Ask HN: I have a SaaS product with $300 MRR. How do I build a company around it?
12 comments
Bad news first: $300MRR means you have validated a niche. Now you need to know if it scales at least 10x-20x to make a living of it.
Good new: At this point you can afford to know your users.
Send them an email.
Meet them in person if possible.
I made my first sale ever just because I met an existing gutomer just to say "Hello, I am your new sales rep. How I can help?".
Make them see you as a person rather than SaaS.
Don't ask customer for new features.
Get interested in customer ecosystem: - what works for them? - which software do they use? - figure out when does projects/money arrive.
Sometimes just making two pieces of software to cooperate it worth a subscription/license or might open a path in a bigger market.
Also, don't build something specific for a customer. If it is usefull for all of them, build it. If not, scrap it.
Monitor churn rate like crazy.
Rise your prices, and granfather your current customers service plan. Be careful not to make it sound like you're trying to charge them much more.
Good new: At this point you can afford to know your users.
Send them an email.
Meet them in person if possible.
I made my first sale ever just because I met an existing gutomer just to say "Hello, I am your new sales rep. How I can help?".
Make them see you as a person rather than SaaS.
Don't ask customer for new features.
Get interested in customer ecosystem: - what works for them? - which software do they use? - figure out when does projects/money arrive.
Sometimes just making two pieces of software to cooperate it worth a subscription/license or might open a path in a bigger market.
Also, don't build something specific for a customer. If it is usefull for all of them, build it. If not, scrap it.
Monitor churn rate like crazy.
Rise your prices, and granfather your current customers service plan. Be careful not to make it sound like you're trying to charge them much more.
I can immediately use your advice. Great stuff...thank you!
I think this greatly depends on whether you currently have 3 customers paying $100/mo, or 300 customers paying $1/mo.
If it's the former, then getting to $10k/mo seems possible. You have 3 people paying $100/mo, so there's a decent chance another 97 people are out there looking for your service, and you just need to focus on finding them. It also means you have a much higher budget for customer acquisition. You can burn $100 in ad spend to find a customer and quickly scale up.
Now, if you have 300 people paying $1, it's a more difficult problem. You need to find another 9,700 customers. Trying to acquire a customer for a few dollars is a far more difficult task, and likely not possible. You're also going to have a lot more support issues as you scale with such a large number of paying users.
I imagine you're somewhere in the middle. I'd start by finding my customer acquisition cost, and trying to bring that number down as low as possible. Then, I'd make sure the lifetime value of my customers is greater than the acquisition cost (potentially by increasing monthly rates). Then, I'd start dumping money into advertising and marketing and try to scale up. If these numbers don't work, then the business might not be sustainable.
If it's the former, then getting to $10k/mo seems possible. You have 3 people paying $100/mo, so there's a decent chance another 97 people are out there looking for your service, and you just need to focus on finding them. It also means you have a much higher budget for customer acquisition. You can burn $100 in ad spend to find a customer and quickly scale up.
Now, if you have 300 people paying $1, it's a more difficult problem. You need to find another 9,700 customers. Trying to acquire a customer for a few dollars is a far more difficult task, and likely not possible. You're also going to have a lot more support issues as you scale with such a large number of paying users.
I imagine you're somewhere in the middle. I'd start by finding my customer acquisition cost, and trying to bring that number down as low as possible. Then, I'd make sure the lifetime value of my customers is greater than the acquisition cost (potentially by increasing monthly rates). Then, I'd start dumping money into advertising and marketing and try to scale up. If these numbers don't work, then the business might not be sustainable.
I would first of all think about getting it up to $3000 MRR or so.
Thank you. That's what I am thinking too, work on revenue first rather than on fundraising, accelerators, etc.
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They should also be available on YouTube
They should also be available on YouTube
I will! Thanks for the tip.
What is your website?
Thanks for asking. I'm not sharing it on HN yet as it's still small. I want to grow the business some more before sharing it.
I am interested in learning more, as well.
Concentrate on customer value and stickiness first. This is not the same as "more features"! Rather, what are the key things that customers love about your service which will cause them to stick around? How can you improve those specific things?
Right now you have freedom of motion. You can make experiments and you are mostly insulated from negative effects due to the small customer base. It's harder to make changes later.
Any investments in customer acquisition are likely to be a waste. If you churn customers every 6 months, any new cohort is a time-limited boost to revenue which will quickly disappear. If you improve retention to 12-24+ months, now you have better revenue over time AND you're able to capitalize on marketing. Same thing with increasing spend per customer: find out how to hold onto them first.
Right now you have freedom of motion. You can make experiments and you are mostly insulated from negative effects due to the small customer base. It's harder to make changes later.
Any investments in customer acquisition are likely to be a waste. If you churn customers every 6 months, any new cohort is a time-limited boost to revenue which will quickly disappear. If you improve retention to 12-24+ months, now you have better revenue over time AND you're able to capitalize on marketing. Same thing with increasing spend per customer: find out how to hold onto them first.
Just what I needed to hear. Thank you for the insight.
1. What are the top 3 things to focus on at the moment to drive up revenue -- product improvements, customer connection, marketing, etc.? 2. Is applying to YC recommended? 3. Is TinySeed helpful at this stage?