Ask Me Anything About SaaS ( I'm building my 7th )

[eliquid]

I wanted to add to this thread with some thoughts and stuff going on in my mind recently...

Had a couple of people ask me recently about building SaaS and surveying their potential customer base and I keep going back to, you need to build based on your domain authority.

Basically, build the product for yourself.

Why?

When you build something you want, that you use, that you are a domain authority of...

1. You know when and what to pivot to when things need to pivot. Otherwise, are you going to ask your customers again what you should pivot to as well?

2. You don't end up building something only your vocal customers speak up about. Customers will not give you feedback in general. How are you supposed to grow and do more, if only 1 out of every 30 customers gives you feedback? In of all my SaaS's and all the years I have been doing this, I barely get any feedback ( good or bad ). If you rely on others to tell you what to do, you will be in bad shape here.

3. You use your product daily and can spot errors, issues, problems, and bad things before you get egg on your face in front of your customers. The things that make you look amateur and a side hustle. Remember #2 above in this because if no one is giving you feedback, you won't know about these issues until it's too late.

I also want to add...

1. The whole idea of this "it only counts if the customers whips out their wallet" is false.

Sure, customers who whip out their wallets and buy something is better than a customer who doesn't.

But buyer's remorse is a real thing.

You can fool someone to buy something from you.

But can you get them to buy from you a 2nd time?

The real deal is when someone buys from you the 2nd time or 3rd time. Not just because they pulled out their wallet and bought from you 1 time on the spot. Count your success as "the number of people that bought from you at least 3 times".

I can't tell you how many times I've bought from someone only to return it later. Or cancel the service after a few days. What really matters is if I am buying from you again.

And in a SaaS, that's more important than anything.

Forget people pulling out their wallets. Can you get them to buy again? That's the gold and when you know you are really on to something.

.

 

[eliquid]

For marketing also, leverage the work of your competitors when possible.

My SaaS focuses in on digital marketers. I wonder where I can find paid users of similar types of products?

 

[Andy Black]

For @c4n - Technology for SaaS needs

This is a case of where you have to use, what fits your needs. Therefor this post might be a bit vague as everyone will have a different need.

I like to build MVPs. I might build 10 MVPs and only 1 or 2 actually make money. The ones that make money I then push live and tweak as needed.

Therefor I am not properly planning out tech beforehand for each MVP. Why do all that work and spend months on it if it doesn't make money?

But once I get to a point where something is public, tech is very important.

And the truth is, even highly experienced programmers won't know what tech is needed for each part of your SaaS until you hit a problem. Sure they can they know and quote "Best Practices", but they don't know either until you hit a roadblock, or the path to a roadblock is so clear you see it months before it happens. Even then, months might not be enough time to act.

I'll give you an example.

One of my SaaS products was never meant/intended to handle big data. It just wasn't expected. We had a plan and a system to prevent having big data.

A couple new features roll out, we got a massive amount of customers, new pivots came in, and now we are processing billions of data points daily and storing them for longer for many more customers. In a series of events that took place in less than 30 days, we outgrew our tech in less than 45 days.

It situations like these you can't plan for or know about until they happen. Which is why I don't spend months ahead of time prepping and getting nowhere. Money first, always. Then react if need be because reacting with no money coming in will lead you nowhere.

At that time, we had to change plans.

• SQL needs sharding now, and what's our shard plan?
• The processing of data now takes forever, we need a quicker solution. Some code changed from PHP to C++
• MySQL on any server is getting bombarded, lets offload to Redis certain features which also makes them faster to process
• As we write more code, more needs to be managed. Here comes git or a git like solution
• We are spending a shit ton on servers. What data do we keep HOT and which can we keep COLD in something like Amazon Glacier?
• With so many servers, how to we keep up with updates, upgrades, and security measures?
• PHP 5 is at EOL now? F*ck. PHP 7 is faster and maintained, however certain libs have to be redone and resintalled too.
• We do more writes than reads on our data, which is the best solution for that.. that also has less overhead?
• Do we keep everything in 1 DC, or global? Whats the cost impact?
• System daemons, cron jobs, or Supervisord? Queues or rolling reserves for data processing? Can ElasticSearch helps us or should be go Hadoop and Apache Spark?
• Should we cram all it in Amazon Web Services or build our own?
• Look at this sexy new Go or Rust lib, we should incorporate this even though no one knows Go or Rust.
• Which feature should be coded next? What has priorities?
• With some of our customer data on 3rd party platforms, how do we ensure that data is safe? Safer than safe?
• Sometimes the newest version of something, is the one that breaks the most. I like to stay 1 version behind unless it's a major security issue or the newer version has a benefit I desperately need or want ( like faster processing )

A lot of times it will realistically boil down to what you know and what you are comfortable with. Also, what's actually available to you as well at the time you need it.

Don't worry about what's the "best". Worry about what works for you and you can keep up with.

PHP works for me and I can keep up with it. My partner can work with and keep up with C++. Our data can mingle and interact via SQL and Redis. Neither one of us slows the other down trying to fit a round peg in a square hole.

Issues and problem come up, we work and code around it to fix it. You'll have the EXACT same problems and issues if you spend 13 months planning too. Therefor, get it launched as best you can and as quickly as you can and see if it makes money and what your customers want and what issues you actually face. Then code to fix and improve.

Many times you might have something break or an issue comes up and you realize, it's not actually a problem or it's a problem that can wait 3 months to address safely still while you do more important things.

Generally the simplest solution is actually the right solution for a lot of issues and choices.

.

(Shudder) Reminds me of my DBA days. x100!!!

Fair play to you both managing all of that while keeping the service up.

I was just about to say the simplest solution is often best, and you finished on that note.

Simplicity is elegant and beautiful, and allows you to move faster.

 

[eliquid]

Also,

Once you found your early adopters and you worked out the kinks and bugs, where do you go next to find customers to start off at the next level?

• ProductHunt
  
• ShowHN
• LaunchingNext
• BetaList

 

[eliquid]

Two questions for you sir!

1) I own a b2b company portal software that hosts company announcements, documents, training, etc and the idea is it's easy to use, non intimidating, way to create a private corporate portal. My competitors are very expensive, time intensive, and have someone that works directly with the company to implement, help with rollout etc. My software has been extremely successful once I get peoples attention and explain it to them, direct selling, etc. However, I do have to do at least 2 or 3 training conference calls. I have no desire to hire "consultants" to do training with my customers - what are your thoughts on this, or anything you may have learned? Does B2B SAAS typically require intensive consulting? I am assuming it's a lot of discovery, learning if these things even can be automated?

Sorry, but my answer my not be what you're looking for. I tend to heavily analyse the word choices people use, so this might throw us both off.

You used the phrase "intensive consulting". So I assume you feel this is what you are doing to close the client after 2-3 training conf. calls.

Here's the thing, if you have to intensively consult someone to win them over and have them pull out their pocket book to hand you money, you haven't hit their pain point yet hard enough OR they haven't had their ahHa moment yet. Even if you hit their ahHa, most times an ahHa moment is worthless without a pain point.. which is something almost no one else tells you.

Something tells me you are missing one or both if things have to be intensive.

Sure, you can be solving a pain point and giving people an ahHa and it still take multiple consultations to get the money. You see this all the time in those guru launches. You know, the ones where Russell Brunson has you go through a 4 part webinar series before making his pitch?

At $4k to get into his mastermind or newest course, you have to hand hold the customer a few times to convince them to sign up.

I know your B2B product is nothing like that, but the concept is still the same. Sometimes you hit the pain point and ahHa and still need to hold their hand a few times. However, that's because your building trust and value. It should be easy and fun. It shouldn't be intense or hard.

If it's hard or intensive, you are missing the pain point or they need to have their ahHa sooner.

2) In the little bit of online advertising I have done, I have estimated my customer acquisition cost to be around $750 (customer that sticks around for atleast 4 months). Theoretically, if I am earning $4000/year per customer, does it not make sense to just constantly reinvest profits back into obtaining new customers via adwords if I am earning $3250/year per customer, as long as my C.A.C stays the same?

That sounds fine. However, you know what's easier and can make you more money? Reinvesting to get more out of your current customer instead of trying to find and win over a new one.

I'd be looking for ways to make them stay on longer, upsell or cross-sale, etc. How can you get more money out of them? Maybe you can offer a training course on how to make their employees happier? IDK because I don't know your market. However it's generally easier to make money from current customers than to find and win over new ones.

How can you increase your MRR or ARR without new customers? Answer that and once you implement it, reinvest in new customers

.

 

[eliquid]

More thoughts on partnerships -

• I don't judge on, "I did X and you only did Y". Or, "I did X of Z and you only did X of Y". If you are in a good partnership, as long as things are not going out of control, it doesn't matter if you did 9 things in marketing this week and they only did 3 in coding. Not every project or task is equal to another. Also, not every person works at the same speed or thinks in the same way. Also true is that some of us are single and like to be online all day, some of us have family and outside responsibilities. Unless work quality is low or things are half-assed, you don't need to look into this too much.
  
  
• There will be conflicts. See above for some idea of why. You might want to do X, they want to do Y. Handling these issues can be tough. Sometimes you just need to sleep on it or go back and forth on it for days to really get to the core of why you can't agree on the next step. If you do have defined roles, the person in the defined role that gets impacted the most from the choice should have the say so in the choice. If defined roles are not really set, you are either going to have to give and take on both sides or find an alternative. Sometimes you have to kick the can down the road a little bit too.
  
  
• There is no need to micro-manage the partner. They need the flexibility to work on things under their own supervision. That is why they are a partner. If you can't give this freedom to them, they shouldn't be a partner. Sometimes I question what my partner does, but it is not about if I trust them or not, it's more about me being informed or understanding why that choice was made. It's not about I think they are wrong and I need validation now.
  
  .
  

 

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[eliquid]

How do you find problems that you can create a SAAS around?

You'll hear lots of tactics and tricks, methods and such on this. I hate mostly all of them.

Stuff like, "go to forums and see what people complain about" or go to Amazon and do the same on products. There are other methods like this.

Also, call up 100 business people and ask them their problems and then find a theme and build that.

I hate all of those like that.

It's like taking a weight loss pill when you are fat. Sounds logical and easy, but what do you do when the pills don't work and now you have diabetes and bad knees too on top of the weight?

You gotta accept the hard answer.

And the hard answer is you have to have domain authority ( i.e. being an expert ) in your field.

Being an expert or domain authority does NOT mean:

1. You have to be popular or the most popular
2. You have to be the smartest
3. You have to have the most degrees
4. You have to be a billionaire
5. You have to have done it for 30+ years

It just means you have to know more than the lay person. More than your mom or the common person.

Once you know a little something about something, that's when you will find problems to create a SaaS around, because you will know what is a problem and what is not a problem.

But at the same time, you are going to know things you wouldn't know if you were not the domain authority, like where your customers hang out.. who your real competitors are and how their products work.. where this industry is heading in the next 5 or 10 years, etc.

That's where calling 100 people or visiting a forum for issues DOES NOT help you.

Being a domain authority does not mean you are THE domain authority, it just means the domain authority within the people you influence.

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[eliquid]

Awesome thread.



Could you expand on this?

I know that deep learning is the new hotness these days. Besides a little tinkering in TensorFlow's Python libraries, I've got no real idea what's going on in this space. (And that was enough to let me know real quick that I was out of my league in trying to do anything serious with AI for business applications.)

What kind of options are we looking at here? Are there any good off-the-shelf packages? Or is this a case where it's better to go hire a PhD in machine learning to whip up a custom solution?

I'd suggest you take a couple courses on uDemy to get up to speed. That's not a crack at you, but this can get complex quickly with the lingo and thought processes. Again, not a crack but unless you have a good footing in AI it will be hard to wrap your head around it.

If you can take a few courses ( I'd suggest a min of at least 3-4 ), it would be a lot clearer.

There are many lib. for these things. A lot in Python. Several in others. However if you jump into the code without a proper foundation, you will get lost real quick and possibly produce outcomes that aren't valid or comprehensive.

I wouldn't hire someone to code a custom solution. In your shoes I might hire someone to help me with the basics after you do some courses to make sure it's set up right and you get any further questions answered. After that, Id run test code on small samples before jumping into bigger sets.

There are also a lot of 3rd party SaaS solutions too. BigML, Amazon, Bing... many others too where you just pipe in a API or submit a dataset to them and plugin in some variables and such. Again, you would need a good foundation first from a course or 3.

.

 

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[eliquid]

For @c4n - Project management

This can be a bear sometimes.

I think it really fits into, what's your companys groove? How is each player impacted and what fits them overall as a team?

This can be hard once you have multiple people on your team. It can be hard with just 2 people on your team. At some point you may have to force them ( or yourself ) into a system.


Example:

I have a pretty freestyle way of how I handle projects. I like total control of them and total ownership. Almost dictatorship of my own projects.

I don't mind help and suggestions, but I need to know personally every bit of code in a project I own so I can stay on top of it. Same with projects in marketing and other areas. That's just how I am. I hate when I forget or don't know how something works because it nags at me.

I also like to work on it as I can, when I can, how I can and with what I understand.

That means, if I code in PHP in a linear fashion without OOP and I upload live to the server instead of Git, that's what I do. Is that best for the team, NO.

However, that is what has worked and got stuff done UP TO THIS POINT.

It has to change though. What got me here, doesn't get me to ----------------------------------------> there ( future me/SaaS ).

You may have to test 5-7 different ways to manage projects before you find a good groove that everyone can work with. If you find it doesn't fit everyone, is it fitting 80%? If not, is it still the best tool for the company itself?

Sometimes you have to layer options, like an onion.

For a while, I used Trello. Just couldn't really get use to logging into it and planning and then finishing.

I used Evernote. Same issue as above.

We moved to text files in an app similar to DropBox.

I used Google sheets, still didn't jive.

We moved to Basecamp and this sorta works, but this can get out of hand so you need to stay on top of it.

We even incorporated weekly phone calls on Mondays.

What I found is there will more than likely never be a 1 size fits all solution that handles all projects and all people using it. Some people will need to give and learn the system, and some systems will need to be assisted by other systems as an additional layer.

For example with code, having a Basecamp set up to go over the goals of the new code project. Who is in charge, deadlines, how it impacts the SaaS as a whole. What other scripts it might interact with.. how monitoring happens, etc. But then you need something like Git to keep up with versioning and so that 2 people don't overwrite each other. You might also need Monday phone calls to go over things verbally and other issues and hash them out on the phone.

For marketing, this may look slightly different. You might need Basecamp to set up goals and timed deadlines for when articles ( or materials ) go live. You may also need Monday phone calls to hash out issues in marketing, like topics for next month. On top of that, you may need Google docs or Dropbox to handle outsourcers who may submit articles, content ideas, and research to you for your marketing.

Could you cram a lot of it in Basecamp and call it a day? Sure.

However, there will be times when you need to branch out because of X reason.

Don't look for 1 thing to handle all your solutions. More times than not, you will need to manage multiple apps.

You also need to let people be accountable.

Give ownership to partners or employees. Even contractors and assistants. Set up a framework for success that outlines what the high level is and what they need to do. Tell them what the goal is and what it should look like. Then, let them own it and take care of it like their own baby and get it to that point for you. Have them check in so you can monitor, but let them own it and you just guide and pivot if they need help. At some point, you can let them define what success looks like and the high level too.


Always have 1 deadline for employees and contractors, and another for when it really needs to be done.

Example:
You need to have taxes due on April 15th. However, you are more comfortable with April 1st in case of any issues or problems. You set April 1st as your "this really needs done by" date.

You hand off your taxes to someone else. A bookkeeper or CPA in your company or maybe a 3rd party you source out. You give them a date of March 15th to be done instead of April 1st.

Does it need to be 2 weeks? No.

All you are doing is building in a buffer. Something will always go wrong or need to be adjusted. Something will always need more time to rework once an issue is discovered.

Projects are always better when done early, than late.. right?

If you got your taxes back on April 13th and your CPA tells you that you are missing several receipts and that also you owe more than you thought and you don't have the money saved up for the payment, you are going to be stressed. You have no time to really check the work and dig up the receipts unless you want to spend the next 48 hours doing so ( or just accept it ).

However, if they had it done by March 15th. You'd have 2 weeks to check their work and maybe find an error ( that saves you money ) and also get those receipts dug up before April 1st. Then you'd have another 2 weeks before it was actually due by the IRS. That's sleeping easy at night in my book.

Trust me, what can go wrong.. will go wrong.

Also, an activity will take up as much time as you allow it.

You might hand off your taxes to your CPA on March 1st and think, "shit, it's March 1st, they should have this done by April 1st for sure". Only to find they finish a few days before April 15th. Don't leave projects open ended. Have assigned due dates with quick turnarounds. Even if the turnaround is too soon and the work is only 80% complete.. 80% is better than no due date with the project at 0% or 10% complete.

Always have a way to gauge success on a project.

When is the final project due and how does it interact? What makes it complete? What makes it a success? How do we monitor success or monitor if it actually helped?

You need to know these before you start a project. You don't want to be caught in the middle of 10 projects, all of which don't really help you or add to the bottom line. You might think you know it helps, but only what's measured and monitored gets improved. Everything else is BS.

You want a clear path for each project to know if you should even be working on it ( what is success?, OK is that the success we actually need? ).

It's better ( in my thoughts ) to work on 1 project at 110% attention, that 5 projects in various states of completion and attention. That one project with 110% attention will get done, whereas 5 with various states of completion and attention will take months and be overextended 3x. I try to be single focused in my work which can be drain to others, but it gets done. Sometimes I'm late, but it gets done within ( normally, but not always ) the timeframe expected.

Working on more than one project can lead to all kinds of issues like loss of time and focus because of task switching. It can also let confusion and stress sink in and allows stuff to fall in the cracks.

Each person is different though. If you can really really handle management of multiple projects, do it. But I think this is a rare person that can really pull it off more than the average.


Give priority scores to projects.

You will always come up with ideas. You will always have things break. You will always have projects you want to push out.

What comes first? Who's on second?

You might have 2 projects that you are working on and they need to get pushed out ASAP. Then, you might realize a cool new idea that could be fun to work on. On top of it all, one part of your system has a bug a user told you about and now that part is not functioning and is broke.

What do you work on with so many things in your way now?

At some point you need to assign a score to what is most important and work on the highest score task in your queue.

• Is what's broke a critical function? Is it really broke or just needs a tweak? Are lots of customers impacted or just 3 because its not a popular benefit? Can it wait 2 weeks to fix? Could you pay someone else to fix it so you can stay on task ( like someone from UpWork ).
  
  
• Will the cool new idea you have triple revenue or reduce costs by a wide margin? Is it a real benefit, or just a cool feature? Did a paying customer bring this up to you, or a free user looking for a freebie? Does the new idea make your SaaS more complex and need hand holding to work ( like depending on an outside API, or adding a lot of cogs to your system that could fail in some way ).
  
  
• The 2 projects you originally were working on, can they be paused? What impact is caused by pausing them and missing the deadline?
  

Asking questions like these can help you weigh and score each task for importance. Whatever is most important can now be focused on with lots of attention and get completed so you can move to the next project. Hopefully, you won't be spending your time on projects that end up wasting time for you or "cutting in line".

Project management will need to fit you and your company culture. It is also something you need to work on weekly, if not not daily to improve.


Also, make sure your projects fit into your goals.

"Does this help us with increasing revenue?", or "Does this help us reduce churn?". Define the success and make sure you can monitor it. Working on projects that don't help goals should be reconsidered or outsourced if you have the money.

.

 

[eliquid]

Hi Eliquid, I am building my first platform and am trying to figure out how to get users.

Let's say you weren't an expert and did not have a an industry reputation for the next SaaS you build.

Let's say you were building an SaaS for something random like...tracking the plant macro-nutrients - nitrogen (N), phosphorus (P) and potassium (K) or NPK for short in a residential garden.

1. How would you get your first 100 users?
2. How would you get your next 1000 users?
3. Are the first two to three growth stages typically different?

Maybe I'm over-complicating it and it is simple as sending e-mails with great copy...

Thanks!

1. If you're not an expert in the topic, how do you know what you are building is what people need? Like actually need and will pay for, not just a want they will check out for free?

2. Lets assume you know what they need without being an expert. Ok. Once built, how do you know it works like it is suppose to ( since you're not an expert in the topic )?

3. Experts can write articles, get interviewed, do podcasts, speak at conferences and people within your topic will be able to tell you're an expert and thus follow you or sign up, helping you to get your first X customers easily. Experts know where their market hangs out too to get the first X customers.

4. Even if you are not an expert, but you have industry rep.. the same can be applied to #3.

Since you are asking if you have none of those, I would think you have a lot of struggle ahead of you.

Getting your first X customers without being an expert or having industry rep puts you at a huge disadvantage in so many ways.


So to answer your questions specifically...

1. Find out where these people hang out, start interacting with them. You will need to get innovators and early adopters since no one will know you or your brand.

2. Your innovators ( and some of your early adopters ) will give you feedback. Some will churn, some will stay. You will need to please these people as best you can. They are basically your life raft in this ocean of SaaS.

3. When you actually provide enough value, these innovators and early adopters will start helping you get to 1k customers with their testimonials, word of mouth on other sites, social media posts, etc. When this happens you change your strategy from getting your first 100 at places they hang out, to getting your first 1k and beyond at mainstream media sites and advertising channels.

4. To grow past the first 100 once you get the word of mouth and social validation, you need to start hitting up places like Youtube, Quora, Reddit, getting interviews or articles on Forbes, gardening magazines, podcasts, etc.


I wouldn't worry about your first 100 or first 1k. I would be worried with Churn.


Getting 100 or 1000 customers means nothing if they only stay with you 1-2 months. You will forever be in a pattern of failure.

When you can keep your churn around 3% or lower, you know you have something worth pushing out to a larger group of people ( past the first 100 customers to 1,000 and beyond ).

But start where these people hang out and interact with them, get them onboard to hit your first 100.

Once they are on board and you can keep your churn to 3% or less, and these people are giving you testimonials, word of mouth, social media posts, and ideas to better your SaaS.. then you are ready to aim for the first 1,000 customers where you will need to reach out in general places like Youtube, etc.

To get your first 100 customers, do anything you can. If your SaaS costs $49 a month and they will signup only at $19.99.. lower the price for them to $19.99 to get them in. You need these first 100 so go at a loss if you have to to get them in and trying out your product.

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[eliquid]

Thank you for the advice.
We`ll see how it goes with G., since there are four of us, we are two on two on the issue.
Because of the time investment we`ll give him the benefit of the doubt, hopefully it turns out OK.

Do you have any advice on onboarding new clients?
How do you entice them to try out the SaaS platform? Discount, extended free trial? Free changes and/or product transfer?
We`re new to this so we`re kind of unsure how to convince a client to try us out.
Should we set some boundries? For example, 3 month free trial but only if there are few to no sales.
If there are X sales per week then initiate payments after only 1 month?

You won't like my answer.

If you really have to discount or do free stuff, you are not adding enough value in your product and messaging to win the client over.

I totally get why and what you are doing. Been there and done that.

But having to discount and do free anything is basically winning people by competing on price. And competing on price is always a race to the bottom. Trust me when I say that there will ALWAYS be someone willing to do more for free once you do it.

I would spend more time on making sure your product is valuable to a potential client. You may think it already is, but if it was you would have people beating down your door. A heart surgeon doesn't need to advertise much if I have a heart condition and need help.

Instead of focusing on price, focus on value.

In SERPWoo, our lowest price is $49 a month. Many people say they can't afford it. Instead of lowering price, I add on more benefits. At some point SERPWoo will be so valuable, people will be able to magically afford $49 for what they are getting.

Today, I just launched a new feature in SERPWoo for our paid customers where they can monitor the internet for their brand keywords. It doesn't cost them anything extra. Once they start using it, it adds more value to their lives. They won't want to quit once we solve a lot of their problems like this.

I did this without having to lower my price.

You also need to focus on your message. Once you know what your customers really want, you will be able to hit their pain points and speak their language. Once you do that, you won't have to do anything for free or discount.
.

 

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[Andy Black]

I love your emphasis on aha moments @eliquid.

I get onto 1-2-1 Skype calls asap and keep plugging away till the other person gets their aha moment. Getting to the aha is the sole purpose of the call - not to "close" a sale.

If they become a client at some point in the future then great. If they don't then that's totally fine too - that's one more person out there who can pass that aha on.


How do I create these aha moments? One-to-one. I engage my market in hand-to-hand combat. Diesel and coffee is best. Skype video is close. Ideally I see the whites of their eyes and their body language.

I want to see people sit back slowly nodding.

I want to see their eyes widen as they suddenly "get" it.

... as their entrepreneurial ADD goes into overdrive.

I want them to remember me as the person who gave them that aha moment.


I don't know if I could scale this without having gone hand-to-hand first.

 

[eliquid]

Awesome to hear this from someone with some experience! This has always been my thought. I'm an avg PHP developer, relatively good at jquery (like you said, easy languages to get to market right away) But when you talk to guys who are full time programmers, with a programmer mindset, they're always pushing you to learn some new javascript language or whatever. I'd think by the time an actual programmer gets involved, they just scrap everything you have anyways.

Yeah, every language has a function or best use case.

A lot depends on how you code though.

For example, we pretty much built our current SaaS in a mix of:

• PHP - why? because it's the language I knew personally very well
• Perl - why? because it's the language my partner knew personally very well
  
• MySQL- why? because it's the database we both knew very well

This got us to our first 5 figures in MRR tech wise.

As we grew we faced some hurdles. Most of it concerning the processing of our ever growing amount of Big Data and our need to get things done faster and faster. Because of this we redid a lot of our PHP, Perl, and MySQL

That got us further down the road a couple of years.

We kept hitting performance issues as we approached the "next level". At this level we had to redo things again to get faster.

This might adding in things like:

• Redis - why? lightening quick database like structure to hold data for us
  
  
• C++ & C - why? critical parts of our system can now talk to other parts faster.
  • Redis is written in C, MySQL is written in C
  • When you write in PHP or Perl, that has to be interpreted and broken down, then talk to MySQL/Redis in PHP or Perl ( drivers ) and also interrupted and broken down. This happens back and forth a lot
  • When you write in C instead, you can talk directly to Redis or MySQL ( and other platforms maybe ). The speed is tremendous. There is no need to break down and interpret.
  • Simple queries and actions in PHP or Perl that took seconds to run over big data, now take fractions of a millisecond to perform
  • When you are running something 24/7, this adds up

However, you can take C or C++ and not know what you are doing and end up writing something awful and brings down your system. You have to know C and C++ well because many libraries you are use to in PHP won't be there. You gotta watch out for memory allocation and other things. You can write some bad code and everything will come to a stand still.

However, C++ had it's place for us when needed and used properly. However, we didn't have to worry about this until we were making good money and had time to figure it out when it actually needed to be figured out.

Could we have still found a solution using just PHP and Perl and MySQL? Hell yeah, but it would get costly as we would have more than likely needed to more servers and more code and more complexion. It just depends on what you're ready to live with and deal with at that time.

.

 

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[eliquid]

Thanks @eliquid I am at the stage where I am pre-selling. But I wasn't sure as far as pre-selling amount (3 months upfront) and all that stuff. I will be sure to ask them too how much they might save or how much their process currently takes).

Do you have any tips on when you cold-call what you might say to the gatekeeper?

The comparison is great too! For the cost of one Starbucks coffee a day, you could save 1 hour!

Thanks!

It sounds like you don't really have a user base yet. Or maybe it's really really small. Just reading between the lines here.

If that's the case, offer your product for free when calling. Offer it for free when not calling.

Get 25 Vets in the door now, all for free.

Trust me on this, they will tell you what works and what doesn't and what they really need. They will also more than likely ( if you do it right ) be your brand evangelists and spread your word for you. ( again, if done right ). All of that together added up is more valuable than $100 a month from them.

.

 

[NMdad]

@NMdad If you don't mind,
How did you find that problem and how you validated it?

Excellent question! I've been in the niche for a while as a consultant (dollars-for-hours), and a few clients came to me complaining about the problem (that my SAAS solves). It was sorta coincidental, because those clients all mentioned the same general problem within a couple months of each other.

Interestingly, COVID intensified the problem for them. I saw something similar during the great recession--not for this problem, but basically a shift in my niche that was spurred by the recession. So: crises are indeed opportunities.

To validate it:

1. I talked with each of those clients to get a sense of the problem, what they were currently doing to address it, and how (ideally) they wanted to address it. That gave me the "before" and "after" pictures of the problem.
2. Then I reached out to more of my clients to see if they had the same/similar problem, and found that about a third do. So, I could see that it wasn't a rare problem (i.e., that not like only 1-5% of the clients I talked to had the problem)--and that different types of clients within my niche had the same problem (i.e., that the problem wasn't specific to a tiny segment of my niche).
3. I searched for existing/competitor solutions, and found several--some that weren't in my niche, but in related niches. I called & talked to those competitors, and got detailed info on their features, pricing, type of clients who use their solution, etc. To get that kind of info from the competitors, I told them I was a consultant in the space & that a few of my clients were asking for a solution to the problem their product solves--which was all true, but I always intended to build the SAAS myself. I got tons of great info from these calls--salespeople are super talkative. I ended up asking my clients if they wanted some of the features that the competitor products had so I could use that feedback to further refine my feature list. The competitor info about monthly/annual pricing, how they priced it (e.g., flat fee, by # of users, requirement for a long-term contract, etc.), & onboarding pricing was EXTREMELY useful for me when I talked to my clients & tested how much I could charge for my (yet unbuilt) SAAS.
4. For a pre-MVP, I did a mock-up in Excel. No functionality, but clients could get a visual of the solution (i.e., buttons, fields, rows, dummy data, etc.); I walked through the mock-up during screenshare conference calls so I could get lots of qualitative feedback, have clients ask questions, etc. I did a handful of iterations on the mock-up with clients who wanted a solution. Those iterations refined the design & MVP functionality.
5. When I had clients telling me they'd pay for a live version of the mock-up, then I started coding the actual Excel tool.

As a side note, the problem and my solution could be used for lots of business types--not just within my niche. But starting in a very specific niche means it's easier for me to identify & reach prospects, and that the solution is tailored to their workflow.

 

[eliquid]

Hi @eliquid
Thanks for the AMA. I have (a subset of related) questions on feature creep.

• How do you handle your backlog of new features / requests ? (e.g. how do you decide what to build when)
• How do you detail out your features? Do you write user stories?

I touched on the new features/request a bit in a former post ( Ask Me Anything - Ask Me Anything About SaaS ( I'm building my 7th ) )

But it comes down to:

• Do these features/requests impact revenue or churn directly? If not directly, can we measure it if it does indirectly?
  
  
• How many people have requested it? Who are these people.. are they free users or paid users. Long term users or new ones?
  
  
• Will this be complex or simple to add? Can we outsource or build in-house? Does it make us depend on a 3rd party ( APIs )?
  
  
• What's the long-term growing cost of this new feature, if any? Sometimes you add in features that end up gobbling lots of data and resources, which is fine for small data SaaS. At big data though, this can multiply over and over each forward month. There will be a cost involved. How does that cost look in 24 months?
  
  
• If we found out we made a mistake, can this feature be easily disabled without users getting upset and a competitor spinning it off? How ingrained will the user be potentially to it? Would taking this away be simple or complex?
  
  
• Etc

You ask questions and gauge the impact and then everything comes out of that process with a score. Based on that score, you know what should be next.



If it's a feature we thought up, we don't really write out user stories.

Since me and my partners are direct users of the SaaS itself, we know exactly what we want 90% of the time. We do hop on calls and talk in Skype to flesh out or throw around ideas too. Features we dream up aren't formally detailed out like a user story though.

If it's something a user request, we note it and then talk with that user and get more input. We generally also let the user beta it ( not always, but a lot of times ) along with a few others users to get their feedback before rolling out live. Your users will give you great feedback if you let them.

We also go in phases and sprints. Some phases are spent on:

• Entirely working on things users want.
  
  
• Upgrading and updating the core system and code base
  
  
• "How can we increase profitability" ( for example, Im on a reduction of churn and marketing phase myself right now )
  
  
• Features none of our competitors have, that we wished personally we had in a tool

So sometimes a feature might get worked and jump the queue if it happens to fit into the current phase we are in. But only if it is still high on the list. Something at the bottom of a long list won't jump the queue very much even at this situation.

.

 

[eliquid]

I was wanting to know under what circumstances could a lower price actually be a USP (and not be assumed "lower quality")?

I'd never say lower price is a USP.

The USP should be a unique selling point.

Price can be copied by any competitor in the future.

You might argue that a non-price feature could be copied by a competitor too and you would be right. However, how easy is it to simply change a price on a landing page and merchant backend?

It's about 30 seconds easy and anyone can do it ( non tech people ) if they wanted to copy you.

Price is never a USP.

Can it be something used to get you clients? Yes. But don't make it a USP.

.

 

[eliquid]

@eliquid

while doing your exercise, I've come across a question.

How do I know if something can or can't be modeled for SaaS?

Or better to say, if it's well suited in a SaaS model or would be better in a, let's say, content model? Do you have specific criteria or use your gut feeling/what you have seen in the past to judge?

I think it comes down to how you feel about it, which will tell a lot about how comfortable you are in X subject area or solution.

For my SaaS, I could have just wrote content on the ideas, topics, and solutions. However, I hate writing. I hate content as a model ( personally ). Therefor, content models are the last pick in anything I do.

So with that in mind, do you see how any idea I have would almost never fit a content model, even though it might actually be great for it?

If you find something and your gut tells you do to a content model, do it. People will read and absorb it and people will pay for it, but here is what happens:

1. People read it
2. Some people ( maybe 10% ) actually go forth with what they read and do it
3. The others ( 90% ) will think its a great idea and do nothing past putting the content down and watching TV.

That 90% is what you end up building a SaaS for. You end up doing it for the 10% too BTW.

However, people want you to provide the answer to them. Not only the answer, but the end solution too. This is where your SaaS would fit in.

I could have wrote for days about SEO research and ORM, but at the end of the day only so many people would take action. I had to provide the action for them, and they pay well for it in my SaaS.

So what do you want the end result to be? Readers who take min action, or real solutions?

This should be your gauge.

My core values and mission statement reads as such:

• Solve problems with simplicity, creativity, and entrepreneurship
• Create Ah-Ha moments based on insight, enlightenment, and knowledge
• Live a full and stable life with complete and utter autonomy

I can achieve the above as content model or SaaS because both are simple to me and create Ah-Ha moments. That's me though.

Would a SaaS fit your core values and mission statement though?

Lots to think about.

What does your gut say, what end result do you want ( min action, or provide the action for customer ) and how does it align with your core values, mission statement, goals, and priorities ( if you have all these to begin with )?

If you follow the above direct statement I just made, it should help you find out if a SaaS model is good for your idea. That's just the first part though, once you can say "yes" to yourself about SaaS, then comes the tough part of if you can pull it off financially, if the market will take it, etc....

Oh, and a bit off topic, is there a good book about SaaS you can recommend?

Thank you!

For books, I don't really have one. Not because I've found no good SaaS ones, but because I haven't read A SaaS one.

Why?

Because really, at the heart of it all... SaaS is just a business model. If you have domain experience in something ( say Digital Marketing ), and you know how to run a business ( if not, read great business books ), all you are really doing is running a business where software gives a solution ( like quickbooks ).

Instead of finding a great SaaS book, you just need to find great business and marketing books, and possible great software books. Also great customer service books.

If for some reason you just need a SaaS solution, look at the conference put on by SaaStr and their videos at Youtube -> SaaStr

Really though, if you can build a good business.. you can build SaaS. You don't really have to master just SaaS by itself.

.

 

[eliquid]

I think for B2C, depending on specifics ( which you didn't mention, but just generally asked about B2C vs B2B )... its the same overall about the information in my thread.

More difficult to manage? Yeah.

But same ideas and strategies for the most part ( speaking 80/20 stuff here ). Yeah.

Why is that?

At the core B2C is dealing with humans and emotions. At the core B2B is too. Humans make decisions in both.

So many of the things in my thread actually don't deal with business problems. They deal with human problems.

Solve those human problems at the core, and it works for B2C and B2B. The things that differ come afterward and expand out like account reps, invoicing types, etc.

But in the end, you're dealing with humans first and foremost.

.

 

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[eliquid]

I for one would absolutely love to hear your input on ALL of these points. Like a quick summary/lessons learned guide maybe?

This would be hard. I love to share value and talk a lot.

I also love to overshare to make sure people really understand what I mean.

I might have to push your answer down some and circle back later as it will take some time to do it right. If you don't see an answer in a few days, I'm still working on it internally, but also some of them might get answered in other posts naturally too.

Will try to do something for you though in some way, at some time too in this thread.

 

[eliquid]

Yeah, that's kind of what I was wondering. I won't hijack this thread over that.

When it comes to development, do you work within a framework? Or build from scratch every time?

Or does my question expose my ignorance?

I don't use any frameworks now.

I like total control of my code and work. I was coding before there were any of the popular frameworks in PHP. I did use some PHP frameworks for some time years ago like Cake, Yii, Slim, etc... but I've moved on from them in favor of my own code pieces.

I wouldn't say it is from scratch though. There is lots of code I have that I reuse over and over again, but its not really a framework.

Past that, nah.

 

[eliquid]

Still holding the churn rate down. Got it pushed a little further. Hopefully I can close the month at 2% even

I just made money... very quickly and easily.

When you compare it to Sept, I just made an extra $1k per customer on average in less than 30 days pushing my churn rate down by 1.2%

 

[eliquid]

Its not currently developed as of yet. I do have mockups and whatnot though.

Start giving away for free.

It's not simple to give away free.

If you find you can't get users to use it for free, you won't be able to get users to use it for $100 ( or $50 ).

And it's not about signups, it's about engagement after they sign up. Ongoing engagement.

.

 

[eliquid]

Thank you for the informative posts on this topic. Regards to SAAS. How do you think sql and other layers of programming in the stack help with securing, integrating, and interacting with services in the market of cryptocurrencies in the next five years. I know it will change. I know it is growing. Just enjoy reading your input on this model and angle.

I honestly have no clue what you are speaking about. That's not a dig or a bad thing, I just don't really understand what you are asking. Maybe if you framed it differently I would understand.

What I think you are asking is how do I think regular programming tech will play with crypto in the next 5 years.

Meaning, PHP.. SQL.. Go.. Apache.. Redis.. etc being involved in crypto.

Honestly I don't know.

I know I see MIT giving out diploma's on the blockchain right now. I see people building websites on the blockchain. I see things happening I haven't had time to study atm and therefor understand fully.

This is why I built a SaaS in what I know and eat/breathe/live and not in something like crypto or blockchain, or women's self help studies. I eat what I cook.

.

 

[eliquid]

I haven't worried about them at all, and haven't investigated them.

I know I am different and many others would suggest for you to look into it before you build. It might be like walking across the street and not looking both ways before you cross.

However, with my domain knowledge.. I knew no one had these ideas/concepts in working play when I came up with them. Could they have them patented and not be using them.. SURE!

However, when I started I didn't have the money or the time to pay someone to find out for me. In the end, it all comes down to someone's opinion anyways in the legal field. People can argue with me all they want, but it boils down to opinion and persuasion. Sure it can be costly, but in the end I went without checking in all my endeavors.

Besides costs and time, I also knew that this could be a possible stepping stone for me personally.

What if something came back closely similar, or almost like it? I'd prob freeze up with "paralysis by analysis" and do nothing and be nothing.

Or I take the risk and do it and be fine and cash out. OR I cash out for several years until noticed and get a C&D and legal battle.. but by then I might have cashed out for 8 years and my company that is getting sued has very little assets left anyways possible, but I was able to ( along with my partners ) take money out of the company long before then ( for 7 years perhaps ). At this point I would just close up the company ( since I generally work with single or dual partners, the companies are not that large anyways ).

If I had something that I purposely built into a 50M+ a year company with 100's of employees.. yeah I would act differently for sure and look into the patents.

If you plan to stay small, move money out of the company and into entities hard to touch regularly, and don't mind closing up shop if you had to.. it makes it a tad easier to not worry about patents trolls or those that have them that might come after you.

I haven't had any issues, but my stuff all has a defined role and plan regardless.
.

 

[eliquid]

Hey @eliquid I'd like to ask some more questions on price- based on your previous answer Pricing can never be a USP- because its super easy to change. So I've run into a unique situation.

Ill keep the story short (since I dont know if you read my SaaSify thread or not):

So I'm looking into using an API for a certain SaaS product of mine. Subsequently, I learned that the company that owns this API also offers a "reseller" account (that you can re-sell their product instead of building software) that lo-and-behold my competition uses.

According to the Company that sells the Re-seller accounts and the API, they charge ~$35 per re-seller account per month. Now these re-sellers (my future competition) take that $35 and charge double (~$70/mo.) to customers. A double increase.

However if I were to use the API and build my own product (more freedom etc.) the approx cost would be ~$10-$15/per mo. per account (I estimate). Much cheaper than using the re-seller accounts. I also retain (partially) the commandment of CONTROL.

Since my margin is ~$20, would you price your offering below ($59), same ($69) or above ($79-$99) to get more clients, differentiate yourself and potentially grab the competitions business?

Take this also into consideration:

My competition (i've done some value-skewing research):

• Do not have professional websites (it looks clunky)
• All require you to "book a demo" (so no instant purchasing)
• Cannot add a feature that could be really beneficial to my target demo.
• Most do not have any video reviews
• No professional photos
• Charge approx ~$65-70

My desire is to make this product SUPER SIMPLE to use. Offer great customer service and even throw in some X freebies (not having X product can be an obstacle). If you were to fix all these things, would you charge less, equal or more?

One other thing: The "feature that could be really beneficial to my target demo" -should I include this as an upsell? Thanks!

So these are my thoughts. Other people might disagree, but there is a reason I suggest these in this order...

The thing about price is, in GENERAL focusing on price can lead to a long term struggle that ends up the "race to the bottom", which is why I hate focusing on it for SOME things.

The other thought is, at some point you will have new competition, or your old competitor will get so butt-hurt over what you are doing, they wise up and upgrade and then lower their price from $70 to $59 and add in more features and now you are MAYBE at the same price but they out have featured you. Rinse and repeat and you get a tiresome game of back and forth until they strike a deal with their "wholesaler" where they only pay $10 now and they offer a new price level for their product ( minus some features they have in other plans ) for less than your entry price now.

This shit does happen. I've witnessed it personally in my SaaS's and I have watched it on the sidelines with companies I buy SaaS services from.

According to the Company that sells the Re-seller accounts and the API, they charge ~$35 per re-seller account per month. Now these re-sellers (my future competition) take that $35 and charge double (~$70/mo.) to customers. A double increase.

First to market, or market leader can enjoy pricing like this. If you're the only ( known ) game in town, o the market leader/first to market... you can charge what you want. That is until someone like you comes in.

It's OK to be #2 or even #3. Lots of money in those positions.

My concern is this... What happens when to this company ( the wholesaler ) if their API is down for 3 days or they close up shop due to bad management. My number 1 concern for you at this point is finding a way off their API in the future.

You're only as strong as your weakest link. Your weakest links is 3rd parties. I can't tell you how many times 3rd parties screw me over monthly because I depend on them. Get your MVP up and running, but #1 priority after that is finding a way to "live without them" if they crash or burn, or have their servers hacked and are down for 4 days, because you will be down too....

Since my margin is ~$20, would you price your offering below ($59), same ($69) or above ($79-$99) to get more clients, differentiate yourself and potentially grab the competitions business?

I'd charge same as them.

Why? You know there is a market at $69/$75 already. People pay that already in your market. BOOM, easy right?

You could go less at $59 or $49, but that will cause your competitors to notice you and start to upgrade their services, maybe offer a lower end plan, maybe extend their free trial ( if any ), etc.

From the way it sounds in the rest of your post, you will match and exceed them in features.

So from the customers mind, for the same price they get more. You already won.

That's for a regular plan.

I'd open a lower end plan for those that can't afford $69. Make it match what your competitor has feature wise and charge $39. You know for the immediate future your competitor can't do jack shit about it.

However, you will watch people ( as they learn about you ) jump ship and maybe bail on your competitor and sign up with you since you match with them at a lower price point.

Since you have your higher end with more features, its an easy upsell process 30-45 days later to have them paying what they use to pay, but getting more.

My competition (i've done some value-skewing research):

• Do not have professional websites (it looks clunky)
• All require you to "book a demo" (so no instant purchasing)
• Cannot add a feature that could be really beneficial to my target demo.
• Most do not have any video reviews
• No professional photos
• Charge approx ~$65-70

My desire is to make this product SUPER SIMPLE to use. Offer great customer service and even throw in some X freebies (not having X product can be an obstacle). If you were to fix all these things, would you charge less, equal or more?

Sounds like you have a small moat. But a moat is still a moat ( advantage moat ). I like moats. Go forward and charge the same ( reg plan ) and lower price plan that matches them exactly. Your regular plan will be the one with the more features.

feature that could be really beneficial to my target demo

I wouldn't add it as a upsell/addon. Someone will come along and offer is as standard, causing you to adapt. If you just add this in, especially on the lower end package.. you almost make yourself a blue ocean ( maybe more like a blue river ) which will give you leverage in your advantage moat.

You could try upselling it to see the responses you get ( almost like split testing ), and then if someone copies you, you just enable it for free for everyone later. However, I like to keep things simple and just add value and steal the customers from competitors to cripple them now as best I can.

.

 

[eliquid]

What? Sure it does. Netflix is a SaaS product, and this is almost an exact clone. If I were to host it online, as Netflix does, it would be an exact copy, more or less. That may be a possibility, as this is in the fleshing out stage of development.

If you don't think this is a SaaS product, what would you call it then?

Here are some of the things you said that I feel disqualify it from being a SaaS:

1. You mentioned not everyone will have internet, it would desirable if they did but most might not.
2. You mentioned a DVD, which is offline
3. You mentioned annual payment/renewal ( I know some SaaS have annual payments, but those that do also have monthly, you havent mentioned that )

The difference in Netflix and you is Netflix started out as just DVD rentals, it wasn't "SaaSy" until they went full blown online really. It was like Columbia House and BMG, but for video. They then went full blown online. It really isnt a SaaS still. Its more like Entertainment on Demand which is like Redbox or cable TV. Is your Telco a SaaS? No, but it is similar, Netflix is like that. Just because you pay monthly for a service or it's online doesn't means it's a SaaS, otherwise my electric company and Amazon Prime is a SaaS.

What's the difference with what you are doing ( with training and offline downloads ) than if I just ordered some Guru's consulting product online where they teach me how to sell on Amazon? I get videos on a specific subject, I can download them, maybe get a DVD, maybe watch them online or offline and choose different subject matter and experience and levels as I need and want.

People love to call things a SaaS all the time if it is online and a recurring fee attached, but this just isn't so.

Gary Halberts old newsletter list he used to charge monthly for would be considered a SaaS then.

If what you are providing is entertainment or training, it's not really "Software as a Service". It would only be that if you ended up being something like Wistia or Sproutvideo where you are the platform so to speak, not the ends.

.

 

[eliquid]

Sometimes just showing up, even unprepared is enough to win most of your battles.

I began helping a friend of mine with his SaaS in Dec 2019. Helping him with marketing ( no heavy tech stuff ) and almost entirely just SEO within that marketing help I did.

Wanna see how I got them to first page, 5th rank in Google for their largest B2B SaaS term in JUST 6 months with no SEO gameplan?

I don't give away the term or niche, but I wrote this out over at SERPWoo ( my current SaaS ) and here is the ranking right now.

Here are the posts:
Ranking A New Site From Scratch, Day 0
Ranking A New Website From Scratch, Day 1-31
Ranking A New Website From Scratch, Day 31-60
Ranking A New Website From Scratch, Day 61-90
Ranking A New Website From Scratch, Day 91-120

The series is still a work in progress, so there will be future updates.

.

 

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[c4n]

@eliquid

Thank you so much for sharing your experience; you have way surpassed my expectations with your detailed replies. This thread could turn out into a great guide to anyone wanting to start a SaaS business.

I look forward to reading more. Rep++

 

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[eliquid]

Eliquid, thanks for this super duper thread!

Transferring all my rep!

Do you have any book recommendation or resource on launching and growing a SaaS business?

Thanks,

I don't have any book recommendations on SaaS though. Sorry.

Although SaaS has always been around, it has lately been the "hotness" and buzzword the last few years ( especially this year ). Lots of "new" people are writing about it. I just haven't had time to vet properly all these bandwagon jumpers trying to get in the craze.

Hiten Shah ( Hiten Shah – Medium & https://hitenism.com/ ) would prob. be the only person right now I would even consider looking into in regards to blog posts, books, and material for SaaS. He built Quick Sprout, Crazy Egg, and Kissmetrics and has several years in the game.

.