How Our Team Collaboration Apps Generate $600K/Month
Hello! Who are you and what business did you start?
My name is Michael Hollauf, I’m one of the founders of Meister, and we currently have two very popular apps for team creativity and productivity on the market — MindMeister is the biggest online mind mapping app with over 11 million users worldwide, and MeisterTask is our new agile task management tool that already has 3 million users and is catching up fast with the likes of Trello and Asana, having won both Apple’s and Google’s Best of the Year award in its launch year.
Our customers are mostly small to medium-sized businesses from all verticals, but especially with MindMeister we also have many academic and private users.
We’re currently close to US$ 10 million ARR with our Freemium subscription business model on both apps.
What's your backstory and how did you come up with the idea?
It all started about 15 years ago when I worked together with my co-founder Till at another tech company. I was based in London at the time, Till was in New York and later Munich. We both loved IT but had grown a bit bored with our jobs, so we decided to start our own business. The first business was an outsourcing company, where we did web projects for other companies with a Romanian development team. This was good fun but hard work and tough to grow.
At that time the news was that Google had just acquired a company called Writely and turned their product into what is now Google Docs, which we started using almost immediately to collaborate on projects at work. We were also using MindManager, at the time the only serious mind mapping software, to brainstorm product ideas and also to conduct and organize customer meetings. MindManager was a standard OS-dependent program that had to be installed locally and licensed for about $300, which made it very hard to share our mind maps with anybody else, as they would have had to buy the software as well. Also, you couldn't collaborate at all, which is something quite important for a brainstorming tool.
If your product isn’t sticky, no amount of content marketing will offset your user churn.
So, while using Google Docs — a collaborative word processing tool — and MindManager — a non-collaborative brainstorming tool — at the same time, we thought it might be a good idea to combine the two. This was the birth of MindMeister.
We bootstrapped the company in the first year by cross-funding it from the outsourcing business but then decided to take a small angel investment of $600K to speed up development and rollout.
Take us through the process of designing, prototyping, and manufacturing your first product.
Both our products are software tools, so there is no physical manufacturing process involved. Instead, we program code that we then deploy onto servers on the internet. (Initially, there was one large computer at a private hoster; these days it’s hundreds of virtual servers in the Google Cloud). This also helps to keep the so-called “costs of goods sold” low, which for us are a few extra processor seconds per additional user — which is one of the things I love most about the software business and cloud software in particular.
In terms of developing MindMeister: In the beginning, we were fighting mostly technical problems of displaying a complex graphic like a mind map in a rudimentary web browser. For example, before HTML5 we had to draw all curved connection lines in a mind map with thousands of individual pixel elements. That was a nightmare. Today we use SVG technology, which runs in all modern browsers and can create any shape we want.
Later, our biggest issue was trying to assure the people of the safety of cloud computing, and we still face this problem today. I think it’s particularly difficult in the mind mapping world because mind maps by nature contain intellectual property, new ideas, and valuable thoughts, which need to be protected. This is why we’ve always placed such a big emphasis on security at MindMeister.
Describe the process of launching the business.
When we started MindMeister, we first distributed invites to 200 friends and business contacts who we thought might be interested in a web-based mind mapping solution.
People really liked it and started to spread the word. One of these first users posted a review on Delicious — the Product Hunt of its day — that made it to the front page, and we soon received messages from hundreds of other people, begging to be invited.
When we officially launched on 7 February 2007, we already had our first 1,000 users. As soon as we opened the beta version to the public, we climbed to 10,000 users. Growth accelerated even faster after we ended the invite-only phase.
MindMeister was still completely free at the time, although we did have a payment option built-in. We told users that someday we would start charging for MindMeister, but until then they could use it for free.
Since launch, what has worked to attract and retain customers?
In terms of marketing, we’ve never just bet on one horse. My first advice to others would be to make sure that customers can find you on Google, but even that requires a whole range of activities, from regularly creating fresh, amazing content, to optimizing your page load time. You’re never done optimizing and updating (and just when you think you are, Google changes its rules or algorithm and you have to start from scratch).
Great content also helps to educate customers and keep them engaged. We’ve created a free mind map academy just for this purpose, and we utilize the content on various other channels such as drip emails and on our social media channels.
The biggest part of our monthly marketing budget is spent on Google Ads, but we also see great ROI on other paid channels such as niche mind mapping blogs or various app directories.
Above everything else, focus on usability and simplicity. If the user experience is good, and you're also solving a problem for somebody along the way, you can almost do no wrong.
Partner/influencer marketing has become another cornerstone of our efforts, and it’s proven particularly successful in the German region where we score due to our server location (Frankfurt) and security measures.
But honestly, all marketing efforts start and end with the product. If you have a great product, you don’t have to look for partners to help you spread the word — they will simply come to you. If your product isn’t sticky, no amount of content marketing will offset your user churn.
How are you doing today and what does the future look like?
We’ve built both our products as self-service platforms, and 80% of our revenue is generated by sales through our websites and the various app stores we’re listed in. This has always helped us keep costs for our sales department low. It currently consists of only three people, who focus on our enterprise customers. In 2019, we’re expecting them to bring in $1.25M through direct sales in addition to the $8.1M we’re expecting from online sales.
Overall, we have just over 50 employees now, spread out over our three offices in Munich, Vienna, and Seattle, and we expect to grow significantly over the next five years.
If you ask me what the future holds for Meister, the short answer is world domination ;)
All jokes aside, we have plans to expand our product range and eventually offer a complete productivity suite for companies who are looking for intuitive, web-based collaboration software that’s actually fun to use.
Through starting the business, have you learned anything particularly helpful or advantageous?
Some mistakes we’ve made: rewrote our second product way too soon, fuelled by technical perfectionism and overly optimistic effort estimations; underestimated the value of SEO and the power of Google when we got hit by a manual penalty some years back; tried to apply other people’s solutions straight onto ourselves, disregarding our unique structure and culture (e.g. in building a growth team).
We’ve done many other things right though — e.g. in hiring not only great people but also really nice ones; growing slowly but steadily instead of going the hyper-growth route fueled by huge investments VC craziness; and focusing on the product above everything else, making sure that our tools make people’s lives easier. There is always a lot of talk about the importance of sales and marketing, and somewhat rightly so, but they only start to matter once the product works and works well. As they say, “You can’t put lipstick on a pig”, so the best marketing in the world won’t be able to sell a crappy product, but an awesome product, on the other hand, will almost sell itself.
What platform/tools do you use for your business?
First and foremost, we use our own tools: MindMeister for brainstorming, note-taking, outlining strategies, creating project plans and feature docs; MeisterTask for task management and cross-departmental collaboration.
G Suite provides the basis for all document-related collaborations and file management.
For internal communication, we use and love Slack, which also integrates with our products so we can go straight from discussing ideas in the chat to implementing them with MeisterTask.
Our design team uses Sketch and Zeplin in addition to the Adobe Creative Suite.
Our blog and parts of our websites run on WordPress.
Our performance marketing team uses Sistrix, Google Analytics, Amplitude, and a whole range of other useful tools.
What have been the most influential books, podcasts, or other resources?
To this day, the most inspiring book to me was Rich Dad, Poor Dad by Robert Kiyosaki. I read it when I started working after university and it has changed my outlook on life — at least the professional part of it — and had a lot to do with my decision to become an entrepreneur. You don’t need a poor dad to understand it (mine isn’t) and it’s a great primer on how to deal with money in your life.
Advice for other entrepreneurs who want to get started or are just starting out?
If I had to pick out one learning as a recommendation to other entrepreneurs developing any product, it would be this: KISS — keep it simple, stupid. Above everything else, focus on usability and simplicity. If the user experience is good, and you're also solving a problem for somebody along the way, you can almost do no wrong.
This has been the key to success for Meister, and we still look at every new feature or idea by first asking: "Does it make the product more complex?" If the answer is yes, we just don't do it.
The KISS principle should also apply to your branding — which, by the way, matters much more than people think (I repeat: Branding matters!). Pick a great product name — it should be short, snappy, and unique. Take as much time for it as you would for naming your firstborn child, and then build a simple, beautiful brand around it. When you're just starting out, also make sure that your business can be described in a very simple way so that people will understand it — the famous “elevator statement”.
Are you looking to hire for certain positions right now?
Yes, we’re almost always looking for great new additions to our team. Most positions are available in Vienna, where we’re currently hiring developers, both frontend and backend, as well as a sales specialist.
Where can we go to learn more?
- Meistertask Facebook
- Mindmeister Twitter
- MeisterTask Twitter
If you have any questions or comments, drop a comment below!
Meister has provided an update on their business!
Over 2 years ago, we followed up with Meister to see how they've been doing since we published this article.
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