Purchasing the project management SaaS MyClientSpot

A few months ago I made the decision to purchase an already operating Software as a Service (SaaS) business. MyClientSpot offers project, client, contractor, and time management software as a service.

This was a pretty big decision for me. Like a lot of developers, I’ve always been of the opinion “Why purchase something that I can easily build?” I’ve had limited success building products from the ground up before and decided to try something different this time by starting with an existing product that had a solid base of loyal customers. My hope is that the customers will be able to inform product development and speed the discovery processes.

Screenshot of MyClientSpot website
Original MyClientSpot Website

I blame Patrick McKenzie for documenting how he’s sold multiple SaaS businesses for putting the idea in my head. You can read his excellent account from the seller side here. I plan on documenting the other side of the sales transaction and where I take it from here.

As a full-stack senior web developer/consultant, I’ve worked on legacy SaaS products many times in the past. I usually parachute in, do some poking around to understand the system then either fix a bad bug or implement a feature that they lack lack the skills and/or time to complete internally.

Something I’ve learned is that there are thousands (millions?) of small applications out there, limping along on shared hosting and making a few thousand dollars a month. Most haven’t been updated in years and the owner is usually a non-tech person who enjoys the stable revenue but doesn’t have the ability to take the product to the next level.

Why not find one of those businesses that still have a solid customer base, update it’s tech a bit, and grow the user count? Nothing I haven’t done before but this time I’d be the beneficiary of the growth. Of course I’d be forgoing the fat consulting check that usually goes along with the job, but hopefully it’ll pay off as the company grows.

I subscribed to the buyers listing at FE International and after a few months found a likely listing. After signing a non-disclosure agreement they sent me a slim prospectus on “MyClientSpot”. The company seemed like a cross between project and outsourcing management, with a few weird database type features thrown into the mixture.

The website had that distinct mid-2000’s look and was still using tables for it’s page layouts. If I was approaching this a consultant, I would have been immediately drafting a “This is a problem and here’s how I can help” proposal with a quote attached, because there was no way it could be signing up many trials let alone converting them to paid accounts.

After discussing it with my team, we were all in agreement that there was potential for this software and made an offer a bit below the listing price. After a little haggling back and forth, we finally came to an agreement to start the purchase process. In order for our proposal to be more attractive we offered to close very quickly in a matter of weeks.

We then had a few weeks to perform due diligence on the website but were limited here by the lack of technical knowledge by the sellers. They’d never had to really dig into the operations and had outsourced the support.

Major red flags we found were:

The above didn’t deter me because it was all items that I would be working on changing as soon as we took possession. Some of the issues were potentially very serious, and there wasn’t much time to waste with updates. It wouldn’t take much for the site to suffer significant downtime which would cause the existing customers to evaporate, leaving the site worthless and our money down the drain.

The good news was the prospectus showed it had a cadre of very stable core customers which had not changed substantially in the past year, and several that had been customers for a few years. To us that said the existing customers must be very satisfied, the challenge would be to attract new ones.

We gave the go-head to FE that we’d like to close the deal and this is where Patrick’s recommendation to “always use a broker” was proven completely correct. FE made sure that all the documents were in order and had a step-by-step procedure that listed exactly what would be transferred and the steps to do so. This made the transfer of sale and monies go very smoothly. And we had them to go to for advice when there were things we did not quite understand.

Despite that we still managed to encounter a few small hiccups.

After closing, I immediately went around changing all the passwords, setup hourly backups, put analytics on the website so we could discover how it was actually being used, and downloaded a copy of the website source code for in-depth evaluation.

We sent out an email to all the current users introducing ourselves and requesting feedback on what they’d like to see improved. We got several fantastic responses that we are currently prioritizing into a proper product road-map. And most importantly, we started using the service for ourselves, not only does this help us to understand the processes, keep our tasks inline, but also gives us a good idea of future improvements also.

Lessons learned from the process:

Would we do it again? Absolutely! We’ve been running MyClientSpot for several months now and just completed an update to modernized the user-interface.

I’ll do a further write-up of the updates that’ve been completed next month and how things are progressing. Want to read about Mysql to Postgresql? Introducing tests to a code base that utterly lacks them? Augmenting Php with graphql? Then tune in next time to hear more about these transactions.