I’m sure you’ve heard of successful SaaS products like Basecamp, Freckle, and Bidsketch. These were the companies that inspired us personally to go down the SaaS route. If they could do it, so could we…right?
I wish it were that simple! Building a bootstrapped SaaS business is really, really, really frickin' hard.
You can have popular blog posts, a huge list of prospects, a successful beta, and even launch into revenue/profit. But without revenue streams besides your SaaS, you will likely fail in the first year.
That’s right, your self-funded venture will fail if you don’t do one of the following:
Most SaaS founders don’t talk about this reality.
But a huge majority of the founders we’ve talked to so far (on the podcast) spend their first few months/years making their money from sources besides their SaaS product. And many of them continue offering high-end services far after their SaaS becomes “successful”.
It’s not fun or sexy to think about these sorts of things when you’d much rather be spending your time working on your baby: that one thing that brings you closer to full freedom than you’ve ever been.
But the sooner you embrace this (we waited way too long), the longer your runway will be and the less stress you’ll inflict on yourself and those around you. So let’s get down to it:
We’ve avoided consulting work like the plague. And it’s been great…it’s allowed us to push our products forward at a great rate. But even at a great rate, SaaS revenue takes a long time to build.
Absolutely turn down long-term contract projects that would distract you or your team. But think twice before rejecting/not pursuing retainer work.
I highly recommend Brennan’s book. It convinced us to charge 5x our normal rate on the only contract we’ve taken since we started. His advice also helped us extend that job into a monthly retainer which is locked in for 12 months now, giving us some level of stability.
Before you start building your product, put up a simple, yet descriptive, page selling the dream (here’s one of ours). Don’t use LaunchRock, and don’t skimp on design. If you’re truly keeping it simple, you should be able to find a great designer on Dribbble that will produce a style guide to keep you on track. I don’t know about you, but when I see a half-assed landing page, I assume the eventual product won’t have any polish/effort invested either.
This page is your calling card. Anyone you interact with on Twitter or in Email will be viewing your product’s page and judging your competency as a maker. All of your future outreach/reputation as an entrepreneur depend on this page.
We’ve been operating for nearly a year, and this is the first time we’ve sat down and thought about what we could send of value to the folks that have signed up for the Small HQ list.
All of our prior focus has been on growing beta lists, and upon realizing how slow SaaS is, we’re now making an attempt to grow the company outside of the SaaS.
What can you do to provide value to your audience on a regular basis, regardless of whether or not it supports your SaaS?
We started promoting our book about 6-9 months ago. Then it sat there, ignored. It wasn’t until Michael Sacca approached us about partnering up on a broader book that we got our asses in gear. Since then, we’ve started publishing our founder interviews, and have many more plans for the Rocketship brand.
Don’t make the same mistake. Sell your knowledge, and give a lot away for free. Let that momentum fuel your product development.
If you do everything right, you should have some side-revenue coming in from 1 or more non-SaaS products. More importantly, you will have built up relationships which can be turned into partnerships on other products/services.
It took us a very long time to realize what works and what doesn’t, and we’ve continued to be fairly non-deliberate in our actions. Moving forward, we’re trying to be more strategic about where we spend our energy. Focusing most on revenue-driving activities, and less on distracting side-projects/our SaaS.
“The end of 2013 marks roughly the three-year mark for my company. As I reflect on where we are today, from initial product, to an advisory round, to seed funding and then to raising our Series A in December 2013, one thing that I’ve always perceived came true: it takes roughly 3 years for you to truly figure out if what you’re working on can be a business.”
– Tawheed Kader, Tout App