How to launch paid SaaS - advice needed

[Kastosaurus]

Hi,

I am currently in the process of making a website that facilitates and helps bringing buyers and sellers together.

The main revenue source will be charging sellers to use the website.

My question is; do you suggest that it is better to start with as a free-to-use platform, and eventually charge the users (since in the beginning, I cannot guarantee optimal exposure due to low website traffic), or should I start with charging buyers from the start to avoid losing credibility?

I would love to hear your feedback about this.

Thanks in advance.

 

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[Gareth]

How far along with your SAAS are you?

 

[3feetfromgold]

Really depends on so many different factors. Difficult to provide an insightful answer unless we know more information.

My thoughts, in no particular order based on the info you provided.

1. Is the revenue model free to use or freemium? If free to use, it will be difficult to convert those free customers into paying ones later. It will also appear "unfair" for users who sign up after the free period is over. If you are going the free to use path, perhaps make it a beta, with the understanding that all beta users are provided the platform for free in exchange for learning. After the beta is over, they will have a chance to subscribe for X% off.
2. You mentioned you have low website traffic. What are you doing to market this? Do you have a mailing list with potential users? It's possible to ask your potential users what they think
3. You're building a double sided marketplace. Do you have a wizard of oz MVP or do you already have one side built up? Buyers won't buy unless there there is a reason to
4. Charging from day 1 is almost always preferred. This way you can test out your riskiest hypothesis, which is determining whether or not a user will even pay for your SaaS product. If they won't pay now, what's going to convince them to pay later?

 

[adiakritos]

I'm in the process of building my first SaaS business as well. I've had the same question, and what I've heard from the folks at Lean Startup Machine is that the best way to validate an idea is to get credit cards. Actually, I've heard this from some peeps here on this forum from a long while ago. I was telling people about the idea of my app and they were saying "Oh yeah, that sounds great, I'd tots buy that!", and when I shared this on the forum someone had mentioned that words don't mean squat till they whip out the credit card and make a purchase.

I had a momentary lapse in judgement and stepped away from my app for a few months to start an eCommerce store. I showed it to lots of people and plenty raved at how awesome the products are. How many of them purchase? 0.

While I'd like from some other members here who have run some successful SaaS businesses, I do think this question is quite common.

 

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[Gareth]

Im reading a couple of books on this.

"The Start-up J Curve" and "The Membership Economy"

Both are great books.

Essentially for any marketplace you need people involved to make it grow.

An app with very few sellers will attract few buyers and visa versa will wither and die.

The more people you have the stronger the marketplace becomes.

The key seems to be getting a lot of people onboard early with the least amount of entry friction.

 

[Kastosaurus]

How far along with your SAAS are you?

Ready to launch in 4-6 weeks (technically). Currently expanding on my strategies and research.

 

[Kastosaurus]

Really depends on so many different factors. Difficult to provide an insightful answer unless we know more information.

My thoughts, in no particular order based on the info you provided.

1. Is the revenue model free to use or freemium? If free to use, it will be difficult to convert those free customers into paying ones later. It will also appear "unfair" for users who sign up after the free period is over. If you are going the free to use path, perhaps make it a beta, with the understanding that all beta users are provided the platform for free in exchange for learning. After the beta is over, they will have a chance to subscribe for X% off.
2. You mentioned you have low website traffic. What are you doing to market this? Do you have a mailing list with potential users? It's possible to ask your potential users what they think
3. You're building a double sided marketplace. Do you have a wizard of oz MVP or do you already have one side built up? Buyers won't buy unless there there is a reason to
4. Charging from day 1 is almost always preferred. This way you can test out your riskiest hypothesis, which is determining whether or not a user will even pay for your SaaS product. If they won't pay now, what's going to convince them to pay later?

Thank you for your reaction, really appreciate it.

It is an online platform on which sellers can advertise their products. The platform in return ensures exposure (SEO etc.), but they have to make a one-time-payment to place an ad. The struggle I am dealing with now is that it is difficult to guarantee sellers that thousands of potential buyers will see their ad, at least in the beginning.

I have a list with potential users, indeed. When I cold call them, however, they ask me how many potential buyers visit the website. I cannot guarantee them that right after the launch, the website will immediately attract thousands of visitors. I do put effort in certain strategies that will grow website traffic, but that is another story, and not their concern.

So perhaps I should charge less in the beginning, and increase the price along the way, depending on the website traffic.

 

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[OverByte]

The platform in return ensures exposure (SEO etc.), but they have to make a one-time-payment to place an ad.

Perhaps instead of making them pay to place an ad when the reach is unknown you could guarantee they only pay for reach, that is to say when a customer clicks their ad. That way they don't spend money unless they get clicks (similar to adwords, FB, etc) and it makes the decision easier for them (less risk, etc).