Grew a SAAS from 0 to $30,000+ Monthly Revenue within 1 year ($1mm v.), $0 invested

[GuestUser450]

and the churn rate is well established at ~14%

Thanks for sharing, always cool to see others taking the SaaS path. My experience seems to be very different from yours however. After mrr, my biggest concern is churn. To be clear, what exactly is churning at 14%? Your monthly customers? Are you growing at 10% and shrinking at 14%?

 

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[fkacam]

Cameron, can you please send me a private link to the service you are referencing, I still have not received it. I'd like to mark this as a verified AMA.

Alright, I've replied to your email. Please make sure that the discretion I am asking for is enforced in this thread. Thanks.

My experience seems to be very different from yours however. After mrr, my biggest concern is churn. To be clear, what exactly is churning at 14%? Your monthly customers? Are you growing at 10% and shrinking at 14%?

Customer churn is 14% monthly and MRR grows (or has grown) at 10% month on month lately. So if hypothetically we have 100 customers then during a 30-day period we'd gain 24 new ones and lose 14 existing ones. It gets complex because you can segment our customers into a few primary groups. We have established business customers who will be around for years and probably churn at like 5%, but the numbers are messed up because of people who let their trials expire without canceling and then ask for a refund (churn goes up), and a portion of customers who are just trying out the industry and thus our software and who generally churn in a few months.

 

[MJ DeMarco]

Guys this AMA is good to go as I have been able to verify some of the details. Tag added! ASK AWAY!

 

[EE7]

Thank you for doing this thread. The information included is extremely valuable. Rep+ for you.

 

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[GrayCode]

Hey @fkacam Thank you for doing this thread.

My question is..

Should someone Dev the product even if the code can be done better, so long as the code they are using still works to get the job done.
Just so they can start getting revenue, then clean the code later on?

 

[fkacam]

Should someone Dev the product even if the code can be done better, so long as the code they are using still works to get the job done.
Just so they can start getting revenue, then clean the code later on?

This is called amassing technical debt, and yea, it's a decent idea and is pretty normal. Debt is a tool.

The code can be imperfect but the product should be perfect. A MVP is a perfect version of a minimal version of your product, not a shitty version of the whole thing.

The reason for this is that a lot of people running MVP tests aren't actually answering the question they are attempting to ask the market. If you throw up a poorly designed version of your product and build a single-page lander in a weekend in order to test if people will pay for the finished version of your product, the question you're really answering is "will people pay for a crappy version of this product" and the answer is usually no. You can't test whether or not people love delicious cake by setting a pop-up shop selling crappy cake.

 

[Agulenin]

How would you go about this dilemma I'm in?

I contacted the market, understood their pains, developed a sketched idea of a software and tried to pre-sell it to them.

They loved the software but didn't pay in advance for having it.

My question is, should I give up on this since it's not a pain that seems to require a paid solution?

Or Should I look for a tech co-founder and develop an MVP, understanding that pre-selling is hard and that people might want this solution nonetheless?

You mentioned that you found your co-founder on the web. How did it happen?

 

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[Kingsta]

How would you go about this dilemma I'm in?

I contacted the market, understood their pains, developed a sketched idea of a software and tried to pre-sell it to them.

They loved the software but didn't pay in advance for having it.

My question is, should I give up on this since it's not a pain that seems to require a paid solution?

Or Should I look for a tech co-founder and develop an MVP, understanding that pre-selling is hard and that people might want this solution nonetheless?

You mentioned that you found your co-founder on the web. How did it happen?

Why don't you ask the company to sign a contract with you, something along the lines of "If I deliver exactly what I proposed I would, you pay me X for it". Make sure the contract is air tight as most companies will probably skirt around this especially if its someone you don't trust. That way you know what you're making has some value even before it exists.

 

[Ridergraal]

Hi thanks for this thread it is a great read
anyway I was wondering how much did it cost to develop the app?

thanks for the reply in advance!

 

[Nick314]

Why don't you ask the company to sign a contract with you, something along the lines of "If I deliver exactly what I proposed I would, you pay me X for it". Make sure the contract is air tight as most companies will probably skirt around this especially if its someone you don't trust. That way you know what you're making has some value even before it exists.

IANAL, but I believe the term for this is a letter of intent. It's like the pre-nup version of a business contract, and is afaik enforceable. I've even heard that in some cases you can get funding with a letter of intent in hand if you are going that route (VC or business loan).

 

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[mirylo]

So small business b2b sales doesn't really require a sales team. But enterprise b2b definitely does. Enterprise b2b is cool because the decision makers/buyers are playing with OPM (other people's money) and so it's sort of similar to selling to the government, from what I can gather. You can charge silly amounts. This is not an area I have ever tried.

Small business b2b does require a sales guy though. You need someone to do the things which spawn the word-of-mouth and organic growth which follow. If you are very socially inept or shy, then partner.



We joined the groups and became active a few weeks before we started using them as traffic. The tool was originally free for everyone in the groups and the idea was validated in the groups too ("hey everyone, if we built X would you use it?").

Admins were either bribable with free accounts (once we went paid), or just liked us. Members of these groups definitely felt a sense of "ownership" over the tool. If your buddy calls you up to update you on how his latest project is going, that's not spam, right?

Freemium is great partly because it makes marketing way easier. When your product is 100% paid, your promotions are seen as spam. But when you have a free plan 'for the little guy', you can always just reply, "uh... no. the tool I'm talking about is actually free forever."

Later on once we were making good money and our efforts became a bit more transparent it was a tiny bit harder and we sometimes used more traditional methods such as replying to questions people asked in these Facebook group as a blog post on our blog and then linking to it in a reply.

One of the cool things we tried was paying the top bloggers in our niche to place our adroll pixel on their blogs so we could then retarget their users around the web. We never really got this working, but I like the idea in theory.



The partner I had on this project, with whom I have made six or seven figures with over our two ventures, I met through a post or private message on a webmaster forum. lol.



At first 100% free, then freemium, then only paid plans with free trials. Freemium makes your marketing easier (see above) but having free plans at all screw up your product management/design process because now you're getting feedback from people who aren't actually willing to pay for your product. F*ck what they want. You're also not getting feedback from people who have issues but just move on because they aren't paying so they don't feel cheated and don't care. People who make real money mostly complain when have an issue and they're spending money not getting a solution. There's lots of issues with Free plans...

Free trials are great for conversions and not just because people forget to cancel them (which we refund 100%). For a ton of reasons which I won't enumerate Free trials are badass.



We did together. Later on we have at times hired development staff via odesk. This has never been a big expense and currently no one is employed. Pakistanis are top-notch.



Great question. What we built was totally new so we did not use any '3rd party software'. However, you should use frameworks and components wherever possible. bootstrap, wrapbootstrap, ruby on rails if that's what you're into, etc. Take every shortcut you can because most MVPs are going to get tossed in the end.

If you have a SaaS idea, what are your thoughts on outsourcing original product development perhaps via oDesk, Freelancer etc instead of having to find a technical cofounder?

I know this is how lack, Fab, Skype, Klout, Appsumo and GitHub got started.

 

[juan917]

If you have a SaaS idea, what are your thoughts on outsourcing original product development perhaps via oDesk, Freelancer etc instead of having to find a technical cofounder?

I know this is how lack, Fab, Skype, Klout, Appsumo and GitHub got started.

In both situations, you will need to have the ability to screen talent and identify who can actually get it done for you. I say try out both approaches and see what kind of responses you get. I know good people exists on those sites but my experience with them has been very sub-par. I won't be doing any product outsourcing myself.

 

[GuestA4319]

Such a great thread. @fkacam are you still around?

 

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[Leo Hendrix]

Likelihood of success for a soloprenuer who outsources areas he is weak or not proficient in? e.g web dev, programming.

I am working on a platform that utilizes the cloud to deliver 'solutions' via my website.

 

[Leo Hendrix]

@fkacam Was your Saas product a result of or where you one of the founders in a Startup?
Did you take in external financing from VC firms, angel investors etc?