How Bootstrapped Freemius Reached Tens of Millions in GMV With a 20-Person Team

I realized I don't have patience for that. I'm really excited about building it. Let's get back to the building plan. Fuck it. I will just start building it.

Okay. That was the CEO of a tool called Freemius. Think of them like a competitor to Stripe.

I realized that the core product didn't change. It was something that I build in two weekends of my spare time. But when it comes to actually turning that into a business, it's like way more time consuming, more complex, requires tons of integrations.

Over the next eight minutes, he's gonna show you exactly how to grow your YouTube just as fast as he did.

We managed to grow our from 5 k to over a 100 k in thirty days.

Number two, he's gonna show you a simple pricing change he made that doubled his revenue.

Yeah. We're thinking to take thirty percent. And we'll also improve the pricing, reduce it significantly later on.

And number three, he's gonna show you a copy and paste way to get 200 RSVPs to your next webinar.

I think 200 sign ups.

All right. Let's jump into the episode. Hey, folks. My guest today is Vova Feldman. He's the founder and CEO of Freemius, a profitable... We love profits. A profitable bootstrap SaaS company helping thousands of software makers sell globally with subscriptions, payments, and tax automation. He's a developer turned founder and built the business to remove the operational hassle so makers can focus on building products, not managing billing or compliance. Vova, you ready to take us to the top? I do.

Yeah. I had some sort of entrepreneur maker. I was always actually on the technical side of things as CTO. And after my previous startup was acquired, I was kind of looking what I wanna do next. And I had this side, Micro SaaS, that was like completely free. And I decided, let's see if we can, you know, turn that into a business. And I joined... Which one was it by the way?

Sorry, which one exited? So Senex exited and RatingWidget was Exactly, the

Okay.

Did you get really, I mean people are gonna want me to ask this right, did you get really rich on this acquisition or was it like an acquihire or was it a meaningful lifetime financial event for you?

It was a life changing event.

Okay, great. And how long were you building that? So just two and a half years basically? Was that one bootstrapped?

It was more than that. We went through some pivots and iterations. We did raise money, not a lot, but we did raise money.

Okay, cool. Great. So then you get involved with the Techstars program, a great program. Looks like you're still involved. Are you based in Tel Aviv today? Yes. Okay. Great. Okay. So sorry I cut you off, but you mentioned the side project rating widget. Is this where you experience the pain of merchant of record?

Exactly. I mean, I was not thinking merchant of record. For me, you know, we I joined, with two guys, and we turned that into commercial solution. It took us about a year. We start to make money selling, you know, subscriptions, withdrawing salaries. Everything was great, but what we're... Like, really, that was the moment. I realized that the core product didn't change. It was something that I build in two weekends of my spare time. So that was

kind of this, you know, realization that building for developers is relatively easy. But when it comes to actually turning that into a business, it's like way more time consuming, more complex, requires tons of integrations, etcetera. And okay. There's a big problem. Let's solve them. That's kind of the original Freemius.

And how did you... What what did like day one of Freemius look like? And the reason I'm asking you is, you know, people... You know, I had Fabian on the show who's now building UDO. Right? I had him on when he was way smaller than he is today, but, you know, he launched because he did see... He contributed hardcore to the ERP open source movement on GitHub, like, way back in the day. Now he's doing 700,000,000

of ARR. You know, we just wrote about Anton with GPT engineer at Level. Right? 50,000 GitHub stars, right, on his open source project in a weekend. What were you doing back, you know, know, in September 2014 to get the first 100 users of Freemius?

So the first thing that I've done before building anything is trying to go and raise money. So my, you know, I I went through the entrepreneurial journey. I went through Techstars Boston, another accelerator. So I went to sell the dream and I was also thinking to find a business partner because I was always like the the technical one. And I did raise like from a little money from angels in Boston area. But I I... It was

hard for me to figure out how do I find like a co founder, because I already had like clarity in terms of the vision and where I wanna take that. And also the whole kind of fundraising didn't go in the direction I wanted. So okay, I said fuck it. I'll just start building it. So this is how it started and frankly it took a lot of time to find the first customer, because naturally like our solution

is basically you bring your entire business into the platform. So before you have any case studies, any credibility, any proof, it's like you know, a hard thing to swallow for someone. So it took about a year to get that first customer.

From first line of code to first customer took a year. Yeah. Interesting. Now people are gonna be wondering, wait, Nathan, Bob would have told you you got pretty wealthy on his exit. Why did he waste a bunch of time trying to raise capital for this idea?

Because what... Why should I invest my capital? Mhmm.

Well, if... But the... Your your premium is time, though. Right? So I guess what was your thought process there? Right? If if you said that the fundraising process was frustrating, why not just say, screw it. I don't need fundraising right now. My own money. Let me just get a first customer. How did you balance basically your own money versus the time you spent on fundraising?

Yeah. I mean, it it it was like I had that cushion that I didn't have to like take... I I took very little money to myself, you know, just for the operation going, I would say. And I didn't invest like too much time into fundraising. I got, you know, I went to San Francisco for about a month, Then I was in Boston area for about a month and kind of that's kind of concluded. I realized I

don't have patience for that. I'm really excited about building it. Let's get back to the building plan. And like I said, we did have a little like runway from like a few angels. So that was enough and because the business itself it's like by definition it's a revenue share. So it's like profitable once you actually start getting those customers. So that was Even

on day one in September twenty fourteen, twenty fifteen your model, your pricing page on that day basically said hey use us to help process payments. We'll take a small percent of your sales. It was always a percent of GMV?

So it was always a percentage. The the business model was wrong in the beginning. It was too high of a percentage because we didn't have, like, a proper point of reference back then, and the closest that we seen it was actually marketplaces. So we we got it too high, the numbers, and we also improved the pricing, reduced it significantly later on. But that was also a learning experience because you don't really have customers, but you do wanna kind of understand what's happening with the pricing.

Yeah, hope it answers the question.

Can you quantify that? When you say it was too much percent in the early days, how... What percent were you charging back then?

Yeah, we're thinking to take 30%. That was the app store model, you know.

Yeah. Yeah. Yeah. And then obviously that, know, when I think about like Stripe, know, takes two, three, 4% today, depending on where you're at, you know, Paddle takes, you know, one, two, three, 4% today too. I imagine you're probably somewhere down in that range now today, right? How did the pricing strategy evolve over time?

Yeah, so we reduced it after about a year or something like that. We instead of taking 30%, first of all, we separate ourselves from the gateway fees and we change our pricing that, you know, there's our margin plus gateway fees. Why? Because we started to notice that PayPal and all the, you know, credit card companies, they keep changing their pricing and we can keep changing our pricing to sustain the same margins that we want. So that

was one thing. The second, we broke it down into, like, kind of gradually, gradual price that reduced over time based on the volumes. So eventually after you cross $5,000 in sales in lifetime, not monthly or something like that, it's 7%. So we've been running the... We're taking a little more in the first thousand dollars and then from one to five it was like lower tier and that was our way to kind of get you know the

the return on investment because usually in the beginning it was significantly more time consuming you know walkthroughs,

integration questions, the support load is significantly higher and we don't charge any setup fees or something like that. So that was our way to get it back. And recently we like lowered it completely. Also for many years, we're focused on the WordPress ecosystem. And only two years ago, we kind of expanded into greater software with a focus on SaaS and desktop apps. So we went through a mega process and still going in the company itself. And

we changed our pricing. So the base price now is 4.7%. Right? Which is competitive with the market standards. And then if you want the complete, like, WordPress solution, which is a very... Like, everything you get because for eight years that was our focus, then you add 2.3% more. And there are no like those gradual steps we remove them. So the base is 4.7 and also we introduce transparent growth pricing, which is we're the only one right

now that doing it that in the market. So our business model by definition creates the situation when we have that interest in the success of the makers on our platform, because it's a revenue share model. So the more successful they are, the more successful we are. So we strategically constantly trying to help them in different ways to succeed. But there is this one point that fixed pricing can really scale when it comes to revenue share. Right?

Because at certain point, you make more, you have to pay more and buy versus, you know, build equation stop making sound... Sense. So usually what happens you, you know, trigger this interaction with your payment provider and say, oh, I want better rates and processing high volumes. And then you get into this, like, exhausting negotiation process, which is distracting you from the focus of the business. You don't know what is the outcome, etcetera. So we decided to,

like, remove, eliminate that hassle and introduce this transparent pricing where the more you make the less you pay. So we're like no longer penalized by your growth and you can know exactly how much you will pay at any volumes basically giving you the peace of mind that I don't need to deal with those negotiations.

Vova, let's let's... I wanna create space for the... Where the pricing is to stay, but I wanna go back. There was a lot to unpack there. That was really good stuff. Let me just ask a couple quick questions. So, obviously, your main growth metric is dollars of revenue that your customers are putting through the platform on a daily, weekly, monthly, Yeah. Annual was the GMV exactly? In 2024, what was total GMV through the platform?

So I will give you some rough numbers, right? So we have over 2,000 products on the platform and the range of how they make is from hundreds of dollars per month to hundreds of thousands of dollars per month. I prefer not to share like the exact numbers, but you can you know roughly guesstimate what would that mean.

Well can you, I mean can you give me some range I guess for GMV platform last year? Like, you can be as broad of a range as you want depending on how vague you wanna stay.

Yeah. Tens of millions.

Okay. Tens of millions. So more than 10,000,000, but under a 100,000,000 of GMV? Right. Okay, got it. What do you think you can break a 100,000,000 of GMV this year or will that take a couple more years?

I think right now we decided to like pause with a focus on revenue because we're in expansion mode. So we have to like refocus, make a lot of changes. So it naturally shift the focus from revenue to to that expansion. But definitely, you know, the SaaS market is huge. What's happening right now with AI pretty much like, you know the SaaS space is exploding. So the market is definitely big enough and we hope that with all

those changes that we're making getting into this bigger ecosystem. Yeah.

Okay. And then using the most, the smallest percent, right? Because you said they could be 4.7%, but if they add on, they go up to another 2.3%. But if we just use 4.7% on the minimum you just told, 10,000,000 of GMV, but you're doing more than that. We can multiply those together. That'd be about $470,000 per year in revenue, right, using that math.

Right, using that math. Yep. Then on the high side of

that, if we take it all the way up to the high side of your range, right, 90,000,000, 100,000,000 of GMV, which you're not there yet, but maybe in the next couple that times the 4.7% would be about 4,200,000 per year in revenue. Is that math I'll check out? 4.7, but yeah. 4.7. Great, great, great.

You said how many million, right?

Well, did 90,000,000 times 4.7.

90. Okay. Okay. Got it.

Yeah. Yeah. Because I figured if you were above a 100,000,000, you would say we are in the 9 figures of GMV, right, instead of in the tens of... Right? So there's different ways. The reason I'm bringing all that back is because you've done something rare. In the interview you sent over to me, you said you're, quote, profitable and bootstrapped. Right? So so how do you think about the profits you're earning each month? How much to reinvest in the business versus to take out personally? You know, how do you think about that?

So I'm running the company as a startup. I'm trying to reinvest everything in the business. We're not like we wanna hire faster, but you know, we're just busy with so many things. And we also... Our approach is focusing on getting a players and that takes time to find them. Like this is something that I found as like game changer for the business once I shifted my mindset to you know just getting great people and not

compromising And what size today full time?

We're 20.

20, okay and interesting. The other thing I want to unpack before I can get to your pricing model today because you glossed over this but it's really important. I'm going to share a screen here and go back. Hopefully this doesn't embarrass you. This is your 2018 website. Yeah.

From way From

way back, machining guys. A lot of people when they launch companies, you're seeing this right now in the AI space, people are saying, oh, it's a new AI note taking tool. It's a new CRM tool. Right? It's very broad. Right? But if you look at Peter Thiel's Zero to One, you just study business success stories. It always starts off as a very defined, some might say small market that you can monopolize and then sort of scale

from there. So Vova, the web... Know, the the content on your site is basically, look, we're not just like merchant of record notes. It's specifically revenue. Sell plugins from within the WP admin dashboard. That's a pretty darn specific market. Yep.

Down here in the bottom left, you have obviously plugins of, you know, your own company using the platform as additional social proof. When did you make the decision to broaden the market? I think you said you did it maybe last year you moved outside of just WordPress, but how long did you stay just in that ecosystem?

Yes. So the plan from the get go was to expand to other ecosystems. We just wanted, you know, to feel that we are in the right moment and the timing and everything. And it happened two years ago. There are like a bunch of things that just happened in the same time, including hiring head of brand, including things that happened in the WordPress ecosystem, the explosion of AI and SaaS apps. So all of that kind of came

together and we started that repositioning process, know, rebranding, all those things basically. Talk to me a little bit

about how you're driving growth, How you're getting new customers today? What's your top one or two growth channels? Or what are your top one or two growth channels?

Yes. So so for many years, we focus on content marketing. That was the main kind of channel for us. So it's like product led growth. It's completely self serve solution. But we know... I'm just

showing your SEO back end to support when you say content. Right? So when you say content, you meaning like blog articles or programmatic SEO?

So we're talking about blog, we're talking about YouTube, we're talking about podcast, newsletter, like every piece of content. We really believed in educational content, talking about the business side of selling software.

Sorry, where is that though? In the blog here, I'm not seeing any individual blog getting more than 50 or 70 organic clicks per month. I just want to make sure I'm capturing what you're talking about. Is this what you're talking about when you say blog?

It's kind of small to me but I'm assuming yes because it's part of the blog.

Yeah, but are these your most popular articles? I mean this one's getting 70 organic clicks per month. I imagine that's not your top growth channel, right?

So what I I was starting to saying is that with AI we noticed like a meaningful shift. We lost a lot of traffic and we started to do other activities. So we shifted more into like bottom of the funnel, closer to the conversion content, started to experiment with paid, started to push paid on YouTube, and also working with communities and trying to basically

get the word out in through channels that have obviously, know, a lot of a lot of our target audience basically. And this is what it's like working better for us right now. We still didn't solve that, you know, we're still looking on what will actually work for us. But mostly that was content marketing for many years and we're still heavily invested in content. Yeah.

Yeah, this is a lot of... I mean, you tell me more about your YouTube strategy? Mean, this is a lot of YouTube subscribers for a B2B software brand. The videos down here, some of them crush it, do 947,000 views four weeks ago. Some of them just flop, Two zero two views from two months ago. Have you been able to pinpoint the difference between a million dollar view video and a 200 view video?

Yeah. So the whole YouTube thing is super interesting. We invested many years in YouTube and we got to around 5,000 subscribers. And then when we started to... And like every video it was like educational and we spent a lot of resources like thousands of dollars but it was not getting like enough attention and we were kind of in a in this crossroad like should we stop our video operation you know and then we decided let's try

to promote it through YouTube and we saw amazing results. So we basically started to promote top of the funnel videos in order to increase our subscribers. So when we release videos, right, it will get higher. Basically building our own distribution channel And it worked exceptionally well. So we're managed, we managed to grow our subscribers from five ks to over 100 ks in thirty days.

So just to be clear, just to be clear, sorry. When you say promoting like this one right here, right, nine forty seven, you're saying use YouTube ads on this or how do you promote this?

Yeah. Yeah. So so there's the native YouTube promotion option. So I actually documented the entire thing on my ex account. It was like building a public thingy. This specific video what you're watching right now, it's like a promo for a webinar that we did, that we promoted obviously. But for us, it's it's like working very well when we, you know, shown the results.

But how do people get from this though to the webinar? Because if I go here, I'd like... I'm... So I was I was seeing nine forty seven k views, like holy crap, that's a lot. I was expecting to see like a lot of thumbs up and a lot of comments, but now I'm seeing none. And now I feel more negative about the content.

Yeah. Yeah. So so when you promote on YouTube, you basically put like a target action and when it shows up on mobile on on the side feed, YouTube is actually adding the call to action as a standalone button next to it. I see. Which is amazing. So actually the ROI is really really really good on YouTube.

Okay. But you're sending them to basically a landing page for a webinar sign up? Correct. I see. Okay. So are you comfortable sharing like how much do you spend on a video like this to promote it? Like a thousand dollars or like you know $10,000?

It was less than that. I think I can check the data, but I think it was around $300 something like that.

Wow. Okay. So that's pretty good. You're and and you're basically saying, man, 300 to get how many people register for that webinar?

We had I think 200 sign ups from YouTube.

I mean that feels like an amazing that's a pretty cheap registration. Dollars 1.10 basically. Yeah. Really, really interesting. Okay. So content, YouTube, and I cut you off when you said something really good. You said we went from five k subs to a 100 k subs in thirty days. Was that just from promoting a lot of the videos like you just said or was that something else?

Yes. Like we strategically selected top of the funnel videos like the marketing funnel and videos that from the first place, you know, we created them in order to drive our... Like target a bigger audience. So when we promoted them, like the marketing funnel, the ones you're seeing here. Right? So this one I think drove a lot of the subscribers from there and also likes and a lot of engagement.

So... Yeah. And is that because when

you launch this as an ad, you select it as the action you wanted YouTube to drive you. You selected get us more subscribers. Is that why this Correct. So many subscribers?

Correct. Correct. I see. They put literally a subscribe button as the main call to action. So let's say someone starts watching it. Right? Even if it's interesting, but they don't have the time to complete it, the button is there. So okay. I'll subscribe, you know, and watch it later.

Yep. Do you now... When you post like a new video without promotion and it gets like, you know, too, you know, isn't YouTube sort of incentivized, if they know you're willing to pay, aren't they incentivized to then when you post something organic for free to give you like no views to get you to click that paid button? You see what I'm saying? Like what's the value of the new subscribers that you've gotten from YouTube? Will they watch in the future without you having to pay for ads?

Yeah. So I think following the results what we've seen, it doesn't make sense not to promote videos. Mhmm. Because you promote videos, I don't know, you put even $50, which if you think about a budget of, I don't know, $2,000 per video, like $50 isn't neglectable and you're getting like 10x better results by promoting it. Right? So it's just kind of stupid not to do that in those budgets.

Yep, yep, yep. And we're in your MrBeast, you know, app he created for tracking YouTube growth. It's called ViewStats here, but we can sort of see some of the history in terms of your views Yeah, can

see exactly that campaign that we ran in order to increase Right here.

Yep, yep, yep. And if we go max though full time, this is where you're saying that campaign launch where you got like, this is probably when you got a lot of subscribers quickly. Right? Yep. Yep. Actually, can go to subscribers. Here we go. It's right here. Really interesting.

Nathan, you can subscribe to our YouTube channel now.

Hey, look, look, boom. Look at that.

Nice. All right.

What else can you teach us about growth? YouTube content? Do you have a podcast? A lot of people get frustrated trying to launch a podcast. They say, Nathan, it's a B2B podcast. I'm getting no listens. How do I scale this thing?

Yeah. It's indeed a challenge, and we kind of paused... We did three seasons. And I mean, it's amazing for content generation and shorts. Shorts working, performing way better for us on YouTube than other types of content. But indeed, the distribution is challenging. So our focus right now is on finding a host that, you know, can actively... That already, like, relevant to our target

audience, check all the boxes that we're looking, and also have an audience that it's relevant to us and use that as collaborative, like, distribution effort.

Yeah. Yeah. We've learned a lot here in the last fifteen twenty minutes here, Vova. Congratulations on what you built. Bootstrapped and profitable. If people wanna learn more about you online, where can they find you?

Yeah. I'm all over the place. LinkedIn, X, Blue Sky, you name it, I'm there. So feel free to reach out. I'm very, you know, happy to hop on a call and discuss about, you know, how to make money in SaaS.

So guys, you might think that Stripe being a multi 100,000,000,000, if not trillion dollar company soon, there's no room for anyone else to be in sort of the, you know, let me help you with payment space, but Vova and Freemius is proving there is another way. He launched Freemius ten years ago, specifically focused on the WordPress ecosystem. Now he's focused on helping anyone selling software or small businesses that need to sell online, do it effectively and

efficiently, right? Whether it's payments, tax, subscription management, and more, they handle it all so you can focus on building your business. They're doing between 10 and a 100,000,000 of GMV across over 2,000 products that use their system to sort of sell. Some of those products are as small as a $100, some are tens, if not hundreds of thousands per product sale. So stay... Watch them closely. They're profitable and bootstrapped. Vova, thank you for taking us to the top.

It was my pleasure. Thank you so much.