How I Built A LinkedIn Outreach Tool That Generated $61K MRR Before Getting Acquired

Mac Martine

•

Published: October 13th, 2023

save

Mac Martine

Founder, CASTANET

$61K

revenue/mo

Founders

Employees

CASTANET

gocastanet.com

from Portland, OR, USA

started August 2018

$61,000

revenue/mo

Founders

Employees

Discover what tools recommends to grow your business!

platform

Webflow

AWS infrastru...

accounting tool-icon

Quickbooks

productivity tool-icon

Google Suite tool-icon

Slack

payments

Stripe

Discover what books Mac recommends to grow your business!

Want more updates on CASTANET? Check out these stories:

Hello! Who are you and what business did you start?🔗

My name is Mac Martine. I started Castanet in August of 2018. Castanet was a LinkedIn outreach automation tool that I built and grew to about $61,000 MRR before selling it two and a half years later.

Castanet’s main customers were those trying to generate leads on LinkedIn. This primarily included consultants, freelancers, and lead generation agencies. When I sold the business in early February 2021, it was making about $61,000 a month. This was after many years of not seeing great results from all my other attempts:

Screenshot showing my revenue from many years of not seeing great results, up until shortly before the sale:

What's your backstory and how did you come up with the idea?🔗

I came up with the idea for Castanet somewhere around July 2018. This was after about seven years of trying different ideas, and a bunch of different SaaS apps, most of which went nowhere. Before this, most but not all of the apps I had been building were trying to scratch my itch. I was trying to find something to build that related to my hobbies.

After a while, I realized I wasn't getting anywhere with that, or at least not getting where I wanted to be, so I decided to take a different approach. I started reaching out to people I knew who either owned a business or had higher-up positions in a business. I reached out to people local to me, which at the time was Portland, Oregon, and asked to meet for coffee so I could pick their brains. Usually, they were more than happy to do so. After all, people like to talk about themselves.

Initially, I had no real agenda for where this would end up. I very quickly honed in on sales teams because I realized they weren't afraid to spend money on tools.

After each batch of meetings, I would go home, write some notes, and look for common themes.

I would then ask my contacts for intros to other people they thought I should talk to, and I would repeat the process, reaching out to around five people at a time. I did this several times, and before long, honed in on lead generation. There's always a big demand for good leads. From there, several ideas started to pop up.

In the process, I even sold a batch of 10,000 leads for $4,500. This was the result of one of my “brain-picking” meetings. I was having lunch with a sales manager at a fairly large software company who had certain criteria for people they wanted to target. I offered to accept the challenge of finding such leads, basically as an experiment, and just to see where it might lead, so I went home and wrote some scripts to get just that.

The scripts did things like hitting the Google Search API for businesses of a certain type, then hit those domains to check for certain MX records to determine if they used Google Workspace, then if we found a match, use various other APIs to get generic email addresses (i.e. ‘info@’, ‘help@’, ‘support@’) for those domains. There was more to it than that, but that was the idea - criteria that aren’t easy to match out of the box with existing tools.

I did this thinking that it might turn into a product, and while ultimately this was unrelated to the product I ended up building, it showed me how easy it was to get $4,500 from a sales team when they were getting good value for it. It was one of the easiest sales I've ever made.

Anyway, after many of these coffee meetings, I eventually started building. I had been sitting outside at a coffee shop talking to someone when they stopped me and said, you know, I think you're close, but if you built this, I would hand you my credit card right now and have you swipe it for $800.

There was something about that and the way they said it that gave me enough confidence to go home and start building. But it wasn't just their comment, it was all the conversations I had had leading up to this that gave me a fairly complete picture of the market and what I was getting into.

Exactly four weeks from the day I started building, I launched and swiped my first credit card.

Expect to have unsuccessful products before you have a successful one. Most of us who succeed have a long list of previous attempts that went nowhere.

Take us through the process of building the first version of your product.🔗

During those four weeks of building the initial MVP, I had a fairly clear idea of what I was trying to accomplish. Periodically, I ran my progress by people to make sure I was on the right track with how they expected the workflow to go.

Aside from that, I was simply trying to get it to work. In its current state, it was not ready to scale and still had a ton of bugs. However, I was moving as quickly as I could to get to the next phase of validation.

Describe the process of launching the business.🔗

I built it with Ruby on Rails and hosted it on AWS, so my overhead was very low from the start, aside from my own time.

When it came time to launch, it was just a soft launch. After about four weeks of building it, I started reaching out to some of the people that I had been conversing with, and cards were swiped right away within the first few days!

At this point, the product still had a long way to go, and I ended up having to rebuild some of the core infrastructure, because this first development phase was intended to validate that I could indeed build what I was aiming to build, and also that people would pay for it. From there, it was a balancing act of improving the product and continuing to reach out to people.

After numerous conversations, I had dozens of warm leads. Because I had built trust with these people by getting to know them personally, they were already starting to talk about it a little bit. Right away, I started using the tool itself to generate more leads on LinkedIn. I conducted countless demos for people over Zoom.

The biggest lesson for me here was the value of talking to people early on before building anything. In the past, I had built before talking to people. I took a different approach here, and it was working.

Since launch, what has worked to attract and retain customers?🔗

Over the entire duration that I possessed the product, the majority of customers were generated through the tool itself, creating awareness and leads on LinkedIn. Initially, I was the one creating these outreach campaigns and conducting demos with people almost daily, often multiple times a day.

As time passed, I gained a deep understanding of the workflow of the people using the tool and what aspects were valuable to them. I also became intimately familiar with the language they used to describe each part of the process. This insight proved invaluable for crafting the perfect messaging for the website and beyond.

About six months in, a customer approached me with a proposal to white-label the product, so they could serve as a reseller. As a reseller, they wanted to be able to sell my tool under their own brand, in exchange for a commission - a sort of glorified affiliate.

Initially, I declined the offer, as it didn't seem to be a priority. However, as time went on and I had a well-functioning sales process, things were progressing wonderfully. Yet, I found myself stretched thin between sales, demos, and product development.

Eventually, I realized that having resellers could be highly beneficial, potentially alleviating some of the sales burden if they referred customers for a commission. This arrangement could increase my customer base dramatically, essentially providing me with salespeople without the need to pay them directly from my pocket. They would simply earn a portion of their sales.

So, I reconsidered the proposal, built a white label, and welcomed my first reseller. This was the turning point. Over time, several other individuals expressed interest in becoming resellers. Ultimately, I ended up with four resellers. This strategy was key to my ability to scale the business the way I did, without the need for any employees.

Affiliates and resellers are a powerful lever for scaling without requiring a bunch of extra resources.

How are you doing today and what does the future look like?🔗

I sold the business in February of 2021. I did so through a broker that some other people I knew of had used, which came highly recommended. I only contacted one broker and went with them because I liked the numbers they tossed out on our first call, and I trusted them based on their reputation with people I knew.

Since then, my wife, two boys, and I decided to live abroad for a while. We have been living as digital nomads for the past 14 months, first in Croatia and now in Spain, with a lot of travel in between.

We are loving being able to let our boys experience the world in this way. My focus at the moment is my newsletter, the SaaS bootstrapper, where I share everything I know about being a solo founder. I also have SaaS Pulse, a daily email digest of your Stripe analytics, to give you an overview of your revenue and incoming/outgoing customers.

In addition, I am a co-founder of Aware, a tool to create custom LinkedIn feeds for engaging efficiently.

Through starting the business, have you learned anything particularly helpful or advantageous?🔗

We are always learning as we go, and I feel like I still have so much to learn. When I look back at what made this successful, after having built so many things that were not, there are a few things that stick out.

Mainly, the fact that I talked to so many customers early on before building anything. I didn't leave a lot of room to make assumptions, and I based my decisions on conversations as much as I could.

Also, I realized the power of affiliates and resellers, especially as someone resistant to hiring a team.

To me, this is a lifestyle business and I like to keep it scrappy with as low overhead as possible. Affiliates and resellers are a powerful lever for scaling without requiring a bunch of extra resources.

On top of that, I realized the importance of prioritizing our own mental and physical health. With the growth and success of an app or business comes a lot of pressure, and it's critical to stay ahead of that and keep it from getting the best of us.

What platform/tools do you use for your business?🔗

Running Castanet did not require a bunch of tools. It was hosted on AWS. The website was built with Webflow. I used Slack for communication and First Promoter for affiliate referral tracking. Of course, I also used GitHub.

What have been the most influential books, podcasts, or other resources?🔗

When I was building Castanet, my biggest inspiration came from people who were a few steps ahead of me. A couple of years before, I had started a podcast called the SaaS Bootstrapper (no longer around). There, I interviewed successful, bootstrapped founders. This was a somewhat selfish way for me to pick their brains, build relationships, and learn from them.

The people I interviewed were all doing pretty much exactly what I was striving to do. I felt that if I could absorb a bit of each of them, I might reach my goals too.

These days, if I were just starting out, I’d read The Mom Test, and consume as much as I can from Derek Sivers (to keep you grounded), and Alex Hormozi.

Advice for other entrepreneurs who want to get started or are just starting out?🔗

The main thing I like to tell people is to just keep going and try different things. Experiment and learn. There's no need to put anything off. Just start now and don't stop.

Also, it's easy to think that successful people have skills or knowledge that we don't have, but in 99% of cases, it's just not true. We all are figuring things out as we go along. I believe determination and willingness to wade into unknown territory are far more valuable attributes than technical skills in this business.

Also, expect to have unsuccessful products before you have a successful one. Most of us who succeed have a long list of previous attempts that went nowhere.