How a 26 Year Old Started a SaaS Company and Sold It For 7 Figures At The Age Of 30
09/10/2021
SaaS Due Diligence Services: Specialized Team for Software Companies
05/24/2022
When did you make that decision to keep Balsamiq bootstrapped?
Yes, it was very much from the beginning. My motivation was never to make money with Balsamiq, the motivation was I wanted to stay as a one-person company forever. I try to pick the smallest possible problem because my motivation is the love of the craft itself.
So my goal was, let’s pick a tiny, tiny problem that will support me and my family for a while, and that’s it. I didn’t want to have a company with employees. That sounded stressful – people problems. I just wanted to program and build a product and interact with my customers, and that was it.
That was the original vision to be a solopreneur or the bootstrapper, whatever you want to call it, and stay that way. Unfortunately, well maybe, fortunately, I picked a problem that was too big for one person to solve on their own, and the market was growing, and growing, and growing, and so pretty quickly, I had to let go of my dream and start hiring people but I thought about it for a long time.
Ever since I’ve had to sort of reinvent my dream based on what the market is dictating but the values are the same, which is, we want to just have a good time building the best product possible with our customers. Money is a consequence, it’s not a motivator.
We are now a team of 33 at Balsamiq, which is a lot but I’ve been able to not hire anyone for the last year and a half. So that’s a success and we’ll see maybe we have finally reached our equilibrium size.
The team does push back like, “Hey, we need somebody to do this job. I’m like: No, no, no, I’m okay here.”
Where are you guys today in terms of the size after 12 years and what is the end vision with the product or the company?
We’re 33 employees, last year, our ARR revenue was $6.7 million, this year, we should easily pass $7 million ARR which is plenty for us. It’s a lot, we have had around a million in profit every year since the beginning, sometimes more, so it’s going very well.
Now the vision is to do more or the same: continue to serve our customers, make them more awesome at what they do by listening to them, talking to them, giving them what they’re asking, or what they need, and I like to grow maybe 2% a year for revenue.
My main goal is to build a company that will outlive me, so the focus has always been on longevity, rather than growth, so that’s why I like small growth because if you grow too fast, it’s like burning a candle on both ends. You don’t last as long!
What does Balsamiq think about competition in the space?
Well, the stroke of luck, not genius, but luck is that the market that we chose is pretty small, so it’s too small for big players to go after and fairly big for tiny players that are coming now to be able to compete with us. So we do have big competitors, but they do much more, they do prototyping, so where you can build a fully functioning fake application or fake website.
Those are complex tools, Pro Tools, and they cost 10 times what we charge. We don’t go there, we are a wireframing tool: we compete with pencil and paper. So we only let you do these sketches and then after that, if you want to use a prototyping tool, you can, if you want to go straight to code, that’s what most of our customers do.
So by focusing on this smaller market, the big players leave us alone, they think that we’re a feature of their software but that’s not actually true, because we are perfect for non-technical users that have an idea, but they have to express it somehow. The fact that we’re so focused means that we can stay simple, even for non-technical users.
How do you compete with VC backed startup companies?
Our market is not VC-friendly, because the total addressable market for wireframing tools, is maybe $10 million, worldwide. We take seven of it, so that’s plenty but it’s not going to grow 10 times in five years, by itself.
You would have to either bundle us with a bunch of other tools and make us a complicated suite, or make us move into the prototyping world.
Then you’re competing with Microsoft, Adobe and in that world, of course, you need VC because of our small niche.
We’ve have had direct competitors that were VC funded and they last a couple of years, and then the VC pulls the plug because they realize that it by itself, it’s not going to grow at the speed that the VC needs.
Can you attribute what drove the growth to Balsamiq in the very early stages and what's working right now?
I have to think because I don’t track anything, so I don’t really know how it happened but what I attributed it, from the beginning we say we compete on usability and customer service and it’s not easy to do those things well, especially for a small company, or not in our small market.
We had competitors before I started and they were clearly made by programmers for other programmers, though they weren’t like 80s and 90s kind of software, so Balsamiq wireframes was the first tool that was easy enough to use for non-technical users and so that was I think, a big competitive advantage.
We also use a sketchy UI designs that you make with Balsamiq look like they’re hand drawn which was pretty unique at the time it’s been copied a million times over but that gave it character immediately.
There was a bit of virality built into the product because as soon as people saw a wireframe made with Balsamiq they immediately asked: “How did you do that!?”
So the product was well built, easy to use, was somewhat viral, and then the customer service we’ve always invested a lot into it. A very close feedback loop with our customers releasing all the time, fixing bugs all the time, cultivating the forums, etc.
I live in Italy but the second employee was in California so we could cover more timezones answering the phone, I think that’s really been our formula for growth and success which is just continuously iterating in close contact with customers.
About Peldi Guilizzoni
Peldi Guilizzoni is the Founder and CEO of Balsamiq, a fully bootstrapped ISV focused on prototyping UI/UX.
After studying Computer Science in Italy he moved to San Francisco, where he worked for a couple of years.
Through his experience at Adobe systems as an Engineering lead, he discovered an opportunity to develop a tool that could make everyone more productive and help them do a better job, something he describes as a “no going back technology”.
After a series of events that lead to quitting his job at Adobe and focusing on his project, he decided to go back to Italy and found his successful company.
