Journeying into the Salesforce world straight out of university, Tim co-founded an AppExchange app that fills a niche within the Salesforce ecosystem. With a solution that started as a direct response to a client’s pain point, Tim’s story sheds light on the challenges, opportunities, and the dynamic entrepreneurial spirit needed to thrive in the Salesforce ISV landscape.
Tim commenced his Salesforce adventure with a consultancy firm in Germany right after university. There was a training program there and he worked as a developer and later in a Technical architect role for two years. It was here that he met Alex, his co-founder and then project manager.
Coming up with the Idea
While consulting for clients, Tim and Alex identified a frequent problem – clients’ inability to create highly specific campaign segmentations through reports. For example, customers who bought in the past, six months, 10 kilos of this product, but they should not have a case in this category, and they couldn’t pull it off with reports. Recognizing this challenge as an opportunity, Tim and Alex took a leap of faith. They transitioned to part-time freelancing and started developing a solution they believed would fill this gap in the Salesforce AppExchange. After six months of development, they had a product ready for the market.
“We thought there must be a better solution. We then decided to just give it a shot and see if we can turn this into a product on the AppExchange.”
The app has been listed on the AppExchange for two and a half years. Initially developed to address the segmentation issue, the app has since evolved, integrating with Salesforce’s Pardot and offering more sophisticated automation and integration capabilities.
What they learned is that clients basically have the problem that they don’t want to manually keep their campaigns up to date. A lot of them work with campaigns which are going all the time. They solved that by building a scheduler into the solution which can clean out campaign members who don’t fulfill the criteria anymore.
In the latest release it is integrated directly into Pardot, as that is the marketing solution a lot of their customers use and it is also limited regarding segmentation. Next they are looking to the same with Marketing Cloud.
Challenges in Business Setup
Founding the business in Germany meant grappling with the country’s intricate bureaucracy. Establishing a GmbH (equivalent to an LLC), obtaining product liability insurance (a surprise requirement from a client as part of their buying process that all vendors have insurance), and regulary educating clients on how the data is stored on the Salesforce Platform (responding to data protection concerns) became integral parts of their business journey.
A typical day for Tim:
“I’m working only from my home office, I wake up, make myself a coffee and then the first thing I do is check if anything happened overnight because we have customers in Australia for example, also the US so it’s time zones where they are working where we’re sleeping and you have something happened and have to respond to that either if it’s a smaller thing, just solve that if it’s larger problem or just get in touch with them. We show them a path to resolution.
Currently Alex and I both switch a bit on who’s doing part-time and who’s doing full-time. Sometimes he’s doing contract roles and I’m focusing on the app and sometimes it’s the other way around. If I’m doing consultancy work at that time, I get four to five hours of that done and then I switch into to app mode after that. So, the reason for that is that I don’t want to get distracted with consulting requests during my app development. So that’s why I do them first. And just work on that until I feel accomplished or don’t get stuck. “
Vision and Future Plans
Their immediate goal is turning it into a full-time business and not doing freelancing anymore. For that to work Tim estimates they would need to do significantly over 100,000 euros per year in revenue. Then they would have time to build it the app out and make progress towards a vision to be a smaller version of a CDP (CDP stands for Customer Data Platform, a way of unifying customer data from various sources). They see an opportunity there, as CDP is quite expensive for a lot of customers and they believe they can develop something that is more accessible. They also plan on eventually having a team, adding developers and a role that support the sales activities.
Rewards and Sacrifice
Owning a product and witnessing its problem-solving abilities firsthand brings Tim immense satisfaction, especially compared to consulting work. The freedom to express ideas in an app.
“What I really enjoy most…is seeing clients use it and solve problems for them. That’s very rewarding.”
The demands of a two-person setup mean having to be available constantly, even during vacations. They cannot shut off their phone as they need to stay accessible if a customer has an issue.
Marketing and Outreach
Their primary marketing funnel begins at the AppExchange, leading potential clients to their website for further details and arrange a demo. They have also tried LinkedIn with limited success, though they acknowledge have not been very active. Consultant partnerships have brought the most clients. Consultants see the problem at one customer and solve it with the app, see it or something, similar at next customer.
“We’ve learned that most of our clients actually come from existing consultant partners.”
“The App Exchange listing is really the hardest part about it is being on point because even you’re very limited with your characters. So you need to use that as well as possible to put your app in the best spotlight.”
Skills and Knowledge to be successful
Tim’s journey has provided him with an understanding of what it takes to build an ISV business. It maybe obvious, but you need technical skills to build something which is so valuable that other people will pay you for it. Also as a consultant he got hands on experience with customer scenarios.
However, the world of ISV isn’t just about technical prowess. To navigate the ecosystem efficiently, one needs an understanding of the Salesforce ISV world. “Get acquainted with the Salesforce processes,” Tim advises. Salesforce, according to him, offers extensive documentation, which is a rich resource. Additionally, he encourages newbies to leverage the insights of Salesforce partner managers.
Potential for Earning with AppExchange:
While the path to substantial income isn’t always immediate or linear, the potential is immense. Tim notes, “If you hit a home run, you can quickly gain traction, and you will be able to lift up significantly.” However, he adds a word of caution about setting realistic expectations. The most likely route is that at least for some time you have will not generate significant income. It sounds manageable to build a full time income, but climbing to that position, especially when you’re a newbie, can be challenging.” Yet, Tim emphasizes the compounding nature of a subscription business. “It builds up over time. Keep your clients satisfied, ensure they stay, gradually gain new ones, and in a few years, you can comfortably live off it. Anything beyond that is just added earnings,”
The surge of generative AI over the coming years will usher in a plethora of opportunities for ISV partners. While Salesforce might take up the larger chunk with offerings like sales GPT and service GPT, niche avenues are ripe for exploration. Tim explains, “There will be niche opportunities to deploy this technology to specific industries. Imagine tailoring an AI model for recruiting and layering it over Salesforce with a seamless user experience. The value proposition there is significant.”
Advice for Aspiring AppExchange Entrepreneurs:
Offer Something Unique: “The most important part is to offer something unique in any dimension, whether in pricing, marketing, or the solution itself. Merely replicating what’s already available probably will not work”
Engage with the Community: “Get out early and talk to people. Seek feedback and don’t be afraid of someone stealing your idea. You’ll get a lot of invaluable insights and feedback from the community.”
Be Patient: Tim confesses his own challenges with patience but advises, “It takes time. You will not get there after one year but it also goes really fast, The time flies by and if you keep your head down, work and incorporate feedback then you will be succesful.
Pay Attention to Details: The AppExchange, while being their main promotional platform, required them to tailor their listing meticulously to captivate potential users.
Network: They discovered the importance of consulting companies, as these professionals could introduce their app to a wider clientele base by showcasing its benefits.
Consider the Monetization Model: A crucial decision they faced was segregating features between their free and paid versions. In the unique ecosystem of Salesforce, they found that the installation and trial processes in different environments is more involved compared to conventional SaaS businesses.