once you’ve got a handle on that, and you can guarantee your platform’s effectiveness, then you can look at making incremental changes that improve productivity and add value - oh and that’s another thing, we’re cost-effective compared to the impact we have on a customer’s operation, which always helps!

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

Our HQ is in Estonia. We also have two more offices in Europe, and we employ people remotely from worldwide. Hybrid working is here to stay, and I’m not wedded to the concept of coming into the office day in and day out. It’s helped us to attract talent too.

Last year, I took TextMagic public with an IPO on the Nasdaq First North Tallinn (part of the Nasdaq First North Baltic, that’s focused on smaller European companies). Our first day of trading was on 15 December 2021. The final count was 9,896,434 shares across 15,410 investors, for €49.5 million, which is pretty good going.

I’m enormously proud of everyone that was involved. It was a huge, huge moment for the company. There is this feeling of us having burst onto the scene, for sure. We have the largest number of shareholders of any Estonian firm in the First North Baltic.

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TextMagic IPO Opening Bell (15 December 2021)

The big project at the moment that’s taking up most of my time in the development of a brand new all-in-one business platform called Touchpoint. We’re moving away from a product offering that focuses solely on A2P SMS services and branching out into multi-channel marketing tools, sales operations, and CRM solutions. This represents a turning point for TextMagic, and we need to get it spot on.

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Touchpoint

Our short-term goal is to continue providing stellar service to our A2P clients and give ourselves enough time, space, and resources to make sure Touchpoint goes to market as an industry-leading product. In terms of long-term goals, we’ll just keep doing what we do and see where the industry takes us.

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

Yes - timing is everything, as they say! I took TextMagic to market in different countries when unified communications were becoming the norm. And I really think that we should have started that earlier, thus we could achieve even more outstanding results. We've flourished alongside softphone technology, instant messaging, and integrated marketing platforms, and our clients are used to communicating through a unified solution that ticks all the relevant boxes. We never really had to convince people that this was an easier way to communicate with their customers. I’ve never had to give our platform the “big sell”. It was all intuitive.

Another crucial part of our success - probably the biggest part - is that we employ good people and trust them to do a good job. I’ve seen some CEOs fall into the trap of micromanaging certain elements of an operation until the decision-making process breaks down - everyone is second-guessing themselves. That’s not for me, and I’d be wasting money by not empowering people to make their own decisions.

The back-end challenges will always be there, but there’s no point complaining about them. The global cellular network is in a state of constant change, and it’s our job to make sure that our products and services don’t get affected too much by things outside of our control, such as infrastructure amendments. We have solid partnerships in place with network providers to make sure we keep ahead of any developments.

What platform/tools do you use for your business?

We use a variety of platforms across our various business functions. For SEO, we use Google Analytics, Google Search Console, Ahrefs, and Semrush. For content creation, copywriting, and editing, we use Wordy and Grammarly. They’re big-name platforms for a reason - super easy to use and highly cost-effective.

Have the courage to accept sacrifices in your personal life that will pay off down the line. The first step is always the most difficult one.

We employ freelancers via Upwork to help lighten the load internally and free up staff for key tasks. It works well for us. We’ve found some real gems on there that understand our product offerings.

Besides the mentioned tools, we also use other popular instruments and platforms like Atlassian, GitHub, Mailgun, Zapier, and Zendesk.

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

I’m a huge fan of Napoleon Hill’sThink and Grow Rich. I read it 20-odd years ago, and it had a huge effect on me. It’s all about having a clear idea of where you’d like to go in life and using that as inspiration for achieving your goals. It may sound obvious, but it’s easier said than done. It’s all about visualization. You hear elite sportspeople talk about visualizing a particular result in their head and becoming single-minded in their quest to achieve it. That translates to business too.

For TextMagic, it was something as simple as visualizing revenue goals. First, it was a thousand euros a day, then I dreamed about adding a zero to it, then doubling that, etc. Every time I ticked off a milestone, I took a moment to reflect on what that meant and thought about the next big step. Pretty soon, it became a self-fulfilling prophecy, and here we are after our IPO, the largest Estonian company listed on the exchange and getting stronger every day.

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

Do as much as you can to surround yourself with good people who will provide constructive criticism of the decisions you make and the direction you’re taking the company in. Objectivity is absolutely critical to building a successful organization. Talk about your vision with successful entrepreneurs in your field and listen to what they have to say. Almost all of them will be happy to help you.

And the most important thing? Dream. Have the courage to accept sacrifices in your personal life that will pay off down the line. The first step is always the most difficult one.

I speak to many Estonians who have a burning desire to run their own company, but the barrier to achieving that is almost always the same - leaving a secure, well-paid job to make it on their own. Everyone has to start somewhere, and someone will always try to talk you out of it. There has to be a point where you have faith in your vision and just swing for the fences, as they say!

Are you looking to hire for certain positions right now?

Yes! We’re always on the lookout for talented people, whatever industry they’re in. Anyone who thinks they have something to offer is welcome to look at our website, study our product offerings, and get in touch here.

Where can we go to learn more?

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Priit Vaikmaa, CEO of TextMagic
Pat Walls,  Founder of Starter Story

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