Hello to Canada’s SaaS Community,
Bootstrapping is an area Pierce Ujjainwalla knows well, having built both a consultancy and a tech company without outside funding. Speaking with SAAS NORTH, Pierce shared more about his journey scaling the tech company—Knak—from zero to $5 million in revenue without fundraising.
- Your first product doesn’t need to be a home run—it just needs to solve enough of a problem to entice users to try.
- Product-led growth may not work for all types of growth and sales motions.
- Bootstrapping is a tough path, but it gives you control over your destiny and gives you more bargaining power if you ultimately choose to raise capital.
Co-Founder/Producer, SAAS NORTH Conference Editor, SAAS NORTH NOW
Some of the most famous startup stories anchor on product-led growth (PLG). Either something inherently viral about the product or the way it’s presented to market makes it super desirable. Pierce Ujjainwalla tried this approach and saw some success in the early days of his no-code marketing platform Knak. But he moved away from PLG as he bootstrapped the company.
Speaking with SAAS NORTH, Pierce explained why PLG wasn’t the right fit for him and how he’s building an enterprise-grade product now.
Pierce got into marketing because he loved the duality of it: at the same time, he could be creative and build a profession. He even built a successful marketing agency, his first foray into entrepreneurship. But through that adventure, he discovered how much he hated to code. And also how much marketers were expected to code, if only in HTML and CSS.
This pain point led him to found Knak. Leveraging most of a $15,000 loan, he had a prototype built: a platform with a lot of pre-made email templates that could be uploaded into Marketo. He then used the remaining money to go to a large Marketo trade show and demo his new product.
From the start, Pierce leveraged a classic product-led growth (PLG) hack: he had a free tier with limited features and then a $99 per month tier. He said the combined PLG plus attending trade shows strategy worked—the company landed “several hundred” customers in its first year who cumulatively built over 50,000 templates.
But with that early success came a mind-numbing amount of support tickets by marketers requesting to make manual edits to templates, said Pierce. Wading through them all he realized that version one of his solution didn’t actually solve the core problem.
“The core problem is that marketers want to change things, so no matter how we built that template out, the first thing the marketer wanted to do was change it,” said Pierce. And unfortunately, because it was just the template, they would have to go in the code again to change it. That’s where all the support tickets came from. Marketers don’t want to code.”
He realized true success would mean a no-code platform where marketers could tinker with a template or start from scratch. And that became version two of the platform, which is still the core of Knak today.
PLG doesn’t speak enterprise
With version two of the platform growing, Pierce thought he might stick with a product-led growth strategy. However, a different path came calling: the enterprise.
“We had one of the largest pharmaceutical companies in the world come to us and say, ‘hey, we love what you’re doing. This is great. The marketer doesn’t have to code, but the problem is still, this is not an enterprise solution,’” said Pierce.
He and the team realized that a true enterprise solution could function with Knak’s version two core product. However, the complexities of enterprise meant needing an experiential layer on top of the core feature set that enabled things like sharing, permissioning, brand management, collaboration, and approvals. It also meant more human interaction rather than a strictly product-led motion.
“As we started selling to the enterprise, we realized they want to talk to people,” said Pierce. We have to understand their business use case. We need to talk to a lot of stakeholders.”
Where product-led growth used to generate much of Knak’s customer base, Knak now uses a three-pronged strategy. The first is through inbound content marketing, especially podcasts, blogs, and email marketing. Then comes a more traditional sales motion with sales reps who are ready to speak to how Knak fits into a complex use case. And finally comes referrals. Instead of offering a free product to get people in the door, Pierce said the company now focuses on making existing customers so happy they tell their friends.
“We really pivoted from like PLG to more of an enterprise sales-led motion,” said Pierce.
This shift ultimately helped Knak bootstrap to $5 million in revenue. But then Pierce decided to raise, ultimately closing a $31 million Series A round in November 2021.
When asked about why he decided to raise, Pierce said it came from growth planning. The leadership team identified dozens of talent gaps they wanted to fill and they “didn’t want to lose out on any time to get there” by waiting to grow only at the pace of revenue coming in. The second reason for raising—and the reason for raising equity rather than debt or other instruments—was because Pierce wanted a growth partner to help them scale up and build an outbound motion on top of their inbound sales tactics.
Looking back on the $5 million milestone, Pierce doesn’t believe it’s some magic number where every bootstrapped company should start fundraising. Instead, it was a perfect mix of market conditions in late 2021, having a bigger vision, and the opportunity to win. Further, he advocates bootstrapping for any founder that wants more control over their own destiny, whether they choose to fundraise or not.
“Whether it’s in style or not with VCs, bootstrapping is amazing because it allows you to stay in control of your destiny,” said Pierce. “And when you do go into raise, if you want to raise, you hold all the chips and all the cards and it’s fully up to you to decide what you want to do.”