Starting in a chat room as a non-technical entrepreneur, Spencer developed a software system that quickly gained traction with user-driven feature requests. Embracing the potential, he transformed his rudimentary MVP into a successful business, a versatile platform for seamless transactions, supporting multiple payment methods and achieving an ARR of $1.2M.
Inception of the Business
Spencer’s journey began as a non-developer in a chat room. He initially created a software system for personal use, quickly gaining traction and feature requests from other users.
He recognised the opportunity to monetise, scaling from a few users to hundreds. Faced with requests for features like free trials and referral rewards, Spencer, despite the initial MVP’s rudimentary state, saw the potential for growth.
“I had to charge for this and then I kept reinvesting all that money into the software’s development,” Spencer said.
This marked the start of his entrepreneurial venture, growing his idea into a profitable business.
The business is a comprehensive platform and Payment Bot designed for seamless transactions. It supports multiple payment methods including PayPal, Stripe Credit Cards, and others. The platform enables users to accept payments, donations, and manage membership subscriptions with ease. It’s compatible with various platforms such as Web, Discord, and Telegram, enhancing the sales process and customer experience.
Building in a “vacuum”
Spencer built his business during a time when “building in public” wasn’t a widespread practice. This posed unique challenges.
“You have no idea what the user audience wants until they request it or react to a release. Building without real-time feedback, you invest a lot of time and energy navigating this uncertainty,” Spencer said.
Starting with a modest $6,000 investment, Spencer and one other developer built the platform, scaling their monthly recurring revenue to $141,000—a significant feat for a two-person team.
So, how did he do it?
Here’s a summary of the growth strategies he implemented:
- User-Centric Development: Spencer continually adapted the software based on user feedback, adding requested features such as free trials and referral rewards.
- Reinvesting in Development: All earnings were reinvested into software development, which was pivotal for enhancing the product’s features and capabilities.
- Pricing Model: The transaction-based pricing model was a key differentiator, tying the businesses success to the success of its users.
- Expanding Payment Options: Encountering limitations with Stripe, Spencer integrated PayPal and later Venmo, significantly expanding the platform’s reach to over 200 countries and regions.
- Direct Outreach and Networking: Spencer engaged in direct marketing and outreach to potential users, nurturing grassroots growth.
- Building a Reliable Team: Despite starting with just one developer, he built a team that was instrumental in scaling the business.
- Adaptability and Persistence: Spencer’s persistence in integrating with major payment platforms and his adaptability in business strategy were crucial for the platform’s growth.
Reaching for a Global Scale
Spencer encountered limitations with Stripe, initially available in only 14 countries, restricting his business’s global reach. As Stripe expanded to 30 countries, he still found it insufficient for his rapidly scaling business.
“I thought this still isn’t it, we need the big Kahuna. We need PayPal,” Spencer said.
But this missing piece of the puzzle didn’t come easy.
Spencer described PayPal as an essential player in his business model, which he saw as unique and distinct from typical B2B or B2C models. His company operates on a B2B2C model, serving merchants who sell to their customers.
“We took a percentage of the transaction. So if a merchant made money, we made money. If they didn’t, we didn’t,” Spencer explained.
Once Spencer got in touch with someone at PayPal, they weren’t interested. His business was too small.
Spencer persisted. He kept calling and emailing different people at PayPal, until someone finally got in touch.
“I wore PayPal down. A giant, massive corporation. They put me in touch with the integration team. It took about a month to integrate with just myself and one developer,” Spencer said.
After they integrated, they started seeing their numbers boom.
“It wasn’t due to the lack of Stripe, it was just having the doors open to 200 countries and regions. So now we had PayPal and Stripe, why wouldn’t we go after more?”
Spencer set his sights on Venmo. And Spencer got Venmo.
Spencer personally reached out to potential users and engaged in direct marketing, fostering grassroots growth of the user base.
He placed significant emphasis on integrating user feedback into the development process, ensuring the product met the actual needs of its target audience.
“We just kept going and then eventually I said, you know, it is time to sell,” Spencer said.
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Selling with Flippa
The decision to sell came from his desire to diversify and “not put all his eggs in one basket.”
“Having to do the vetting yourself while trying to run a six-figure monthly business is like a second job,” he said.
He struggled with other platforms, where “there were no profile pictures. No LinkedIn and very basic.”
This led him to Flippa, where he met Fiona, his M&A Advisor.
Spencer appreciated Fiona helping him to navigate negotiations and protect his boundaries.
“As a risk-averse person, there were a lot of requirements that I had because, you know, going through the business world, you get very cynical. There’s a lot of backstabbers out there,” he said.
“I had specific strict requirements. I’m not showing my customer list before the check is in. I’m not going to give you the names and emails of everybody, nor will I give access to our source code.”
Spencer said Fiona was there to reassure and smooth things over.
“She was a real advocate, always in my corner, handling due diligence, and fighting for my interests. Her efforts in hustling the deal were fantastic, which is why she deserves her own Singapore office.”
Fiona’s support led to a successful sale of over $3 million dollars, leaving Spencer to contemplate what’s next.
What’s Next for Spencer?
Well, he’s not one to sit back and relax. Spencer’s diving headfirst into the world of personal branding and the creator economy. He sees big potential in building a direct connection with audiences and sharing his journey.
Spencer plans to become a buyer himself, utilising his experience and insights from selling the business. His goal is to acquire businesses in familiar domains, such as marketplaces or SaaS platforms.
Content creation and mentoring are also on his radar. He wants to share his insights and guide some up-and-comers in the tech world.
Inspired by this story? Read up on others who have successfully bought and sold their businesses here.
If you’re ready to sell, get a free valuation for your business here.
If you’re ready to buy, find your next business venture on Flippa.
