From Open Source to $500K in SaaS Monetization

Omer (00:11.840)
Welcome to another episode of the SaaS Podcast.
I'm your host Omer Khan and this is the show where I interview proven founders and industry experts who share their stories, strategies and insights to help you build, launch and grow your SaaS business.
Today's interview is with Maciej Zawajinski.
Maciej is the co founder and CEO of Pewick Pro, the business arm of Pewick.org Pewik is an open source alternative to Google Analytics which puts users in control of their data, never shares data with other servers and never sells data for ad targeting.
Piwic Pro focuses on providing Pewic cloud hosting and extra paid services for enterprise level customers.
Maciej, welcome to the show.

Maciej Zawadzinski (00:58.650)
Welcome.
Thanks for having me.

Omer (01:01.050)
Now before we talk about piwic, tell the audience a little bit about yourself.
Who is Maciej when he's not working?

Maciej Zawadzinski (01:11.370)
Maciej is working quite a lot, but he's not working.
He's eager to learn.
I learn about, I learn languages.
I do some sport, especially in winter, skiing.
I try to spend some time with my girlfriend going to theater or cinema.
So nothing really out of ordinary.
Maybe in the summer I do some bike marathons, which is kind of interesting but not really dangerous.

Omer (01:47.410)
All right, now we like to kick things off with a success quote to better understand what drives and motivates our guests.
What is one of your favorite quotes?

Maciej Zawadzinski (01:56.460)
So I think maybe it's a bit like simple, but it's a quote from Steve Jobs.
The only way to do great work is to love what you do.
And I really liked that because that's something that is really close to me.
I was never going after money from the very beginning, from high school, I was always doing what's interesting me.
And the money come after that.

Omer (02:24.790)
Yeah, I love that quote.
I think that that's from his commencement speech, I think, right?

Maciej Zawadzinski (02:31.750)
Yeah, I believe so.
I'm not really sure, but I believe it was the commencement speech.

Omer (02:37.030)
Yeah.
Awesome.
Okay.
What were you doing before you got involved with Pweek?

Maciej Zawadzinski (02:44.710)
So I was having a startup here in Poland.
It was an advertising network.
Specifically it was the block advertising network on Polish market.
And I was seeking a solution to track the visitors in the network and provide data to advertisers and so on.
So I came across the first release of Pwig which was done by co founder Matthew Albert.
He's CTO of the company and he just released the first version of pwic which was the next version of php.
My visits, some PHP script to plot nice charts with analytics.
And that's where I found it interesting.
I decided to use peweek as a foundation of my art technology system for data collection and reporting.
And, and I started contributing to peeg, actively resolving performance issues, adding more features.
And that were really early days of the project.
So there were just a couple guys from all over the world contributing to it.
We had some first meeting in London, I think it was 2006 or 2005, and we met each other.
Everyone had a job, everyone was doing something different and that, that's how PWIG really started.
We developed the product further, we gained more and more users and today we got like 1 million websites worldwide using PWIC and building the business upon this.

Omer (04:38.860)
Now there's a little bit of irony that I see in there that peeq is about never sharing data with other servers, never selling data for ad targeting.
And yet you were in a business in an ad network which relies on this type of data.
Right, to be effective.

Maciej Zawadzinski (04:58.960)
Yeah, yeah, yeah, exactly.
What's even more irony is that NSA use pwig.
There was some article, I think quite a few weeks ago that or months ago that MSI also uses pwig.
So, you know, it's like with, you know, tools or guns, you can use it for a good, but you can use it for bad as well.

Omer (05:25.330)
Okay, so you got involved with the Pewick project and you were contributing to that and sort of getting involved with these guys.
Were you still building the, the ad network?

Maciej Zawadzinski (05:41.900)
Yeah, yeah.
So I, I continued to work on this business and it was, I mean it, it, it wasn't super successful, but it was successful.
We exited the company after two years.
We were minority shareholders.
We got really shitty deal with our investor.

Omer (06:01.020)
So we decided what minority was that?
How much did you have?

Maciej Zawadzinski (06:05.180)
70 to 30%.

Omer (06:07.230)
So you had the 30?

Maciej Zawadzinski (06:07.910)
Okay, yeah, I mean we had 30, but there were three of us.
So it was really bad.
But yeah, I mean that was exciting time.
I learned a lot during this time and I managed to at the same time to contribute and become like one of the pillars of PEE Week during this time.
So it was definitely interesting.

Omer (06:35.690)
So how did you guys end up with a 30% share in your company?
Was it just because you really needed the money or it was just the type of investors that you had partnered with?

Maciej Zawadzinski (06:49.850)
I think it was a combination.
We launched this just without much, even savings to three friends.
I mean, two friends.
And then the third guy joined us.
We won about one year on our own and then we realized that we really need money badly to get this going and this investor wasn't investing in startups where he didn't have majority, it was kind of strange, but we didn't have really other options at that time and we didn't really care that much.
And that's the deal that we got.
But thanks to that, I came across Pewic, which is really great.
And that led to other things that I'm doing right now.

Omer (07:53.110)
So when did you get fully involved with Pewic?

Maciej Zawadzinski (07:57.590)
So this was a gradual process.
So once I exited the ads advertising company that I had, we found it with one of the friends that I was having with one of friends that I was working with a software house called Clear Code and we focused on software development and mainly in the areas of analytics and app technology.
And at the same time I was still involved in Pwig.
And so with peweek we had more and more success.
We got more and more consulting requests.
So Clear Code was partly working on some project not related to peweeg and partly on consulting requests that I was handling.
And then I had some people to help me to handle them.
There was no one on the peweek core team that could help with that.
So somehow at some point, speaking with Matthew, the founder of, we said like we need to really do something about that because we got companies like Lufthansa or T Mobile or Government of Canada contacting us for services and we still don't have even a company.
And we are doing is either as individual consultants or either as clear code.
So we finalized this around one and a half year ago.
Of course we had some plans earlier, but we finalized it about one and a half year ago.
And as my company ClearCode grew by the time to 70 or 60 people, we basically provided the resources needed to develop cloud product and to support customers.
Because already some people at clearcode knew Peewic very well.
And Matthew contributed help to us to get going from the marketing side to to start adding some information about peeweeg Pro on peeweeg website.
And that's how we really started.
We already had a background what customers may need because we were doing for five years consulting services based on pwic.
So it was pretty easy start.
It sounds really easy that right now we just need to create cloud product, offer consulting services and we'll be starting money.
It turned out that it isn't that easy, but I think we'll speak about that in a moment.

Omer (10:44.030)
Okay, so first of all, yeah, I mean, what was the reaction?
So you guys have been working on an open source project and then suddenly you're trying to make money from this and Selling it as a commercial business.
I'm sure that caused some challenges for you, right?

Maciej Zawadzinski (11:04.030)
It wasn't that challenging for from our image or Community reaction because Community was demanding these services.
So we had this consulting firm in the very beginning and we keep receiving inquiries that people would like to have some, I don't know, one day consulting or they need some training from peweek and things like that, or they need help and they are willing to pay for that or they are willing to pay for a feature.
So it seemed like pretty natural just incorporate a business which would be official business of Pewic, which is incorporated by founders of Pewic or key people in Pewic.
And we never heard a bad reaction about that.
What was harder is to come up with the services that really work and really scale.
Because I knew already from clearcode that consulting services you can scale only with the headcount and that won't work for Pwig.
And that was what mainly the inquiries from Community were just I want to buy a couple hours of consulting.
But this wasn't.
I knew from the beginning that this isn't going to work and we won't be able to scale component make money from projects for a couple of hours.
So I come up initially with the idea of cloud product which comes with the support that was quite natural.
But on the other end our one core differentiator is that you can host the data on your infrastructure.
So that could work for some of the clients but not for all of the clients.
And then the enterprise product, that was a bit longer journey and a lot of discussions with different customers, getting feedback.
And it turned out that it isn't that easy that you have a popular open source product because when we were launching it was already used by close to a million websites.
And it isn't that you just start offering services and the money will start flow.
That wasn't that easy.
But after a year I can say that around a year it took to create an offer that really started working.
And we see quite a lot of interest in the enterprise offer from corporate clients as well as from government clients.

Omer (13:53.730)
So looking back at the early days of starting up this business, what do you think was one of the biggest mistakes that you made?

Maciej Zawadzinski (14:02.940)
There were a couple, I guess first of all, the first mistake was that we were a bit too late with that.
We should have done it much earlier and we would be probably in a different place today.
So we led this open source project for over five years and then we started the business.
So that's definitely too late.
And I'm I'm not sure why we waited so long.
The second mistake was that our initial business offer was really complex.
We created a creator where you can add consulting hours and then you can choose different types of training and all other services.
We had almost zero conversion rate on that.
I think that's.
That led to some.
We're thinking of the whole business idea how to appeal to the enterprise clients and how to reach enterprise clients, which after a year led to our current offering that started to work.

Omer (15:12.550)
So I think that's a really interesting point there.
I want to talk a little bit more about that.
So what I'm hearing is that, you know, you were providing some similar kind of consulting services for Pewic through your clear code business, right.
And you guys were seeing this demand from these potential Pewic customers, right?
Peweek users who were saying, you know, I want to pay for these types of services.
But when you actually launched Pewic Pro, you found, as you said, your conversion was almost zero because of the offer.

Maciej Zawadzinski (15:53.170)
Yeah, I mean, we tried to like, you know, we took together what were the most common enquiries and then we put it into nice, like creator wizard that you can just click what do you want?
And we had no conversion on that.
Then we started to simplify, simplify.
The more we simplified, the more we got, the more conversions we got.
But that was just the beginning of the problems because we offered things like Audi consulting or maybe a service that was called just setting up peeg on your server, but setting up the software on the server, it cannot be that much expensive.
And we saw that this does not scale from the business perspective.
So right now what we have, we have four different packages.
So from the entry level to really like, you know, highly priced pro level.
And these packages have set of services that are built like setup and then software updates and some consulting package for discovery and needs analyzers or for setting up the measurement strategy for the client.
And with each higher package you get more and more of our services and training.
And initially you get just email support.
In higher packages you've got email and phone support and so on.
And this package, such packages, because they are yearly plans, you can sell at much higher price than just a service for one day consulting or setting up kiwig on your server.

Omer (17:44.940)
So how did you go about figuring out what the right offer and the right packages were for your customers?
Were you testing this?
Were you going out and talking to customers?
What process did you go through?

Maciej Zawadzinski (18:00.140)
Yes, I mean, first of all, we spoke with the customers quite a lot, regardless of if we converted them or not.
So that was the first input.
The second was just I think our knowledge, maybe not even knowledge, just comparing it to competition in other totally different consulting areas that we could find.
And pricing I think was quite difficult to figure out.
But we did some research.
We saw what's total ownership cost of different web analytics solutions for enterprises.
And based on that we were able to determine what would be our higher end packages like and the lower end packages we figured out based on what customers were willing to pay for consulting and other services that we are offering at the moment.
Just scaling them up to yearly packages let's say.

Omer (19:07.090)
So you reframe these packages and then what happened to your conversion?
So

Maciej Zawadzinski (19:15.890)
we started to sell these packages.
So the inquiry started to convert.
Of course these are enterprise sales.
So it's totally different than SaaS product, which is our peeweet cloud product.
So it still takes from two to nine months to close these deals.
But they started to close and we saw, okay, that's where we are on the right track.
And then we just kept improving the offer based on the questions that customer asked or based on the requests that were coming from existing customers that we signed up.
And we keep improving this offer.
So we just, I mean every, I think every six months we try a bit improved iteration based on the feedback that we gather from the last quarters.

Omer (20:08.480)
Now tell me a little.
So you mentioned some few names like you know, Lufthansa, what were some of the other companies you named?

Maciej Zawadzinski (20:18.640)
Hewlett Packard, Government of.
I mean that's government from government clients.
We work with Government of Canada, Government of Netherlands.
From the enterprise sector.
Accenture.
Yeah.
Why?
I have still some names that I cannot name because they are from banking sector.
So we become more and more popular in banking.
But these clients are very sensitive about when you talk about the technologies that they use.

Omer (20:57.560)
Why are these companies and organizations choosing PWIC and not Peweec in particular but an open source analytics solution versus you know, why not just use Google Analytics?
I mean, you know it's got a big company behind it.
There's no issues with scaling, there's a lot of resources working on that stuff.
Why is it so important for them to do that?

Maciej Zawadzinski (21:21.800)
So there are a couple of reasons.
So first of all is privacy.
So the open source source solution can be installed on the servers within the organization.
That organization controls the access to the data.
It's never sent to it never uses the data for third parties.
The other thing is the customer centric aspect.
So with ga, for example, you don't have the access to the data at the session level or at the visitor level.
And that's where all the BI tools, if you want to connect this data with other data that you have in your systems at the customer level, you can never do it with ga.

Omer (22:13.140)
Okay.
And you know, I think I'm thinking about sort of Google Analytics and most people would say okay, you know, I'm kind of using software from a trusted organization.
Google tells me, you know, they're not going to do any evil.
But what are some of the issues that come along with using a product like Google Analytics?
What's happening to my data when I use Google Analytics?

Maciej Zawadzinski (22:45.720)
You first need to separate Google Analytics Free and Google Analytics Premium.
Google Analytics Premium is a package that you need to buy once you cross 10 million pages per month or so.
But let's say that you use Google Analytics free.
But I think everyone knows that nothing comes for free in the world.
You just pay with your data.
So GA Free and that you can find this in the terms of service.
Google has rights to use your data to so called improve or use it in other Google products.
And mainly where this is used is for advertising or competitive ranking.
So basically your data is used to know what kind of visitors are on your website and to improve advertising products of Google or to even help your competition that one advertising.

Omer (23:52.730)
Okay.
I mean that doesn't sound too bad.

Maciej Zawadzinski (23:57.050)
It doesn't sound too bad.
But many of the companies want to just have the control over the data and can do that with the data, whatever they need.
The other thing you cannot do is you cannot export the raw data.
So you don't know like you don't have the information about every visitor what he does on this website.
And this could be very valuable if you connect this data with your CRM data or other database where you can see which customer was interested in which products on your website or what kind of offer they viewed who is more engaged with who engaged more with your content, who didn't engage at all with the content.
So these kind of things are not possible with Google.
But you know I have a lot of respect to their product because of course, as you said, there is a lot of people working on this product.
It's case well, but you need to just accept that you pay with the data if you use the GA3.

Omer (25:14.450)
Okay, let's talk about an incident from a few years ago which you told me was a single incident that's kind of haunted you guys for some time.
Back in 2012, hackers inserted some malicious code into the open source Pewic code.
Can you tell me a little bit about what happened there?

Maciej Zawadzinski (25:37.640)
Yeah, yeah, that was really like this haunts us for years.
The problem that we had there was that our website was hosted on.
I mean we used WordPress for our website and unfortunately at that time we hosted our software that you download on the same server.
So once the hackers broke into the WordPress they were able to change their with the latest version of pwip which people start downloading and installing on their servers.
We knew about that within hours and we right away changed the file and informed the users, released the statement.
We had some lessons learned of course as well.
So that the WordPress site is right now on a separate server and we never link to the.
We never put anything crucial on the server where we have the website.
So it will never happen again.
But people keep asking about this incident because there were a lot of articles about that and it was a huge issue because we already have a lot of users around the world.
And by updating Pewick in that like short time span of couple of hours, you could, you could get infected, your servers can get infected and probably other scripts on your server could get infected as well.

Omer (27:24.480)
And so you know, what kind of did that set your cause backwards?
Did people lose confidence in using pwic?

Maciej Zawadzinski (27:36.240)
There were probably people that this just freaked them out and they didn't decide to use Pwig, but it didn't slow down our growth.
So it wasn't like something that set us back for a few months maybe because there was a publicity and there was an offset of like people were talking about Pwig which brought new customers and only some of them were discouraged because this was a security issue.
So it wasn't that bad.
But we still keep receiving inquiries from some clients and they ask like is your software secure?
And we have like, I mean security of our software as well as privacy.
These are two core values of the component of the project.
So we have a lot of pressure on put on security, especially with we run a bug bounty program.
So whoever finds a valid security bug is rewarded with cash.
So this brings security researchers from all over the world to check our software.
We also run external security audits for major releases.
So we pay for an audit for a security company, performs it and sends us recommendations or potential issues as well as every commit that is matched to the core PWIC is reviewed by one of our senior staff to scan for any potential security issues.
So we had really great process for keeping the software of the security and that wasn't Even the the issue that we have in 2012 wasn't the issue with the bug in the software, it was the issue with our website, which was run by WordPress.

Omer (29:44.700)
And there have been no issues since then?

Maciej Zawadzinski (29:47.100)
No, there have been no issues since then.
There weren't any issues since then.
Of course we fixed some security issues in the software, but there weren't critical and they weren't malicious code.
One simply the normal cycle of releases.
And like we fixed some issues that were submitted by the researchers and we paid them back bounties.
So there's a continuous process to improve the quality and the security of the product.

Omer (30:22.340)
How many contributors do you have working on the PEEwic project?

Maciej Zawadzinski (30:27.200)
So total contributors is more than 80 people, but a lot of them there are really small contributors that contribute translations or contribute to our device detection library.
Actually it may be even more than 80 because we separated these projects on GitHub to make them useful for people for other open source projects.
So for example, we have a separate project for our device detector library or for our tracker.
So the actual number of contributors may be a bit more.
But as I said, we have the small contributors that contribute just translations, update libraries, or update the catalog of search engines or social sites in peewee, and we have these bigger contributors that contribute actual code or develop plugins for pwig that we publish on our marketplace.
So the developer community is growing and we know that for a fact that this is just a fraction of people that are working with peewip.
Because with every business contact we see that there are people in companies and sometimes in big companies that they develop their own plugins for their internal use and they never shared it publicly.
So probably there is much, much more people, but we have no way to know how many actually developers are involved in public related work.

Omer (32:07.470)
Let's talk a little bit about the cloud hosting part of the business.
Now earlier we talked about, you know, we said, hey, one of the most attractive things for Pewic users is that they can take this product and they can self host it, they can put it on their own servers.
So you know, providing a cloud hosting offering for this software seems like one of the last things that would make sense for your customers, right?
So why did that become a part of the offering?

Maciej Zawadzinski (32:45.000)
Actually it is not really the case because for some countries it's important to host the especially here in Europe, it's important for people to host the data within the country or within the European Union later is the case mostly.
So there are some privacy regulations in European Union countries that Say that you should not host your data outside of eu.
And that was the first thought why we should run the cloud product.
Of course it wasn't the only cost, the only argument why people choose peewee Cloud because we see a lot of, for example American customers using Peewee Cloud and we have a data center in US hosting pewig Cloud for them as well.
So it looks like people just like the product very much.
They like the interface, they like the simplicity of pwig, they like the features of Pwig and they like the features that they get in Pee Week that they don't get in other products.
And they don't want to have this technical.
They don't have the technical knowledge or they simply don't want to do on their own installation and maintenance and updates.
And they sign up for peweek cloud because it's easy and it's cost effective and they have Pewic with our support and high availability infrastructure for Pewic.
So I think that's the most what people are really why they are signing up for pewik Cloud currently.

Omer (34:43.970)
Okay, what sort of revenue are you guys doing with the Pewg Pro business?

Maciej Zawadzinski (34:50.050)
So we did close to half a million in the first year.
The current numbers and the current plans are higher but I think that shows how that we had already customer base that we could just start the business and in the first year get these numbers right now we'll be heading for this year for probably tripling this, tripling

Omer (35:24.559)
that in the second year.

Maciej Zawadzinski (35:25.600)
Yeah, yeah.

Omer (35:26.320)
Wow.
And are you profitable?

Maciej Zawadzinski (35:30.200)
Yes, we are profitable right now.
We just passed the break even point.

Omer (35:37.170)
And most importantly, what sort of stake do you have in this company?

Maciej Zawadzinski (35:43.090)
So what do you mean?

Omer (35:44.770)
I mean do you have an Investor who has 70% of your business?

Maciej Zawadzinski (35:47.890)
No, no, no.
We own the company.
We don't have an investor.
We bootstrap the company by our own.
Even though that I keep receiving the LinkedIn invites from various venture capital firms at least let's say once a month or once every two months.

Omer (36:11.600)
Awesome.
Is there one part of your business or one product offering or one thing that you guys are working on that you're most excited about right now?

Maciej Zawadzinski (36:23.360)
So yes, I think what's.
I mean right now the product over the last few months was mainly about the stability and improving the performance because we are really agile in releases in our products.
So every month we release a new version and while we were adding features, it was a bit too fast paced and we just decided, I think around November that we'll have this stability phase for a couple of Months just to, just to improve the product performance and stability.
And that's about to finish and we have a couple of exciting things.
So one of the things that we want to work on is a B testing.
So some integrated a B testing product in the peewee.
And the other thing more like this is more a bit longer term goal, maybe one to two years is get more involved in measuring Internet of things or we call it measure anything.
So we don't want to measure just website and mobile apps like we do today, but we want to be able to measure almost anything that generates some data in pee.
And I think that's personally my favorite and most exciting thing that we'll be working on.
Cool.

Omer (38:00.950)
Now, looking at like the Pewick cloud product for example, are you still targeting enterprise customers for that or is that sort of a more broad offering?
So if somebody's listening out there who has a startup, is that something that they should be considering when they think about analytics for their business?

Maciej Zawadzinski (38:21.430)
So yeah, cloud is more targeted at smaller businesses and medium businesses, but it does not end with that.
We have customers that on the cloud that track more than 50 million events a month, which is quite a lot.
And these are no longer small medium businesses.
So I think most of our customer base though is still small medium businesses.
And by starting analytics in your business, you can learn a lot and with Pwig and with support you can definitely have deeper insights even on the smaller traffic audiences because you have this customer level data and you can look into each separate visit and analyze how they interacted with your content.
And what's more, we have some ready to use integration so it's super easy to get started and start using Pewik and then reaching out to us to learn more or to do some custom use cases which we also support.
So we sometimes for some smaller customers, I mean mainly we do it for enterprise customers, but we work with some startups on building custom solutions upon Peeq as well to support their business case.
Especially if they are going to use PWIC as a foundation of their analytics product.

Omer (40:06.130)
Okay.
All right, Maciej, it's time for our lightning round.
I'm going to ask you a series of questions and I'd like you to answer them as quickly as you can.
Are you ready?

Maciej Zawadzinski (40:14.050)
Yeah, ready.

Omer (40:15.090)
All right, what's the best piece of business advice that you ever received?

Maciej Zawadzinski (40:21.720)
When you want to launch a product and you want to be a founder of your company, you need to be able to sell your product.

Omer (40:29.800)
What book would you recommend to our audience and why?

Maciej Zawadzinski (40:33.640)
Predictable revenue by Aaron Ross.
It tells you how to organize sales in your startup, in your organization.

Omer (40:42.440)
What's one attribute or characteristic in your mind of a successful entrepreneur?

Maciej Zawadzinski (40:48.020)
Passion for what you are doing?

Omer (40:50.820)
What's your favorite personal productivity tool or habit?

Maciej Zawadzinski (40:57.780)
I could name a few.
Probably the most important are Zero Inbox and Kanban boards for planning.

Omer (41:06.900)
If you had to start over tomorrow, what type of business would you go and build?

Maciej Zawadzinski (41:14.030)
I would build something in advertising industry.
I believe there is plenty of things to be done in advertising technology.
Alternatively, I would go for finance industry and blockchain payments, digital currencies because I think there is a big future there as well.

Omer (41:38.680)
What's an interesting or fun fact about you that most people don't know?

Maciej Zawadzinski (41:44.280)
I'm trying to learn German since I was a kid and right now that's my eighth try or ninth try and I think it would be successful.

Omer (41:58.200)
You know, my wife is Puerto Rican and we've been married for almost 15 years and my Spanish still sucks.
So, you know, it's, it's not as easy as it sounds.
Learning a new language.
And finally, what is one of your most important passions outside of your work?

Maciej Zawadzinski (42:19.250)
So recently it's the first passion is basically doing sport and staying fit.
But recently I start to learn a lot about finance and history of financial market, history of central banking and I start to be like really digging deeper and deeper into this topic.
So I could probably tell it's become recently my passion to learn about this.

Omer (42:52.210)
All right, great.
Maciej, I want to thank you for joining me today and sharing your experiences insights with our audience.
And thank you for letting us get to know you a little better personally as well.
Now, if folks want to find out more about PWIC or PWIC Pro or they want to get in touch with you, what's the best way for them to do that?

Maciej Zawadzinski (43:12.250)
I think the best way is just to go to Peweek Pro or drop me an email at Miwik Pro.

Omer (43:22.170)
Awesome, Maciej, thanks again and I wish you continued success.

Maciej Zawadzinski (43:26.490)
Yeah, thank you very much.
Cheers.