Welcome to my field notes!

Field notes are notes I leave myself as I go through my day to day work. The hope is that other people will also find these notes useful. Note that these notes are unfiltered and unverified.

Indie Hackers

Author

TJ Palanca

Published

July 31, 2022

Building a Micro-Saas Business

What Is Micro-SaaS & Why Should You Read This - Tyler Tringas

  • Practicing and refining a craft is probably a more fulfilling life than climbing abstract career ladders.
  • Biggest change in SaaS is the recurring revenue model.
  • Most powerful lifestyle business model out there right now.
  • Benefits
    • Running a small product yourself affords the opportunity to see the fruits of your labors directly delivered.
    • You can work and live in any country. Writing code for a living.
    • You can really disconnect from work that is different from remote work and running a consulting project.
    • The Magic of Recurring Revenue (Time Leverage) - you can keep spending less and less time while not losing any revenue potential (impossible to be zero).
    • You can work on things that don’t really generate revenue!
  • Building a base of financial security allows you to launch into a risky startup land.

What Makes A Good Micro-SaaS Idea? - Tyler Tringas

  • Trial and error are going to be part of the process
  • Try to find a fast and effective way to reject business ideas.
  • Good business ideas:
    • You need to be 5x better or 5x cheaper or some combination of both for the currently competing products. It needs to be a no-brainer.
    • You would need a large conversion rate (>50%) for conversion from free trial to paying customer.
    • Other players in the field is good, especially if those players are pigeon holed (specific to a solution or technology)
    • You need a very specific defined group of people, not just everybody, like real estate agents, accountants, travel agencies. One particular real example is a perfect window cleaning software. This target market needs to be easy to find.
    • Have at least one channel for the first 25 and 250 customers. You’ll need to find that place where customers congregate.
    • You should have a line of sight to the MVP. It’s only good if you can code it yourself. You need an MVP that actually works, don’t do landing pages or prototypes or video demos until you can get an MVP.

    You have to build in resiliency for the inevitably high likelihood that your idea actually still sucks. Build and launch fast.

    • Do you have founder/product fit? You shouldn’t consider the business idea in a vacuum simply because your motivation for it is gonna be lower.
  • Tactical suggestions:
    • Focus on automation. Initial setup then continuous value provided on an ongoing basis. It shouldn’t need the customer to login everyday to sue it.
    • Sell to growing markets.
    • Small online businesses are the best to sell to because large enterprises are terrible and annoyingly complex.

How to Get Startup Ideas: The Meat Grinder Approach

  • Developing a process to find the right business idea is the wrong approach, instead you should be very good at shooting down the bad ideas.
  • But just know that unless you are currently well-networked in Silicon Valley, the time of getting VC funding for “just and idea” is over.
  • Meat grinder questions
    • Can I make this? Just me.
    • Are people currently spending money on it? If you want people to pay you have to be at minimum 10x better to start spending money on a totally new thing.
    • How will I get to the first 25 customers? Then the next 250?
    • If it works, will it be sustainable? Make sure you won’t just be doing some other company’s R&D work for them.
    • Am I the person to build this business?

Finding Micro-SaaS Business Ideas - Tyler Tringas

  • Scratch your own itch. This is an ok strategy at the start (Basecamp and Baremetrics), but now that the idea is around there are tons of very similar software people. Most software entrepreneurs itches have already been scratched. You can only do this if you are truly living an interesting life.
  • Niche versions of existing SaaS. Custom software for Yoga Studios (MindBody). You can technically execute this by customizing existing SaaS but when there is a single product then it is easy to meet the 5x hurdle.
  • Repeatable freelance and consulting work. If there is a very repeatable contract work then there is opportunity to build a SaaS solution there. Be a consultant in this space and learn what customers really need.
  • Automate manual tasks. One micro-saas focuses on following up with customers that have an expired credit card on file.
  • Build upon growing platforms. Baremetrics and Stunning on Stripe

Micro-SaaS Ebook: from Idea to Shipping a Minimum Viable Product

  • Pre-launching vs building an MVP
    • Just build a working MVP, don’t give yourself unlimited time to launch a product because you will likely not finish it.
    • I think that products that are pre-launched are more likely to succeed, BUT I believe that pre-launching is not the right strategy for most people.
    • You want to get to paying customers as fast as possible. Plus pre-launching requires that you are launching something for a boring use case that you can’t really blog about.
  • What is an MVP
    • an MVP should actually do the job it purports to do.
    • Author is not in favor of the landing page idea because it takes more time and commitment to do
    • There should be ways to change the admin from the backned
    • You should have an admin login to the user account or a way to simulate an admin login
    • You need to code
  • What not to do when building an MVP
    • Build things only current customers would need after months ofusing the product, like change billing method, subscription level, invoices, cancel account, etc. Just do this manually via the support channel.
    • Don’t invest too much in branding.
    • Don’t do some common features like different plans, a free tier (not worth the expense), and multiple payment options, multiple users per account.
    • Don’t build stuff in code that you can just do manually especially those that are just done infrequently. Always fallback to a spport email.
    • Don’t do faux professionalism. Be honest that you’re an indie hacker. No need for a help desk.
    • Don’t put your phone number on the website that’s a nightmare
  • What to do with building an MVP
    • Use and pay for existing services. Time is the most limited resource. Use services that are fastest time to ship.
    • Separate your app and landing page.
    • Ask for credit cards upfront!
    • Use a single price point.

Chapter 5: Getting Your First Customers - Tyler Tringas

  • You should ideally already know how to find your first 25 customers
  • Consulting for e-commerce businesses are useful because you then get to really understand their pain points
  • They will congregate online somehow, try to find them where they are.
  • Try message forums and really try to be helpful, build a relationship, and then pitch your solution if and only if it is really that useful.
  • You can add it to your signature on the forums to get some good content.
  • Don’ts
    • Paid acquisition
    • Compete with startups
    • Heavy time investment
    • Messing up the funnel with irrelevant signups
    • Adwords, Facebook Ads, etc
    • SEO tricks - if you don’t have a working knowledge of it then it’s best to just avoid trying to do this.
    • Affiliate deals and partnerships.

Chapter 6: Thriving in the Long, Slow, SaaS Grind - Tyler Tringas

  • If you ramp up too fast in SaaS you’re going to run into cash flow issues.
  • Storemapper growth
    • Year 1: $150/month to $2,180/month, so from beer money to rent money.
      • Don’t allocate too much time!
  • Tips
    • Don’t compare the hourly rate to consulting, it won’t make sense at all because you are building a long-term recurring revenue.
    • Become stoic, make sure that you can walk away unscathed even if it all blows up.
    • Don’t spend a dime on marketing.
    • Don’t build features until there is a revolt. It’s harder to remove a feature than never to have it.
    • Don’t pre-build for scale. It won’t break the internet. Be transparent with your customers instead when you are encountering scaling issues.
  • Pitfalls
    • Accounting Bookkeeping and Legal
      • Once you reach rent money stage get a basic checking account and bookkeeping started.
      • Separate the revenues and expenses from personal exepenses.
    • Partnerships
      • These are a giant waste of time because they are messy.
    • Acquisition Offers
      • There are many people in the business of buying websites and flipping them for a profit. Mention your target multiple asap in order to prevent any mispricing issues down the line.
      • Only two deals make sense: (a) you don’t have time and can a discount, or (b) it’s a strategic acquisition that complements the product of the acquirer and therefore pricing is much more favorable.

Micro-SaaS Ebook: Retention & Support

  • Churn is a bigger threat to new Micro-SaaS, because the lack of it makes everything else easier. Churn rate should be less than 5-8%.
  • The goal is to automate empathy, for effective, automated, and proactive support.
    • Conversion from free trial to paid users = big reason to sign up and start paying money.
    • Churn = repeatedly frustrating support interactions will cause cancellations.
    • Expansion Revenue = provide a customer support solution while also upselling the customer.
  • Every support ticket is an opportunity
    • Your worst customer is not the one sending you a support email every day for two weeks, your worst customer is the one who signs up for your app, then cancels without ever giving you a word of feedback.
    • Customers become more loyal after a good support experience.
  • Attitude Hacks
    • Don’t use the royal we, don’t give the impression that you are a big company with a massive support team.
    • In fact showing that you are an independent entrepreneur may be a good selling point.
    • Say sorry a lot.
    • Use the backend admin panel, login as the user, and provide a video that is custom with the users’ data.
    • When you have a bug, give constant updates not just when there is a fix deployed.
    • If you don’t charge that much then it will be more forgiving.
  • Just use a simple email and a way to set standard replies.
  • Automating empathy
    • Each support ticket is an opportunity to make a small tweak to the product to improve the experience
    • In-app screencasts for complex pages.
    • Helpful UI empty states, use this to show how to fill it up with data.
    • Custom Onboarding Flow. Take the user through a series of squeeze pages (single purpose pages without navigation menus) that walk the users through the primary onboarding steps one by one) so that they skip the empty states altogether.
    • BCC support on critical error emails
    • Better Error Messages, give them some self help or helpful tips rather than just show them the error, or add a link to the support email.
    • If some error happens more than 5 times then send it over to support so that you can provide assistance
  • Last In Last Answered. This is because older support tickets are more likely to have already been solved by the customer already.
  • Remember you can only do you best.
  • Set a time cap then get back to work.