Hello! Who are you and what business did you start?
Hi, my name is Osman, I'm the co-founder of UserGuiding. UserGuiding is a SaaS product that helps web applications show their value propositions by enabling them to improve their ease of use. Interactive product tours, which can be created without coding, help product managers, marketers, and UX designers to make changes to the interfaces of their platforms. Personalized guides, built-in minutes, decrease the customer support workload by accelerating the onboarding process.
Our main target is SaaS. 35 of our 73 current subscribers are SaaS businesses. There is also a huge potential in enterprise solutions, e-commerce websites, market places and large corporates having web applications such as banks, telecommunication companies, and insurance companies.
Today, we have +5,000 sign-ups from 92 countries. And there are more than 4 million end users onboard with UserGuiding. Over the past 14 months, we have grown by 20% + per month. The number of active subscribers increased from 5 to 73, and our monthly recurring revenue increased from $413 to $9,400.
What's your backstory and how did you come up with the idea?
Muhammet and I are close friends who studied in the same class at both high school and university. UserGuiding is the second company we founded together. We had a startup studio named "YNOT Partners" derived from "Why Not?". We helped entrepreneurs to build their business from ideation to investment. We made a good amount of money by working hard and smart for a year. And then we went to San Francisco with our savings to build our product without any idea!
Why do you work on your own when you get the solution right away?
In the early weeks of San Francisco, we were stressed out. We were staying at a friend’s house, Deniz, founder of Voscreen. We were in Silicon Valley, we had everything such as time, money and skill set, except an idea to start a one-billion-dollar company :) And, we’re sure we would find a great idea soon; because ideas are free, the significant part of doing business is execution. We’ve heard that a thousand times at least.
We started to search for our idea and we searched for it every day on g2crowd.com, crunchbase.com, alternativeto.net and so on... We’ve spent three whole weeks to try to find our business model. We’ve attended more than 25 events and met over 100 new people in our first month. No idea at all! We understood that execution is more important than the idea when you have an idea!
We decided to quit our search for a business model; we were in one of the most beautiful cities in the world! We can go to Las Vegas and Los Angeles, spend all our money and go back to Istanbul. That was not a problem because we had earned that money.
After you find a business idea, allocate a great deal of time and effort to find the right super advisors and mentors. If you can ask the right questions, everybody is ready to answer them.
On those days, one of our friends, who is an ex-Googler, and managing partner of a VC in San Francisco offered us a job in one of the startups they've invested in. We got interested in the offer, so we spent some time analyzing the product. We concluded that the product was difficult to use, so we planned to develop a tool in which they can create product tours. Then we found out we could build a generic tool for anyone. In the previous company, a software house, we've worked with more than ten startups. We were designing and building web applications for idea-stage startups.
Designing a user onboarding was one of the biggest problems after we developed web applications back in the day. So, we started to think about building a product to solve a problem we’ve faced a lot of times. Our research showed us that we were not alone. SaaS, marketplaces, enterprise solutions were having similar issues we had. There were existing players in the market, but it still looked like there was room for one more well-designed product. Because we had a lot of web development experience, we've been confident about building a better user onboarding tool.
I’ve worked for an angel investment platform for two years. I have a lot of friends who founded SaaS products before. We prepared a potential customer list and started to call them to receive feedback. Most of them were interested in what we were planning to build. Then we started to design a prototype of a user onboarding product while we were still receiving feedback from our experienced SaaS founder friends.
Two company pictures in the same restaurant with a three-year break
Take us through the process of designing, prototyping, and manufacturing your first product.
Firstly, we started to list the most crucial functions we needed to have by analyzing the current tools on the market. Since we have already lead many web projects, we know the main pain points of user onboarding. We did lots of reading about the onboarding process to create domain expertise. Meanwhile, we made a prototype on proto.io, and we love that tool!
We just called it Splinter Guide in those days
The turning point for us was meeting with Aykut, founder of Mobile Action, app marketing intelligence tool. He’s one of the most successful entrepreneurs from Turkey in the Valley. We’ve already watched his videos and wanted to meet with him. We emailed him and he said, “let’s have a cup of coffee in a Philz” which was between our houses. We talked about our background in web development and showed our prototype to him. He said that “I’m already paying $200 per month for another tool if you can build this product I’ll be your first customer. If you can build an MVP in two weeks, we can meet again.”
That was an excellent kick-start for us. We’ve taken a second appointment from Aykut and made our first sale!
These two weeks were crazy busy! We’ve called Alican, our designer at YNOT Partners to create the first design of UserGuiding. Muhammet built our MVP incredibly fast immediately after Alican and I completed the product design and the website. We’ve also created a couple of guides for Mobile Action to show Aykut. As you can guess, it was a primitive version of our product, but it was good enough to signal that we could build a promising user onboarding tool.
In Aykut’s office in SaaStr, he was surprised when we showed him the MVP and displayed the guides. He said “Is this a video or something? You did all this in only two weeks? If it’s working, I congratulate you!” He has given us access to his existing onboarding tool to immigrate all of the guides in two weeks. Another two weeks challenge has just started!
When we’re showing Aykut our weekly progress in San Francisco.
Describe the process of launching the business.
We’ve migrated all of Mobile Action guides from our competitor dashboard to our product. We showed them to Aykut and his team members. They said your product doesn’t have every feature of the other tool, but it’s good enough to pay! He subscribed to an annual growth plan, and we’ve made our first $2,000 of UserGuiding in our first month! Then, he became our super advisor with whom we spend half-day every week.
We’ve launched UserGuiding on Product Hunt on January 17th. That was an unforgettable night for us; we had hundreds of visitors from all over the world. Everybody was asking many questions about future features, giving feedback and criticizing our product! This week, we had more than 300 new sign-ups and a couple of paid customers. We liked the feeling of doing global business.
Our first launch on Product Hunt, January 17th, 2018
After the Product Hunt launch, Aykut asked: “Do you guys attend SaaStr Annual 2018?”. The event hosts thousands of SaaS entrepreneurs from all over the world. However, the tickets are expensive for an early-stage startup which didn’t raise funding yet. He bought us two tickets as a gift for the launch. SaaStr was like a heaven for us. We hustled a lot! Besides we acquired a couple of paid customers, we made many friends who own SaaS businesses.
We were still spending our savings made on our previous startup for personal and company expenses. Since we were in San Francisco, our biggest expenses were accommodation and food. Our monthly rent was around $3,000. Even though we had almost all dinners at home, our monthly kitchen expenses were over $1,200.
The biggest lesson I've learned in the launch period is that you need to put the customer in the center of the business. As Aykut always told us, "No assumptions, no overthinking." I'll talk to the customer after launching the product is the wrong idea. Even when nothing is available from the beginning, you must talk to potential customers and get feedback from them. New products and features should be decided together with the customer.
Muhammet and me on SaaStr Annual 2018.
Since launch, what has worked to attract and retain customers?
In the 5th month of our journey, we’ve organized “a lifetime deal” sales on AppSumo. We think it is an amazing catalyst for an early-stage startup. For us, it was so exciting at the beginning that we couldn’t sleep and it was awesome at the end. We sold thousands of deals, got 34 five taco reviews and made money which was equal to a pre-seed investment in only two weeks.
We haven't allocated a marketing budget of more than $15 per day until we raised investment. On those days, we had a content-based inbound marketing strategy only. We share at least 3 new posts every week on our blog. There are subtopics like "Onboarding Tips", Customer Success Story", and "User Experience" in our blog. We've tripled our Google traffic within-site SEO and site performance enhancements over the last 3 months. Some of our Quora answers are viewed more than 10K. We are one of the most viewed writers on SaaS, User Experience and Onboarding topics on Quora. There are more than 130 UserGuiding backlinks in Answer Wiki. We publish content and e-books with platforms such as Product School and Reinvent Growth. We were the product of the week at Product Hunt. Finally, Hubspot included us on the list of best onboarding software.
Cold emailing is also one of our primary marketing channels. We have a great mentor advising us on our emailing strategy. Cem is a veteran of SaaS and co-founder of two successful companies Sendloop and Octeth. We’re sending a personalized email to our potential customers. Muhammet has developed a bot that can create a draft guide for your web platform automatically. Sending personalized emails increases open and click rates considerably. We didn’t make A/B testing on our landing page and pricing so far, but we’re starting to do that soon.
How are you doing today and what does the future look like?
As I mentioned above, our current annual recurring revenue is around $100K. In fact, we are not far from being profitable, but at this stage, we are focused on fast growth rather than profitability. We have also raised seed funding from an Istanbul based angel investment network (Galata Business Angels) and a local venture capital Collective Spark (as the lead investor). This investment is big enough to give us a paid marketing budget in order to find a scalable and profitable unit economy.
Our goal is to increase monthly recurring revenue and raise the next round as soon as possible. In the next round, we will look for an investment of $ 1M+. As long as we meet our KPIs, our current investors expressed that they can participate in the next round.
User onboarding and product adoption market is growing rapidly day by day with the growth of “Product Led Growth”. Almost all of our competitor products have become complex products that require coding during the setup and guide creation process. They moved away from the zero coding concept. At this stage, we aim to be the easiest player to use in the user onboarding market. We gather our differentiated points under 3A, more applicable products, more accessible support, and more affordable prices. In short, we want to be the Canva of the user onboarding market, not Adobe’s Photoshop.
Through starting the business, have you learned anything particularly helpful or advantageous?
Building a fast-growing, sustainable, and profitable SaaS is tough, especially if you have no experience in SaaS. You’re spending thousands of hours to develop it, but no one uses your product ten days after the launch. The only thing more difficult than getting money from people is getting money every month. It’s hard to convert free trials to paid customers when you have no paid customers. It’s like a vicious circle. I’m sure there are other ways to exit the circle, but we found the solution by organizing a lifetime deal.
The benefits of making a lifetime deal can be summarized in three main categories:
- Numbers: It boosts all of your positive numbers. We acquired more than a thousand new customers from 82 countries ==> This is awesome for raising seed investment.
- Feedback: Only users paying money give real feedback. We had lots of valuable feedback from paid customers. ==> Our roadmap is full of required features.
- Partnership: Your brand recognition increases signiﬁcantly. We had a couple of great partnership opportunities. ==> Good for marketing and customer development after the deal.
What have been the most influential books, podcasts, or other resources?
My favorite podcast is Naval Ravikant’s Naval. I also love his epic tweetstorm, How to Get Rich (without getting lucky). He has a very sharp, inspiring and fantastic ideas about wealth, investing, tech and life. How I Built This with Guy Raz is also one of the most exciting and inspiring podcasts I’ve ever heard. A16z, Glocal, Masters of Scale with Reid Hoffman, Y Combinator are other podcasts I follow regularly.
Crossing the Chasm, The Messy Middle, How to Fight a Hydra, The One Thing, and Hard Thing About Hard Things and Trillion Dollar Coach are my favorite books which shaped my business attitudes and business perspective.
What platform/tools do you use for your business?
- Stripe: Payment service
- Github: Code repository
- Slack: Internal communication tool
- Woopra: Product analytics
- Sketch: Design and prototyping tool
- Zeplin: Collaboration tool between designers and developers
- Loom: Screencasting tool
- Full Story: Digital experience analytics
- Hotjar: Conversion funnels, heatmaps
- Calendly: Scheduling appointments
Advice for other entrepreneurs who want to get started or are just starting out?
My first advice is that they must be in contact with their potential customers. I suggest that they pick the idea based on the number of people they know in that field. For example; I, a former angel investor network employee, had a big number of people on my phone with SaaS experience in the early days of UserGuiding. Before we started UserGuiding, I called many of my friends who did SaaS and asked them about the dynamics, good aspects and challenges of building SaaS.
I remember these phone calls were very useful for me. I learn what to pay attention to. For example, we could not directly enter the self-driving car business without considering our phone book. Because there wasn't even one of us who had a driverless car. This means that there is no-one to ask dozens of questions about where to start.
After you find a business idea, allocate a great deal of time and effort to find the right super advisors and mentors. If you can ask the right questions, everybody is ready to answer them. Don’t be afraid to ask for help from familiar or unfamiliar people. They’ve already passed through these roads and figured out the same issues.
Why do you work on your own when you get the solution right away? The video gamers know well, there are "how-to" videos on YouTube for some tricky levels. I believe that these advisors provide the same thing for entrepreneurship. You can learn how you can pass a tricky level in minutes from them which you couldn’t figure out for weeks on your own.
Where can we go to learn more?
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