How to 10x an acquisition
I'm going to break down how we more than 10x-ed ScreenshotAPI and why this acquisition worked when others didn't. Not everything here is generalizable, but I'll pull out what worked well from our first interactions with the seller to the deal closing a few weeks ago.
Sticky Product: Developer tools are inherently sticky. If you solve something meaningfully hard and a dev picks your tool, they're not switching unless they absolutely have to. Devs don’t like touching things that work, especially in larger companies where risk and change are avoided like the plague.
Relatively Low Churn: ScreenshotAPI had churn under 10% for most of its life—sometimes dipping to 6% and other months spiking to 20%. But here's the thing: churn stats can be misleading. We saw a pattern where users would leave after a project ended, only to come back months later for the next project. It wasn't lost business; it was cyclical. That's a big difference when you're assessing the health of a business.
Broad Need / Almost a Commodity: Screenshots are almost a commodity—cheap and easy to implement with a basic browser for most cases. Our customers came to us for that tricky last 30% where things got annoying: proxies, long pages, scaling issues. When you’re taking 1M screenshots a month, spinning up the infrastructure is a pain, and it’s not exactly cheap. Plus, lots of junior devs don’t want to touch servers (hence the rise of Heroku, Vercel, etc.).
Straightforward Name: The domain name said it all: ScreenshotAPI. This wasn't just good for SEO—it was a magnet for high-quality traffic. Developers knew what they were getting into. If your product’s name spells out what it does, you’re already winning half the battle. It’s a hack for both SEO and targeting high-intent users.
Smart Pricing: Usage-based pricing is in vogue, but we had this nailed from the start. Our two-pronged approach—regular plans plus overage charges—meant cash collections often outpaced MRR. When a user hit overage limits, it wasn’t just a one-time upsell; it was a chance to lock in more recurring revenue. We’d say, “Hey, you blew past your 10k screenshots, how about a 30k plan and we’ll waive that overage?” It worked like a charm every time.
Patience Pays Off: We held ScreenshotAPI for three years. Growth was steady, not explosive. But sometimes the best moves are just letting things run and not messing with success. We waited, and it paid off.
I ended with this one on purpose. People always ask what our growth strategy is, our playbook, etc, etc. The real answer is, if you buy a good asset, keep doing the stuff that's already working. Do more of it. Try to do it better. And then let time and the compounding nature of low churn saas do it's thing!
