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State of Independent SaaS [pdf]

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Re: State of Independent SaaS [pdf]

#61

Post by streetcat1 »

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.

You cannot.

A "validated" idea is product that someone will pay their hard-earned money for.

Moreover, the true cost of buying a product, is the actual integration into the current workflows, internal processes changes, etc.

Since most people only change when they must, they will not buy a product even if they approve it and like it.

Hence, before the product is ready, what you getting is only opinions.

And, there is also a scale issue, since to get a statistically significant answer, you would need a large sample.

Re: State of Independent SaaS [pdf]

#62

Post by [deleted] »

Maro wrote: post #8
zabana wrote: post #5

Earlier quoted context omitted.

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.

Depends on the idea, but there's a lot you can do before you write a single line code. 1. Of your friends/network, pick 5-10 people who could be potential customers. Ask them. 2. Think of a way to scrape emails addr of people who could be potential customers. Ask them. 3. Same on Linkedin. 4. Build a landing page, buy traffic from G and FB, look at time spent on your landing and CTRs to a signup page which then colle…

[deleted]

Re: State of Independent SaaS [pdf]

#63

Post by AlchemistCamp »

Axsuul wrote: post #60
AlchemistCamp wrote: post #59

Earlier quoted context omitted.

> 5. When you're boostrapped (which is where this report is skewed toward), you don't have the time or resources to provide support to non-paying customers. I'm highly skeptical about this one. Very, very few freemium services actually struggle due to the cost of supporting free users. Unless you're doing something unusually resource intensive or nobody is paying, the infrastructure costs of having free users is usua…

Sorry, I meant customer support costs, not infrastructure costs.

How much support to you really need to offer to the free tier, though?

I.e. if you had 10,000 more free users and 10 more paid users, would that be a financial loss? It would be a gain for every product I've worked on.

Re: State of Independent SaaS [pdf]

#64

Post by streetcat1 »

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…

I give you my take.

1. VC funding is down, since there is not a lot of VC. VC get pitched by 2000 startups a year, and choose 2. I.e. getting a VC founding is actually an anomaly.

2. Right, this should be much higher. I.e. to be successful you should dig where the gold is, not where you want.

3. See my prev answer, there is no point in wasting time validating since the answer does not reflect reality. If you can get pre-orders than sure. but just hearing someone's opinion on something?

5. Why would you offer a free plan, do you get free housing?

Re: State of Independent SaaS [pdf]

#65

Post by Axsuul »

AlchemistCamp wrote: post #63
Axsuul wrote: post #60

Earlier quoted context omitted.

Sorry, I meant customer support costs, not infrastructure costs.

How much support to you really need to offer to the free tier, though? I.e. if you had 10,000 more free users and 10 more paid users, would that be a financial loss? It would be a gain for every product I've worked on.

It wouldn't be a financial loss but it can hurt your growth. Free users are a huge distraction since what they ask for can be very different from what paying users ask for.

As a bootstrapped startup, your goal is probably to get to ramen-profitability as soon as possible so you can quit your job and focus on it full-time. You're not gonna get there fast enough by making free users happy. Paying users are what move the needle.

Re: State of Independent SaaS [pdf]

#66

Post by DanHulton »

victor9000 wrote: post #55

Along these lines, can anyone recommend a framework for developing a SaaS prototype? Ideally, it would include things like payment processing, user auth, admin dashboards, etc. I've been looking at Laravel Spark, but I'm wondering if people have other suggestions.

Huh. I've actually been working on one of these for the past month or so. It's largely borne out of the fact that I couldn't find any that worked quite the way I wanted (Node, Vue, Tailwind, HMVC architecture), but also that, yeah, there definitely seems like an opportunity here for a pretty wide variety of SaaS template apps.

Any chance you'd be willing to have a short email conversation about what you're looking for? If so, my email's in my bio here.

Re: State of Independent SaaS [pdf]

#67

Post by csa »

Alex3917 wrote: post #46
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…

> It costs virtually $0 these days to start a SaaS company The average cost of raising a kid in a middle class family is around 250K. What percentage of micro SaaS founders do you think had less than double or triple that (inflation adjusted) spent on them between when they were born and when they founded their companies? If founding a SaaS company is free, it's only in the same sense that gas for a Tesla doesn't cos…

> Keep in mind you're really only able to learn to code if you're able to read English at a proficient level, which only ~13% of Americans are able to do.

Proficiency is measured on a scale — it is not binary.

What specific level of proficiency are you referring to, and what is your source for saying that this is the minimum level needed to learn to code. I will go out on a limb and say that your 13% is folks who can read at a 12th grade level (or thereabouts). Note that in the literature, this does not refer to the reading level of an average 12th grader, rather the level that curriculum developers aim to have 12 graders read at.

Also, what level of coding are your referring to?

I will just say straight up that I can teach and have taught kids who have little or no knowledge of English how to code (e.g., with Scratch), so I think you may need to make your assumptions a bit more transparent.

Re: State of Independent SaaS [pdf]

#68

Post by [deleted] »

Axsuul wrote: post #65
AlchemistCamp wrote: post #63

Earlier quoted context omitted.

How much support to you really need to offer to the free tier, though? I.e. if you had 10,000 more free users and 10 more paid users, would that be a financial loss? It would be a gain for every product I've worked on.

It wouldn't be a financial loss but it can hurt your growth. Free users are a huge distraction since what they ask for can be very different from what paying users ask for. As a bootstrapped startup, your goal is probably to get to ramen-profitability as soon as possible so you can quit your job and focus on it full-time. You're not gonna get there fast enough by making free users happy. Paying users are what move th…

[deleted]

Re: State of Independent SaaS [pdf]

#69

Post by Alex3917 »

csa wrote: post #67
Alex3917 wrote: post #46

Earlier quoted context omitted.

> It costs virtually $0 these days to start a SaaS company The average cost of raising a kid in a middle class family is around 250K. What percentage of micro SaaS founders do you think had less than double or triple that (inflation adjusted) spent on them between when they were born and when they founded their companies? If founding a SaaS company is free, it's only in the same sense that gas for a Tesla doesn't cos…

> Keep in mind you're really only able to learn to code if you're able to read English at a proficient level, which only ~13% of Americans are able to do. Proficiency is measured on a scale — it is not binary. What specific level of proficiency are you referring to, and what is your source for saying that this is the minimum level needed to learn to code. I will go out on a limb and say that your 13% is folks who can…

Source: https://nces.ed.gov/NAAL/PDF/2006470.PDF

> Also, what level of coding are your referring to?

Just being a working developer. For which the main skill is just being able to read and understand the documentation for new languages, frameworks, libraries, etc.

Re: State of Independent SaaS [pdf]

#70

Post by dzonga »

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…

to answer 1. most of these SAAS are micro-companies or leisure based as some would say. they operate in non-VC territory. You're basically looking at markets that are 10K - maybe 100M at the high end. VC's are playing the high stakes game. ie gunning for markets in the 100B+ range. with regards, to diversity, it being mentioned, doesn't make sense. I say this as a minority individual, because I'm fairly certain the organizers, wouldn't be say in some circles where they can meet those individuals operating the companies e.g there's probably tons of individuals in africa | south america etc operating these small micro-saas. but they don't even know the term or are bothered to do so.
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