Peter Peter - Founder, UserActive

Is Shipping Early Always The Best Way to Launch a SaaS? – Karsten Madsen

If you’re looking to improve your SEO and gain more organic traffic, check out Morningscore, an all-in-one SEO tool that operates like a game to help you reach your SEO goals. Is shipping early always the best way to launch a SaaS? Co-founder of Morningscore Karsten Madsen shared his experience launching a product into one of the most competitive SaaS industries. Watch the interview to find out why shipping early doesn’t always work and charging too soon is not always the best approach for your SaaS.

[00:00:00] – Peter

Okay, so here I am today having an interview with Karsten Madsen from, Karsten is the cofounder of Morningscore and that’s an all-in-one SEO tool and it’s really been designed to be like a game. So the user experience on this is Gamifying, the journey to improving your SEO and achieving more organic traffic to your website. Welcome to the chat Karsten, and thanks for joining. Would you like to just share a little bit more on that intro?

[00:00:29] – Karsten

Yeah, but Peter, you’re already an expert, I see. That’s exactly what we do. I mean, we make it fun to grow your traffic organically. So free traffic from Google and I usually save a bit like Super Mario on making money at the same time because obviously there’s a serious business. So it is built like a game, more like a strategy game, actually, that you would play on the computer. It will give you tasks and once you complete them, you will hopefully grow your traffic.

And yeah, that’s motivating. And motivation is key because we found out that there are so many SEO tools out there, it’s like there are 200 of them. But the biggest problem that people have in SEO is getting it done. You know, you can analyse all day, but you need to get it done to get the results. So, yeah, that’s the problem we’re trying to tackle. Yeah, right.

[00:01:17] – Peter

That’s an interesting take because it is interesting to analyse your stats and where you are with SEO, but obviously, then there’s a lot of work and strategy that goes into actually getting it done like you say. Can you tell me a little bit about how the game role operates in the product? Are you scoring on things like page rank, visitors, all of these kinds of methods?

[00:01:40] – Karsten

Yeah, we score in all of it. So you basically complete missions or you rank higher and then we provide you with XP that’s like levelling you up. And then you have a little space city. We have a space theme. So we have a little space city in our tool and it grows as you level up. So it’s a bit like Civilization, that game, on the computer. Yeah.

[00:02:01] – Peter

So that’s it like a cool concept and the teams use the tool together, or is it usually one kind of SEO person focusing on the tool collaboration?

[00:02:16] – Karsten

Depends. Some teams, the bigger teams use it together. And that’s one of our problems right now, that the team features. Everyone is like, hey, can we assign people to tasks? And so on these missions? And as high on the to do list to make the team functionality better? Because we found out that that’s actually a really good way to use a tool like that.

[00:02:35] – Peter

Right, great. So whereabouts are you in the journey of the business? How long has it been operating and how did you get there so far? Are you bootstrapped? Did you raise any cash? Along the way. Just a little intro background.

[00:02:50] – Karsten

Yeah. So we’re five years old. Yesterday or two days ago, we survived. So we have had angel investments and we’ve been lucky to get some public funding in Europe. There’s a lot of basically soft money, it’s called, where the government gives you money basically to do product innovation great and use that to build some of the features as well. So total funding, like €1 million roughly over the five years. And this year our goal is to get to cash flow positive. So no more funding. It’s going to be really good for us. I hope we get there. It’s always a journey. I mean, we’re in a solid place now. So the only question is do we need a little bit more money before we are cash deposit or can we make it with the current runway?

[00:03:39] – Peter

Yeah, where are you in terms of like active users and MRR?

[00:03:45] – Karsten

Yeah, so we have 800 paying customers, a bit more than that and $50,000 MRR.

[00:03:52] – Peter

Fantastic. Okay, so, really good situation. Congrats on the five years. And now I want to ask you a little bit more about the product because, from my perspective, it seems like you have an interesting angle on the product. So what’s been your journey in building out this product and your experience so far? How did you approach that?

[00:04:13] – Karsten

Yeah, the wrong way. I listened too much to the so-called “experts”. There’s this saying, it’s very hurt in Silicon Valley that you got to ship fast and you cannot ship too early, you can only ship too late. There are all these sayings around that. So we did that. I was listening to that advice. And first, we did a better of the tool. We couldn’t do anything. I could see the product wasn’t good, but I was like, they tell me, just ship, just ship, just get the feedback. So what happened was we did have this free beta.

So people actually did come in and they did give us feedback and it was great in that way. And they told us it’s not great, it’s you need to fix so many things. And we know. So it’s like, okay, but then I was like, but yeah, now we’re going to and then there’s another saying in Silicon Valley, and someone’s like, you got to price your stuff. You need to charge money for it even early. So we did that, we stopped the beta. We had 4000 people testing it and we actually had a really good run on that.

[00:05:20] – Karsten

It was spreading everywhere. But then we start charging and it was clearly not ready the product. And then we killed all the hype. We got 30 customers out of those 4000. Don’t want to calculate the conversion rate on that from beta to pay. That’s very bad. And yeah, the product wasn’t ready. So the next year and a half, we were almost dying. I remember it wasn’t going well and then kind of last minute, we released version 2.0, which introduced one of our most used tools and that was a smash, that was a hit. And then from there, we survived.

And that’s really when we released 2.0, is when I realised, okay, we can actually do this. We might survive. Now we are at version 3.4, just released a few days ago. My whole take on this is like, you can ship too early and you can start taking money too early. And if I had something I could do differently, it would be to make sure people think the product is good before charging for it. At least have a decent group of people saying if they love it. And also consider that if you’re in a market with 200 competitors like we are, you need more time.

[00:06:36] – Karsten

It takes like two or three years to build a good product. When you have a mature market with 200 competitors in SaaS, I mean, if you’re doing something entirely new, like crypto, or some totally new category of SaaS, I don’t even know if that exists anymore. But then you can do it with less than two or three years of product development with a small team of three engineers. That’s what we needed at least.

[00:06:58] – Peter

Yeah, I’ve heard that before, actually. I’ve heard that on average, SaaS founders are finding it to be around two years to build out a product that customers value and that they’re having a decent recurring kind of validation on their part. So it’s interesting to hear your take on that. Did the fact that you shipped early and started charging, did that give you any insights and learnings that you used for the V two that actually did make some have some impact? Or do you feel that actually it just gave you some kind of negative impression for your early adopters?

[00:07:38] – Karsten

It was all negative because what happened was when we started charging money is we went from having a lot of people talking to us on Facebook and sharing it everywhere and talking about it, so we could just basically get the feedback from the crowd. After charging, I started writing people emails because no one was saying anything anymore and it was just empty. No one would say, Please give us feedback. There’s empty. And I realised at that point, the worst thing you can have with a product is just silence. We had like six months of silence and no one really cared. There were a few happy customers that we managed to impress at that point, but that silence, I will never forget it. So, no, there was nothing great about it, honestly.

[00:08:21] – Peter

Yeah, especially if you were having that momentum of really good feedback, and especially if people are commenting in public forums. I mean, that’s a really great thing to happen.

[00:08:30] – Karsten

Even if it’s negative, these guys still have a lot to do. They all told us that the UX is great. They said, oh, it looks great, but it can’t do much. That’s what I believe as well, was the case. So that was great, but it doesn’t have to be even positive, because as long as people keep talking about you and they say, oh, they’re on their way, there’s something positive there, not just total shift, then I believe that’s still powerful.

[00:08:54] – Peter

Yeah. Then that gives you something to work with and you’re driving that people are paying attention and also that they expect that as you develop and improve the product, that they’re going to be there for when it’s more valuable and they need it. That’s quite an interesting take on things, especially since you have quite a competitive space. Right. So it’s a busy market, there are a lot of tools in this area, so you needed that extra time to innovate and make sure your product was valuable. Now, you mentioned that you shipped something in V Two that really made an impact, so you got some more traction there. What was the feature and how did you conceive that feature? How did you know what to ship? And did you expect it to have that kind of resonance with the with?

[00:09:42] – Karsten

The market, that feature? We didn’t know exactly what this was going to be, but we knew it was going to be important, so it was basically the health part of our tools. Like an onsite crawler. Don’t want to get too technical here, but it basically scans your website and gives you ideas on how to fix the problems and so on. And I knew that I didn’t like most of the health tools out there. I thought they were either too complicated or too simplified, and I didn’t feel good when I was using them and I wanted something that felt good.

So that was actually the hardest product design we ever did because we had so many meetings where we’re just, like, almost giving up, because, no, we want it to be because first my designer did something and I didn’t like it. It was like you just copied the others, we needed more. Then the programme came in and they were like, oh, we could do it more like that and that. So basically, the entire team started giving feedback and it became like a Frankenstein at one point. But there was a lot of pain.

[00:10:41] – Karsten

It took like, two or three months to build it. There was a lot of pain. And then in the end, we struggled so much with getting it right, but I think somehow that struggle turned out to be then it was a one-hit wonder, so to speak. When it was released, everyone thought it was cool. I mean, it’s not like we released Chat GPT or anything like that. We didn’t shake the internet, but people liked it and it turned us into a cool tool.

[00:11:04] – Peter

I mean, that’s really something when you’re building a product and you’re in the early stage, are you using that score mechanism as a kind of conversion tool, or is that already a paid feature for users once they’re already on a premium plan?

[00:11:19] – Karsten

So we haven’t done much free tools because we see all of our competitors are doing it. So at this point, it’s a lot of noise to get through. The SEO tool in industry is probably SaaS on steroids. I mean, I don’t think you see many other categories of SaaS with such hard competition for product-led growth and SEO organic growth. That’s what we’re good at. That’s what everyone does.

So it’s something we want to do at some point, but the competition is so high that we’re like, okay, just focus on building a great product and having a free. So the one thing we did that worked really well was we made it very easy to sign up for our tool. No credit card, very few details. Like, you need to give us an email, and then we send you a password after that. So that’s all you need. One email on your website, and that’s it. Then you’re inside, you sign up and.

[00:12:11] – Peter

Start trying out the product. So for people that want to try this out, it’s Is there anything else that they can do to try or learn a little bit more or any place you want to point them to?

[00:12:23] – Karsten

No, I would just say if you’re a little bit curious, that would be awesome if you just test it out because it’s instant and people can test it, and the tool is supposed to guide you to get going. So even if you’re not an SEO expert, we have a lot of stuff, and we have a community as well. So when you join, you become part of this community, where people help each other, so it’s all really easy to get going.

[00:12:46] – Peter

Fantastic. Okay, costa, thanks so much for sharing with us. And also your journey on building that product has been awesome to chat with you.

[00:12:54] – Karsten

Yeah, here. Lovely to be here, it was very cool.

Final Words on Is Shipping Early Always The Best Way to Launch a SaaS?

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