Opster runs Elasticsearch and OpenSearch for other companies, so they don’t have to deal with it themselves. Their customers include Bloomberg, Coupa, BMC, LivePerson, Palo Alto, Check Point, and Cybereason.
Summary:
Most startups do it the same way. Build the product or service, then go find people willing to try it for free. But people who get something for free rarely want to start paying for it. It’s a trap.
SmartUp does it backwards and Opster proved it works.
How to do it?
I joined Opster a few months in to handle sales and bring in revenue. At that point there was no product and no customers, just the founder, Yonatan Stern, and me.
Every new company faces the same choice. Chase customers, or build something that makes customers come to you. Working with Yonatan, we decided early that the second one had to come first. Not just to close deals, but because it’s the only way to actually learn what people need and where the market is heading.
As we built the company, we kept asking, “Who are our customers? What attracts them to what we’re offering? Who is willing to pay, and how much?”. In the early stages, this kind of process saves both time and capital. We moved on real information and never stopped, constantly checking, testing, and refining.
Yonatan saw this from day one. Looking back, we all agree it’s the reason Opster worked. Because we talked to the market early and kept improving, we started making money faster than most companies do. And it’s not a one-time thing. It’s a constant process. That’s how we signed half a million dollars in contracts in our first year. We’d been talking to customers before the product even existed, so we already knew what they needed.
I’d worked with people like this before. Ziv Segal, Opster’s founder, and I were early employees together at Logz.io. But that was a totally different game. Grow fast, build sales teams, worry about profit later. VC money meant we never had to think too hard about any of it.
Opster was the opposite. Revenue came first, not growth. And it worked. Opster was profitable within two years.
Some of the hard questions we had to answer:
When do you actually go talk to customers? How do you build revenue that keeps coming? How do you price something that doesn’t exist yet?
Pricing was the big debate. We didn’t have a big sales team, so we needed a different approach. Yonatan pushed for $25,000 a year, positioning us as premium, so we could promise great support to a smaller set of customers and build a real brand around it.
We had leads two months before we had anything to show. Since there was no product yet, we just helped people with whatever problem they had. Real problems, worth paying to solve. That built our sales process. Two and a half years later, the product is mature and bringing in several million dollars a year.
The takeaway:
Companies Yonatan builds think about sales before they have a product. It sounds backwards, but having done it the other way at other companies, I can tell you that this works better. You don’t lose six months after launch scrambling to figure out who to sell to. By the time Opster was ready, we already knew.
This only works because VC money wasn’t an option when we started, so Yonatan was in it with us, not just watching from the sidelines. He kept telling us to dream big, but stand firm on the ground first. When we were ready, we’d move fast.
He was right. We built a profitable company in two years and we kept our equity. We still own what we built.
