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The New American Micro-SaaS Dream
- jeanlucas 4y agoI don't know, it is hard for me to just say "go with it", maybe I'm getting old. Businesses like this are a dream, but it's also a risk. To me seems like the next goldrush, and those mining and rushing to the gold are usually the ones to lose as well. I feel anxious and not sure if I want to support such movement. There's a second thought: I don't think paying 10/15 small SaaS each with their own instability, billing issues, risks. Imagine running just an ecommerce like this [0]. This is not the future I want to see for internet businesses. You shouldn't need a plethora of small suppliers to just run a blog with payments. Or most things. Isn't it fragile to a platform to just take it all? I feel conflicted. [0]: Interesting comment from an e-commerce entrepreneur - https://twitter.com/benedictevans/status/1543740260265361408 https://twitter.com/benedictevans/status/1543740260265361408
- k__ 4y agoTrue. On the other hand, there are small companies that have their niche and nobody bothers to steal them customers.
- jeanlucas 4y agoHope so, I think their biggest risk is just being so niche that won't have enough clients to sustain the founders ambition and they will give up halfway. It's hard to put your faith on a product you don't know will exist in 2 years.
- semireg 4y agoI maintain “mission critical” label printer software that powers thousands of customer businesses. But here’s the catch: it’s self hosted because it’s an electron app running on their desktop computer. If it “goes down” it’s not because of some internet connected component. I’ve been very careful to avoid being “on call” - but this also means I don’t have much to sell on a monthly or yearly basis. I could charge for support, and I do for some customers. I sell one-time licenses at a “fair” price but also sell a monthly expiring license because some users prefer that (even though I wouldn’t as a customer). You can read more at https://label.live/pricing https://label.live/pricing
- kory 4y agoThis is something I'm excited about, as I have the time & interest. One concern I have though, is coming up with an idea I'm passionate about enough to run with. Where are these business ideas found? A Ubiquiti host is great one, for example.
- nine_k 4y agoLook at what non-tech people are struggling with. Think about ways to make their life easier with the tech you know, at a small expense. This takes hanging out with non-tech people, or at least reading what they write, or what others write about them.
- encoderer 4y agoYou don’t always need passion about the subject matter. I was not “passionate” about cron jobs but I needed some tooling, built Cronitor, and now I never have to work for somebody else, which is something I CAN get passionate about.
- kory 4y agoPerhaps I mean more of, “convinced this is an idea that could potentially be a commercial product” rather than “passionate”
- raunometsa 4y agoBut I think you're right in your first comment about being passionate about the idea! The thing is, you don't get a salary from day one or maybe even year one (as compared to, for example, to building a VC-funded startup or working somewhere) and so you need to find the energy and motivation from something else, and "passion" fits very well with this "something else." As I recently wrote in one of the latest newsletters (you'll find it on MicroFounder, called "keep going"): "It can be easy to abandon your project as soon as you launch and don’t see instant results – be it visitors or paying customers – but I’ve been looking closely how microfounders build their startups for the last 3+ years and I’ve almost never seen a real overnight success."
- ezekiel11 4y agolittle do they tell you about the product-market fit lottery and how hard it is to win a bagger. i worked on one saas for years that yielded nothing. i worked on another that took literally a few weeks to make and somehow its gaining traction. i literally did nothing different. sometimes i ponder whether capitalism really is the result of dice rolling and the participant thinks they have greater influence than they really do.
- Icathian 4y agoI think you're probably right, by and large. The trick, then, is to get as many rolls of the dice as is possible, and to recognize as early as possible whether you've won or lost. If you've lost, cut your losses and roll again, if you've won double down and cling on for dear life. While simple, this is not an easy call to make, I imagine.
- ezekiel11 4y agowhich makes me think back to somebody saying how poker tournaments are a mini version of our free market democracy. As you win more chips, you stand to win even more chips because your incremental risk is a lot less expensive than somebody on their last few blinds. Someone with very few chips cannot afford to experiment, has to choose a hand with the highest rate of probability, and even then they can still fail!
- BlargMcLarg 4y agoWorse, since society becomes reliant on big players, their risk is further lowered by the fact they "can't possibly fail or it would be a disaster". At that point it's more like every big player gets an extra card they can choose to use.
- nine_k 4y agoMarkets may stay irrational longer that you can whatever. To me markets look like evolution processes: there's definitely a vector towards better efficiency, better "fitness", but the trajectory is more like a random walk than a targeted shot. With that, markets fail, but all highly-planned regimes have historically failed even worse. What I take from this is that one should not emotionally invest in a business, and not make a serious business out of things that one has emotionally invested in. Be curious, try things and see if they work. Many of the best-looking of them won't; some of the sillies of them will.
- ronyfadel 4y agoThis gold rush started -at least for my generation- with the App Store. The reach of the internet is so great that even simple ideas are still raking in thousands of dollars per month. I remember sitting at a dinner table with new acquaintances, and my -now ex- girlfriend saying it’s baffling how seemingly simple apps [1] even make any money. They were making twice her monthly salary at the time :D [1] https://fadel.io/ https://fadel.io/
- ackbar03 4y agoI don't think apps make anywhere near that much money now unless I'm mistaken
- raunometsa 4y agoPhilip is making $10k+ per month with Session (https://www.stayinsession.com https://www.stayinsession.com) but I see apps very rarely on MicroFounder... mostly SaaS
- pc86 4y agoPersonally when I think of apps I think of one-time purchases. Good on him for finding 2k+ people willing to pay $5/mo for a pomodoro timer but this seems much closer to SaaS than app to me.
- cercatrova 4y agoHence the title, micro-SaaS
- ronyfadel 4y agoYou're mistaken. If you'd like to estimate how much apps are making, check https://app.sensortower.com/ https://app.sensortower.com/ (it's pretty accurate), you're going to be very surprised with the number of apps making > $5k/month.
- ec109685 4y ago
- muhaaa 4y agoI built 7 products until I had a product with product market fit with decent revenue. I could not solve the marketing / ads riddle yet. But I have about 25% revenue growth per month starting from a low level. Now I am making a 8th app. I started while I was working as an employee. Obviously I made more money. now I have way more time and flexibility which is a massive gain of freedom plus any potential revenue growth. Basically I exchanged employment risk with business risk which is fine for me.
- moneywoes 4y agoHow did you find your just buyers? Signed someone looking to do the same
- lloydatkinson 4y agoI’d love to know this too
- jollybean 4y agoI loathe to say this, but it might not be good for the economy because it fails to take into consideration division of labour. A 'niche product' is usually be more economically better provided by a slightly more generic product, or a 'product feature' at by BigCo or SME. Of course there are always going to be 'hyper niches' with very, specific and applied technology, but I don't feel this is the case. I think most of these micro saas just have customers that 'like them' and 'pay a certain amount' 'because' and not really fully taking into consideration the added complexity, cost, overhead, resiliency. In China, they have hugely complex manufacturing supply chains - yes - you need the little 'mom and pop shops' to provide that hyper niche component - but with generic SaaS it's not the case really. All of that said, the theory falters a bit when you have A) Big Corps and SMEs that languish and fail to provide features, or have monopoly pricing power (though the later is not usually the case, usually the price is near $0) and B) Surpluses are not shared aka if we all used BigCo and SME SaaS, they'd 'keep' all the surpluses and so everyone else is resigned to working at Starbucks. The $1M SaaS is basically a way to leverage power extract some surplus at the cost of overall efficiency. Again, legitimately hyper-niche solutions notwithstanding. I don't know what the answer is, but it's worth contemplating what this means structurally. At least it's not completely vapid 'Social Influencing' and scammy value destroying Crypto/NFTs.
- HeyLaughingBoy 4y agoThis is a perfect example of a different sort of analysis paralysis. Forget the economy. If you want to build something, build it. Worry about your impact on the economy when you're worth a few billion $$$. IOW - you'll never have to worry about it.
- moneywoes 4y agoIf I got this right, you’re suggesting that bigger companies can cannibalize all of the sales for smaller cos and there’s no reason for a micro SaaS to exist? If that’s the case what type of company is worth considering for someone like with a poor background like myself to escape the rat race?
- jollybean 4y ago
- aliswe 4y agoI built a CMS in Dot Net core completely built and integrated into entity framework. i was super excited, the UI admin interface mimicked gits workflow, instantly diffing anything you type. supports complex properties, enumerables, nested forms. it was "almost done". but I came to the conclusion and insight that I should be enjoying the journey as much as the end goal, and as such I stopped development. for now.
- pedalpete 4y agoI actually think micro-SaaS is an oasis. There are hundreds of thousands, if not millions of people building small businesses to leverage a tiny opportunity in the market. Build a feature that no major player has captured yet. This is good for the user for a time. But then they end up with a ton of tiny subscriptions, and trying to link them together to make a complete product. All these tiny companies competing for eyeballs, to get the marketing to be recognized on top of the other tiny companies building similar tools. And what's the goal of almost all of these little tools? To make a small difference in the efficiency of somebody running their business. Minor efficiencies, not game changers for the most part. Then one of the big players comes in and adds the feature to their main product. Poof, everything somebody worked long and hard for disappears. Niche to find what you can build that's larger, but I think staying niche as a goal is a challenge.
- samtho 4y agoI don’t think the goal is to be totally sustainable indefinitely, if I ran a micro-SaaS product, I would fully expect a bigger player to add that feature one day. The goal, IMO seems to be to get something working and generating ARR with as little overhead as possible. If you can make $100k/yr with 4 hours per week of work, that’s a huge win even if it doesn’t last forever. You can still work a 9-to-5 and enjoy the benefits those come with as well as having supplemental income. Because you’re still in a career as a employee at this stage, a big player coming to eat your lunch isn’t going to be financial ruin, only a lifestyle change if applicable. The bigger goal (for me at least) is to get enough cash in an index fund where the money you need each month is exceeded by monthly gains of your investment portfolio.
- rmbyrro 4y ago> Then one of the big players comes in and adds the feature to their main product. Poof, everything somebody worked long and hard for disappears. It depends a lot on how you market yourself. Basecamp is a good - admittedly cliche, though - example. Now they have Hey. It's an email client for $100/yr. And they continue to make millions, despite sharing the market with giants. The reason people use their services is not only because of the features. They also build a relationship. One doesn't stay married because there's no other potential partner around with better features. It's because there's a deeper relationship, a bond. Might be stretching now? Perhaps...
- stakkur 4y agoI'm far less interested in 'ARR' or 'MRR' than I am 'how long will this actually sustain?' And for this sort of stuff, the answer is nearly always "several months, or maybe a few years, or until Corporation X spends a month adding it as a feature to their app". It's really just one notch above the drop-shipping 'dream'.
- mattlondon 4y agoYeah I had the same thought. But there is something to be said for making a bunch of money for a short amount of time and have enough to be buying your house outright. That will set you up for an easier life in the future where you do not need to be a "wage slave" just so you can keep up with the monthly rent or mortgage payments. Having a guaranteed roof over your head whatever happens (even if you can only afford candles and basic pasta to eat) frees you up a lot. I guess in America it probably doesn't help much since you might need medical treatment one day so you'll need several hundred thousand dollars in reserve for day to day medical expenses, but anywhere else in the world you could live quite happily on the odd small contracting job here and there if you know you have zero housing costs (or close to zero when considering maintenance and taxes etc)
- Axsuul 4y agoWhy would you need to have several hundred thousand dollars in reserve if you can just get health insurance?
- mattlondon 4y agoAs I understand it, US health insurance often just entirely nopes-out and tries to find any possible excuse not to cover your illness. And even if they do cover you, from what I understand you still need to actually pay some percentage of the hugely inflated costs yourself. I have a cousin in Florida who was charged $700 for some cortisone cream, but "good news" they only had to pay 20% because their insurance covered it! That is still $140 for something that in the UK is approx £2/$3 (three) (e.g. https://www.expresschemist.co.uk/hydrocortisone-cream.html https://www.expresschemist.co.uk/hydrocortisone-cream.html), assuming you need to pay at all (many people get these things entirely free, and if not it will be at some fixed peppercorn price regardless of what the drugs actually are). If basic skin creams are 700 bucks, I can't imagine what actual treatment costs. You'll want to keep a significant buffer of cash in case you are unfortunately sick one day, otherwise if you cannot pay your medical bills then I presume they will declare you bankrupt and force you to sell your house to pay the bills. The last thing you want if you have a heart attack or cancer is that your kids now also don't have a home as well as you not being there to support them etc. To me it feels irresponsible to just trust that insurance will cover you when in reality there is a not insignificant risk that you will not be covered and instead have some huge bill arrive one day that you cannot pay.
- opheliate 4y agoI'm surprised to see this on the front-page. It really doesn't seem to have much substance, just aspiration-porn driving sales of their product. I was hoping to read about how to get started, pitfalls to watch out for, etc.
- tommoor 4y agoAh, well for that you need to buy the book ;)
- 88913527 4y agoThe concept could be quite appealing to people who do a tour around a few tech companies and then are ready to de-accelerate in their career. Maybe they want to coast FIRE but still have income and do something with their time. Previously, these used to be called lifestyle businesses.
- notpachet 4y ago> de-accelerate You can just say "decelerate".
- lolinder 4y agoUnless what they meant is "stop accelerating quite so much" and not "slow down".
- leephillips 4y agoThat’s what I meant.
- HeyLaughingBoy 4y agoBoth are examples of deceleration, but in the latter case, the vector is in a different direction. [edit] Apparently I'm wrong. All the definitions of deceleration I can find are actually negative acceleration.
- oldstrangers 4y agoI'm happy with my $7k MRR. I'm like a micro-micro founder.
- artemonster 4y agoWhat do yo do?
- oldstrangers 4y agoProductized little design and web dev studio https://gloutir.com/ https://gloutir.com/. Work with 4ish clients max at a time. Its really chill.
- davepeck 4y agoI got lucky and built a Micro-SaaS that grew to a healthy ARR. At least, I assume I got lucky. I’ve only done this once. Twice? I have yet to attempt. I remember the early days of painful uncertainty and minuscule MRR before I really understood my market. Could I break through that “fog of startup” a second time? Whether you’re on the venture treadmill or your aspirations are smaller (but every bit as valid, IMHO), building a great business — solving a real and pressing problem, communicating that solution to the right people at the right time, and capturing some of the value created — well, it’s never easy. I appreciate the aspirational tone of the article, but I don’t feel that it captures… any of this? To me, anyway, it feels important to at least acknowledge that much of the work is unglamorous grind whose outcome is always in doubt.
- lumost 4y agoCurious what if any funding models would have helped you achieve this outcome? I suspect although I could be wrong, that a small amount of venture capital prices at a reasonable SMB rate would enable many more successful small SaaS firms. It’s a shame that in software we must always “go big” or go home. Particularly when much of the world runs on broken or nonexistent software.
- lloydatkinson 4y agoWhat did you build?
- siliconc0w 4y agoI tell myself that eventually I'll quit my job and 'micro-found' something simple that generates enough income that, combined with investments, will be sufficient. I've built a fair share of demos for ideas but it's hard to take them to a full product. Very few ideas I have seem good for this model (niche, executable w/ a small team) and the barriers to entry for software businesses have gone up considerably - it's hard to be a 'generalist' since the popular tooling is now built for specialists and the tech has gotten considerably more complicated, mostly due to evolving standards, customer expectations, and security requirements.
- lloydatkinson 4y agoIf you’ve ever looking to pair up with another dev to get something going I’d be interested in helping out! I am in a similar situation but struggling to think of ideas.
- brundolf 4y agoThat's the dream, but I'm always skeptical about how easily it replicates. We see the success stories, but we don't see the thousands of people who tried and failed to get anything to take off at all
- semireg 4y agoThis is a strange amplification, for sure. But so is every other success story. I’ve had two successes that were only tangentially connected. The first was consulting, then building my own app, now I’m entering selling hardware. I went from building industrial BLE sensor apps for $/hr, to selling licenses for a niche electron app (talking to hardware, label printers), and soon I’ll be selling physical hardware (label printers) bundled with my app. Each success let me bootstrap the next. I’m still solo, and plan to grow to 7-figures over the next 18 months. Buckle up! You can read a bit more about the label printing solution I’ve built at https://sourceforge.net/articles/qa-with-label-live-how-we-made-printing-from-excel-spreadsheets-easy-and-fun/ https://sourceforge.net/articles/qa-with-label-live-how-we-m...
- CosmicShadow 4y agoA go-nowhere article with a lofty click-bait title aimed at promoting the site it sits on using survivorship bias examples to prove what he's promoting works. I guess that's one way to grow, but still. It's just called being an entrepreneur and starting a business without getting funding. You get to choose how big or small you want to get it and you realize that you don't have to make it big, you can live a comfortable lifestyle if you want to. The little problems are learning how to entrepreneur successfully, have the money and energy to do so, and getting lucky enough to find the right idea, right market, right timing with the right messaging. It all seems so easy when you see someone making a boring, bland, basic ass tool collecting $1MM ARR, but you can't just easily do the same. It's possible, but good luck. You also learn that you don't have to sell a recurring service or even software at all, you can just sell "stuff" and people will buy it if there is a desire.
- DLA 4y agoI'll take the counterpoint; I loved it. The article was by no means a HOWTO but rather an inspiration to what can be done by solo devs or very small teams without institutional money. There is far worse so-called click bait our there. Re: "survivorship bias" fair point, but all winning businesses and the end state returns of VC funds are all survivorship driven - losing entities drop out of history and fund returns, and in ugly cases the public stock markets too. The twitter feeds of many of the companies listed are very much building in the open and the ones that fail are in that sample set. It was interesting to me the types of businesses that are making money (in this list)--several Twitter audience growth tools, a few tools related to social media content, etc. Very marketing tool heavy list, but a few B2B plays in there too.
- CosmicShadow 4y agoThis article is meant to fool coders into believing they can just start their own mini-company and focus on what they like best, coding, to build recurring services for some imaginary audience they haven't found, vetted or understand yet, and live a dream life. It'll get them excited enough to want to read more on the primary site about how to do it, how to be an indiehacker and "micro-founder", more exotic and exciting words for "entrepreneur" that have less slog associated with them. They'll sign up for the email list and get entered into a drip campaign that'll feed them more fantasy without the slog. After email 5 they'll download a PDF cheatsheet, after email 11 they'll sign up for a time-limited pre-order of the new $129 book on for $39, but only if they sign up now. They'll read the book and then sign up for the exclusive paid forum access. A few months later they'll be signed up for the $1200 video course that is a 1:1.02 rehash of the book they already bought. They'll have started subscribing to all these podcasts and going to all the sites, they'll be excited, they'll get ready to quit their job, but they still won't really know anything about how to vet and build a business, how to deal with everything themselves now that they are self-employed, or how not to spend all of their innovation chips building their new microsaas on the newest, sexiest platform on the top of HN today. After awhile you realize the person running the blog's only success was selling this dream to you and enough others like you that they can now live their dream. It's fine if you want to start your own business and anything is possible, but this article isn't doing anyone any favours, it's just hollow, self-serving temptation pointed at a lucrative audience. If anything, picking generic successes that seem even more easy or understandable makes it worse, because those are the hardest to successfully do. Giving very niche examples would have been more benefit, but those people generally fly under the radar.
- zurtri 4y agoI run a SaaS. The value of the business is not necessarily in the code (any decent coding team could recreate the software bar a bunch of edge cases in a few months), but moreso in the relationships I have in the industry I'm in. These relationships can't be copied or stolen readily. And if someone was out to steal them - I'd see them coming.
- huachimingo 4y agoWhats the answer to services? More services! /s
- Existenceblinks 4y agoMost of these micro-SaaS are in shovels business if this was a new gold rush dream. I've observed this space for years, the only saas that makes money is marketing tools / analytics. It's true that B2B is boring, it does not have many types of app. I don't have number but my perception is that this long tail has a big chuck of shovels business. And I'm very skeptical about "niche" vertical type of app, I think it's tooooo small market share even if you told me that some market is really big that 1% is enough for small fish.
- reillychase 4y agoFor reference my micro-SaaS is $1.7M ARR. B2B. Not marketing tools or analytics related. Large market share % of a tiny market rather than 1% of a large market.