[Progress Thread] Internet SAAS company

[pande]

Hello, this is both my intro and a start to what I hope to be a long thread. I'm posting here to hopefully provide some inspiration for others willing to take the dive in the future.

I'm starting a SaaS company based around education and studying. I will be charging only $10 to $20 per year per customer. The number of possible customers is approximately 100,000 customers. It's a fairly tight community for such a large amount of people so I am hoping that the word will spread fast. The competition is very outdated. This is my first app so I am hoping to reach a goal of $100,000+ per year of income within 2 years. It will be an iPhone app to start with and is about 90% passive after everything is setup. I will be in the business of selling information.

I'm 26 years old, I have a wife and a daughter and am in the military. This business idea and goal was started before I discovered millionaire fastlane , but the book has really clarified some things for me and totally solidified my goals, which I am very grateful for. It's been about 2 years since I had my "aha!" moment, so it's about time to finally buckle down and pull myself up by my bootstraps! My goal is to no longer be a slave to a 9-5 job by the time I am 28 (when my enlistment is over) and retired by the time I am 32. In this thread I will post any updates that I think might help others in their journey.

To start off here is what I've accomplished so far.

• Opened up a business bank account
• Registered company name
• Bought a computer for business
• Purchased domain name
• Spoke with lawyers about legalities of business to make sure I wont get into any legal trouble. Seems okay so far.
• Started a 7 day logo contest at 99designs $600
• Created a launch page at kickoffpages - $50/mo, but if it seems good i will purchase an annual package to save money.
  • I hope to have the launch page completely finished by December 1st, including any pre response emails.
  • I've started talking about my app with other people. I've gotten past the stage where I'm afraid everyone is going to steal my idea.
  • I've been listening to entrepreneur podcasts and they all are pretty fond of these launch pages.
• Created some of the material to be purchased - 3 hours spent.

To do list:

• Set a goal for a final release date of April 15th
• Sell our paid off car for $10k (and refinance another one) for cash on hand to build the app. The app should cost from $5-10k on elance to build.
• Finish designing app and website administration backend wireframe for elance designer.

November 2013 expenses: $650
Expenses so far: $780

 

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[pande]

Things are going well with creating the app. I'm very happy with the developer so far. He's great at communicating with me and really understands everything well. We changed the monetization strategy to use adverts instead of iap's. However, i'll be offering 2 in-app purchases. One to study while offline and one to get rid of ads. Between those two IAP's we should make up for any slow ad performances. I just want this app to be mainstream to it's niche.

I've started asking for beta testers on facebook. We should be ready for beta in february. People are responding very well on fb. So far I have 20 beta testers who are all very interested. And some people are even offering to help with the content. It seems like people are pretty excited about the app.

 

[pande]

I'm now at 83 email subscribers. I had paused the facebook advertisements for a while. The ad is not performing as well as at first. I paused the ad to pay for some web designing. I also found a pretty neat podcast/forum for tech startups. I was listening to startups for the rest of us, but I've pretty much listened to every podcast.

Now I'm listening to Fizzle.co, which is one of the better startup podcasts I've listened to. But they have some decent video tutorials / community w/ their paid membership. I'm doing the 1 month trial for $1 to see how useful it is.

 

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[pande]

Thanks for the replies

Good luck on your journey!!! Apps are crazy competitive, what is your value proposition going to be?

Yes, apps are competitive but I am able to deal with that by selecting a very specific niche. The value proposition is that the product is currently available by a competitor on a website (and is widely known), but not in the appstore. Coupled with the fact that my learning process is 10x better than what the competition uses for their customers. Customers will learn way more productively and effectively while it being conveniently on their phone and for the same price.

Well you're not afraid to splash some cash to get the ball rolling. Sounds interesting.

So what's the idea, since you're not afraid to have anyone steal the idea?

No I'm not afraid to make a splash =). I am confident in my product. The only way that I will fail is if I fail to execute properly. I know there is a big heaping pile of gold buried somewhere out there with this niche. I just need to navigate to it properly. Since I am about to release the launch page to the public I do not want to direct traffic from people who are not my intended customer base. The emailing service at MailCheat(Chimp) gets more expensive with more people signed up on the mailing list. So I want to make sure those people are actually interested in what I have. I will share with you what it is after it's released, but that's not for another 4-5 months!

 

[pande]

The 99designs contest is into the second round now. We've rounded it down to 2 designs from two designers that we really like. I included a third designer (who had a poor design, but it was his first rendition) in the final round because he has an extensive portfolio with over 100 wins so I think he can come up with something good. Either way we're going to have an exceptional logo compared to what I had put together myself. I've learned that "your website" or "your logo", whatever you mock up as an owner is most likely UGLY. However, we are blinded through the proud lenses of our blood and sweat over photoshop. So I tend not to trust my judgement on my own creativity with my site/app. So lesson learned here is that when it comes to creativity and branding.... get a professional to do it. When someone thinks of my app they will picture this logo in their head. So it's really important that it is excellent.

I've successfully lobbied my wife into agreeing to add another $500 to the credit cards to design the app itself. (in photoshop, not the coding).

I've also talked her into selling both of our cars so we will be able to afford to pay a programmer from elance to program the app. I'm going to sell my truck and get a cheaper one to lower the car payment. Her car is paid off already so we'll sell her car and have cash on hand for the app, and just finance another car for her. Tricky way to finance a business, I know.

So the next step is to create another contest on elance to have the rest of the application designed. The launch page should then be fully ready to go with a really good preview of the app. We should have the launch page up by Dec 1st. I think it will be intriguing enough to people for them to enter their email addresses so that I can build up a pre-launch mailing list. My goal is to have 500+ subscribers before we launch.

 

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[pande]

Just make sure you budget some funds for paid traffic generation/Facebook Ads etc. to your launch page to validate interest and build your list.

Thanks for the tip. I think I will start out with facebook ads because my target audience is difficult to reach and facebook seems great for that.

We have a little bit of a setback. We have some credit card debt and the wife very understandably wants to pay it off first before we start investing in the business. So it might be a month or two before we start throwing cash at it again. Luckily I was able to finish the logo and landing page. It just won't be as intriguing to visitors because there won't be a slide show of different screenshots of the app design.

I'm currently out of state for the military so I'm a little busy, but still making some progress. Next to-do item is to finish the autoresponse emails and touch up on some of the copy on my site. I also need to fine tune the facebook, twitter, linkedin, etc accounts before I can release the launch page to the public. I'll try to get some version of these items done tomorrow so we can start getting the word out because the sooner the better.

 

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[NikS]

I've also talked her into selling both of our cars so we will be able to afford to pay a programmer from elance to program the app. I'm going to sell my truck and get a cheaper one to lower the car payment. Her car is paid off already so we'll sell her car and have cash on hand for the app, and just finance another car for her. Tricky way to finance a business, I know.

Great sacrifice and commitment!

On the other hand, the trend these days (and it's a good one) is to have paying customers or at least committed customers before dumping money into something. Perhaps you should make some images of what the app will look like. Then you could do a small facebook ads or google adwords campaign to get people to look at the screenshots. Make them an irresistible offer to pre-order (say it's coming soon) with a money back guarantee and a time sensitive discount. Setup a "pay with paypal" button. All this would be relatively easy and cheap.

See if you get any nibbles before you cast your net!

 

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[NikS]

Sounds like a good plan. Nice to see you guys getting your financial house in order, and working on your fastlane venture at the same time.

I wish you success.

Thank you Cornelius.

The launch page turned out to be a bust, so I cancelled my account and got my money back since it was within 30 days. My facebook page is chugging along well. The wife decided she did not want to sell her car and have another car payment so it forced me to think of another way to finance this idea. And it turns out I had a lucky stroke of genius. It's true that you have your best ideas at very random times. It's important to think constantly about your business if you want it to be successful. I believe this helps make it an evolutionary process to develop a finer product.

Instead of looking for a way to get more money I found a way to lower the cost of creating the app. I will no longer need a server database for users to sync to. Everything will be within the app, local.

It will no longer be SAAS. It will be a one time purchase with in-app purchases. I'm thinking the initial app purchase price will be $9.99 and the in-app purchases will be $19.95 to start with. Eventually, I will raise the in-app prices to $29.99, and then $39.99. The customers will be getting a great value for even $39.99. However, I do not want negative reviews due to people complaining about paying too much for an app. I believe that once I have collected many positive reviews I will be able to raise the price.

And without going into detail, the overall daily maintenance will be next to zero compared to the prior design. But above all, the app itself is so much simpler to make. It should lower the costs from the $5-10k range down to the $1-5k range. This will minimize future problems in trying to relay my idea to a developer on e-lance and also minimize future bugs.

We made a plan to pay off all debt and then save for the app. So in the meantime I'm working on content, designing the app layout, planning the How-it-works video, appstore description, etc. We should be able to at least have it professionally designed in the second half of January, and start building it in February. My wife is the safe and responsible type. If it were only up to me I would stack up the credit cards to finance my business, but her support is important.

In the meantime I won't have much to post, but I will check in from time to time.

 

[pande]

It's been a while since I've updated here. The development of the app has been delayed a little bit, as expected. The design of the app has changed drastically since I first started. It's a fairly technical/complex app. I lucked out with the developer I got. If I hired someone from India or China I believe this would have been a failure.

The admin backend is complete. My developer is now starting on the frontend of the website. I've changed my monetization strategy again to subscriptions. I think that will be more in line with the "Fast Lane". So the title of this thread is once again correct. I'll be charging anwhere from $5 to $13 a month per user. I should be able to get several hundred to several thousand within the first year after launch. I'll have to address my advertising campaign when the time comes.

I opted to do the design of the website myself to save about $1,000.

I will be hiring a copywriter for my website and promo video. So far total cash invested in this venture is around $8,000. The expected launch date is now May 1st, moved from April 1st.

I also had an idea to create dynamic webpages based on content. So eventually, I will have about 30,000 web pages out there to help funnel customers in. With the copywriter, promo video, and marketing I expect to spend around $11,000 before we make a single dollar.

 

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[tafy]

Education is great area! If you target market is an age range i.e 7-9 year old then you dont need to worry about subscription too much as they will move on and other 7 year olds will be your new customer, its an iphone app so just make it free and have in app purchases to get more content

Free app so they can try your product 20% of the content??? then in app purchases for the next 20% etc

 

[MattCour]

Good luck on your journey!!! Apps are crazy competitive, what is your value proposition going to be?

 

[Talisman]

Well you're not afraid to splash some cash to get the ball rolling. Sounds interesting.

So what's the idea, since you're not afraid to have anyone steal the idea?

 

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[pande]

Education is great area! If you target market is an age range i.e 7-9 year old then you dont need to worry about subscription too much as they will move on and other 7 year olds will be your new customer, its an iphone app so just make it free and have in app purchases to get more content

Free app so they can try your product 20% of the content??? then in app purchases for the next 20% etc

Thanks for the advice. I had been toiling at trying to figure out how to charge for this. A while ago I had considered in app purchases and then decided to do account based annual reoccurring fees, but after rethinking the in-app purchases after you mentioned it, something clicked. If I can get the programmer to pull it off I will probably do the in-app purchases.

So, thank you for making me rethink!

 

[tafy]

Wow you are dedicated, I wish I had an idea i feel passionate about like you. Keep us updated on how it goes.

 

[exige]

Just make sure you budget some funds for paid traffic generation/Facebook Ads etc. to your launch page to validate interest and build your list.

 

[exige]

It just won't be as intriguing to visitors because there won't be a slide show of different screenshots of the app design.

This is always the challenge...but one thing you can look at is creating wireframe style sketches that give a glimpse of what it will do. There is a free alternative to Balsamiq called Pencil (http://pencil.evolus.vn/) that includes Android and iOS style UI elements, iPad/iPhone/Android phone borders and it saves PNG images.

Waiting a month or two on cash injection might not necessarily be a bad thing, it sounds like you've got quite a bit on your plate already to crush through...

 

[Strive]

Firstly let me say thank you for serving in the military, I appreciate anyone who is or has done so. I would really sit down and reevaluate where you're going with this before throwing your money around because of 2 things - you say there is a possible customer base of 100,000 people, even with 100% market cap (impossible) and charging on the higher side of your product you're at a 2 million a year business if everything works out perfectly, and that's before taxation and expenses. To me the numbers don't work at all in your favor. Also, you should not have spent $600 on a logo. If you can, get that money back and get a logo from fiverr. If you can't find a good logo on there by the time you spend $50, there's something wrong. Wish you the best of luck with everything!

 

[pande]

Great sacrifice and commitment!

On the other hand, the trend these days (and it's a good one) is to have paying customers or at least committed customers before dumping money into something. Perhaps you should make some images of what the app will look like. Then you could do a small facebook ads or google adwords campaign to get people to look at the screenshots. Make them an irresistible offer to pre-order (say it's coming soon) with a money back guarantee and a time sensitive discount. Setup a "pay with paypal" button. All this would be relatively easy and cheap.

See if you get any nibbles before you cast your net!

Thanks for the idea. I'm not sure if it's possible for me to make an irresistible offer since i'm only charging a max of $20 per year.

I am doing facebook ads right now. They are pretty expensive. I've gotten 20 clicks so far, but nobody has signed up for the mailing list yet.

 

[pande]

Firstly let me say thank you for serving in the military, I appreciate anyone who is or has done so. I would really sit down and reevaluate where you're going with this before throwing your money around because of 2 things - you say there is a possible customer base of 100,000 people, even with 100% market cap (impossible) and charging on the higher side of your product you're at a 2 million a year business if everything works out perfectly, and that's before taxation and expenses. To me the numbers don't work at all in your favor. Also, you should not have spent $600 on a logo. If you can, get that money back and get a logo from fiverr. If you can't find a good logo on there by the time you spend $50, there's something wrong. Wish you the best of luck with everything!

I'm viewing this company as a good business to start with. It has really good chances of success since the competition is very low. There are several companies doing it, but my idea applies today's technology to it. They are way outdated. So if I can garner $100k per year I would be extremely happy with that. I have multiple ideas and I'm sure more will come. I've been a big idea person ever since I was a boy, so I'm sure they'll keep coming. Once I have more time and a steady income from my first business, I hope to attempt a second business, but that's not until I'm able to get out of the military in a few years.

 

[pande]

Created the facebook page and changed facebook ads to advertise for "likes" instead of linking to my launch page. Currently paying $10 a day for facebook adverts. Started adding tons of people to my facebook so I can invite them to my business facebook page. Currently at 7 likes, woohoo.

 

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[pande]

Spent 4 hours today creating content while watching football .

I've created a plan to get all content completed. I should be able to finish it by March 1st, but I'll have to spend several hours everyday to accomplish this.

My facebook page is at 38 likes now. Not that great. Going to have to research how to promote a facebook page better.

 

[Cornelius]

Wow - sounds like you're really going for it! Best of luck

 

[pande]

Thank you Cornelius.

The launch page turned out to be a bust, so I cancelled my account and got my money back since it was within 30 days. My facebook page is chugging along well. The wife decided she did not want to sell her car and have another car payment so it forced me to think of another way to finance this idea. And it turns out I had a lucky stroke of genius. It's true that you have your best ideas at very random times. It's important to think constantly about your business if you want it to be successful. I believe this helps make it an evolutionary process to develop a finer product.

Instead of looking for a way to get more money I found a way to lower the cost of creating the app. I will no longer need a server database for users to sync to. Everything will be within the app, local.

It will no longer be SAAS. It will be a one time purchase with in-app purchases. I'm thinking the initial app purchase price will be $9.99 and the in-app purchases will be $19.95 to start with. Eventually, I will raise the in-app prices to $29.99, and then $39.99. The customers will be getting a great value for even $39.99. However, I do not want negative reviews due to people complaining about paying too much for an app. I believe that once I have collected many positive reviews I will be able to raise the price.

And without going into detail, the overall daily maintenance will be next to zero compared to the prior design. But above all, the app itself is so much simpler to make. It should lower the costs from the $5-10k range down to the $1-5k range. This will minimize future problems in trying to relay my idea to a developer on e-lance and also minimize future bugs.

We made a plan to pay off all debt and then save for the app. So in the meantime I'm working on content, designing the app layout, planning the How-it-works video, appstore description, etc. We should be able to at least have it professionally designed in the second half of January, and start building it in February. My wife is the safe and responsible type. If it were only up to me I would stack up the credit cards to finance my business, but her support is important.

In the meantime I won't have much to post, but I will check in from time to time.

 

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[pande]

Thank you NikS

I am currently having the app designed with 4 different screens for $750. I'm also in the hunt for a programmer. I'm a little gun shy in hiring a programmer on elance. I'm afraid of having a bad experience with a programmer and hurting my chances of success. I'm looking to have the app built for $3k or less. Anyone have any personal recommendations for when hiring someone from elance or odesk?

 

[NikS]

I haven't hired programmers on Odesk yet only VAs. Here's what an experienced guy who I met on this forum told me:

"You *can* find good people. I use odesk. Typically I look for the following:

English Level 5
Feedback rating 4-5
Hours Billed: At least 100
And I dont use agencies, only independants

And the above criteria is without exception. Doesnt matter how much some begs or otherwise. Good english is a must. Ideally a portfolio of past work as well."

Seems like solid advice to me. Hope it works out within your budget. Cheers.

 

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[pande]

Thanks for the piece of advice. I found a programmer! An electrical engineer from UW. He seems pretty smart, smarter than myself at least. The proposed cost is just under $4k to build the app and cms system. I'm very excited to finally get this show on the road. I just hope he is competent enough to successfully build the app to my needs. I've been talking to programmers non-stop for the last 3 days. Talking to them was pretty much free consulting. I changed my app design a little bit after speaking with each programmer and finally developed into what I have.

If anyone plans on using elance, I recommend you be very, very patient in finding a developer.

 

[pande]

I realized that I just can't concentrate and get things done in the house with the wife and kid. I toyed with the idea of getting a small office or desk for about $2-400 a month, but decided that was too expensive. I don't want to add the stress of "We have to make $xxx to be positive".

So I'm parking my truck outside and I turned half the garage into an office. It's now my little safe haven. I can get away and concentrate on work, be productive, listen to music loudly. I wish I had done this earlier.

It's now tax time. I didn't think it was too important just yet because we're not making any sales, but having something like quickbooks would be very convenient right now. I'm probably going to get a quickbooks account when we get a little closer to launch.

I'm trying my hardest to not get "feature creepers", but I've asked the dev to make an adjustment to the program. The change will save me many man hours of adding data in the long run.

Total 2013 expenses = $5,615.96
Total 2013 revenue = $000.00

Current target completion date: April 1st
Current target launch date: May 1st

 

[pande]

As of now the admin interface is complete. The programmer is now working on the front end part of the website. I finished the design of the website and it looks pretty nice! I'm glad I didn't just throw money away for a designer. If I haven't said earlier my project is a flashcard studying web and iphone app. The website should be finished in about a week or two. At that point I will get 1 or 2 "early access" users to test out the system. I hope to be able to charge people within 45-60 days from now.

I've realized that "launch day" isn't going to be a big bang or anything. So I'll probably just open up shop whenever I'm ready. I honestly don't want a lot of people to sign up on day 1. I'd rather have people slowly trickle in so I can make adjustments and improvements as I go along. And incase anything bad happens I wont cause a bad impression on a large percentage of my market. Once I have the website built to where I'm happy with it I will promote the heck out of it.

I've set a personal financial goal for myself today. It is to make enough money to comfortably fly my entire family down to visit for my daughters birthday in December.

 

[James Fake]

Nice... good luck dude.

 

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[pande]

Setup a new landing page. It looks really great. Created 2 facebook ads as test pilots. So far I have 4 email subscribers through organic posts. Core functionality of website is done. Looking at a few more weeks at a minimum until the website is finished. It's gonna be about a month delayed past the already adjusted dates. But now that I have a landing page and an auto email response, I can really get the word out and get people interested in my product.