How I built Microsoft Teams App that makes 250k/ARR

Written by ilia

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Updated over a week ago

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12 min read

How I built Microsoft Teams App that makes 250k/ARR

Hi there! My name is Ilia, I'm the founder and CEO of Perfect Wiki, a knowledge base solution for Microsoft Teams. This blog post is dedicated to a self-made success story. In the summer of 2020, during the COVID epidemic, I launched an app for Microsoft Teams that provides an internal knowledge base for companies using the platform. After three years of hard work, I achieved an impressive milestone of 200k 250k in annual recurring revenue (ARR) without raising any investments. This success was achieved solely through organic growth. It's an inspiring story of dedication and determination that shows what can be accomplished with hard work and purpose.

Today, I'd like to share my experience and observations on the journey of trial and error, to make it easier for you to get where you want in the field. More information and tips can be found in my Telegram Channel.

This post is based on your questions / my answers on Reddit AMA.

A bit about me, my career Journey and Experience

Let me start from introducing you to my career journey. Behind the creation of the successful project, I have a long journey of education, practice and trials. I started coding at the age 12. Later on, I graduated from Lomonosov Moscow State University with a degree in Computer Science. After that I have been working as a software engineer for more than 10 years in different companies and projects, both big and small. Nevertheless, there's no success without fails. I got my first paid job as a software engineer at 21. Several times I tried to get employed to FAANg but without any luck, unfortunately (or maybe not). Here is a cool post about my interview experience with Google back at 2020.

I've also spent more than 10 years working for different IT start-ups. I even launched 3 failed start-ups myself and wasted? a lot of time and effort. However, all that led me to the place I'm today. So, practically speaking, Perfect Wiki was my first real (and successful) app. Though it'll be fair to mention, that I launched a few other small apps like Translate It  just to understand how app certification works.

How I built Microsoft Teams App that makes 250k/ARR
Translate It! app for Microsoft Teams was the first app that I launched in Teams Marketplace

As for now, I'm working part-time as an IT consultant for a Canadian company. I have built their entire tech stack from the ground up and have developed a strong relationship with the CEO, so I don't want to leave them in the lurch. Money-wise I can live only on Perfect Wiki income.

Why it took me so much time at the time to get to that point? Speaking from my own experience, I can state, that unfortunately, there is no any cool blogs or tutorials on how to build apps, except for Microsoft resources. Even official Microsoft resources are very limited and don't provide you with a full picture. 

Frankly speaking I was asked multiple times about any recommendations (and even looked for some resources myself) and that gave me the idea to create some kind of forum/chat where people who build apps for Microsoft Teams can share their ideas and help each other. I even tried to find some guys on r/MicrosoftTeams but that didn't work out. So, now I'm sharing my experience, tips and tricks in the Telegram Channel. If you guys have any suggestions on expanding that or know a great platform for exchanging knowledge - I'm always open for suggestions!

Apart from that, I have some sneak of the resource that'll take you to another level. I can highly recommend an Ahrefs course on SEO

Perfect Wiki

Development Story

Let us start from the very beginning of the Perfect Wiki project. It was during the time of the COVID pandemic when the popularity of Zoom skyrocketed. I found out that Zoom launched their own marketplace and decided to create a few apps for that. Though they were pretty cool, I quickly realized that Zoom marketplace doesn't have a lot of users and won't bring me customers.

How I built Microsoft Teams App that makes 250k/ARR
Translate It! - Zoom App that was originally launched by me back in 2020

At this point, I decided to turn to Microsoft Teams Marketplace, as has much more traffic than Zoom does. While studying the marketplace, I saw on Microsoft User Voice about built in wiki. Basically all the users were really disappointed with that and kept complaining about the lack of some basic features or any viable alternative. That is how the idea of Perfect Wiki first appeared. I searched through Microsoft Teams marketplace and didn't found any real competitors.

First version of my app was deployed at the beginning of July 2020, after a few days after launch I got my first customer.

Looking ahead, I'd like to mention that the start, you don't have to pay them a penny for certification and you don't need to share your revenue with Microsoft part (as it functions with Apple Store). You only need to pass certification and prove that you're real person and not a robot. 

Nevertheless, work on Perfect Wiki still made we lose quite a sum of money. I have changed several pricing models before coming up with the current one. (and will change again quite soon ๐Ÿ˜‰) Price-point is not a constant, that idea made me switch to a per user pricing model and start earning money, not losing it.

Of course, the journey wasn't a smooth ride: passing a certification on Microsoft Teams marketplace, marketing my app, hiring and firing contractors - all that takes a lot of time and energy to figure out how to do that the right way around. But no doubts, the biggest block was (and to tell the truth still is) to find new marketing channels except for Microsoft Teams Marketplace to attract users and (hopefully) in the future to turn Perfect Wiki into a more well-known and popular product working outside of Microsoft Teams.

Sure, getting a good team that will share my ideals and purpose is also a difficult task. For example, I tried to hire a person who will help me with the marketing and quickly realized that no one except the founder himself (me) wants to think deeply about the product and do something that requires creativity. Sadly, only boring routine tasks could be easily delegated.

The same applies to the tech side of the development. I'm not afraid that someone could steal the code, launch a competitor, etc. Based on my experience - people are too lazy to even do that.

It's very hard to motivate people to work at a start-up pace and take responsibility for their actions. Most of the employees are getting used to their mundane tasks and don't want to think outside of the box. Innovative start-up is a different story, where you need to learn something new and apply new knowledge to stay on the ball.

That was the main reasons for me to fire staff members.

Thus, the creation and marketing process went on. I launched an MVP and after few days got my first customer after posting a link to my solution on Microsoft User Voice. Confirmation that my product is market fit motivated me a lot. I started marketing campaigns, feature improvements and soon got another 10 customers from Microsoft Teams Marketplace and later on - 100 customers from Microsoft Teams Marketplace and SEO.

Technical Details

I'm not feeling like it's necessary to dive deep into tech details, as I think they might look too niche for many readers, however, I'll be glad to share more about the developer's side in my channel or if any questions arise in this regard.

Just to shape some minimal understanding of what's there behind the scenes of Perfect Wiki, I'd like to enumerate some points.

Despite much confusion, it doesn't require any specific language to build such a SaaS product, as basically it's an Iframe embedding into Microsoft Teams client.

When creating Perfect Wiki, my motto was โ€˜Content is a KINGโ€™ (and it probably still is). So, I didn't focus too much on the technical part of SEO. Nevertheless I had specified title and meta tags, and added relevant JSON-LD micro data to some pages of the site.

The first version was really limited. It was semi-working, to say the least. But I decided to launch fast in order to get the feedback and check if it fits the market.

It took me about 2-3 weeks to build the MVP. That seems to be really fast, but note, that I was super well familiar with the tech stack I used. And for those who's curious, I used Node.js and Google Cloud Platform for the backend, React in combo with Vercel for Frontend development.

It appeared that the most time-consuming task was to pass Microsoft Teams Marketplace certification with my very raw (at that time) product. 

The process of integration with Microsoft Team Business Suite requires a separate story, in my opinion, but I'll try to squeeze a brief outline inhere. 

Integration with Microsoft Teams and Business Suite

When entering the Microsoft Marketplace I had really little experience with that platform and format in general. Previously, I have created just a few small apps to approximately understand how it's working from the technical perspective (here is the one of them, if you wonder https://appsource.microsoft.com/en-us/product/office/wa200001480?tab=overview ). Otherwise, that was my first Teams project.

You probably wonder why I turned to Microsoft app shop so boldly?

Microsoft Marketplace it's a B2B market and based on my experience it means that your average customer will be ready to pay way more than those on the B2C market.

In my opinion the only one disadvantage of the whole story is that you should be closely connected with Microsoft itself and you can't predict their decisions, updates or moves that can be disrupting your product's functionality. However, I guess uncertainty chases an entrepreneur on every market.

Many customers of mine are former Microsoft Built in Wiki users. So, it was impossible to avoid comparing and thoughts of the competition between the two wikis. Nevertheless, Microsoft Teams built-in wiki helped me a lot. It created a whole market for me :) Seriously speaking, Microsoft built in wiki was very weirdly constructed, clunky and cumbersome, thus I could easily identify the pain points and build a better solution that people were ready to pay for.

And as we know, for today built-in wiki is sunsetted by Microsoft.

So, there're no more reasons for being nervous about Microsoft improving the wiki and driving us out of the market. Though, at the start that could be the case. But, frankly speaking, Microsoft is a really big company and it's really hard for them to build something really cool.

For example: 2 years ago they released Microsoft Viva which should have eliminated Perfect Wiki. As a result, the solution was so difficult to navigate that no one uses it as knowledge base. Another case: a year ago they launched Microsoft Loop that had a potential to defeat Perfect Wiki as well, but again they failed to create really cool product that is user friendly enough.

In my ideal plan, I'm awaiting when they come up with the decision to simply buy Perfect Wiki. So, if you're a Microsoft representative and want to buy Perfect Wiki - DM me ๐Ÿ˜‰

But jokes aside, I guess the chances are almost zero here.

Marketing

Moving on, after launching the app on the market the top priority was to let people know about that and convince that they need to buy it. And of course I had to dive into the world of marketing and advertising. I created a few blog posts (like this https://perfectwikiforteams.com/blog/perfect-wiki-vs-ms-teams-wiki/) on why you need to migrate from Microsoft Teams built-in wiki to my solution. Also, initially I used to market through the Microsoft UserVoice portal and Microsoft Support forums. I replied to all questions regarding built-in wiki issues and offering a great equivalent - that was Perfect Wiki.

I achieved the result that currently I'm welcoming 80% of paid customers from organic traffic of Microsoft Teams Marketplace. Other 18% are from the SEO posts about "why you need to replace Microsoft built-in wiki with Perfect Wiki". I never tried cold-email campaigns on this project and Facebook and LinkedIn ads too expensive for me (not to mention that ROI is really bad). I mean I was spending on ads way more than earning from them.

What really helped me with the organic growth I focused on, were the following points:

  • SEO on Google with high quality content which I created all by myself. I took an ahrefs course on SEO and it really pays off. I got a lot of paid customers from my SEO posts on โ€œWhat is the best alternative to Microsoft Teams wikiโ€
  • Reddit, especially subreddits connected to Microsoft Teams
  • A lot of small forums connected to Microsoft and Microsoft UserVoice.
  • Tried to cooperate with Microsoft MVP's (Most Valuable Professional) but didn't get any beneficial results
  • Right now, I'm focusing on building a personal brand to get some audience.

The way you handle support is also of great importance. Online chat widget is my main source of user feedback. I'm trying to make my app super simple to use, nevertheless recently I hired a part-time contractor to answer email messages, just to make my support be a more personal and friendly. This way we can get more feedback from the customers, create mailing lists and in general stay afloat and on the agenda.

Frankly speaking, what I got from my marketing adventure for now, if you're able to write a good post on a really hot and acute topic, it'll be easy to get to #1 page of Google. Especially if you're targeting a niche auditory.

But there is another side of the coin, because when topic has a niche target audience you won't get a lot of traffic initially. You're basically betting that in the future this topic's relevance will grow. That was particularly my case.

My goal #1 for the future development is to find other marketing channels other than Microsoft Teams marketplace, I'll be happy if someone suggest me anything. I'm struggling with this issue for the whole 3 years.

Profit and Income

Now it's time to talk about the most interesting part - let's talk money!

As I've mentioned at the very beginning - I reached the income of 200k250k in annual recurring revenue (ARR) without raising any investments. The way of getting to this point was not an easy one, to be honest. It's always been a rollercoaster. Some plateaus lasted for 3-4 months. That worked as a signal for me to change something in the product itself or in my acquisition strategies, as running a start-up is about constant changes. Market is everchanging thus your solution should keep track as well.

For me personally, the biggest plateau was when I got stick to fixed pricing for the product, once I decided and was bold enough to change pricing to per user pricing model for all customers my revenue skyrocketed.

Let's look at the current state of things: I'm earning about 16k / month. I get approximately 30% of the revenue from large customers purchasing the Enterprise plan, of course there's 0% revenue from free accounts, and everything else comes from Premium plan subscriptions (check out Perfect Wiki website to get the understanding of the price range).

Of course, there're some expenses and collateral costs to upkeep the business:

  • 300$ - 500$ I spent on Google Cloud Platform
  • 400$ - 500$ I spent on Algolia
  • < 150$ on other SaaS apps
  • < 500 $ for part-time contractors

All the rest makes my profit and sits in my bank account. Maths is on you guys ๐Ÿ™‚

Future Plans

So, that brings us to an end of my story. Do I plan to expand my business? I'll be glad to do so and hopefully will be able in integrate other platforms, but it's hard to find something that will pay off.

I even considered investment inflows. Frankly speaking I don't think investments will help me to scale up. Investors want the developers to work a miracle within seconds, otherwise it's not really profitable for them. Paid ads alone won't be enough to solve this issue.

Also, I applied to YCombinator in 2020, but unfortunately, I was rejected after the final interview. 

The main nuance with Perfect Wiki right now is that it is not clear how to scale it up beyond Microsoft Teams environment. For example, Notion was able to boost its product by creating a lot of templates for users, thus gaining a lot of organic SEO traffic.

If someone could suggest a good way to scale Perfect Wiki to other platforms, I would be very grateful. And for now, I'll be glad to chat with you and answer all the questions in my Telegram Channel. Join it today or even give Perfect Wiki a try.

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