Building a SaaS with a successful exit in mind with Antti Ala-Ilkka @Addsearch

saas.unbound is a podcast for and about founders who are working on scaling inspiring products that people love, brought to you by https://saas.group/ . I’m your host Anna Nadeina, Head of Growth for saas.group.

In this episode #43, we talk with Antti, founder of AddSearch, a lightning-fast, effortless, and customizable personalized site search for any website. 

Introduction

Running a successful business requires identifying a problem and creating a solution. This is exactly how Addsearch, a lightning-fast and customizable personalized site search for any website, came to be. Here, we will explore the fascinating story behind Addsearch with its founder Antti Ala-Ilkka, its journey to success, and its recent acquisition by saas.group. We will also delve into the challenges faced by the company and the lessons learned throughout its 10-year history.

The Inception of Addsearch

The idea for Addsearch originated from a personal problem. Antti encountered difficulties while searching for a tax card on the Finnish Tax Authority website. Despite the presence of a search field, the results were nonexistent. Frustrated by this experience, Antti realized that many websites had poor site searches, which could potentially lead to lost customers and revenue. This realization became the driving force behind the creation of Addsearch. Antti wanted to fix the search functionality on websites and provide a seamless and efficient search experience for users. Thus, Addsearch was born.

From Small Beginnings to Big Customers

Addsearch initially focused on serving small and medium-sized companies, as well as non-profit organizations. The product was designed to be self-service driven, allowing anyone to try it out on their website without requiring technical expertise. Through Google ads, Addsearch started acquiring customers and gaining traction in the market. 

However, as the company evolved, it became apparent that there was demand from larger companies and more complex use cases. This led Addsearch to expand its features and offerings to cater to the needs of bigger customers. Antti realized the importance of implementing advanced features and open APIs to meet the requirements of large organizations.

Eventually, Addsearch began serving some of the biggest companies and organizations in the world. This evolution from small websites to large corporations showcased the company’s ability to adapt and grow according to market demands.

The Evolution of Customer Acquisition

As Addsearch transitioned from a self-service product to serving larger customers, its customer acquisition strategy also evolved. While the company continued to prioritize a product-led approach, it recognized the need to engage with multiple stakeholders within the customer organization. 

Addsearch ensured that anyone could try the product and implement it on their website independently. However, the buying decision often involved technical assessment by a developer, followed by approval from business and product teams. To navigate these different stakeholders and ensure a smooth purchase process, Addsearch introduced sales support. This support helped customers through the buying process without hindering the self-service nature of the product.

Unexpected Challenges and Lessons Learned

One of the unexpected challenges for Addsearch was the vastness of its target audience. While having a large market size is advantageous, it also posed difficulties in terms of marketing and messaging. Trying to sell to everyone can dilute the product’s value and make it average for all. 

Addsearch had to carefully select the most potential target groups and focus its efforts on serving them effectively. Another challenge for Addsearch was the legacy of its previous website builder business. The company initially targeted small companies, which resulted in delayed opportunities to serve larger customers. Addsearch acknowledged the need to pivot sooner and implement features demanded by larger customers.

The Path to Acquisition

Addsearch always had an exit strategy in mind. From the beginning, the founder, investors, and stakeholders agreed that the company would eventually be sold. With this long-term goal in mind, Antti planned his role accordingly. 

He stepped away from operational roles and focused on building an organization that could stand on its own. The process of finding potential buyers and building relationships was ongoing throughout the company’s journey. 

Addsearch received inbound inquiries from various interested parties, including saas.group. The actual exit process began in early 2023, when Addsearch hired a financial advisor to guide them through the process. The advisor helped navigate the negotiations and facilitated efficient communication between the parties involved. By addressing difficult topics early on, Addsearch minimized potential roadblocks and ensured a smoother due diligence process. The company maintained transparency and provided the necessary information and documentation promptly. The due diligence phase involved extensive information requests, meetings, and the review of reports.

The Importance of Business Resilience

One valuable lesson from Addsearch’s acquisition journey is the importance of business resilience. Antti emphasized the need to keep the business in good shape, both financially and operationally. By focusing on profitability and maintaining control over their runway, Addsearch avoided being forced into a sale with diminished negotiation power. 

Antti also highlighted the significance of timing in startup success. He acknowledged that being on the market at the right time is crucial and necessitates persistence. By weathering market fluctuations and consistently improving their product, Addsearch positioned itself as a strong player in the industry.

The Smooth Merger Process

Post-merger integration is often a concern for founders, as they fear that the acquirer’s vision and strategy might not align with their own. However, Addsearch’s merger with saas.group was described as smooth and professional. Both companies are fully remote, which facilitates cultural alignment and communication. 

The merger process involved integrating systems, processes, and teams. While there was a lot of work to be done, Addsearch appreciated the support and expertise provided by saas.grouproup. The focus on documentation and clear communication ensured a successful transition.

Conclusion

Addsearch’s journey from a personal problem to a successful acquisition by saas.group is a testament to persistence, adaptability, and resilience. The company’s commitment to addressing customer needs and continuously improving its product allowed it to serve customers of all sizes, from small businesses to global corporations. The acquisition process highlighted the importance of careful planning, transparent communication, and maintaining a strong business foundation.