4 ms·
Solo founder here. For my SaaS, I keep considering a low-cost hobbyist tier at $60/year and I keep rejecting it every time. It just doesn't make sense unless yo
by jwr 7y ago
Solo founder here. For my SaaS, I keep considering a low-cost hobbyist tier at $60/year and I keep rejecting it every time. It just doesn't make sense unless you have huge economies of scale. Dropbox might be able to pull it off, a niche SaaS can't.
Selling to individuals is expensive, not just because of credit card fees, but also because of accounting costs, VAT MOSS in Europe, and support. In my case, a single support inquiry from a customer could negate income from that customer for an entire year.
At the same time, you can sell to companies, which pay 8-48x more, and will bother you with fewer support requests because they have things to do.
I think pulling of a consumer SaaS is extremely difficult in general.
- speedplane 7y ago> Selling to individuals is expensive, not just because of credit card fees, but also because of accounting costs, VAT MOSS in Europe, and support. In my case, a single support inquiry from a customer could negate income from that customer for an entire year. As a very rough comparison for SaaS companies, sales and marketing can consume a solid 50% of your revenue, overhead like accounting, insurance, support, and office space should be 20%, and actual product development is just 30%. This obviously varies greatly by industry and product, but if you're solely thinking about the final product and not how you get it to your customer, you're not thinking broadly enough.
- criddell 7y agoDropbox has a free tier so it doesn't seem like it would be a big deal to have something between that and their first paid level. If support costs are the big factor, then don't offer support at the lowest levels. Do you have a free tier?