Think flipping houses is lucrative? Try flipping SaaS. Csaba Cserep bought a bundle of WordPress plugins for $30,000. He later sold the most promising of those plugins, a Stripe payment processor called WP Full Pay, for six figures, earning over a 1,000 percent return.
Csaba credits the success of his SaaS business to three things: massive online usage during Covid, adopting Stripe before it was popular, and hiring a contract marketing and frontend team for a low $800-per-month retainer.
Here’s how he grew a new payment processor from 300 to 7,000 customers and sold it on Acquire.com eight years later.
Not Every Industry Is Ready For a SaaS Tool
In the mid 2000s, Csaba, an experienced game and software developer, decided to help sell tires.
Tires? The rubber things that go on cars? Not exactly what you’d expect from a tech guy. But in the mid-2000s, Csaba became obsessed with running a subscription SaaS business. Who wouldn’t want to earn money in their sleep instead of answering client calls all day?
His first two SaaS startups failed. One was an online ad network quickly dethroned by Google Adwords. The other was a CRM for businesses selling large-vehicle tires in 2006. He thought it was a brilliant idea executed too soon.
“Putting tires on trucks and other bigger vehicles has many legal requirements, and I thought businesses would appreciate a CRM to track sales progress,” he says. “But I was too early. Most tire businesses weren’t even on the internet then. It was a hard sell.”
Though Csaba had failed at helping people sell tires, he persisted and became the successful technical cofounder of a third startup, an SMS gateway (allowing computers to send or receive text messages) for startups and media companies. He drew a paycheck from 2011 to 2017, but he wasn’t saving much. He still wanted another source of income.
By 2015, Csaba realized the hardest part of building a SaaS was finding an idea the market wanted. The safer route was acquiring a SaaS that had validated its product with paying customers. Unfortunately, few options for acquiring small SaaS businesses existed at the time.
“Acquire.com wasn’t around back then,” he says. “I looked at Flippa and Empire Flippers. But they didn’t have any SaaS businesses I was interested in.”
At that time, everyone in SaaS wanted to build on Stripe
Finally, Csaba came across a bundle of six profitable WordPress plugins for $30,000. The plugin most interesting to him was a Stripe payment gateway called WP Full Stripe. Another was an A/B testing plugin. He acquired the whole bundle in four weeks and then scrapped all but WP Full Stripe and the A/B testing platform.
After running both plugins for 18 months, the Stripe plugin was the obvious winner. It grew quickly, and Csaba was excited about the Stripe ecosystem. He scrapped the A/B tester.
“At that time, everyone in SaaS wanted to build on Stripe,” says Csaba. “I didn’t know much about it other than it provided complex subscription products. You could also do all sorts of pricing models and the API was easy to use.”
For the next three years, Csaba worked lightly on WP Full Stripe as a side project. His only point of sale was the CodeCanyon plugin marketplace. Stripe eventually sent him an email telling him it was time to drop Stripe from the name, so he changed it to WP Full Pay.
In 2018, Csaba decided to make Full Pay his full-time job. In the three years that followed, he would manifest the six-figure SaaS application he’d been dreaming of.
You Can Hire Cheaper When You Promise Long Contracts
Between 2018 and 2020, Csaba multiplied his startup’s revenue by ten and organic search impressions by 15. He credits a relentless, year-long content creation and UX improvement strategy he ran at a bargain price.
Csaba’s first project was generating sales outside of CodeCanyon. Many plugin creators start selling on plugin marketplaces but switch to their own websites once they’re looking for real money.
“CodeCanyon doesn’t allow us to have much personal relationship with our buyers and doesn’t sell subscriptions,” he says. “Not to mention they’ve been experimental with their pricing over the years.”
To start, Csaba hired a UX specialist, an SEO specialist, a content writer, and a handful of other freelancers (all still work with Full Pay today). Since he could promise long contracts, Csaba hired all of his UX and marketing team for a low price fluctuating between $400 and $800 per month.
As an experienced founder, Csaba knew a simple landing page and SEO-friendly blog might not be enough to push sales. Complex businesses like payment gateways frequently struggle to demonstrate how they work without a customer first paying to use them.
Csaba arrived at a clever solution: a live demo for each type of payment system offered by Full Pay. Customers could click on the type of payment gateway they wanted, and the website would show them an example of how it would look on their webpage (shown below).
Csaba finished his website just in time for Covid to sweep the world and send billions indoors and onto the internet. As a result, by 2020, WP Full Pay jumped from 300 to 4,500 paying customers.
“People were stuck at home during Covid,” he says. “So they bought Peloton, they did Zoom calls, and they started websites that needed payment processors.”
For the next few years, Csaba finally could earn a steady source of passive income from a successful SaaS business, but he also knew it couldn’t last forever.
Why Sell a Profitable SaaS Business?
Though most of Csaba’s success happened between 2019 and 2022, by 2023, he’d been working on WP Full Pay for eight years. An eternity in the SaaS world.
Burned out and ready to work on other things, he began hunting for buyers.
His marketplace of choice for selling WP Full Pay was Acquire.com. He’d already acquired a SaaS there back in the MicroAcquire days. Since then, he’d kept close tabs on its growth.
“I’d seen how many paying buyers Acquire had on Andrew’s Twitter posts,” he says. “I was confident I’d have a great chance to sell there.”
As any experienced M&A pro might tell you, a profitable business isn’t necessarily a sellable one. Csaba came into his acquisition prepared to make his business the latter.
For example, he knew he needed all of his accounts to be easily transferable, which meant creating separate subscription accounts for his payment processor, support ticketing system, and email marketing tools.
“The other important thing was to write standard operating procedures (SOPS),” he says. “I wanted the future buyers to have the answers to most questions, so I wouldn’t need to be involved much post-sale.”
After perfecting his listing with help from the Acquire team, WP Full Pay went live on the marketplace and ten buyers contacted him in the first 24 hours. The next day, Acquire featured his listing in their newsletter, resulting in 50 more NDAs over the next two days.
Flooded with interest, Csaba needed to sniff out the serious buyers. He messaged them and got on calls to understand their motives.
“I saw some buyers communicating in a way that wasn’t professional, so I weeded them out,” he says. “Some buyers were trying to buy for extremely cheap and were a bit rude. One candidate asked all the right questions, and I could tell he knew what he was doing. He said he’d like to send an LOI and I agreed very quickly.”
Once he’d found a buyer he liked, Csaba took two weeks from signing an LOI to completing his APA and two more to transfer his business. He says it would have been faster without some slip-ups in the escrow process.
Finally, after almost a decade of hard work, Csaba could breathe a sigh of relief. He’d created a valuable SaaS and had the six-figure sale to prove it.
But there was no rest for Csaba. He’d already broken ground on a Shopify application for processing webhooks called Cloudhooks and hoped his acquisition would fund another, hopefully larger, success.
The Best Time to Start Marketing Was Yesterday
Csaba has over two decades of experience running successful and unsuccessful startups. That makes him a wizened sage among founders. Some of his advice is a bit unexpected. Contrary to some developers, he always recommends you obsess over marketing.
“The best time to start marketing was yesterday, and the next best moment is now,” he says. “Also, users consume help in many different ways. Write articles, create screenshots, record videos.”
Csaba also has a contrarian view on pricing products. While many believe lifetime pricing deals are a trap, Csaba believes they can remove customer friction and unlock extra cash.
The more a customer pays, the nicer they are in general.
“Don’t marry your prices. Experiment with different pricing strategies and price points,” he says. “A lot of customers avoid recurring payments. Try to offer a one-time pricing that gives customers support and updates forever. In our case, it worked surprisingly well. Also, the more a customer pays, the nicer they are in general.”
The fast-paced tech world suggests you’re only one great idea away from success. Csaba tells a different story. It’s through failure that you learn to be successful. And that resilience to failure separates those with great ideas and those who build great businesses.