How to Start, Run, and Sell a Bootstrapped SaaS
The story of growing FeedbackPanda to $55K monthly revenue and selling it in just 2 years!
90% of software engineers dream about having enough money to never work again. Some dream about founding a startup, and some about creating a small and profitable SaaS.
Only 1 in 1000 act on that dream and become indie hackers/founders. ~5% of them actually succeed. This makes Zero to Sold by Arvid Kahl a very rare and enjoyable success story! In 2017 together with his partner they created a simple SaaS for online English teachers, grew it to $55K monthly revenue, and sold it in 2019 for an undisclosed ‘life-changing sum’.
I’m among the 999 of us who stay in the dreaming phase and safe full-time employment, but I still really enjoy reading books about that topic! I feel there is a lot we can learn about the process and apply it in our day-to-day jobs.
The book is divided into 4 stages: preparation, survival, stability, and growth. As 90% of projects fail before even getting a single $ of revenue, today I decided to focus on 5 practical takeaways from the preparation stage:
Your MVP is like a tiny spoon for a bowl of soup (that’ll make sense in a second)
How client-side monitoring can create magical moments
Starting with the niche, not the product.
Don’t focus on painful. Focus on the MOST painful.
A solution is NOT a product! This a classic mistake of many companies.
The tiny spoon MVP
It's very very hard to time when your MVP is done. You are just too invested. You have that grand vision of what the product should be, and here you are, looking at a poor version that is so thin that your vision is barely unrecognizable.
Here is Kahl's method for helping you get over it:
Imagine your customers are sitting in front of a bowl of soup with a fork. You have a tiny spoon to offer, but you think you could make a much larger spoon. Your customers will be perfectly happy with the small spoon, because no matter what it can do for them in the future, it will already help to eat their bowl of soup, right here and now.
All our customers want is to have one less problem in their lives.
This is a great metaphor that I plan to use to convince PMs to release thinner features 😅
Client-side monitoring can create magical moments
Here’s a terrific tip from Kahl: set up great client-side monitoring as soon as you have your first customers.
When you get notifications for errors immediately after they happen in the browsers or app, you can see the stack trace and additional information even before the customers notice anything is wrong.
On quite a few occasions, I had already composed a customer service response while the affected customer was still typing their initial message. Reaching out to a customer before they have even thought about talking to customer service is one of the most effective ways of delighting a customer in a situation that is typically negative.
This is a huge advantage of being solo - for most companies, it’s a far dream, as you have layers of people between the customers and engineers. We can still try though :)
Start with the niche, not the product
Ok, back to the basics. Before we even have an MVP, we need to decide on an idea. The classic advice is to “find a problem you have yourself and solve it”.
Kahl suggests a different approach: first find your niche. Having a group of people who ALL need your product will save you many heartaches further down the road:
A place where you can get feedback
People who’ll support and root for you
A distribution channel
Ideally, a niche you can be part of. In Kahl’s case, his partner was a remote English teacher. The app solved her own problems, but she was also very active in online English-teaching communities, had credibility, and easy access to potential customers.
The key point is to find a niche you are excited to help!
Focus on the MOST painful
Once you find a niche you like, try to find their single most critical problem. You are looking for painful problems, and you want to solve the most painful of them all.
The most critical problem a customer faces is on their minds most often. It’s the most
Kahl suggests 6 questions that can help you zoom in on a critical problem:
A Critical Problem Is Painful - Find the critical problem where ignoring something causes a lower quality of life.
A Critical Problem Wastes Time or Money - Find the critical problem at the intersection of something mandatory and something wasteful.
A Critical Problem Is Not Optional - Find the critical problem where people would love to opt out, but can’t.
A Critical Problem Occurs Frequently and Repeatedly - Find the critical problem where people need to do the same thing over and over again.
A Critical Problem Takes Up Too Much Time - Find the critical problem where solving a problem takes a long time every time the problem occurs.
A Critical Problem Forces People to Solve It Using Their Own System - Find the critical problem where people are solution-aware and have already created their own simple systems to solve the problem.
Don’t confuse a solution with a product
So you found a niche, you found its most critical problem. Your mind will automatically jump to solutions. Here’s a great example from the book:
Let’s say you have chosen rural hairdressers as your niche audience and have validated that their critical problem is dealing with winter cancellations because their customers get stuck on snowy roads.
Something will come to your mind as a great solution:
You may think of helping them manage their booking, so it takes into account local weather data and routing information.
You may think of letting the customer quickly inform the hairdresser when this happens so they can reschedule.
You may think of automatically rescheduling appointments when snowy days are expected.
All of these solutions could probably make a meaningful impact on the lives of your customers. None of these solutions are products yet!
Those solutions could become apps, services, processes, web applications, or just new ways to operate a business.
The instinct of a developer is to always solve things with code. Rein yourself, first see if that solution actually makes sense to your customers. In this stage, it doesn’t really matter how it will be done later on.
When you talk about your solution, you might hear things you didn’t expect, such as: “Oh we have already tried this one, it didn’t work because…”, or “No no no I can’t count on my customers to update me, they are 80+-year-olds”.
For a great read about talking with potential customers, check out our article on “The Mom Test”.
Once you validate your solution, you can follow the last 2 steps:
Build a product to implement that solution
Build a business that can repeatedly sell that product to your audience
What we enjoyed reading this week
Nailing the basics: How to deliver high-quality work products by
How to do sales with no experience by
From selling access to selling work by
. About the change the AI-SaaS products brought to monetization models.
Loved the writeup!