5 ms·

I can see a number of data points in the comments, let me add another one. I started a self-funded SaaS business fairly late (in my 40s). I was tired of being

by jwr 4y ago

I can see a number of data points in the comments, let me add another one. I started a self-funded SaaS business fairly late (in my 40s). I was tired of being dependent on others, especially as others mostly failed me in the past. I wanted to be independent: no investors, no bosses, no employees. Just me. It took five years of slow growth to get to a stage where I didn't have to worry about revenue. Do I regret it? Hell no! It's the best decision I've ever taken in my life. I am now very happy with where I am: I have a business that depends on very few external factors and runs well. I don't have to worry about investors doing crazy investory things. I don't have to worry about employees pulling crazy employee stunts (believe me, I've seen a good number of those in the past, and the entitlement of many employees is absolutely crazy). I don't have to worry about user numbers, only about paid subscribers and maintaining slow revenue growth. Nobody pushes me for crazy growth. Most importantly, the business model is simple: my customers pay me because my software improves their workflows. That's it. There is no "monetization", no shove-it-down-your-throat marketing, no tracking, none of that unpleasantness that seems to be dominating today's world. If they like the software, they pay a subscription fee, if they don't, well, they don't, and I have a problem. But so far it seems they do :-) The only thing I had to carefully manage was my engagement: it's easy to get pulled in and work crazy hours, because in a single-person business there is always much more to do than you can possibly ever do. You have to become good at prioritizing, which means identifying the single (ONE!) most important thing at this moment and focusing on that. But you also have to accept that most things will not get done and be OK with it. That was hard for me, but I learned, and I keep sane hours and a good work-life balance. I'm posting this just to provide a counterpoint to many negative comments. PS: if I were to provide one bit of advice to aspiring entrepreneurs, it would be: look for a business that delivers high value to customers with money. So don't start a B2C business that does something easily replicable with a low value. B2B is where it's at.

randlet 4y ago
How do you deal with the bus factor as a B2B? I lost a few larger contracts because customers would not risk making a one person business a core part of their workflow.
- Axsuul 4y ago
  I’m in a similar situation and this has not been an issue, at all.
  - Frondo 4y ago
    Also in a similar situation now (well, in the B2B space, with ~20 corporate customers around the country) and the times it's come up, people have been more concerned to see a business continuity plan than a big office full of people who can take over. You can find lots of examples for a BCP on any search engine, and in my experience so far it's more important to show that you've thought about it and at least have a plan in place to take care of business continuity, should something happen to you, in the future. Another thing to keep in mind is, even if you had staff who could keep a platform going, until you're running quite a large operation, even finding someone who'd want to take over should something happen to you is going to be difficult. I'm eyeing a buyout by a large competitor in the distant future for that, because this is a really niche space and requires a lot of technical knowledge and people skills.
- jwr 4y ago
  I don't. I don't hide the fact that this is a single founder business. If a customer isn't comfortable with that, then they look elsewhere. I sometimes explain that I've been doing this for eight years now and this is my life's work, which is a much better guarantee of stability than a VC-funded hotco startup, where winds can change any day. I also sometimes explain that if you are the customer of a VC-funded startup, something is certain to happen in a couple of years, and there is no outcome that is good for you, the customer. The startup could be sold to a bigco (bad, they will ruin the service or shut it down outright), go for an IPO (bad, huge pressure on user base growth at the expense of maintaining existing features), have another investment round (bad, increasing pressure on user base growth), or simply get shut down. But these kinds of discussions are very rare, in general I haven't found this to be a problem. Or, in other words, I have enough paying customers for this not to be a problem :-)
hu3 4y ago
Thank you for sharing your experience. It's the style of life I want to pursue. I'm starting a B2B SAAS business (the dream) on the side where I also plan to work on my own (no investors, no employees) and maybe be helped by my wife. My question to you is: Do you have experience with free tiers? I'm thinking about having a free tier to lure in customers and allow them to play around with the app without having to commit their credit-card right away.
- Axsuul 4y ago
  I wouldn’t recommend it early stage since it can be a distraction and use up lots of support bandwidth. And you should be focusing on paid customers and the features that will bring value instead. But like everything in business, it depends (on the idea, vitality nature of it, etc)
- rudasn 4y ago
  B2B cofounder here. It may be more helpful to you if you frame your question as "what can I build that would make them want to commit their credit card right away". Focus on what exactly your customer would be paying for, and build that, as opposed to what may look interesting to some random visitor to your site.
- jwr 4y ago
  I do have a free tier, but it is for a different segment (hobbyists), and no "conversions" from free to paid are expected. In a way, I maintain it as a hobby and a service to the community, also hoping for some PR and visibility. In general, I would strongly discourage a free tier in B2B SaaS. Nothing that has value is free. If you need to offer something for free to "lure in" customers, then I'd say your main offering does not provide enough value. Also, you will be "luring in" customers who expect and want free stuff, this is not the kind of customer you want. Do not get caught in the race to the bottom with your pricing. Do not listen to pricing advice on HN: people here are not your customers. Many expect B2B SaaS to offer $19/month plans, which is impossible. In my opinion, any B2B SaaS with an ARPU lower than $50/month is doomed to fail. If you find a counter-example, it will be a company burning through VC money to get "user growth", or a loss leader from a big corporation. Think about it this way: at $19/month you are looking at $228/year revenue from a customer. Ignoring all other costs, if you spend ONE HOUR PER YEAR supporting that customer, you are already losing money. Build something that provides real value to businesses, price your service fairly, err on the high side, and see what happens. Trying without having to commit is important, but that's what free trials are for. I had free trials with a credit card required for the first few years, because I was afraid of the support load. Then I switched to free trials with no credit card required and in retrospect I should have gone with that from the beginning, since the niche I'm operating in is fairly small and most of my customers are smart engineers, so support load wasn't an issue.

by jwr 4y ago

randlet 4y ago

How do you deal with the bus factor as a B2B? I lost a few larger contracts because customers would not risk making a one person business a core part of their workflow.

Axsuul 4y ago
I’m in a similar situation and this has not been an issue, at all.
- Frondo 4y ago
  Also in a similar situation now (well, in the B2B space, with ~20 corporate customers around the country) and the times it's come up, people have been more concerned to see a business continuity plan than a big office full of people who can take over. You can find lots of examples for a BCP on any search engine, and in my experience so far it's more important to show that you've thought about it and at least have a plan in place to take care of business continuity, should something happen to you, in the future. Another thing to keep in mind is, even if you had staff who could keep a platform going, until you're running quite a large operation, even finding someone who'd want to take over should something happen to you is going to be difficult. I'm eyeing a buyout by a large competitor in the distant future for that, because this is a really niche space and requires a lot of technical knowledge and people skills.
jwr 4y ago
I don't. I don't hide the fact that this is a single founder business. If a customer isn't comfortable with that, then they look elsewhere. I sometimes explain that I've been doing this for eight years now and this is my life's work, which is a much better guarantee of stability than a VC-funded hotco startup, where winds can change any day. I also sometimes explain that if you are the customer of a VC-funded startup, something is certain to happen in a couple of years, and there is no outcome that is good for you, the customer. The startup could be sold to a bigco (bad, they will ruin the service or shut it down outright), go for an IPO (bad, huge pressure on user base growth at the expense of maintaining existing features), have another investment round (bad, increasing pressure on user base growth), or simply get shut down. But these kinds of discussions are very rare, in general I haven't found this to be a problem. Or, in other words, I have enough paying customers for this not to be a problem :-)

hu3 4y ago

Thank you for sharing your experience. It's the style of life I want to pursue. I'm starting a B2B SAAS business (the dream) on the side where I also plan to work on my own (no investors, no employees) and maybe be helped by my wife. My question to you is: Do you have experience with free tiers? I'm thinking about having a free tier to lure in customers and allow them to play around with the app without having to commit their credit-card right away.

Axsuul 4y ago
I wouldn’t recommend it early stage since it can be a distraction and use up lots of support bandwidth. And you should be focusing on paid customers and the features that will bring value instead. But like everything in business, it depends (on the idea, vitality nature of it, etc)
rudasn 4y ago
B2B cofounder here. It may be more helpful to you if you frame your question as "what can I build that would make them want to commit their credit card right away". Focus on what exactly your customer would be paying for, and build that, as opposed to what may look interesting to some random visitor to your site.
jwr 4y ago
I do have a free tier, but it is for a different segment (hobbyists), and no "conversions" from free to paid are expected. In a way, I maintain it as a hobby and a service to the community, also hoping for some PR and visibility. In general, I would strongly discourage a free tier in B2B SaaS. Nothing that has value is free. If you need to offer something for free to "lure in" customers, then I'd say your main offering does not provide enough value. Also, you will be "luring in" customers who expect and want free stuff, this is not the kind of customer you want. Do not get caught in the race to the bottom with your pricing. Do not listen to pricing advice on HN: people here are not your customers. Many expect B2B SaaS to offer $19/month plans, which is impossible. In my opinion, any B2B SaaS with an ARPU lower than $50/month is doomed to fail. If you find a counter-example, it will be a company burning through VC money to get "user growth", or a loss leader from a big corporation. Think about it this way: at $19/month you are looking at $228/year revenue from a customer. Ignoring all other costs, if you spend ONE HOUR PER YEAR supporting that customer, you are already losing money. Build something that provides real value to businesses, price your service fairly, err on the high side, and see what happens. Trying without having to commit is important, but that's what free trials are for. I had free trials with a credit card required for the first few years, because I was afraid of the support load. Then I switched to free trials with no credit card required and in retrospect I should have gone with that from the beginning, since the niche I'm operating in is fairly small and most of my customers are smart engineers, so support load wasn't an issue.