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How to Compete With VC-Backed SaaS: Grow Slowly, Stay Lean, and Change With Your Customers

One perception of venture capital is that it can help you undercut your competition. Just look at what Uber did to the taxi industry or Airbnb to hotels. Uber infamously only started making a profit last year after ten years of business because it used revenues to cut prices.

However, the big tech companies of the past decade don’t just compete with legacy industries anymore. A growing number of bootstrapped startups are beating VC-backed SaaS companies at their own game, sacrificing sweeping global networks for lower prices in targeted locations.

One of these small SaaS businesses is the Canadian customer service tool, Chekkit

Created over five years after a fateful meeting between a paper-mill employee and a commercial banker in The Pas, Chekkit started as a simple, wifi marketing product. Today, it’s an all-in-one subscription-based customer interaction tool.

Chekkit grew 300 percent during pandemic-hit 2020 and now earns $1.3 million ARR – all with a team of six and at prices less than half those of their VC-backed competition.

To reach this point, the Chekkit team learned to code a website and product, run Google ads, and more from scratch, never realizing there was a whole community of founders out there doing the same thing.

Chekkit CEO, Daniel Fayle, sat down with me from his office in Winnipeg to tell me about how they created a super-competitive customer service platform with zero growth hacks and almost zero knowledge of startups.

A Banker and a Paper Purchaser Walk Into a Bar

Daniel did not start as a tech founder. He went to college to become a commercial banker and spent his first few years working as one. It was not to be. His first job at Scotiabank connected him with Myles Hiebert – a purchaser at the local paper mill and his unlikely future cofounder.

“I met Myles while I was banking up in The Pas,” says Daniel. “He was working at the mill up there. There wasn’t much to do in town so we’d usually get a beer together after we got off work and talk about what we wanted to do with our lives.”

Daniel and Myles met in rural The Pas, Manitoba

Daniel and Myles’s conversations at the bar produced a business idea too good to pass up. “We were just tossing out ideas over Coronas one night,” says Daniel. “We thought it would be cool if before you even got to the bar you could use an app to communicate with the staff. We decided it would probably best be done by tracking wifi connections. People always sign into the wifi and give their personal information.”

Daniel left ScotiaBank and Myles quit the paper mill. They moved to Winnipeg and laid the foundation for an agency creating wifi portals that collected customer data.

Their next move was to get a developer. “I knew one of the professors at the local college and he linked me up with a promising connection, Emily Franz-Lien, to be our developer,” says Daniel. “She met me at a coffee shop, I pitched this idea, and she agreed to build it.”

Daniel, Myles, and Emily finally brought on Emily’s boyfriend, Lee Klimpke, as their fourth cofounder. He managed web design and UX while Emily managed the backend. “Emily and Lee are our technical founders,” says Daniel. “Much of it they learned on their own online. Neither had a formal background in development. I think one took stats in school and one was an engineer.”

The team started marketing the only way Daniel and Myles knew how: door-to-door sales. Chekkit established a network of restaurants and small businesses through steady foot traffic and savvy pitching. This network expanded from Winnipeg into next-door Calgary.

A year in, the team realized door-to-door sales were a growth bottleneck for a tech company. “We eventually said, ‘Hey, we’re doing 10 shops a day. There’s no way we’re going to grow at this rate,’” says Daniel. “Then one of the guys we were living with said to look online at more modern alternatives.”

The team did look online and over the following months, they taught themselves the basics of cold email marketing campaigns and trapping leads. They also learned how to run Google and Facebook Ads. Rather than knock on doors, the team appeared in the web browsers of every major business in the area.

“We quickly expanded across Canada and got into a bunch of big dentist associations, jewelry groups, and auto associations,” says Daniel. “Now we work with these businesses in Canada, the US, and Australia.”

From Wifi Marketing Platform to Customer-Service Interface

Chekkit today is an all-in-one customer interaction and communications platform. After their original wifi marketing product, they added more services to meet growing customer demand. 

“We started as general marketing services for restaurants in Winnipeg,” says Daniel. “We’d gather phone numbers and emails from customers when they signed in to the wifi. That expanded to sending customers coupons and other deals from our clients. Then clients began asking us, ‘Hey, is there any way you could help us get all our reviews in one place?’”

Monitoring and responding to reviews is critical to customer loyalty, argues Daniel. “Customer service managers today spend a lot of time going into Google and Facebook responding to reviews. To help them out, we created a feed that aggregated reviews from all their feeds onto one platform. We had a lot of positive feedback for that. Then customers started asking us to help them get more positive reviews.”

To encourage reviews, the Chekkit team automated the process. Since their clients were already collecting phone numbers through Chekkit’s wifi service, they could text review templates where customers could leave comments in a few simple steps. Things kept growing from there.

The Chekkit office in Winnipeg today

“We built a slew of different features and products for getting reviews,” says Daniel. “Our biggest was our all-in-one messaging inbox. We aggregated Google My Business messages, Facebook, Instagram, and website comments all into one chat. It turned into a complete customer service communications hub for businesses.”

Other Chekkit features added include software for paying businesses and requesting video calls through SMS. “All new products and features use the same communication channel we started with: texting,” says Daniel. “‘Send a text and get a review, send a text and get paid, send a text to hop on video calls.’ We try to integrate everything through text.”

Chekkit charges its customers a flat fee of $99 per month. That price includes all-in-one inbox and review management, private surveys, and two-way texting. Customers seem very happy with that. “We have a fairly low churn,” says Daniel. “We are extremely competitive and feature-rich and have the lowest price point in the industry.”

Undercutting the Venture Capital-Backed Businesses

Daniel isn’t worried about Chekkit’s competition. They offer similar services but at a much higher price. He believes they scaled too quickly.

Bootstrapping allows you to move fast, build features like crazy, and set prices that customers love.

“Some of our competitors may have more features but their subscriptions cost three to four times as much,” he says. “I think this is because they are much bigger companies than we are and almost all are VC-funded. Bootstrapping allows you to move fast, build features like crazy, and set prices that customers love.”

Daniel also thinks that being small gives his startup a competitive edge. People like to know a business can adapt to the times and give them personalized service.

“I have a favorite quote from Rupert Murdoch,” says Daniel. “It goes, ‘Big will not beat small anymore. It will be the fast beating the slow.’ When we started, people were nervous about working with us because we were small. They’d say, ‘I can’t go with you because you don’t have a massive customer support team and there’s no one there to support if your software goes down.’ Now they tell us how much they appreciate how responsive and personable our customer support team is.”

Daniel believes that online messaging for customer experience will be around for a long time, but reviews will eventually move to video. “It’s much more difficult to fake a video review compared to a text review,” he says.

Looking Back on Five Years of Building

While Daniel is happy where Chekkit is now, he wishes he had known more about being a bootstrapped founder when he’d started. He learned many lessons the hard way.

The best pieces of advice I’ve ever got were free, never from courses or consultants.

“I wish I’d had a bit more of a background in digital marketing,” he says. “I also wish we’d had a network of people building with us and mentoring each other. Learning from people who have already done what you want to accomplish is crucial, even if it isn’t in a similar market. The best pieces of advice I’ve ever got were free, never from courses or consultants.”

However, Daniel doesn’t think he’d change much about the path he took. “I never would have gained this knowledge at a corporate gig,” he says. “Now I always push people thinking about starting something to go do it. It will pay massive dividends in the long run.”

Stories like Daniel’s rarely make the news. Chekkit grew sustainably without growth hacks or VCs, focusing on iterative improvements and customer feedback instead. Lean and agile, Chekkit now proudly competes with better-funded companies – an example for bootstrappers everywhere.

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Andrew Gazdecki
Andrew Gazdecki
Andrew is an award-winning serial entrepreneur with three exits. He’s the founder and CEO of MicroAcquire, the world’s most founder-friendly startup marketplace, and its rebellious child, Bootstrappers, which gives voice to the entrepreneurial underdog. When not building businesses, he writes for Forbes, Entrepreneur, and now, Bootstrappers.

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