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Making your first dollar from a SaaS project
- dangero 9y agoI've crashed and burned on SaaS enough that I'm very into the landing page approach -- don't build the product, but convince people you have so that they can click the "buy now" button. That way you feel more confident that the market exists while you're actually building it. After all the projects I've failed at, nothing is harder for me to do than spend 200+ hours on something without having a clue whether it will reap benefits or not. Corey spent 100 hours trying to gather traction. He could have potentially skipped the 100 hours it took to build it and instead just tested the sales side. There are people who can know where a market is and confidently blaze straight into it without any validation. I think I'm just not that genius or lucky.
- ianstormtaylor 9y agoI'm curious, if you're willing to share, what were the projects you worked on that failed?
- dangero 9y agoI built a competitor to Reddit and Digg (at the time) called RatherGather that had some differentiators that ended up not mattering to people. I wish I understood Metcalfe's Law better at the time. I built a mobile game called Roaring Racers where you had to use your voice to make your car move (roar louder, go faster). I built a stickers app for iOS stickers launch that allowed you to import anything. This one wasn't a total dud, but the way Apple positioned the store, the traction wasn't at a scale that made it worth my time. And then of course there's the laundry list of companies that I've been employed by and built products for where months into it I discovered nobody in the company had really done any market testing, but they got clearance to build something for $XXX,XXX anyways. 9/10 startups fail, so just by nature of that fact, most of us spend our time working on building tech that never really "makes it". There have been great successes too, but you asked about the failures.
- dangero 9y agoEdit: I forgot one that is fairly recent too. I built a Windows app that allowed you to watch Twitch picture in picture while playing a game. Sold one copy before shutting it down.
- albertgoeswoof 9y agoRoaring racers sounds like a brilliant idea! Where can I play it??
- dangero 9y agoIt came out maybe a year after the App Store launched, and the 100 copies I sold never justified maintaining it. It's long gone. Only way to play it would be an old iPhone that still has it installed and I don't even have one of those.
- KekDemaga 9y agoGood idea but I for one am glad that roaring racers did not become pokemon go. Kids are loud enough.
- tomcam 9y agoI absolutely love your creativity and persistence. Thanks for sharing. You're totally going to hit one out of the park.
- andrewchambers 9y agoI think the second/third/forth SaaS site won't take 200 hours once you get in the groove.
- MediumD 9y agoIf I understand you correctly: You whip up a bootstrap page that describes the product with a 'beta sign-up & pay' button, and if enough people sign up and pay, you build it? - What sort of demo do you have on the website? Or is it just a basic description of the product and a list of features? - Does this mean you get payment processing setup before development every time? - How do you manage returning money if you decide not to do it?
- dangero 9y agoI usually just do believable screenshots and a call to action like, "Request a trial" or "Buy now" it depends on what it's for. I never take any money I just log the actions people took on the site. If it's a buy button, then you can just say, "Thanks for your interest. We are launching soon."
- zeptomu 9y agoBut it can also have the opposite effect: people get put off as they think the product is vaporware (rightfully).
- beambot 9y agoLet's say you get 20 people to signup, all of whom think it is (rightfully) vaporware. Well, at least now you can be sure there's a real market (>>20) to justify development. Even if you drop those 20 on the floor... the validation is more than worthwhile.
- Untit1ed 9y agoMy experience in doing this has been that a surprising number of people who click the buy button still put their email address down afterwards, and none of the people I've talked to who did were remotely miffed about the deception. It probably depends on the audience, but people are more understanding than you'd think about the need to look before you leap, especially when they know you're just a solo entrepreneur.
- crispinb 9y ago
- alexpetralia 9y agoAny recommendations for quick and effective landing page solutions? I assume something like MailChimp for email sign-ups?
- cookingrobot 9y agohttps://launchrock.com https://launchrock.com is the classic tool for this.
- lugg 9y agoEmail signups don't really validate your idea anymore, even if they manage to get you some emails. There was a post a while ago on Reddit where someone built this little project: https://fauxbuy.com https://fauxbuy.com Basically lets you add a fake buy button easily and emails you when someone attempts to buy.
- Untit1ed 9y agoI'm building something to do exactly this at https://nichetester.com https://nichetester.com - I should note that I used the method described in the OP to validate it and it worked really well :).
- mindhash 9y agolandbot.io is interesting. Try it out
- stephengillie 9y agoDo you only consider a project a success when other people are using it?
- justonepost 9y agoTragedy of the commons. This stops working as everyone creates these vaporware pages.
- nickjj 9y agoThat's essentially what Kickstarter is. You get backed before you build your product, and you don't even need to convince people it exists because they expect your product not to be finished. I think it's an excellent model as long as you live up to your promise and deliver above and beyond expectations. It's how I started my software developer course selling business and validated the idea (spending hundreds of hours making a course is no different than a SAAS MVP). I wrote all about this process recently in an Indie Hackers interview: https://www.indiehackers.com/businesses/nick-janetakis https://www.indiehackers.com/businesses/nick-janetakis.
- laydn 9y agoI don't mean to sound harsh, but, just 200+ hours? That's a little more than a month of work. I wouldn't even begin to expect any meaningful returns with just one month of full-time work.
- codingdave 9y agoThat was known back in the day as "vaporware". Somehow today that concept evolved into "marketing".
- jameslk 9y agoI'm not sure why this is on the front page. I mean, $1 that you just made yesterday doesn't really indicate product/market fit, nor seem very noteworthy in general. If anything, it seems more like a midway point in the journey of what you might expect to get there. You might have to pivot several times after realizing traction is not stable or perhaps not scalable vis a vis marketing efforts, as has been my experience. Kudos to building something though. Edit: I get the point others are making about celebrating a milestone and your first sale being the stepping stone to the next, but I don't think it addresses mine: Is $1 that you made just yesterday really enough data to demonstrate to others what to expect? Is there really any conclusion that can be drawn from such a small experiment? Maybe it's just me, but I feel like there would be much more interesting insights to discuss after waiting more time or when more sales occurred. Honestly this looks more like an SEO piece given the keyword rich external links in the article from a high PR domain and boost from HN. The author has mostly just submitted his own articles on HN to boot.
- travisjungroth 9y agoIt's one person describing what it took to make their first sale. Maybe that information doesn't have value to you, but it does to other people who are considering doing something similar.
- dangero 9y agoThe first dollar is usually the hardest though. This is a true account of one person's experience and I think a lot of people don't understand what that feels like. 200+ hours to cheer for $1 and some people don't even get to the dollar.
- mjnaus 9y agoThe first $1 is easy.... If you're struggling to attract a single customer you seriously need to re-evaluate what you're doing. As mentioned earlier in the comments; doubling from MRR from $40,000 to $80,000 is a way bigger challenge than making that first buck.
- deleted 9y ago
- guytpearson1 9y agoI don't want to hear about the first dollar you made. I want to hear about how you went from $40,000 to $80,000 MRR. That's the key area. This post is just an ego stroke for a guy who made $1.00 ($.96 after fees).
- dangero 9y agoYou think making a dollar after 200+ hours stroked his ego?
- guytpearson1 9y agoYes, I do think that. It was a promotional piece for his SaaS.
- lefstathiou 9y agoIll take a crack at this though I'm going to paraphrase and ignore thousands of small details but here was my experience: At the time we were making 40k we only had one product. As such, growth could only come from either: a) winning new clients with the service we had as is ("sell what you have to more people") b) adding new functionality we knew our clients would be willing to pay more for ("figure out a way to upsell what you currently have") or C) create a new service altogether that you could cross sell ("find something else to sell them") We did a combination of a and c. Strategy A is clear-cut. If you want to make more money go find more people to buy what you have. Of course, this is easier said than done. Is your solution any good? Is the problem worth solving? Is the lifetime customer value sufficiently higher than your customer acqusition cost? All of these things play a roll here. For us, I think all of the above were true. Our biggest challenge is we sell to enterprise and financial services at that which requires a robust outbound sales process (in other words, no one is going to sign up for our tools because of a twitter post or mention in a news paper). The key takeaway about this is that to grow a SAAS solution, you need to be thinking about how you are going to sell it from day one. Internally we are constantly asking ourselves "how do we merchandise this?" (I realize that is not the best word but it captures a lot of things you need to be thinking about). We don't initiate development of any feature or product without seriously considering and designing a sales strategy around it. Strategy C (cross sell) is worth highlighting here. I believe people mentally don't like paying more for the same service once they have been anchored to a price point regardless of how much value they get from it. As such, I spend a lot of my time pondering services or tools that I can cross sell. People like vendor consolidation and once they know like and trust you it's easy to get them to open up about other solutions. Because they are distinct solutions you can start the pricing discussion from scratch and command higher fees. Another huge benefit is bundling always improves attrition and can become a major barrier to entry to the extent you are in a competitive space. That's not to say B isn't important, we are constantly innovating. I find pricing to be a bit more sticky in the SAAS space so improving a product is more about creating moats, reducing attrition, building brand etc. Not sure this answer will help as there are a lot of "it depends on what you are doing for who imbedded in my answer".
- lefstathiou 9y agoTo share our experience (we sell SAAS in financial services): our first solution took us 6+ months of development (one person) to get our MVP launched and another year to get people to use it actively without active outbound selling (that is to say it was sold but we had to hold your hand the whole way through). Some thoughts: internally we consider the "V" in MVP to encompass not just what is the minimum you need to do to solve a problem but the minimum to solve a problem (worth solving) at a level someone is willing to pay you for the solution. That often is more extensive than a traditional MVP which is why SAAS solutions require so much up front development. Consumers are not fond of subscribing to services and businesses don't like beta products. A couple additional thoughts as we now actively sell 4 SAAS services: - to be successful in SAAS you need to build something people need. They say there are two types of businesses: painkillers and vitamins. If you're a vitamin you are 20x more likely to fail than a pain killer. The value prop is just too hard to communicate and people's attention spans are too limited - the more you understand the user / workflow / domain the better. I realize this may sound obvious but I do my best to pay forward the mentorship I received and I am shocked at how often I come across people trying to solve other people's problems as an outsider. - with the exception of notable billion dollar startups we all love and read about daily, I believe the dream of "build it and they will come (register, put in their credit card and bam you're done) is just that, a dream. Yes organic growth is real but all my buddies who have successful SAAS companies spent a ton of time and effort selling them before that organic growth kicked off. This could be an east coast vs west coast thing as my network is hitting niche workflows but worth sharing regardless.
- blizkreeg 9y agoOn vitamins vs painkillers: conversely, do you think if you are able to build a vitamin product that does make your worklife better/easier, wouldn't it be a harder barrier to entry for newcomers? i.e., greater entrenchment? I'm currently doing customer development on such a product. I've burned my fingers previously building nice-to-have products and don't intend to repeat my mistake. With this one, I'm validating the market before I build anything. There are ways people do this thing (inefficiently and poorly IMO) today. Their business isn't likely to suffer if they don't adopt my product but I'm hoping to prove a factor of efficiency improvement if they adopt it. What would your advice to me be (aside from don't do it)?
- throwaway81122 9y agoMake one dollar a million times and you have a million dollars. It's ok to spend 200 hrs, even 2,000 or 20,000 hrs, and a lot of capital, to learn how to make a single dollar. Just make sure you have the ability to scale it afterwards.
- hoodoof 9y agoIn 1998, before people had much of clue about what represents success and how big things can get given time, I built a software product and posted it to the net. Within a week or so there had been a handful of sales at $100 each. That looked like failure to me at the time - "that's a trickle of money - extrapolating maybe $25,000 per year? Not enough to pay my bills. I need to get a job". Today that sort of start looks like a whopping success. I've been trying to replicate that start ever since. The upside is that I did go and get a job, and through that job met the woman who I had kids with..... if that's that path to getting my fabulous kids then I don't regret it.
- TwelveNights 9y agoThe internet is becoming a bigger and bigger playground. Even getting that first bit of attention is extremely meaningful now. There are so many different services and other attention-suckers out there at this point that everything really does matter. What type of software product did you make back then that warranted $100 sales?
- deleted 9y ago[deleted]
- roel_v 9y agoBack then, every software product cost that much. Well OK maybe I'm exaggerating a bit, but certainly anything that was B2B focused. 'Personal' sales would be $25 for something really simple, $50 for something established that people would use a lot. Car expense tracker for Palm - $19.95. Today if you even want to charge $1.99, you'll be competing with several free (ad-supported) ones.
- lifeisstillgood 9y agoMan that last paragraph is the kind of success to keep in mind. I have loads of regrets on businesses and opportunities missed since 98 as well, but a huge number of them would not have lead to my family today. A more spiritual approach to the decades is how I am hoping to live in the future - that and still plenty of coding.
- nametube 9y agoTook a look at the site https://www.placecard.me/ https://www.placecard.me/ and went through the flow of making a card and couldn't see a single place to pay for the template or order prints. Its possible I hit some kind of A/B test but i think the call to action might be buried too deep in the process.
- czue 9y agoIt should be the case that if you pay for a template you get a preview link where the PDF has a watermark on it, and the only way to remove that watermark is to pay. I agree it's way too many steps and am trying to figure out how to make it easier and more seamless without delivering people something they don't actually want.
- nametube 9y agoMaybe having the cards on the front page might help. You've invested a lot of screen realestate on explaining the product. You could probably make this https://www.placecard.me/try/ https://www.placecard.me/try/ your homepage, have the instruction in the banner and have the product in front of the user right away.
- dereknewsom 9y agoI'll second this. I wasn't exactly sure what you were selling until I got to the "try" page.
- czue 9y agogood thought, will A/B test this soon!
- jkarneges 9y agoSeparate from finding someone who is willing to make a purchase, getting the technical bits in place in order to properly accept a purchase can be challenging, too. It's not just about being able to charge a credit card. In our case we're an infrastructure service that charges customers based on their usage level. This required collecting the right metrics, consolidating them durably, making the metrics visual somewhere so customers understand how they are being charged, implementing notions of billing cycles, syncing with the payment provider (in our case Stripe), UI elements to indicate if the account is paid or not, ability to cancel paid service, etc. All in all it took us a good two months from when we wanted to charge people to when we could actually charge people. Of course every service will have different technical needs. Congrats on the first buck. :)
- chvid 9y agoVery inspiring and well executed; I can certainly learn something from chasing problems that is so small that one can actually implement and promote a well-functioning product within reasonable time.
- johnvonneumann 9y agoAs you get through the article, he mentions https://toggl.com/ https://toggl.com/ as his time tracking tool. I'm not usually a fan of videos, but that intro is awesome.
- tonyedgecombe 9y agoHilarious, especially the board meeting.
- donkeyd 9y agoI feel like not adding affiliate links is a missed opportunity. The guides section would be the perfect place to recommend a paper cutter, envelopes and paper and link to Amazon. The income probably won't be very big, but people who print their own place cards will probably need that stuff anyway, so it might add some revenue. It might have been a conscious not to do it though, which is of course fine. But if it wasn't, I'd look into it.
- mercwear 9y agoYou don't have any hosting costs listed, are you hosting the site for free? If so, where?
- iakh 9y ago"You might be wondering where my server costs are, and I’ll admit that I’m cheating a bit on that one. I host all of my projects on the same server—one that I’ve been paying for for more than five years—so I’m not including that in the budget for this project specifically. In reality I should probably include a portion of those costs here."
- imhoguy 9y agoI like the product. But I wouldn't invest in automation of all the stuff upfront. I would just process the upload/order manualy for a couple of first users just to validate an idea financially. From my experience people fear more of success than failure therefore overdo the product to survive an imagined scale explosion. But there wouldn't be much outrage from users that once flooded you have just raised the prices or temporary suspended the service. I guess queue with bucks in front of the door would boost your motivation to finish up the process implementation in half of the time.