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State of Independent SaaS [pdf]

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Re: State of Independent SaaS [pdf]

#31

Post by beardedman »

> Diversity continues to be an issue in SaaS. Only 11% of founding teams include a non-male and 21% include a non-white founder

I find this line absolutely infuriating. And I'm disappointed it's right at the start. Must there always be an issue when the data doesn't suit a worldview? Why compromise a survey 's integrity with your own bias?

It costs virtually $0 these days to start a SaaS company, regardless of gender, ethnicity or religious creed. Look at the emerging African & Indian markets to see absolutely remarkable people hustling & making things happen with having very very little.

Re: State of Independent SaaS [pdf]

#32

Post by barry-cotter »

notlukesky wrote: post #27

The ultimate issue with all these studies is the sample bias. How did they source the independent SaaS companies (there are over 40 thousand plus, follow power laws and most are economically duds). All samples are biased but there are methods of “correcting” the bias. Historical errors are legion: https://www.math.upenn.edu/~deturck/m170/wk4/lecture/case2.h... By the way the key takeaway from this post is that you ca…

> Levi’s was the main beneficiary of the gold rush.

For all practical purposes San Francisco didn’t exist before the Gold Rush and it was one of the biggest cities in the US after. That’s quite a bit bigger than Levi’s. If you’re going to try and make a point by referencing history learn the history or leave it out.

Re: State of Independent SaaS [pdf]

#33

Post by notlukesky »

balfirevic wrote: post #30
notlukesky wrote: post #27

The ultimate issue with all these studies is the sample bias. How did they source the independent SaaS companies (there are over 40 thousand plus, follow power laws and most are economically duds). All samples are biased but there are methods of “correcting” the bias. Historical errors are legion: https://www.math.upenn.edu/~deturck/m170/wk4/lecture/case2.h... By the way the key takeaway from this post is that you ca…

I hope I'm reading the report right: median peak monthly revenue seems to be larger than $10000. Almost 35% of surveyed business don't have any employees. The only way for this not to sound pretty promising (without getting into sample bias) is if you live in Bay Area.

It would be great to see a breakdown of the range of earnings and not just revenue per employee. Some SaaS companies only end up working for the ad companies Google, Linkedin and Facebook. In those SaaS businesses the House always wins. This is maybe asking for too much, but I have come across too many SaaS founders who would have made more money opening a taco stand.

Maybe the best approach to start it as a side hustle and then quit your job once you have enough traction.

Re: State of Independent SaaS [pdf]

#34

Post by kareemm »

inapis wrote: post #4

Some surprises for me - 1. Why is VC funding so down the rank compared to self funding, friends and family, angels and even debt? Is it probably because VC funding expects a >100x exit and most SaaS probably can't deliver that? Or are SaaS founders turning away from VC for ideological reasons (like want to enjoy the process instead of rushing to justify a valuation?) 2. 50%+ people pursued ideas which were not their…

> 6. Most founders don't know their website visitor to trial conversion rates

This is surprisingly difficult to solve in 2020. The biggest issue is (in Google Analytics) how to separate traffic that could potentially sign up for a trial vs. traffic from people who’ve already signed up.

Here’s one way to do it:

1. When someone logs in set a cookie

2. If they visit your homepage later check for cookie

3. If cookie exists put them in a segment called eg “existing users”

4. Create visit to trial report in GA for traffic where users aren’t in “existing users” segment

But it seems like this should be simpler.

If there are other approaches that work I’d love to hear them!

Re: State of Independent SaaS [pdf]

#35

Post by kareemm »

zabana wrote: post #5
inapis wrote: post #4

Some surprises for me - 1. Why is VC funding so down the rank compared to self funding, friends and family, angels and even debt? Is it probably because VC funding expects a >100x exit and most SaaS probably can't deliver that? Or are SaaS founders turning away from VC for ideological reasons (like want to enjoy the process instead of rushing to justify a valuation?) 2. 50%+ people pursued ideas which were not their…

how would you go about validating an idea if you don't have at least a prototype to show potential customers ? This has been suggested to me on many occasions but I fail to understand how it works in practice. I'm not being sarcastic I'm genuinely interested because if this is possible it would save me a whole lot of time and headaches.

I wrote an article about how we did this at my second company. It worked shockingly well:

https://www.reemer.com/articles/why-only-fools-write-code-fi...

Re: State of Independent SaaS [pdf]

#36

Post by tarsinge »

beardedman wrote: post #31

> Diversity continues to be an issue in SaaS. Only 11% of founding teams include a non-male and 21% include a non-white founder I find this line absolutely infuriating. And I'm disappointed it's right at the start. Must there always be an issue when the data doesn't suit a worldview? Why compromise a survey 's integrity with your own bias? It costs virtually $0 these days to start a SaaS company, regardless of gender…

Racial statistics also only make sense in the US where skin color is associated with usually only one culture/origin, and while it's understandable in this specific context be aware than in other countries this is plain racism (and also illegal in some like France) because of the complexity and multi culturally and background that exist between a similar skin color.

Now sure there are socio-economics realities correlated but in that case instead of using skin color as a proxy (which again only works in the US) the correct thing to do is to use directly the variables of that socio-economics background, like education, income level, parent's wealth, ...

Re: State of Independent SaaS [pdf]

#37

Post by cambalache »

tarsinge wrote: post #36
beardedman wrote: post #31

> Diversity continues to be an issue in SaaS. Only 11% of founding teams include a non-male and 21% include a non-white founder I find this line absolutely infuriating. And I'm disappointed it's right at the start. Must there always be an issue when the data doesn't suit a worldview? Why compromise a survey 's integrity with your own bias? It costs virtually $0 these days to start a SaaS company, regardless of gender…

Racial statistics also only make sense in the US where skin color is associated with usually only one culture/origin, and while it's understandable in this specific context be aware than in other countries this is plain racism (and also illegal in some like France) because of the complexity and multi culturally and background that exist between a similar skin color. Now sure there are socio-economics realities correl…

Why are you downvoted? Americans are right when they say people from outside do not understand certain things about Americans (like the second amendment or why car culture is so prevalent) but many don't apply that standard to themselves. In many countries race is not a big deal.

Re: State of Independent SaaS [pdf]

#38

Post by sethev »

sudhirj wrote: post #24
Ace__ wrote: post #21

Some context would help in framing this report. MicroConf: "MicroConf is a collection of two-day events laser-focused on self-funded and indie-funded software startups" Rob (Walling): started Tiny Seed Fund: https://tinyseed.com/ Tiny Seed Fund: Accelerator for BootStrappers, "... we do this all without the headache of traditional fundraising, loss of control, or the pressure to build a unicorn." So, it provides some…

This is often characterized as an investment, where the money Bezos paid is accessible by the company to do company things - but this seems to be private sale of shares from founders to Bezos. I don't think the company got any money out of Bezos' check - think the founders got it to their personal accounts. That would not qualify as an investment in the sense we're talking about, no?

Investment seems like the right word to me. It wasn't fundraising for the company, though. It was the owners selling a portion of it to hedge the risk that it might fail (according to the link article). That implies to me that they kept the money for themselves rather than re-investing it in the business, at least at the time.

Re: State of Independent SaaS [pdf]

#40

Post by deltron3030 »

threeseed wrote: post #14
deltron3030 wrote: post #6

Earlier quoted context omitted.

>Why is VC funding so down the rank compared to self funding, friends and family, angels and even debt? Mental health and emotional attachment I guess, working at a scale you're comfortable working at. The tools, frameworks etc. you prefer, and the community around those can all contribute to developer happiness. So if you optimize mainly for growth you might throw many things out of the window. I think the more deve…

> The VC way seems to be more suited for more marketing oriented entrepreneurs who may not even code Actually this is completely wrong. Investors at all stages from angel to VCs look for strong technical and product leadership from the founding team. Unless you have had a previous successful startup you will not get funding if you are some random executive with an MBA who doesn't know the technical details of the pro…

>Unless you have had a previous successful startup you will not get funding if you are some random executive with an MBA who doesn't know the technical details of the product.

I don't disagree with that, the discussion is about devs avoiding VC funding and why, not about what VCs want and a perfect world.

My impression is that preferences of marketers are a better fit for VCs than the preferences of devs, and it's obvious that they're looking for a mix of both, but this seems to become hard with devs putting their mental health first. They can still make a good living by staying small, and at some point your happiness just doesn't scale with more money.

>And the reason a lot of entrepreneurs go the VC route is because you get money e.g. $2-5 million which allows you to set up a proper team and build a proper product without worrying about paying the bills.

The thing is that a proper team can require different processes than those of a single developer/entrepreneur, and that's exactly what I meant. And while you don't have to worry about bills, you still have to worry about your reputation in your niche. If you've just discovered a market and create an app around that, good, but that's not what most devs do, they create something around their area of expertise.

If your product isn't special, like most ones out there your reputation in your niche is what counts, especially true if you make the typical SaaS app and create tools for other developers.

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