Inform
Michael Ozalparti spent five years building Sabazo, a professional services and custom software company serving global hospitality firms with employee development tools. The business grew to "upwards of 40%" growth rate and generated just under $1M in ARR through project-based work and licensing. But Michael saw a ceiling: the services model was high-touch, low-leverage, and ultimately not scalable. He realized that the real opportunity wasn't in building one-off custom solutions—it was in productizing what his team had learned from working directly with 20 large enterprise clients across the hospitality space.
Instead of abandoning Sabazo, Michael made a bold decision: use the cash flow from the agency to fund a new SaaS product called Inform. He bootstrapped the venture with $200,000 saved from Sabazo's revenues—no outside capital. The team split into two: 10 people remained on Sabazo (which would continue generating revenue and insights), while 5 people moved to Inform. The product launched in beta in 2018, positioning itself as an all-in-one LMS for hospitality teams. The key differentiator wasn't just the software—it was bundled content. Michael identified a critical gap: most LMS platforms fail because they lack engaging content. Inform would solve both problems by providing pre-built, professionally produced video and text courses alongside the platform itself.
Michael's dual-company strategy was counterintuitive but strategic. Rather than going all-in on Inform and burning cash, he kept Sabazo alive as a cash engine and customer research lab. The 20 enterprise clients at Sabazo became the proof-of-concept for Inform's value proposition. This approach allowed him to bootstrap responsibly while gathering real-world intelligence about what hospitality teams actually needed to train employees effectively. The pricing model was straightforward: three tiers, two paid, targeting SMEs in hospitality with a freemium entry point.
As of the interview in 2018, Inform was pre-revenue—still in beta, with pricing set to launch by year-end. Michael was clear about the long-term vision: transition fully into the product space over the next five years while maintaining Sabazo client relationships through their contract terms. This wasn't about running two businesses forever; it was about using cash flow and customer knowledge from the legacy business to fund and validate the future one. Michael's philosophy: "You can never buy resourcefulness. What we've achieved in five years working with these customers face to face is a tremendous amount of experience in the space."
- •By maintaining the cash-generating agency business while building the SaaS product, Michael eliminated the need for external funding and avoided the pressure to achieve unrealistic growth timelines that force premature scaling decisions.
- •Direct relationships with 20 enterprise clients in Sabazo provided validated market feedback and proof-of-concept data that informed Inform's product design, reducing the risk of building features nobody wanted.
- •The bundled content strategy addressed a concrete, observed failure mode in the LMS market rather than replicating generic competitors, creating a defensible differentiation that resonated with the target customer segment.
- •Splitting the team into two entities allowed Michael to retain institutional knowledge from five years of customer problem-solving while freeing capacity to design a scalable product without losing the revenue that funded it.
- 1.If operating a service business in your target industry, deliberately preserve and extend client contracts while allocating a small, dedicated team to build the productized version of your core service offering.
- 2.Conduct structured interviews with your 15-25 largest service clients to identify the one critical gap or pain point that existing off-the-shelf solutions consistently fail to address, then make that gap your core product differentiator.
- 3.Build the SaaS product's first version using only the cash generated by your existing business—set a specific bootstrap budget (e.g., $200K) and design your MVP scope to fit within it, avoiding dilution and external pressure.
- 4.Create a tiered pricing model (freemium + two paid tiers) that targets SMEs in your industry specifically, pricing based on the value your service work demonstrated to enterprise clients, not on competitor pricing.
Similar Companies
247.ai
$25.0M/mo247.ai, founded by PV Cannon in 2000, is an AI-powered customer service automation platform serving over 150 enterprise customers with $300M+ in ARR. The company raised only $20M from Sequoia (2003) and bootstrap, achieving 10% net profit margins while maintaining a 12-month CAC payback period and 100% net revenue retention. Despite a security breach setback around 2018, 247.ai has recovered and recently achieved 20% new revenue booking growth in their best quarter.
iCIMS
$13.3M/moiCIMS is a bootstrapped SaaS provider founded in 1999 that dominates the talent acquisition software market as the #2 player, serving 3,500 enterprise customers with an average monthly spend of $4,000. The company exited 2017 with $160M ARR and is targeting 25%+ annual growth while maintaining profitability, recently acquiring Text Recruit to expand into candidate messaging and recruitment advertising.
Zoom
$12.0M/moZoom is a freemium SaaS video conferencing platform founded by Eric Yuan in July 2011 after he left Cisco to build a next-generation collaboration solution. The company has grown to 850,000+ paying customers across individual, SMB, and enterprise segments, generating over $12M in monthly recurring revenue with approximately 100% year-over-year growth. Rather than focusing on customer stickiness or aggressive growth targets, Zoom emphasizes customer happiness and organic word-of-mouth acquisition, which has proven highly effective in driving viral adoption.
Madwire
$10.0M/moMadwire is a comprehensive SaaS platform for small businesses (1-100 employees) that combines CRM, payments, invoicing, billing, e-commerce, and multi-channel marketing tools in a single platform. Founded in 2009, the company has grown to $120M ARR serving 20,000 customers with an average revenue per user of $500/month, while maintaining strong unit economics ($3,000-$4,000 CAC with 3-month payback) and recently turning profitable with a focus on reaching 15-20% EBITDA margins. The company is exploring an IPO within 12-18 months without having raised substantial capital beyond an initial $7.5M.
SwiftPage
$7.0M/moSwiftPage is a CRM and marketing automation platform founded in 2001 that targets small businesses. Under CEO John Oshel's leadership since 2012, the company scaled from 60,000 customers with $26.2M revenue in 2015 to 84,000 customers today with an estimated ARR of $36M+, maintaining 1.5% monthly logo churn and a 6-7 month payback period with a sub-$500 CAC.