What happened to Estonian-based SaaS Grew to EUR10M ARR after expanding across 3 continents
What can a tiny firm operating in Estonia extend to three continents in just seven years with no funding?
The year before, Messente hit EUR10M ARR and is still growing strong. We spoke with Lauri Kinkar Messente's co-founder about how they did it.
What Is Messente?
Messente is a worldwide messaging SaaS which helps businesses send SMS messages and PIN codes to countries across the globe.
Established in 2013, Messente created a platform for messaging which initially served companies located in Estonia, Latvia, and Lithuania.
Presently, Messente operates across three continents and helps companies who have multiple business segments send SMS messages, regardless of their client's location or operator network.
How Messente started
The early years of 2010 were when text messaging your clients could be a lotto. Lauri was working in the field of telecommunications and wanted to deliver SMS messages swiftly and efficiently to customers. However, the available platforms at the time didn't meet his needs.
"There was something of a black box," Lauri explained. "You could transmit messages but you never knew what happened to them. Were they delivered? Were they not received? The whole telecom industry lacked the transparency we believe, and this is the issue we've set out to fix."
The platform Lauri along with his colleagues created was Messente -- a messaging platform that allows companies to send SMS messages to customers, complete with delivery reports, usage stats, and historical data.
How Messente was able to grow without funds
1. Introduce a new product rapidly; pay salaries ASAP
Being a small, bootstrapped business Messente had limited funds at the beginning. This meant that they had to get a product on the market fast and begin earning a steady income.
Working with his two co-founders, Lauri saw an opportunity to help companies send business-critical and one-way SMS alerts to customers. Also, they noticed a lack of transparency and efficiency in the services which were available in that time, and determined to fix that problem. Messente built a platform that did the job better than everything else available at the time, and soon it was earning money within Estonia.
Lauri shared with us that Lauri "would suggest to any business there to see whether it's possible to start selling products in the earliest time possible, even just a fragment of what you're trying to build if that already creates worth. Since you'll be able to generate a revenue stream and that provides you with a greater amount of oxygen."
As for their situation, the cash that Messente generated from these initial sales allowed them to make salary payments quickly. This made it possible to remain open to new ideas and keep their ideas flowing.
After they had been capable of surviving, it was the time to concentrate on growing.
2. One way to scale: Be location insensitive
Based in Estonia, Messente started its firm with local customers, however, it soon expanded its business to Latvia as well as Lithuania. However, the total population of the three countries was just two-thirds the size of the city of London. The founders knew that in order prosper, they'd have to look beyond the borders of their closest neighbors.
"If you're part of a small market in a country then you must have the mindset right away that you're not building something specifically for your market, because it's just too tiny," Lauri explained. "And the next geographical location for us was Europe generally."
Messente's growth plan involved focusing on specific sectors. For them, this meant targeting logistics companies whose messaging and notifications strategy would be a perfect fit with Messente's services.
Lauri shared with us their approach was to remain location-independent. They looked for companies throughout Europe that matched their ideal market.
"Once we brought a few of European customers we had them refer us to companies that who they had worked with. From there, we introduced a number of additional industries to this mix, including the financial sector and new digital marketplaces."
Messente was turning an income each month, so that it was able to hire sales people and start scaling up.
3. Get involved with your clients
Expanding into new geographic markets could be expensive and lengthy, but for many SaaS businesses, this is the area where they see the most growth.
Instead of seeking out hot new markets to market their products, Messente let their customers guide them.
When their clients expanded into new territories, their team was able to research and determine the best ways to reach the new markets.
"If we were aware that a company was going to start operating in Myanmar such as, say it was necessary to be present at least a month before," Lauri said. "We were required to verify that the coverage we provided to Myanmar was high-quality, and that it was tested and ready to go."
By keeping in regular touch with customers, and actively seeking their input on business objectives during an expansion, Messente was able to solve problems before they became an issue.
That's how they managed to extend beyond Europe to Southeast Asia, Latin America as well as more than 190 countries worldwide.
This strategy worked because Messente has a long-term, reliable customer base "I like to mention always that the first client that joined us 8 years ago still is at Messente," Lauri said.
Important: If you're looking to expand to other continents or countries, we can help you offer each region's preferred payment method and currency.
Lauri's Tips to Other SaaS Leaders Looking to Grow
1. In creating a growth strategy make sure you concentrate on the bottom line
Lauri confesses to working in the software industry meant his company is "more borderless and less capital heavy" but, as an enterprise that is bootstrapped, Messente has always had to keep an watch on their financials.
There are a variety of ways Messente can expand its offerings including offering different kinds of messages that aren't SMS. While they make the most of new technology and have begun to offer solutions like WhatsApp's Business functionality to clients, they are equally ruthless when it comes to leaving other users out.
"The way we usually decide on this, is to take on a new project, it means investment," Lauri explained. "So we will always inquire what is the fastest way to begin making money with it? In some instances we've seen it appear to us that there wasn't a quick route to revenue."
Lauri added: "Perhaps there's a new communications platform that is amazing in terms of what it can do, and maybe the user base is growing as well. However, we've decided to use this as an example, we're going to sit out for some time and then reassess after a year."
The critical assessment of the risks they undertake has allowed Messente to operate at an income.
2. Be aware of founders' failures as much than their accomplishments
Lauri confesses to having tremendously benefited from the community of tech-related community in Estonia the country where Messente was born with his company, not only the stories of success.
"In the startup community where people discuss goals, and you have the impression of global dominance. They talk about the examples of people of entrepreneurs who made it big time after time and have had massive, glittering IPOs," he told us. "But I believe that listening to and creating an opportunity for others who are great entrepreneurs out there -regardless of whether they're struggling or are in the beginning stages of their development -- having that kind of group to support them has really helped a lot."
Through keeping close contact with others who are on similar journeys, Lauri has been able to keep grounded, learn the best ways to avoid mistakes and be aware of the difficult realities of operating a bootstrapped business.
"In the media, there's lots of discussion about the more attractive aspect of becoming an entrepreneurial. However, seeing the flip side of it knowing that what's happening to me will be happening to 1,000 other people too -- that is what is the biggest thing that has helped me."
3. To help bootstrappers, create teams with the same mentality
For a successful growth and boot-strapping process to grow, the correct team is critical. You need a mix of tech and sales experts, and since your goal will be selling globally, you need diversity in your workforce and an array of backgrounds.
"We were the first to have three people working in our business." Lauri said "What worked for us in the early phases was a great mix of two technical salespeople, a very good tech-savvy founder, and a chief information officer."
This shared mindset is vitally important: An agreed-on knowledge of the mission of the company and how to conduct business.
"For example, what do is a good work ethic to you," He added. "It's extremely important to discuss this with co-founders, then you move into the rest of the core team. If you're making tools that are accessible to the entire world, then it's important to include people from different backgrounds working together. For me, the culture of the business is all about the way you think and how you approach problems and the way you approach do your work."
Smaller businesses that have no capital do not have the resources of venture capital behind them meaning teams are under pressure to develop a product that delivers real value as quickly as possible. In order to do that, all team values need to coincide and in line with one another.
"I think that abilities are extremely important," Lauri told us. "But on the other hand when you have the option of choosing against someone who's not as skilled, but the match between your attitudes and your approach to work is better, I'd rather choose the person who's a better cultural match."