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

[eliquid]

@LeoistheSun

Sorry, I just realized you said it's not developed yet.

My bad

.

 

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[eliquid]

Here's trying "the foundation" method to starting.

How would you start from $0?

I gave Leo some tactics and strategy I've come across in my own life that are tested for casual use with friends and relationships based on what I know about the foundation and being an employee for a business.

My theory and tactics are currently untested for starting a business though from $0 though.

I've touched on this a bit in this thread and others.

I'll include the highlights again here ( a few ). When I reference "See Above" below, this is what you should come back to

• Domain experience
• Authority position in domain

Neither of those require money. But they do require time and expertise. Putting yourself in an authority position will more than likely require content from you in some form. Again no money is needed though.

Once you get to that level, you will need to be able to have a great idea. One that can bring people into your company for little or no money unless you plan to do it all yourself. Is this optimal? NO. But thats 1 way you could do it with $0 and for some reason wanted to stick to that.

You could also get people to buy in and invest.

You also need to meet CENTS somewhat too.

Some forum recommended books have even stated that money hurts more than helps. My own experience has confirmed this: Other people's money doesn't help. Excess cash has only helped me fail in a spectacular way.

I think cash can help. Do you have to have it? No.

If excess cash caused you to fail, you weren't disciplined at that time in your life when it came to you. This is not a personal dig at you. Most people are this way.

I haven't tried the $0 approach though because I always thought it takes money to start rather than certain critical resources.

I will PM you the theory I have on how to start from nothing if you want to just check it across your experience without answering publicly.

Please PM. Though it might take me days to answer back

You could pollute the SaaS industry overnight with the answer.

You also saw my other thread asking about databases to search for market information. Please answer what you would use for that research.

I don't know of any databases myself. However I did comment if you found someone to do this work and do it right, you would have to pay them more than you offered.

I personally think you don't need any cash to start or experience. You usually don't need much if any experience for most jobs (non-technical and even some technical because they train). Lots of things in life can be learned when taking action because life is a non-linear path.

I somewhat agree, and somewhat disagree.

I fully think you need experience in something to start a SaaS.

I can't start a SaaS helping mothers with ovulation issues if I don't really understand women and ovulation and the WHYs behind it. I could fake knowing, but it will come through in my product eventually.

1. How would you start from $0 without coding?

You may keep your technical experience on directing projects.

I posted some of it above.

2. How would someone get to project completion and first customers?

See above

3. What database would you use for your research?

See above

4. What would you look for in a market to build an industry solution?

See above

5. What would you look for in a product?

See above

6. For non-technical creators would you use a low-code or robust no-code system like bubble.is?

If you rely on 3rd parties, you will fail at some point. They will be the weakest link in your chain. Code your own, on your own platform

If you had no technical experience.

7. Do you think it's possible in 2017 to start with $0 and build a SaaS. Please give a defense if you think so because some people trash the method who are credible.

Yes. I started with no money each time. Is that odd?

No.

I firmly believe that each project pays its own rent from day 1. Therefor no project gets a "loan" or other freebie from another current or prior project. They work and stay in their own silos.

2017 is no different than 2008, 2010, 2012, 2014, 2016, etc.

If anything, things are cheaper now than then.

If you have no tech experience you can find a tech co-founder or raise money and pay for one that way.

It's not easy or fast, but you didn't include those adjectives in your question.

8. How profitable do you think doing it that way would be? Exit potential? Lifestyle potential? Start to lifestyle change potential?

How you start ( at $0 or $10k ), does not dictate profitability. It also does not predict exit potential or lifestyle or change.

Maybe it does if you took in investment or gave out equity, but it entirely depends on what numbers YOU choose if you do that.

Really want to get a fact check from someone who has done this 7 times differently than Dane Maxwell.

I listed 5 ways I think you can get to a profitable idea in the Saasify thread. There should be many ways to start as well.

Im not for or against Dane.

There are 1,000 ways to cook chili.

You can add peppers, put in noodles, eat it cold or use turkey instead of hamburger, etc.

No matter what you do, you made chili in the end.

You can cook chili with $100 in ingredients, or $0 in ingredients.

There is no recipe for SaaS, just like there really isn't one for chili.

There's only fundamentals.

.

 

[Guest92dX]

Transferred Rep. Nice post.

You answered everything well and in your own way.

Thanks for the post. I will PM you soon.

 

[BrooklynHustle]

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?

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?

I would make that investment all day long if the numbers hold up

(though I suppose increasing the value of current customers makes a lot of sense as well)

 

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[BrooklynHustle]

Will answer the rest above when I get my off my coaching call with my students in a few hours.

Thanks!

@eliquid - Do you coach on SAAS or something else?

Can you share details?

 

[eliquid]

@eliquid - Do you coach on SAAS or something else?

Can you share details?

I do.

I basically have one group of students for online marketing and another for SaaS.

I've thought about bringing the offer to the FLF marketplace, but not sure just yet. Most people find me online and just ask me if I do already.

.

 

[BrooklynHustle]

I do.

I basically have one group of students for online marketing and another for SaaS.

I've thought about bringing the offer to the FLF marketplace, but not sure just yet. Most people find me online and just ask me if I do already.

.

Understood. Unfortunately I don't know your real name to do that outside of here

Maybe you could PM me details assuming you won't be "going public" on FLF just yet?

 

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[c4n]

@eliquid

A new question popped up in my mind and was wondering if you could share your experience please.

How do you handle email sending (and receiving)? I mean do you run our own SMTP server or rely on a third party (Amazon SES, Sendgrid, Mailgun) for email delivery?

I am asking because reliable email delivery is of huge importance in my business. I am sending about 100k emails per month, 99% of them transactional (not marketing/newsletters).

I ran a few servers and have built very good IP reputation over the years so I don't really have any delivery issues. It's also free as I don't have to pay anything extra, it's all run off the server hosting the software. However, the downside is I am tied to my current server provider as I don't own the mail server IP and if I want to upgrade this server, my provider cannot guarantee I will keep the same IP address...

I figured if I move to a third party email service (with a dedicated IP) and build up good reputation there, I can then change server providers much more easily without effecting delivery (IP warmup, reputation, handling bounces, ...).

 

[eliquid]

@eliquid

A new question popped up in my mind and was wondering if you could share your experience please.

How do you handle email sending (and receiving)? I mean do you run our own SMTP server or rely on a third party (Amazon SES, Sendgrid, Mailgun) for email delivery?

I am asking because reliable email delivery is of huge importance in my business. I am sending about 100k emails per month, 99% of them transactional (not marketing/newsletters).

I ran a few servers and have built very good IP reputation over the years so I don't really have any delivery issues. It's also free as I don't have to pay anything extra, it's all run off the server hosting the software. However, the downside is I am tied to my current server provider as I don't own the mail server IP and if I want to upgrade this server, my provider cannot guarantee I will keep the same IP address...

I figured if I move to a third party email service (with a dedicated IP) and build up good reputation there, I can then change server providers much more easily without effecting delivery (IP warmup, reputation, handling bounces, ...).

Some of it is your IP, but some of it is also your domain. I don't think you would have too much issue changing IPs honestly.

We actually send out a couple of ways. This is because as we grew we needed solutions and along the way some of the providers shut down or changed direction as we had to as well.

Starting out, we couldn't get email to work on our servers. Either dovecot wouldn't work or we had some issue with MX records. It was always something.

So we went Mandrill and used their transactional service as our email service with a route for inboxed mail. I don't remember why, but for some reason we had to change direction and we ended up sending via SES on Amazon for everything.

At some point this also became an issue, mostly around trying to send out transactional and reg email ( updates, newsletters ) and we broke it out as transactional with SES via API, but reg email and newsletters with Sendy via SES API. Sendy lets us add some design GUI to the emails and track opens and bounces, etc.

We did move to finally getting inbox email with the server directly too.

At the same time, we have this small mess.

For example, Intercom sends out onboarding emails for us and thus is connected to our email process too. We also have some internal emails sent out via sendmail on PHP ( cron jobs ) like when someone's CC is about to expire we send out an email from the server.

All this creates a system where each platform has to talk to each other and update.

For example, if someone unsubs from the newsletter sent with Sendy, I need to also have a script that updates Intercom and our internal sendmail on our server and vice versa.

We have some issues with getting our mail inboxed, but I've noticed that was with Intercom and Sendy ( via SES API ) and I narrowed a lot of it down to either the HTML template we used or something in the headers like sender name or subject line.

I test all the emails now we have before they go into production. It's made a world of difference too.

One day we will get all of this in 1 place. Right now it's just not a priority as long as it works well.

If we can do it with all the systems we have, I'm sure you won't have an issue.

.

 

[c4n]

Thanks for your reply. I feel like my system is super simple compared to yours, I guess it can become quite a mess if emails are sent through so many different sources.

I prefer keeping all email transactions from a single source, so I can easily control things like reputation, SPF lookups, make sure all emails are DKIM signed etc... This all has really made all the difference in sending emails reliably for me.

From my experience IP reputation is actually a large part of reliable email delivery; I had problems delivering email to some government agencies as they were using IP reputation lookups by Cisco for example, and AOL is a constant nag. They both have tools to check your reputation (so do many others) and a Good reputation greatly increases reliability and it takes a while to get it there, hence I am so reluctant to changing it regularly.
AOL: AOL Postmaster - Check My IP Reputation
Cisco (former senderbase.org): Reputation Center Support - Cisco Talos

 

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[eliquid]

From my experience IP reputation is actually a large part of reliable email delivery

It is, but domain is a lot larger.

For one, domains under X months old wont deliver well. This keeps spammers at bay who would just buy new domains and spam with them.

Also, if someone has been spamming with a dirty domain and then signs up for Sendgrid or some other ESP.. they could just get away with the "IP" of the new service. To prevent this, domain weight is given a lot of the factor.

IP has some factor in it, but domain is going to play a lot too. You gotta make sure your domain and HTML template/wording is right too.

It's a layered approach, which I always preach anyways.

.

 

[c4n]

It is, but domain is a lot larger.

When I think of it it does makes sense, of course only hand-in-hand with domain/sender validation, (rDNS, SPF, DKIM, ...). Not sure if some ISPs like AOL rely on IP reputation more as I have had emails blocked by them only due to poor IP reputation, never because of the domain name.

Should be especially true with IPv6 which adds exponentially more addresses and will require a lot more resources to track IP reputation vs IPv4.

 

[TreyAllDay]

@eliquid
Thank you again for all this gold! Have learned so much from this thread.

I was wondering if I can ask you about patent infringement - how do you navigate them, or do you even worry about them? The reason I ask: I've built 2 additional technologies for businesses outside of my intranet service. Very small level, maybe earning 80k a year. One specifically is a loyalty program - I am not actively selling/promoting it however I maintain a loyalty service for one of our customers who was searching for a solution and I earn modest income from it.

When you do patent searches, you get hundreds of results - some on them are extremely broad claims. IE: one company seems to be claiming the general idea of a customer checking their balance online, and converting that balance to a "currency value" using a computer program. Or even the concept of a company looking up a point value on a system and applying it to a transaction. It seems so odd that a company can own the idea of multiplying points by their dollar value and using it to reduce an invoice.

Anyway, I'm curious for a guy like you who's done this many times. Are patents another thing us fresh tech entrepreneurs are afraid of, and most likely are never bothered by unless you're making millions? Or should they be a real concern? How do you dig through the hundreds of patents and their broad claims, do you have to hire someone?

I'm starting to realize, this is a great reason why you should stick to one business. Easier to manage these things when you provide one service lol.

 

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[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.
.

 

[TreyAllDay]

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.
.

Thanks for your awesome insight. Yes - this is exactly how I plan to operate. Like you said in a previous question i asked - operating a small sass can pay for a beautiful home, some cars and a good savings!

I think what you said make sense about pulling out assets. Here is my concern - I see much more potential in my intranet service as a long term income provider. I happened to come across the opportunity for this loyalty program contract by connecting with a franchise customer and will earn about $10k per month on it. However both services are operated out of the same company - I am concerned the patent liability on the loyalty program will jeopardize the intranet and vice versa.

Based on what you mentioned about cashing out/asset protection I'm thinking I should almost separate the services into different entities.

Sent from my SM-A520W using Tapatalk

 

[LeoistheSun]

Hey @eliquid happy holidays.

Question: So I have a list of 6000 offices (each office might have 1-10 vets) who all might have the problem I want to fix. Granted I still need lots of feedback. I'm having an MVP built, and I'm hoping to find a couple beers who would be willing to work with me to find tune the MVP.

Do you have any suggestions for reaching out to them? Establishing a relationship?

 

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[Rafał Lizak]

Hej. Mam pomysł na stronę internetową łączącą dużą liczbę krajów. Nie wiem jak to zrobić ... help me ?

 

[LeoistheSun]

Hej. Mam pomysł na stronę internetową łączącą dużą liczbę krajów. Nie wiem jak to zrobić ... help me ?

użyj Tłumacza Google

TRANSLATED:

Hi. I have an idea for a website that connects a large number of countries. I do not know how to do it ... help me?

 

[Rafał Lizak]

Sory, hehe I forgot and wrote in Polish.
I have an idea for the website.It is about creating a website similar to trivago.com but with a different content. I can not program. I am looking for someone who will help me in creating such a website. She will be mighty all over the world, so I must go.

 

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[eliquid]

Thanks for your awesome insight. Yes - this is exactly how I plan to operate. Like you said in a previous question i asked - operating a small sass can pay for a beautiful home, some cars and a good savings!

I think what you said make sense about pulling out assets. Here is my concern - I see much more potential in my intranet service as a long term income provider. I happened to come across the opportunity for this loyalty program contract by connecting with a franchise customer and will earn about $10k per month on it. However both services are operated out of the same company - I am concerned the patent liability on the loyalty program will jeopardize the intranet and vice versa.

Based on what you mentioned about cashing out/asset protection I'm thinking I should almost separate the services into different entities.

Sent from my SM-A520W using Tapatalk

Def keep it as sep companies.

I generally set up a Wyoming LLC for each of mine. Very cheap and quick setup ( same day ). About $125 total for the LLC, $30 a month if you want a WY phone and office ( real lease ) to get an addy.

.

 

[eliquid]

Hey @eliquid happy holidays.

Question: So I have a list of 6000 offices (each office might have 1-10 vets) who all might have the problem I want to fix. Granted I still need lots of feedback. I'm having an MVP built, and I'm hoping to find a couple beers who would be willing to work with me to find tune the MVP.

Do you have any suggestions for reaching out to them? Establishing a relationship?

I got mixed on on the "beers" part. I think your asking for either programmers to fine tune the MVP, or a couple of the 6000 offices to help you fine tune it.

In either situation, if your service truely fulfills a strong enough need and provides great value.. one of the 6000 offices would be willing to help you if you offer it to them for free.

If I had cancer and someone reached out to me with a MVP drug that could cure it, yeah I'd take it for free. If I was a local plumber in dire need of clients and someone asked me to test out a free MVP of a product that gets me customers, yeah Id try it for free.

If this is your case, offer them free access to the MVP. Their feedback will help you, so why not let them use it for free.

If you mean programmers/coders.. then you will need to either pay or provide equity.

In all cases, reaching out by phone is the best route because people like to ignore and delete/miss emails.

Phone will help you stand out.

.

 

[eliquid]

Sory, hehe I forgot and wrote in Polish.
I have an idea for the website.It is about creating a website similar to trivago.com but with a different content. I can not program. I am looking for someone who will help me in creating such a website. She will be mighty all over the world, so I must go.

You're gonna have to find someone that has experience building such sites and wants to trust you enough to see the project out. That's difficult.

Can you show the other person a good prior track record? Can you pay them anything?

If you are not able to pay cash and you want to give them equity, you better have a good track record of prior success.

I had some people come to me with good ideas, they made me equal partner and I coded and worked on the idea. 9 months later they wandered off to other ideas and folded up the company without telling me. These guys wasted my time and since that time, I never do equity deals on other people's projects unless I can see prior success and focus/commitment in past projects AND I am the majority stake holder. Otherwise, I can just work on paying projects, or my own.

Other guys ( programmers ) like what you are looking for will have been in the same situation.

I wish you well though if you can find someone to help you.

.

 

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[Rafał Lizak]

You're gonna have to find someone that has experience building such sites and wants to trust you enough to see the project out. That's difficult.

Can you show the other person a good prior track record? Can you pay them anything?

If you are not able to pay cash and you want to give them equity, you better have a good track record of prior success.

I had some people come to me with good ideas, they made me equal partner and I coded and worked on the idea. 9 months later they wandered off to other ideas and folded up the company without telling me. These guys wasted my time and since that time, I never do equity deals on other people's projects unless I can see prior success and focus/commitment in past projects AND I am the majority stake holder. Otherwise, I can just work on paying projects, or my own.

Other guys ( programmers ) like what you are looking for will have been in the same situation.

I wish you well though if you can find someone to help you.

.

Unfortunately, in such situations you can not take anyone away, this is sad. Where did these people help me, do I have to look? While reading the book DeMarco it was just my first idea. Do you think I have a chance to find such a man? Or maybe you know someone like that?

 

[eliquid]

Unfortunately, in such situations you can not take anyone away, this is sad. Where did these people help me, do I have to look? While reading the book DeMarco it was just my first idea. Do you think I have a chance to find such a man? Or maybe you know someone like that?

You'll have to look for someone to help you under the situations you can handle.

 

[LeoistheSun]

Hey @eliquid thanks again for putting on this ama!

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

If I made a SaaS app that was marketed to users instead of enterprises (which is what I consider competition to be doing) along with a monthly fee (they only charge yearly subscription) option, would you consider this to be a USP?

Competition charges $100-$300/yr. I'm thinking around $5-20/mo. (The audience is potentially massive ~950k) .

Thoughts?

 

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[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.

.

 

[Olisan]

I do.

I basically have one group of students for online marketing and another for SaaS.

I've thought about bringing the offer to the FLF marketplace, but not sure just yet. Most people find me online and just ask me if I do already.

.

What would you recommend to me (18 years old guy still studying, no knowledge but about any programming language (but I know how to sell, how to market myself, social media marketing and I have my own personal brand (my tribe) ) that wants to create his own SAas Software but don’t know how? and also where can I find you online to search your coaching?

 

[LeoistheSun]

What would you recommend to me (18 years old guy still studying, no knowledge but about any programming language (but I know how to sell, how to market myself, social media marketing and I have my own personal brand (my tribe) ) that wants to create his own SAas Software but don’t know how? and also where can I find you online to search your coaching?

You can look at "the foundation" (search Dane Maxwell AMA on this forum) or just get good at:

1. Asking questions and finding ideas
2. Prototyping those ideas
3. Preselling before making
4. Hiring a good dev

 

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[eliquid]

What would you recommend to me (18 years old guy still studying, no knowledge but about any programming language (but I know how to sell, how to market myself, social media marketing and I have my own personal brand (my tribe) ) that wants to create his own SAas Software but don’t know how? and also where can I find you online to search your coaching?

I don't advertise it online at all.

What I meant by "people finding me online and asking" is, people find me on forums like this one ( I'm on several other forums, throughout the years ), or find my SaaS products, or find me through others that know me ( Slack/Skype/podcasts/interviews I've done, etc ) and then they reach out and just ask.

So it's not like they know me or know I do coaching and then seek me out for my coaching. It's more like they read my stuff on a forum, blog, interview I've done, podcast, Slack channel, or something else and thought, "this guy knows something I want to learn" and then they just ask me if I can coach them. They don't necessarily know I do coaching beforehand when they ask.

I like this approach better. I don't feel like I'm selling something or trying to convince someone to hire me. When people seek you out and ask you, it's a lot different dynamic that shows me they are ready to learn and will maybe put real effort into it.

It also keeps the amount of people I coach very low, which means more attention for the student so they get more value.

.

 

[OMDA]

Thank you for this, I'm almost through the thread but I do have a question about your dev process.

When you have an idea, do you just use a whiteboard or a drawing app to figure out your UI? Or do you use something like Balsamiq or Moqups?

Or do you just layout and code based on raw experience?

I've been searching for something that makes certain UI layouts a bit less wild on the workflow. I did some UIs but spent what I think to be way too much time on them with hard coding.