How We Built It: $900K Open Source SaaS

Summary

In this video, Mark and Julia, the husband-and-wife founders of Papermark, share how they transformed a weekend open-source project into a thriving business approaching $1M ARR in just 1.5 years. Papermark, an open-source alternative to Docsend, offers secure document sharing and analytics, combining free self-hosted software with paid enterprise features. The founders highlight the advantages of open source, including community-driven development, scalability, and trust, while explaining their growth strategies, tech stack, and cost structure. They offer actionable advice for developers and entrepreneurs, emphasizing the power of starting open source, engaging communities, and targeting niche markets with focused, differentiated solutions.

Takeaways

• 🚀 Papermark was built as an open-source alternative to Docsend, starting from a simple weekend project and a single tweet.
• 💡 The initial tweet announcing the project received massive attention, validating the idea and leading to early customers within days.
• 📄 Papermark allows secure document sharing with analytics, including time spent on each slide, password protection, and watermarking.
• 🌐 Open source means the code is publicly available, anyone can contribute, and communities form around popular projects.
• 💰 Papermark monetizes using a hosted version and advanced enterprise features while keeping the core software free and self-hostable.
• 🔒 Open-source projects offer high security, transparency, trust, and defensibility because anyone can audit the code.
• 📈 Building in open source accelerates growth due to community contributions, faster feature releases, and scalability with minimal barriers to entry.
• 🛠️ Papermark's tech stack includes Next.js with TypeScript, hosted on Vercel, PlanetScale for PostgreSQL, with tools like Stripe, Resend, and Trigger.
• 📊 The company grew from $20,000 MR in the first year to $75,000 MR in the middle of the second year, serving 30,000 users and 60 contributors.
• 🤝 Founders recommend building in public, engaging with the open-source community, reaching feature parity with incumbents, and converting community excitement into paying customers.
• 🎯 Niche markets and AI-driven opportunities make it easier than ever to build targeted, differentiated software businesses in open source.
• 💡 The key to open-source business success is starting small, iterating publicly, and leveraging community-driven R&D for rapid innovation.

Q & A

Who are the founders of Papermark and what is their background?

The founders of Papermark are Mark and Julia, a husband-and-wife duo. They started Papermark as a side open-source project without initially intending to commercialize it, and within 1.5 years, they grew it to nearly $1M in ARR.

How did the idea for Papermark originate?

The idea originated from a tweet by Mark stating he would build an open-source alternative to Docsend. The tweet received massive attention, validating the demand and leading him to build the first MVP over a weekend.

What problem does Papermark solve for its users?

Papermark is a document analytics and sharing platform. It allows users to share documents via links, protect them with passwords and watermarks, and track detailed analytics on how recipients interact with the content, serving as a modern alternative to traditional data room solutions.

What is open source, according to Mark and Julia?

Open source means that the software's source code is publicly available for anyone to view, use, or contribute to. It allows global collaboration, transparency, and community-driven development.

How does Papermark make money despite being open source?

Papermark uses an open-core business model. The core software is free and self-hostable, while revenue comes from a hosted version for non-technical users and enterprise licenses that provide advanced features on self-hosted infrastructure.

What are the benefits of building an open-source project for business?

Benefits include high defensibility since the core product is free, scalability due to low barriers to entry, rapid community-driven R&D, and high trust and security because the code can be audited by anyone.

What opportunities exist for developers to build businesses with open source today?

Developers can target niche markets and build simplified, specialized alternatives to complex incumbents, leveraging AI to differentiate and create small, high-value solutions that may not require large-scale resources.

What growth strategies did Papermark employ to reach $75k MRR?

They built publicly in open source to attract community attention, iterated quickly on features, participated in events like Hacktoberfest, and focused on delivering superior functionality compared to incumbents.

What tech stack and tools does Papermark use?

Papermark is built with Next.js and TypeScript. Their website and app are hosted on Vercel, the database uses PlanetScale, background tasks use Trigger, emails are sent via Resend, and Stripe handles payments. AI tools like Cursor are used for development productivity.

What advice do Mark and Julia give to founders wanting to build open-source businesses?

They recommend starting open source from day one, engaging with the community, achieving feature parity with incumbents, outshining competitors, and converting community excitement into paying customers.

What key metrics indicate Papermark’s success?

Key metrics include 75k MRR, 30,000 users, 60 contributors, 7,000 stars on GitHub, and 800,000 document views, highlighting both adoption and engagement.

How does the open-source community contribute to Papermark’s R&D?

The community contributes by adding features, fixing bugs, and providing feedback. This increases development velocity beyond what the internal team could achieve alone.