You don’t need millions in VC funding to build a sustainable company. In fact, companies like eBay, HP and Dell were originally bootstrapped. 

At CodeInterview, we built a profitable seven-figure ARR business with minimal outside capital (cash still unused) and an average engineering team size of one. 

Along the way, we learned valuable lessons about building a lean company that I’ll share with you today. These are difficult times, especially for tech, so I hope these lessons will help you de-risk your business and come out of this crisis stronger than before. 

Here are seven lessons from building a seven-figure SaaS business with just one engineer.

Before starting

Before starting CodeInterview, I was running a dev agency working with clients like Microsoft, Nokia and ESPN.

My focus was on hiring engineers and building teams so I needed a way to quickly and accurately evaluate developer skills. This was back in 2014 so I couldn’t find any out-of-the-box solutions to this problem, especially when hiring remotely. 

So we built a simple tool for coding assessments to use in-house. This evolved into CodeInterview, a full-featured platform with programming tests, interviews and take-home projects. 

When we started selling it to other companies, it was much easier to develop new features and find the right people to talk to. This was because we understood the problem and actively used it in our own recruiting. 

Also Read: What founders need to watch out for before joining a startup accelerator

So rather than building in the dark, the lesson here is to scratch your own itch. This makes it easier to hit product-market fit without wasting time and resources on building the wrong things. 

Early feedback stage

To get early feedback, I offered CodeInterview to existing clients and some of my friends who were in senior engineering positions. It turned out that some of the must-have features we came up with had to be killed. 

Ever since then, one of our key priorities has always been ease of use and this led to a great benefit when building a lean company — very few customer support requirements. We have been able to effectively serve 60,000+ users so far with just one customer success specialist. 

So the lesson here is don’t be afraid to kill features — you will end up with a more intuitive product that doesn’t expand your overhead with each new customer. 

Investors or mentors? 

As mentioned in the intro, we did raise seed funding when starting CodeInterview. This was mostly to get access to people like Tim Draper, Ravi Belani and Steven Tamm (ex-Salesforce CTO) who became our investors. 

The first introduced us to some of our key customers. The latter taught us about selling to engineering teams at large organisations like Google and Adobe.

Another one of our investors, The Alchemist Accelerator, gave us a structured B2B sales curriculum and paired us with Kevin Ramani, ex-Head of Sales at Close.io, as our sales coach. 

So early on, try to pair up with the right advisors and investors in order to gain access to more than just money — the skills and intros we got proved invaluable for us even to this day. 

Finding the right marketing channel

I have seen startups spending thousands of dollars per month in PR early on. It’s a mistake. You need to focus on finding early adopters who are looking for your product, ideally in a well-defined niche. 

As Paul Graham says: “Build something 100 people love, not something 1 million people kind of like”. 

Now, let’s look into our own experience in more detail. 

One of our biggest advantages has been simply having a relevant brand and domain name. As of writing this article, the term “code interview” has 1,600+ monthly searches and we always rank in the top 3 results, largely because of our domain name. 

Also Read: Navigating a recession: How founders can protect revenue as funding dries up

Of course, some of this search volume consists of people looking for our brand name but the majority are likely interested in the topic — either as a candidate or an employer. 

Our domain name is also giving us an advantage in many related terms like “code interview tool” or “online coding interview tool” which are super relevant keywords for us. 

So, if possible, try to purchase a descriptive domain name and aim for search traffic with high-value and low competition. You may find SEO works a lot faster and cheaper than expected, especially when compared to channels like PR. 

Subscriptions are the holy grail

Although we started getting a consistent stream of users, monetisation was still difficult. 

What really moved the needle was the introduction of a pay-as-you-go model. We found out that many of our users are senior engineers just exploring different solutions. Committing to a monthly or annual subscription usually involved getting their finance and procurement teams on board which was a big barrier. 

The pay-as-you-go model (paying US$5 per interview) allowed customers to expand usage, often using their personal credit card, before getting management buy-in. This means they had a chance to integrate the product into their hiring flow before committing to a subscription. 

When the main users turn into power users, it gets much easier to get buy-in from other stakeholders.

The key lesson is that while subscriptions remain a good way to boost the value of your business and make it more predictable, you should explore other pricing models that may be a better fit for your company.

On hiring people

As we grew, the temptation to hire additional full-time employees was high. There are endless projects you want to start or recurring tasks to complete which, at a surface level, seem like great reasons to expand your team. 

And this is exactly what many tech companies did – leading to mass layoffs in 2022 due to overhiring throughout the pandemic. In order to keep overhead low and increase your chances of surviving an economic downturn, you should carefully plan the roles you truly need. 

Here’s a bit more from our experience: 

Instead of expanding our in-house team of 4, we relied on short-term contractors and external advisors to help guide our internal team. We hired generalist employees and specialised contractors to mentor us or execute directly. 

For example, we have some very senior engineers from companies like Microsoft and Meta on our advisory board helping our product team with issues like scaling and software architecture. We also have external consultants to help us with growth and SEO. I’ve personally had a sales coach and stay connected with peers and mentors to help with strategy. 

Here’s the rationale: a young cash-deprived startup can not afford to hire expensive experts for everything. Instead, hire high-energy generalists who are hungry for learning and have an “I can do anything” attitude. But make sure you connect them with the right experienced coaches.

This approach has helped us remain profitable and in a stable position even now – as other companies are scrambling to raise cash and keep up with high labour costs.

Our key lesson is this: hire generalist employees and specialist consultants to guide them in order to stay lean and profitable. 

The right mindset

I started my career very early, running my dad’s small retail shop in Karachi, Pakistan. This was a transformative experience as you have to focus on profitability and cash flow every single day. 

Also Read: Insights from a Singaporean founder’s journey to Silicon Valley

I found this very helpful when building a lean SaaS company. If you don’t want to rely on investors’ money every six months (and want to make fundraising easier), you need to obsess over profitability. 

This is not just related to costs. You should also focus on sales from day 1. Not only do you get to monetisation faster, but you will also naturally prioritise features users are willing to pay for and avoid wasting time on activities that don’t generate revenue. 

So obsess over cash flow and profitability – this is a key reason why many successful companies (bootstrapped or funded) were able to build for the long term and overcome adverse economic climates. 

Conclusion

It still feels like we have a lot to do (and learn) at CodeInterview. 

However, we have come a long way since starting in 2015. Looking back, we can see the decisions that helped us the most. In many cases, these lessons confirm common startup knowledge. But so often common knowledge is not common practice. 

I hope this article will serve as a gentle reminder to stay lean even when you have the opportunity to expand — both product and team-wise. 

And if you’re still early on in your journey, you may find things to repeat and mistakes to avoid, especially when starting a B2B SaaS company with little or no external investment. 

Lastly, if there’s one thing to remember here, it’s this: avoid the temptation to overspend when things are going well in your company. External events that will slow you down are practically inevitable so you have to be prepared to face these adversities.

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