Starting & Growing A Micro SaaS Business

[circleme]

[PROGRESS/LEARNING THREAD]

Tldr: SaaS entrepreneur who failed due to a small TAM and too little actual added value is changing direction.

I have been a member of this wonderful forum for just over a year now. During this time I have been able to learn from so many different people/entrepreneurs - the added value generated as a result is priceless! (Thanks for that guys (too many ppl to @)

I think it's time to give something back too. Spoiler: Unfortunately not a typical success story, but things that I learned in the course of my execution. Things that I would do differently in retrospect and will do differently(!).

My background in brief: Graduate > Software Dev > Freelance Consultant (Technical SEO) > Fastlane entrepreneur (current, kind of… :X)

Business plan in brief: Create added value through software (time savings and/or more sales) + Business Model: SaaS

Business plan in detail (but still short, because I don't have one): I focused heavily on automating various activities in the field of performance marketing and e-commerce. My focus was also on providing market research data to give the same target group a competitive advantage. These software solutions were implemented exclusively in the form of Chrome extensions, as the nature of this type of software is ideal for these activities. I also found - after initial difficulties - a way to gain complete control over this type of software, which in turn fulfills the control aspect. I currently have 6 micro SaaS solutions available for the market/live for exactly this target group and the respective areas of application.

Now to the core of this thread: What has worked well so far and what has worked less well/badly?

What worked well:

• I have learned more in the last 12 months than in 5 years of studying business at university.
• I have not only managed to generate one customer, but many paying customers who saw added value in my products. So I have successfully established the basic skills for creating a specialized unit and creating a business system.
• I felt like I was able to eliminate 80% of my initial worries (before I threw myself into this business model and creating added value through software) because they were only in my head and were resolved during the execution. I feel a lot more confident in some areas (not all of them - lol) than before.
• I feel much more mature, even though I failed at the end of the day. The learnings I had in the last year, at 29, were much greater than the learnings I had in my entire 20s in terms of actual knowledge gain and REAL self-improvement - more on that now...

What didn't work so well:

• Despite the knowledge from the MJ trilogy and the belief that I understood and internalized the concepts contained therein, I still reached for the hot stove like a young child, not just once, but many times.

Broken down:

• My TAM is way too small
• I thought I had found a fastlane through II (Intentional Iteration) - similar to a franchising company - using a large number of different SaaS products, as I have discovered a lot of problems in recent years that have either not been solved or have been solved very poorly. But: Even 6 Micro SaaS with several thousand free users is an absolute pain to maintain and support; apart from that, I have no processes in place, which I can replicate as all of the products aren't identical/similiar. It's not like McDonalds, where the products and processes are the same. Each of my products is different. Systematization is therefore only partially possible.
• The actual added value created per product does not justify "higher" prices. In other words: If I sell a SaaS product between $2-5/month - I cannot artificially charge more because in my opinion it does not justify the actual added value delivered to my customer - the number of free users required with a freemium model would be so high that I would probably never reach this goal (due to the TAM).

Here is a short calculation that I made (unfortuantely) AFTER executing:


These are average industry values. 20 extensions are not exactly a small number. Nor are 5000 installs per extension. Even if I were to achieve these values, which is more towards unrealistic, I would at best achieve a slightly above-average income compared to my country.

• No pre-validation (hard-proof) of my ideas

Most of the problems are problems that I discovered myself. Solve your own itch, so to speak, because I myself worked in this niche professionally. However, there are or were almost no competing products. Something that I initially viewed as positive. Now an idea without existing competition is a pretty big red flag for me. Reason:

If there is one or, in the best case, several competitors, the probability is high that there is a correspondingly high need for this solution.
If not, then there may still be a correspondingly high need, or it is a pure vitamin product that is nice to have, but nobody would pay for it.

The final/current problem:

The TAM of the target group would in principle be large enough (e-commerce businesses & performance marketers), but I serve a much smaller sub-niche with my solutions. Example: Only Amazon FBA sellers who operate in Europe. This, combined with too little actual added value, which I also fairly promote as perceived value, is currently breaking my neck. And I have enough users who support this problem.

I don't blame anyone but myself, but I would be lying if I said that this situation doesn't piss me off. It sucks, but I think I pulled the handbrake early enough.

What have I learned from this?

1. Choose a TAM that is large enough to help as many people as possible
2. Solve problems that have already been validated (existing, successful software products with SaaS business model)

Personal learning:

• Change in my basic motivation/purpose to go fastlane

Initially (when I first read TMF ), and I would be lying if I said otherwise, the financial freedom aspect was the main focus. After a year, that has changed 180 degrees. I still care about money, but my basic motivation is no longer money only. Of course, I have to be able to live off something, but far away from that amount, the "I'm helping someone else" aspect has become very important to me. That is my purpose. For me, a positive review and a sale have almost the same feeling. I know that somewhere out there I have helped a complete stranger with their problems. That gives me a lot. Whatever the reason, I can't say exactly. On an emotional level, the lack of market response is really upsetting for me, as I am very convinced of the added value of my products - even if it is not very high in quantitative terms, but in quality. However, if the business system necessary for response/feedback is missing (aka marketing and enough traffic), it can really affect your mood. That's why I'm now very happy to have found my purpose, which allows me to execute without a lack of response.

Next steps:
I'm sticking with the same niche, as there are really a lot of problems in it and I have a lot of insights into it. However…

1. Reverse-engineer an already validated idea that is also economically viable (more than $20/user/year and/or where the TAM is large enough)
2. Identify gaps in this idea (gaps where I can skew value)
3. Create an MVP based on it (with the appropriate skews)
4. Set up a business system and promote the MVP

In short: Catapult myself onto a playing field where a home run (?! = I hope the comparison is correct, I'm European and just had to research it; I only have a football/soccer brain, sorry) is possible.

A big thank you to so many members of this forum who - even if they don't know it directly - have helped me a lot over the past year with their views/opinions/realities.

I'm very positive about what lies ahead of me, even if I'm back at position 0. However, this time not in the sense of knowledge, but much more in the sense of getting started (again).

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[akshayazariah]

This is really good.

I keep preaching that value skewing is the king of all business plays, right after solving a problem.

The TAM of the target group would in principle be large enough (e-commerce businesses & performance marketers), but I serve a much smaller sub-niche with my solutions. Example: Only Amazon FBA sellers who operate in Europe. This, combined with too little actual added value, which I also fairly promote as perceived value, is currently breaking my neck. And I have enough users who support this problem.

The further you niche down, the more specific your messaging needs to be. This is key, and sometimes it's the entire difference between the businesses that convert at 3% and those that convert at 11%. How are you positioning your SaaS?

 

[circleme]

The further you niche down, the more specific your messaging needs to be. This is key, and sometimes it's the entire difference between the businesses that convert at 3% and those that convert at 11%. How are you positioning your SaaS?

I am currently in the research phase (again). I will note your comment, ty. So far, I have been somewhat generic, even though it already catered to specific niches.