We are bringing you a case study from Jordan Welch, an e-commerce entrepreneur who decided to invest his e-commerce profits to start his own SaaS company back in 2018. He has been able to scale this SaaS business to almost $100 000 in monthly revenue and $50 000 in monthly recurring revenue. However, he admits that it’s been the toughest business he has done in his career and it almost made him go bankrupt more than once.
In this article, we are sharing with you the 4-step formula that he used to reach this level of success, his journey on how he built this software business without writing a single line of code, his struggles, and how he was able to turn it around from making losses to having a market valuation of approximately $3 000 000.
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Let's dive into this article...
Building the Software
Jordan built the software called Viral Vault in 2019. It is an all-in-one tool kit for people who are planning to start their own online stores. The software provides product ideas, marketing tools, training, and an online community of e-commerce entrepreneurs.
While building this software, Jordan followed through the following 4 stages:
- Research
- Building the MVP(Testing stage)
- Building the software
- Scaling phase
There are tons of segments under these stages but we are going to break it down according to his own personal experience.
Stage 1: The Research Phase
In the research phase, the first step Jordan t0ok was to find a problem. There are thousands of problems that anyone can solve, but Jordan chose to start this process by picking a niche.
He chose the e-commerce niche because that was his area of expertise as an owner of e-commerce dropshipping stores. He was in many e-commerce related online communities and he could see the challenges and problems that e-commerce entrepreneurs would face and that made it easier for him to spot the exact problem to solve.
Jordan says, "The way I actually stumbled upon the idea for viral vault was simply asking people in this community what problems they had. At the time, my youtube channel had around 20 000 subscribers so I had a few people in my comments and contacting me in my DMs and I would constantly ask them what's the biggest struggle they have with creating their own Shopify store.
After asking hundreds of people, the most common issues I found were that people were struggling to find products and they had no idea what to do with the products they found from other research softwares. So at the time, I, together with a business partner of mine decided to go all in to build the all-in-one toolkit to help people find products and more importantly start their own store with those products."
The solution that Jordan decided to implement was to create the easiest way for beginners and intermediate e-commerce entrepreneurs to start their own Shopify store, by providing all the necessary resources in a single software as a service program.
Stage 2: Building the MVP
An MVP refers to the Most Viable Product. It’s the simplest, cheapest, and fastest to-build version of your idea. Its goal is to validate your idea without spending a lot of money and time. According to Jordan, skipping this step can be extremely costly. You could end up spending months and thousands of dollars building something that nobody even really wants to use.
What Jordan did to build his MVP was actually using Clickfunnels to build a basic version of the software back in October 2018. It was not looking that good but it was getting the work done. It was providing product ideas every single day but it was a bit messy.
"When I look back on it, it kind of got us started and it didn't cost me any money to build this. Clickfunnels is not made to build any type of apps but somehow I made it work and I think that was the goal in this phase…to think creatively outside of the box and figure out how to do this without spending a lot." Jordan explains.
The first version wasn't the best but it allowed Jordan to test it in the market and see if anybody was interested in buying. He used his Youtube channel, Facebook groups, and his Instagram account to announce and drive traffic to the MVP.
On the first launch, he was able to get over 100 people to join and that validated his idea overnight and made him more confident to build something better.
Jordan says, "Over the next couple of months, I kept improving what we had on Clickfunnels and promoting it to my audience so that I could raise money to develop a much better version. After 6 months, I had raised around $30 000 from the revenue we generated from this business and I was super hyped.
I was ready to build this thing with the money we had collected but unfortunately, my business partner at the time decided to blow up the product and ran away with the $30 000 we had generated.
That situation left me back at square one! I was extremely motivated to continue building it so I kept pushing forward with the money I had made from my Shopify store and Youtube channel. This ended up being the most challenging part of my entrepreneurial journey thus far."
Stage 3: Building the Software
For entrepreneurs, when it comes to building the real version of your software, there are a couple of ways to do it. You can learn to code yourself which isn’t recommendable unless you have a real passion for that or you can partner with a developer and give up a certain share of your company. Another option, which is exactly what Jordan did is to hire a team of developers.
The option Jordan opted for isn't a cheap one and actually, the other two options are much better if you're very low on cash flow. Somehow Jordan made it work.
"Thankfully I had a friend who referred me to an amazing team based in Russia and had a project manager in Los Angeles, USA where I was living at the time. This was the perfect fit because I was able to get cheaper work than if I had hired developers in the USA. I was still able to get a very high level of support and development, so we went straight to work.", Jordan explains.
Jordan created a mock-up of what he wanted on photoshop and sent it over to the developers then they quoted him on a price. They had an agreement and went straight into building the software, this is where things started to get difficult for Jordan.
For 6 months straight, he was spending between $10 000 to $30 000 a month on building the software while not getting anything in return. After what had happened with his partner, all of the money was coming out of his own pocket. He even paused his Shopify store and youtube channel to focus on this full-time. He once again admits that this was one of the most difficult times in his career. Even though he had validated the idea, he was basically starting all over again - but he made it through.
Fast forward to July 2019, the team had officially finished building the first version of the software and everything was ready to launch. Jordan did a huge live stream event on his Youtube channel while being eager to see many new customers flooding in and making a life-changing amount of money but everything flopped in the span of 48 hours.
"Only 30 people had subscribed and I was in the hole of over $100 000 from the development process. I panicked and got very depressed, stressed, anxious, and pretty much every emotion you could imagine. But after everything me and my team went through to build this, there's no way I could have given up on it. So I just decided to figure out how.", Jordan says.
Stage 4: Scaling it, Making More Mistakes, and Finally Resolving to Profits
After failing on his launch, Jordan made another mistake by trying to scale immediately in order to recover the losses. He tried everything from running Facebook ads, Youtube ads, organic marketing with blogs, email marketing, but everything was still in the negatives.
He even spent thousands of dollars in coaching from Alex Becker and a few other gurus for the entire year of 2019 but nothing was working at all.
Jordan says, "I was literally spending thousands of dollars in ads in coaching and of course to pay my team of 6 employees while getting nothing back in return, it was a really difficult time. At the end of the year, I even tried to make a pivot by selling some type of high-ticket e-commerce mentorship program while selling my software on the backend. I was losing my mind, so I was ready to try anything to sell this product, but to no surprise, the mentorship program flopped as well."
Fast forward to July 2020, the business had ruined him financially. Every single month it was losing money and Jordan had spent almost $300 000 of his own cash trying to make this work.
Jordan says, "I even ended up moving out of Los Angeles and going back to Florida. At this point, I had pretty much given up but I have to say thank you so much to my team for motivating me. They're really what got me through this.
It was also at this point that I realized a very important lesson that you need to apply if you're going to launch your own SaaS company — It's so much easier to do it if you have some type of cash flow business or job that you can use to fund the project and your lifestyle. I would never recommend building something like this with your savings or the leftover cash you have on hand. This is super dangerous as you can see what happened to me."
The Solution
Finally, Jordan chose to go back to his roots and build a Shopify store - which actually is the e-commerce brand that he’s still running up to this day. In the second half of 2020, he put all his time and energy into that e-commerce brand and was able to stack up a good amount of cash. This made him confident enough to try the software one last time.
In December of 2020, the software was literally dead. It had like $3 000 in recurring revenue with $10 000 in expenses. It was doing nothing apart from making consistent losses but surprisingly, this was when everything started to change.
Jordan realized that he was trying to promote the software in so many different ways but he was neglecting the golden goose that he had all along. That was his Youtube channel. All that it took to grow the software was making the best videos possible and providing as much e-commerce value as he could on Youtube.
"I figured if I did that, people would naturally want to check out what I’m offering and maybe even subscribe if they like the product. And since my Shopify brand was starting to take off, I had a bunch of ideas, case studies, and content that I could make around that. That's exactly what I did over the last 10 months.
I’ve posted a new video every single Friday and I have been able to grow my Youtube channel from 29 000 subscribers to over 200 000 subscribers. In turn, this helped my software take off…
I just want to say thank you so much to anybody out there who has been supporting my channel because it means the world to me. You guys have absolutely changed my life and I wouldn't be where I’m at today without you.", Jordan says.
Current Situation
After Jordan focused on generating organic traffic by offering free value on Youtube, his software’s revenues drastically changed. Currently, the software makes between $80 000 to $100 000 in total monthly revenue. Out of that, $50 000 is from users on monthly recurring plans. This makes it way profitable at the moment considering that the running costs are at about $10 000.
Advice from Jordan Welch
"My piece of advice to anybody out there that's looking to start their own SaaS company is to build an audience and market your product organically. It might not be the most scalable way but it's free. Your customers are going to be loyal and you’ll know exactly what they want because those are your people and you can serve them as best as possible. This has been my main focus and as you can see, it's starting to pay off. In my opinion, youtube is definitely the best way to do this.
You need to study your niche, post relevant highly valuable videos that actually help people, and you should very subtly mention your software. You shouldn't make your whole video about selling your product or people are gonna hate you. Drop value and people will show love to whatever you're selling.", Jordan says
Conclusion
Ever since Jordan changed his approach by starting to provide lots of free value on Youtube, his software has grown to earn an average of $90 000 per month. In turn, he has helped thousands of people to start their own e-commerce stores and to him, things are just getting started.
He says that this has become his number one passion and he’s going to keep doing this for as long as he can. He could have easily pivoted to anything else due to the struggles in the first 2 years but he kept at it. Currently, the software business is valued between $2 500 000 to $3 000 000.
His plan isn’t to sell it but rather to keep improving it because he truly loves what he has built. A SaaS business is one the most lucrative business models anyone can get into but just be prepared for the journey it takes.
