In episode 678, join Rob Walling for another solo adventure where he answers listener questions. He answers how he might find buyers for a half-done SaaS product, addresses platform risk that accompanies no-code development, and shares insights on bookkeeping for SaaS startups. Rob also details what frameworks new marketers should be looking into and gives advice on launching a new SaaS tool to an email list.
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Topics we cover:
- 3:10 – Where can I sell partially developed SaaS apps?
- 7:42 – Evaluating higher platform risk inherent in no-code apps
- 11:44 – Approaches to bookkeeping early on in your SaaS business
- 14:47 – Setting up a marketing engine for those with little experience
- 20:43 – Launching a new product to an email list with a phased approach
Links from the Show:
- Apply for TinySeed
- Join Us For A Big MicroConf Announcement
- The SaaS Playbook
- MicroConf Connect
- #1 Mistake No-Code SaaS Founders Make – Don’t Build Without THIS
- Episode 642 | The Pros and Cons of Building a No-Code MVP
- Traction by Gabriel Weinberg, Justin Mares
- Hacking Growth by Sean Ellis, Morgan Brown
- Episode 670 | Relying on Luck, Avoiding Burnout, and Bad Player vs. Bad Instrument (A Rob Solo Adventure)
- How to Build SaaS from Scratch in 8 Simplified Steps
- How to Validate Your Idea & Launch to $7k in Recurring Revenue – Rob Walling – MicroConf 2014
If you have questions about starting or scaling a software business that you’d like for us to cover, please submit your question for an upcoming episode. We’d love to hear from you!
Platform risk exists in a lot of apps and it certainly exists in the stair-step approach, and what I don’t say is, “Then don’t do it because there’s some risk.” Realize what you’re getting into and realize the risk is there. Think about how to potentially mitigate it or just live with the risk and realize, “This is not a 20-year business. This is a business that’s going to get me to the next step to where I could potentially get away from the platform risk.”
Welcome to Startups For The Rest Of Us. This is the podcast where we talk about building companies that are unlikely to change the whole world, but very likely to change our little corner of it.
I’m Rob Walling, I’m your host and this week I’m going to be answering listener questions. Before I dive into those, I wanted to ask if you have read the SaaS Playbook, my most recent book, saasplaybook.com. If you could go to Amazon and leave a five star rating for me, the ratings go a long way towards helping other people discover the book and they’re a strong signal to folks who may have never heard of me and are considering buying the book based on the name and the cover and a recommendation. And in fact, it looks like there’s one or two folks who have something out for me because I believe I have a two star review that says something to the effect of, “This book is really light on actionable information,” and I chuckle because it’s just a very dense book and it’s full of self-promotion and the book fell apart.
“I got the book and it just fell apart at my house.” And I’m thinking to myself, if I knew who this person was, I would just send them another copy. But I genuinely think they’re either out to troll me directly or just in general are trolling Amazon authors. I don’t know. If the book falls apart, email Amazon and they’ll send you a new book. But with that said, it would be amazing if I could get a few more five star reviews and help out the average on this new book.
Before we dive into the episode, I have two announcements for you. The first is that TinySeed applications for our fall 2023 accelerator batch will be open from September 4th to the 16th. We are funding companies in two batches. We have our Americas and our EMEA batch, that’s Europe, Middle East and Africa. And if you have at least $500 in MRR and you are looking for the perfect amount of funding as well as world-class mentorship, you can’t get anywhere else, and a tight-knit community, unlike any you’ve been part of, head to tinyseed.com/apply. If it’s from September 4th to the 16th, applications will be open and you can apply there. It usually takes about 10 minutes. If they’re not open, you can enter your email to be notified when we open the doors. I hope to see your application.
My second announcement is that while some of you might have spent the summer vacationing or spending time at the lake, our team at MicroConf has been gearing up for one of the biggest announcements we’ve ever made. The last time we made a major announcement was in 2019. I don’t want to jinx it, but there are some pretty amazing things coming down the line to help you build, launch and grow your SaaS business. If you want to be the first to hear about it, head over to futureofmicroconf.com and sign up for our announcement event. It’s going to happen on September 14th, 2023. You won’t want to miss it.
And with that, let’s dive in to my first listener question.
Hi Rob. Big fan of the podcast. I have a question for you. I recently made my first SaaS product. I am not a developer myself. I teamed up with a team of student developers. I realize now that I’m in over my head. I didn’t know that so many things could break and that it would be so challenging to maintain a SaaS product over time. I have some early traction in the sense that I have a few people placing test orders and quite a lot of interest, but I want to exit this thing as soon as possible because I’m pretty sure that if I keep it I’m going to drop it and it’s going to break.
My question is are there any communities or platforms where you can sell SaaS products that are only half done or what would you do in my situation? Thanks.
Thanks for the question, Max and for keeping it succinct, Max actually sent a second voicemail that gave me more context, but that really, you don’t need to hear all of that, and he did a really good job of keeping it as a succinct question that I can answer on the show. Probably the only additional piece of information he gave that is necessary for you to understand the problem is the product itself is in Dutch, the market of people who could potentially buy it is obviously a lot smaller than if it was in English.
Definitely a tough position Max, and frankly there aren’t any places. Basically you don’t have any value until you have customers or I should say very, very little value. Could I imagine paying a thousand dollars for a code base with a few customers? Maybe. If you found a strategic who really needed this, and again it being in Dutch in that case is a challenge because it really limits who you can sell to, but realistically, products sell based on revenue, traction and growth and until you have that you have nothing.
If I were to do a hot take on Twitter, I would say you have zero value until people are paying you money. That’s not totally true, but mostly it is. And I don’t have a great recommendation of a place you can go to sell this, to be honest. What I do like about your question is you talked about how complex it is to build and run a SaaS app and people don’t believe me when I tell them they should stair-step and everyone wants to start a SaaS app and a lot of people run into what you’re running into and I feel your pain and I’m sorry that you’re having to learn this lesson this way. I’m sure it’s tough. I’m sure it’s a hard process for you to be going through. With all that said, the only recommendations I could make in terms of selling this, there are a handful of these side project marketplaces, acquire.com is the big one.
You could of course list it there. Do I think you’ll sell it or get any traction? Probably not, but it’s worth it. It’s a marketplace and you can list it at an asking price. There used to be some others. There was 1kprojects.com, sideprojects.com are the other two and I believe one of them acquired the other or merged with the other and it’s a totally different domain name now, and I’m not going to pull up Google and go looking for these, but if you go to Google and search for those domains, you’ll likely find a couple other sites that are small and basically it’s Indie Hackers. It’s usually people who have indie hacked and launched on Product Hunt and they have $200 in MRR and they’re like, “I’m willing to sell this for a few thousand dollars.” Those are the types of marketplaces that I could recommend for this.
And of course there’s communities. There’s MicroConf Connect. We actually stopped taking new community members into Connect over the summer as we retooled and revamped some things, but we are going to be relaunching that in the next couple of weeks. Had to microconfconnect.com, if you are interested, you can get on the wait list to hear more about it. But a community like that of other SaaS founders, you could feasibly go in and specifically look if there’s a Dutch channel or I believe there is a buy sell channel in MicroConf Connect where you could bring up this kind of thing and outline what you’re looking for and potentially get feedback or find a buyer. It’s a tough spot to be in. I feel your pain Max and I hope that was helpful. As a reminder, if you want to send a question in to be answered by me and potentially a guest in a future episode, startupswiththerestofus.com and look in the top nav for ask-a-question, audio and video questions go to the top of the stack.
Although I will say in this episode, I do want to get to a few text questions since there are so many audio and video questions in the queue, I wanted to sprinkle a couple in. The next question is from Andrew and he says, “Hey Rob, I enjoyed your episode with Tara Reed,” so you can tell how old this text question is. That’s back when Tara and I talked about No-Code, the pros and cons of it. Back to Andrew’s email. “I recently sold my startup and I’m looking to start my next business. I’m not technical and No-Code is intriguing to me. One thing you didn’t seem to address is platform risk. If you build your business on a No-Code platform, what happens if the No-Code platform closes significantly raises prices or changes how it operates?” This is a great point Andrew, and what’s interesting is I believe this email’s almost a year old now.
Sorry about that. That’s the backlog we have with text questions. But shortly after that episode with Tara Reed, I actually had a conversation on Twitter where someone else pointed this out as well, that platform risk is such a huge risk with No-Code. And a few months after that I recorded a YouTube video on the MicroConf channel, that’s microconf.com/youtube and we’ll link it up in the show notes, but it’s called The Number One Mistake No-Code SaaS Founders Make. And in it I talk about how Bubble had dramatically raised their prices and people were furious because migrating off of Bubble is really hard. Migrating off a No-Code is really hard. Compared to AWS, not that that’s a breeze, but if you have code that can run on any server, you can move from Heroku to AWS to GCP to Azure to your own homegrown Dell Box sitting in your bedroom connected to a fiber connection, which of course I wouldn’t recommend.
But you get the idea. Moving code-code from place to place while it’s a pane is totally doable. No-Code’s not portable as far as I know. There’s no standard. You don’t export to XML or to JSON and move it into another No-Code platform. It’s all proprietary and it has massive platform risk. If they dramatically raise prices as several have done, if they change how they operate, which Airtable does about every month or two, they break, they don’t break it, I’m overstating it, but they break how our podcast and our video production systems work because they changed their top nav and they changed the left nav and they forced us to only have a left nav and we don’t really want to, but it’s No-Code and we can’t do anything. You are 100% at the mercy of the No-Code platform when you are building on it.
I appreciate you writing in with that, Andrew, because we did miss it in the initial conversation. Since then have obviously done quite a bit of talking about it, but I did want folks to know, and I should add one other point here, that doesn’t mean you shouldn’t build something in No-Code. Platform risk exists in a lot of apps and it certainly exists in the stairs-step approach. And what I don’t say is, “Then don’t do it because there’s some risk.” Realize what you’re getting into and realize the risk is there. Think about how to potentially mitigate it or just live with the risk and realize, “This is not a 20-year business, this is a business that’s going to get me to the next step to where I could potentially get away from the platform risk.” Thanks again for that email Andrew, I appreciate you weighing in.
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My next question is from Franz about bookkeeping.
Hey Rob, Franz here, longtime listener, started listening during the Hit Tail era. My question is, I’m not from the US, I’m not familiar with any the tax laws and everything there. How do I go about bookkeeping? Just background, just start my own SaaS, just took the plunge recently. Apparently I need a US entity to open a Stripe account, I did that, now I have a Stripe account, but now it’s think about, “What about bookkeeping like taxes in like March or April?” How do I go about it? Do I do it myself? It’s simple enough. Or do I get somebody to do it? And if I get somebody, that would take a chunk of money from my very early stage startup, do you have any suggestions how to go about that one? Thanks.
This is a question of whether or not you want to take time away from your startup or money away from your startup. And if you don’t have funding and you are on a shoestring budget, paying for a bookkeeper can be a challenge to justify. I’ll admit that in the early stages of say, Drip, I was doing the books, wasn’t the best use of my time, but I just didn’t have the budget to pay someone like Bench. You go to bench.co and it’s 250 to $350 a month for them to do your books. I actually did hire a couple different bookkeepers on Upwork with varying degrees of success. Sometimes I had math errors in my books, other times categorization errors, and I was frustrated with my books for a very long time and eventually I just plunked it down. I actually talked to my CPA, my accountant and he started doing it for I think it was about $180 a month and I just bit the bullet and I moved on and I never looked back.
I think in the very early stages of a startup where there’s almost no money coming in and mostly no money going out, signing up for Bench or Xero, which is X-E-R-O, linking up a credit card and a bank account or a Stripe account for that matter and letting most of it auto categorize and going in and spending 20 minutes a month, 10 minutes a month if you really don’t have much going on, I don’t think that’s the end of the world. The thing to be aware of and to be careful of is when that turns into a few hours a month and you’re still justifying to yourself that you should be doing it. By the time it’s complicated enough for you to be spending a chunk of time on it, you should have enough revenue to be able to go and hire a service.
And Bench themselves, I’ve heard mixed reviews, I’ve heard some real positive reviews and other people it hasn’t worked for. I think it really does just depend on the bookkeeper you get in any given month. There are definitely services out there that are less expensive. There are zero approved bookkeepers and I think if you expect to pay a hundred dollars to $200 a month to do your books, that’s probably a reasonable expectation. I think in the very early days I would do it myself until it became a little annoying and then I would hire it out at that point. My next question is from John Potter and he says, “Hey Rob. I’m the non-technical co-founder of a bootstrap SaaS for accountants. I’m an accountant by trade, so I’m unfamiliar with how to set up the ideal marketing engine.” It’s good you’re listening to this podcast. I would also recommend purchasing the SaaS Playbook at saasplaybook.com and reading Traction by Gabriel Weinberg.
His email continues, “I plan to focus my sales and marketing energy on my network first, but I will need to reach out to cold contacts eventually. I do plan to have a self-serve sales motion for a long time with no sales reps. Could you walk me through a few ways to set up a marketing engine for someone who has little marketing experience?”
All right, John, here’s I think a big mistake that you’re making is if you’re going to sell to accountants, self-serve is 99% not going to work. Pretty much it’s not going to work. I never say never and always and these kinds of things, but I cannot imagine trying to sell to non-technical folks, especially folks who are busy and bill by the hour. We’re talking legal, accounting, consulting, non-technical consultants, coaches, you are going to want to demo to handhold and to get them on board.
It doesn’t have to be enterprise sales, it doesn’t have to be five call closes, should be a one call close frankly, but I don’t think you will succeed without having some type of sales process. Accountants are just going to want to talk to someone and it doesn’t have to be complicated. It doesn’t have to be a long process. With that in mind, I literally wrote an entire chapter of the book, saasplaybook.com, it’s $10 on Kindle or on PDF and I talk about the three factor framework, which is that each marketing approach has these three factors that dictate whether you should try them or not. The first is speed. Is it slow or is it fast? Meaning does it work tomorrow or does it work in a year? SEO is slow, cold email could feasibly work quickly. It may or may not, but it could feasibly.
The second is scalability. There are things like a Product Hunt launch that are not scalable. You can do them once and you get a few customers and that’s it. Versus SEO content, cold outbound, there’s things that really scale up. Often those ones are perhaps more expensive or more hard to get right, but the scalability of those is a far cry from something like answering questions on Quora or doing a Product Hunt launch. The third factor is cost. We could say that if you’re writing your own content, it’s free. We know that’s not totally true, but let’s just say in answering questions on Quora, which is something I did in the early days of Hit Tail and the early days of Drip and even a little bit in the early days of TinySeed, and I did that myself. The cost in effect was zero, but it was my time versus ramping up AdWords or paying a third party to do cold email outreach on your behalf.
Those three factors are different for each marketing approach. And in my chapter on marketing, I go through the 20 B2B SaaS marketing approaches and then I talk about how to use the ICE framework to prioritize them based on the impact you think they might have, you’re going to take a guess at it, the cost to do it and ease of implementing it. And I basically walked through a framework that would make no sense to walk through here on a podcast, but is it foolproof? Is it 100% going to tell you exactly what you should do in what order? No, of course not. Being a founder is making hard decisions with incomplete information and figuring out which marketing approach to try first is a hard decision that you have no data on until you try it. And using a framework like I’ve outlined, and there are others like go look at Sean Ellis and his book, I believe it’s called Hacking Growth.
He talks about ways to think about growing your company. This is just a matter of getting educated and realizing that there is no one right answer. There’s going to be a lot of gut feel in it, but you have to mix that gut feel with rules of thumb. And my rule of thumb is a three factor framework and Sean Ellis’ is different and Gabriel Weinberg’s, in Traction, is also different. These are just frameworks and mental models to help folks who haven’t marketed for learn, which marketing approach should I try first? And then you get to decide if I pick a marketing approach, like cold email for example, do I go and learn it or do I hire a productized agency, for example, Postaga, they’re a TinySeed company and they have a done-for-you outreach product as well as a SaaS app that you can use for your outreach, but do you hire someone like that who has sent tens of thousands, hundreds of thousands of emails and LinkedIn outreach and do you hire them to do it?
Usually it’s budget, do you have the budget to hire them? So that you can test this and feel good that if it doesn’t work, the channel probably doesn’t work because the person or the team implementing it knows what they’re doing. They have a pretty high success rate. This goes back to the bad instrument or bad player analogy I mentioned on a recent solo episode where I talked about my 13-year old who is an amazing violinist. He’d been playing for 10 years and he picked up an old clunky violin. It was his first or second violin. It sounds terrible. He played it and it sounded awful because it’s just a toy, it’s like a hundred dollars thing and the strings are barely real strings.
And if you walked into the room, you wouldn’t know is it that he has a bad instrument or is it that he doesn’t know how to play? And then of course he picks up a full-size violin. Sounds amazing. And that’s when you know that it was a bad instrument. With marketing approaches, if you try and approach and you’re doing the work yourself and the marketing approach doesn’t work, you don’t know if it was a bad instrument or a bad player. And I often encourage founders that I’m advising if you have the budget, try to find someone who’s good at this to test it out, to dip your toe in the water and to put your best foot forward such that if it does work great, and if it doesn’t, which is honestly the more likely outcome, then at least you know that you took the best shot you could.
But oftentimes budget stands in the way and hiring someone good to do a marketing task is hard. It’s not as easy as snapping your finger and finding someone amazing. And sometimes it can be hard to know are they good at what they do or not? There’s some complexity here, but I hope that gives you an idea, John, thanks for the question.
Hi Rob. Hi Steve. We met briefly, MicroConf in 2019 in Croatia. I was working on a different set idea back then, which unfortunately didn’t work out, classic, rookie mistake, building something that I thought somebody wanted, but turns out they didn’t. But that’s fine. I learned a lot. I’ve since moved on and I’ve had a new idea. It is essentially a SaaS tool for property finders in the UK, but particularly focused on foreign buyers trying to buy property in the UK. This time around, I’m going to do it differently. I’ve run a few Facebook ads to see if there’s any interest to try and get some emails to build a launch list. And that’s been really successful. We’ve 500 plus emails from foreign customers or foreign target customers, and that list is growing daily, I think that’s probably going to get to about a thousand.
My question is what’s the best way to approach launching the new products to said thousand lead list? We’re obviously going to do an MVP. Is it 50 users at a time? Or the usual question of how big should the MVP be? And then final question, because I know a lot of our users are essentially coming to us through Facebook or Facebook leads, they’re obviously using their mobile phones. Now my question is that in terms of getting them to our sales website and buying and starting their subscription, what’s your views on Apple Pay? Can it work? Should it work? Does it work for subscription businesses like the one hopefully that we’re going to get going? Love the content and hopefully see you again soon. Cheers. Bye.
Thanks for that question. I think there’s some good stuff to dig here. I actually recorded a YouTube video called, How to Build SaaS from Scratch in Eight Simplified Steps. It’s also on the MicroConf YouTube channel, and we will link it up in the show notes. One of those steps is the phased launch, and if you have a tiny little launch list of 30 people, 50 people, there’s no reason to phase it. What I mean by phases is breaking it up into chunks exactly as you have mentioned. But if you have a product that you’re not sure if you have product market fit yet, or even you’re concerned that you don’t have the features that you want or that it’s just not anything more than an MVP, then if you add thousands of people on an email list and you put them all into your product, they’re just going to bleed out.
You’re not going to retain any of them. Everybody’s going to churn, no one’s going to convert. And the idea of phasing your launch is to let in a group of users to let them try it out. And this is not beta. This is early access. This is something you charge for. They’re not beta testing the product. You should have the bugs worked out, but you’re trying to find out do they need it? Do they love it? What else do you need to build in order to retain as many as possible? Then you rinse and repeat. Yes, if I had a list of 500 people, I probably would break it up into chunks of 50 at least to start with. With Drip, we had 3,400 people on an email list, and I think I started doing it in, I think the first launch was to 300, and then we did another 300, and I realized we could totally handle it.
Then we went up to like four or 500, and I believe by the end we were doing 600 at a time for the last couple. And I just increased it as my comfort level improved, my comfort level with the product, my comfort level with our conversion rate, my comfort level with our ability to support it and to close deals frankly. Again, I have that YouTube video where I talk more about this and I have a YouTube video where I talked all about the Drip launch. I believe it’s titled, From Launch To 7K MRR, and it’s also on the MicroConf channel. And I probably spent 10 or 15 minutes talking about how we did it, and that was within six months of doing it. The data was fresh in my mind at that point. And then your second question was about using Apple Pay.
I’m going to be honest, I’ve never used it and I’ve never heard, I don’t know of many SaaS apps that do it right. Most of the time that’s a mobile app. Now, can Apple Pay work for subscriptions? Of course. Now, I want to be clear here that Apple Pay is different than having an iOS app in the app store. In that case, Apple’s going to take 30%, but using my Google-fu, I have looked at Apple Pay, which again, I haven’t used, but it says that Apple Pay takes no fee. This is where you just allow someone to buy your app or charge a subscription, which Apple Pay supports according to the Apple website, and you still pay the typical charge, the 3% credit card charge, but Apple Pay is a layer on top of that. I guess a concern of mine as I think this through is can I administer that?
Because we used to need to upgrade or downgrade subscriptions or refund subscriptions or do all types of craziness with it. And if I don’t have a dashboard where I can do that, and it’s all the customer themselves doing it through iTunes, I don’t know if that’s how it’s managed or not. Steven, in your shoes, that’s where I would want to see the entire flow from the start to the finish of how do they subscribe, how do I administer those, how do they cancel, upgrade, downgrade, do I have the flexibility that I want when using Apple Pay, or is it going to be easier and better for me to spend whatever three, four days upfront to really build out a top-notch custom, Stripe integration or Braintree or Paddle, whoever you want to use, such that I have full control? And that I don’t know because I just haven’t evaluated the two options side by side. But if you do and you have something to report back, feel free to send it, questions at startupsfortherestofus.com and we can educate the entire community with your findings.
Those are all the questions we have time for today. Thanks so much for joining me again this week. I think I’m going to answer more listener questions next week as well to try to work through some of the backlog. I hope you join me for that episode. This is Rob Walling signing off from episode 678.