Ask HN: When is it time to give up on a side project SaaS?
135 points| 9967d2cad_askhn | 5 years ago | reply
Growth is, however, slow. I have a good understanding of who my target customer is now, 1 year later, after talking to them and noticing common patterns in terms of their needs.
This is my first real business. I would really love to hear from someone experienced in building a SaaS business from scratch. Your insight would be appreciated. What should I expect in terms of growth? How fast did businesses grow in the beginning (BaseCamp, for example, Digital Ocean, MailChimp)?
Thanks
[+] [-] mherrmann|5 years ago|reply
There is no general answer to your question. Are those 8 customers paying you hundreds of dollars each per month, or tens of dollars? What's the reason you haven't gotten more? Have you lost motivation to work in this space / on that project?
I was in a similar situation to you a few years ago. I had started a clone of patio11's appointmentreminder.org for the Austrian market. After 2 years, I had 8 customers and €2k monthly recurring revenue. But it was very difficult to get new customers. I decided to stop growing this business. Since then, I've lost 4 of the 8 customers, but those that remain now pay me more for additional services, so I'm back at €2k MRR. I'm satisfied with my decision.
Another project I worked on is https://fman.io, a desktop application. There, I wish I had stopped sooner. I spent 3,000 hours and made <€20k. I actually recorded videos about this and the other business I mentioned above [1], [2].
In general, I suspect most founders keep going longer than they should. The fact that you are even asking the question indicates to me that you are losing motivation. Maybe it is time to move on.
If you'd like to talk about more details privately, feel free to reach out by email. You can find my address at http://herrmann.io. Good luck!
1: https://youtu.be/I1K3IkOlaVw
2: https://youtu.be/NWCOwvp23uk
[+] [-] kev2908|5 years ago|reply
[+] [-] bootloop|5 years ago|reply
[+] [-] zerr|5 years ago|reply
[+] [-] iopuy|5 years ago|reply
[+] [-] codingdave|5 years ago|reply
But it grew to around $15M ARR in that time. That might not sound like a huge number compared to the best known startups, and VCs would have no interest in such a company, but it does prove that slow growth does work.
So to answer your question... when should you give up? Give up when you no longer feel fulfilled by working on it. There is no magical growth rate that makes it a good project vs. a bad project. It is all about your personal goals and whether it fulfills them.
[+] [-] mandeepj|5 years ago|reply
As a founder, I'd be more than happy to work on it for my entire life
[+] [-] jwr|5 years ago|reply
The "long slow saas ramp of death" is real. Google it.
You can supposedly grow faster if you do marketing well. But from what you wrote I'd guess that you do not do marketing well. My adventures with marketing came down to the following conclusions:
* Spending money on ads is basically burning money and does not work for me. (tried Google Ads, LinkedIn, Facebook ultra-targeted ads, Quora). This became painfully obvious after I implemented my own conversion tracking, because I did not trust their metrics/analytics.
* You will find plenty of marketing experts all around you, but none of them will work for a commission, which speaks to how much trust they really place in their "skills".
* Since I am a solo founder, I eventually decided that I'm OK with my organic growth and I'd rather concentrate on making the product better. This helps in building bigger product value, improves customer retention, allows me to raise the ARPU, and in general works great. I just don't get the marketing-pumped stream of new customers. But I'm OK with that, especially at this point.
That said, I think I would expect more than 8 paying customers after a year. My ramp-up in the first year was slow (the product didn't have a lot of value back then), but it was quicker. I just checked, and I had 25 paying customers after one year from the first one.
[+] [-] csa|5 years ago|reply
There are many marketers who will work on commission (e.g., affiliate marketers, some/much of which is not BS). The challenge is creating a context in which a producer and seller can work well together. Specifically:
1. The seller needs to have a product that people want. That’s product-market fit.
2. The seller needs to be willing to pay the marketer enough to make it worth their time. Many producers fall woefully short in this department. Sometimes it’s because the producer is cheap, sometimes because they don’t value marketing, sometimes it’s because they don’t price the cost of marketing into their product (either not at all or not correctly).
3. On top of all of the above, there needs to be a sales funnel that converts. This can be set up (even crudely is ok) by the producer, or it can be set up by the marketer. Note that a good sales funnel takes time to develop and refine, and doing so is expensive —- expensive to the point that the marketer maybe should be a co-owner rather than a hired gun.
If a producer is missing any of the above, they will naturally only attract folks who will work for a flat fee rather than a commission, and that’s because the groundwork has not been laid for a commission system to work / be worth their time.
[+] [-] Veen|5 years ago|reply
You won't find many developers who work on a commission either.
[+] [-] rsoto|5 years ago|reply
As a marketer myself, it's not that we don't trust our skills, it's that few things happen in short term. If I'm going to work with you with commisions it's because I have trust in your product in the long run (2+ years, at least).
Otherwise I could spend a year optimizing your site, your funnel, your strategy and you could easily fire me and keep all the strategy, SEO and branding done to your site.
[+] [-] shostack|5 years ago|reply
>"Spending money on ads is basically burning money and does not work for me. (tried Google Ads, LinkedIn, Facebook ultra-targeted ads, Quora). This became painfully obvious after I implemented my own conversion tracking, because I did not trust their metrics/analytics."
When I hear about solo founders decry poor results from paid media, lack of trust in tracking and metrics, etc., I often wonder how much time they've actually invested in learning what they are doing.
Managing paid media is a career and industry in and of itself that is highly-technical, rapidly evolving, and requires deep understanding of the specifics of individual platforms, creative, audience, etc. The metrics themselves are INCREDIBLY nuanced, and I've come across more fellow marketing professionals than I would like who aren't familiar with the impact of view through conversions, how they should be viewed in relation to other efforts, where/when/why they will mess up your analytics in different platforms (for example, FB view throughs are counted by default, but will not show up in Google Analytics).
So when you say they are basically burning money and not working for you, my gut tells me that there are decent odds things were not setup, tracked, or optimized according to what many in the paid media industry would consider best practices.
This is NOT a knock against you. This stuff is difficult, but the platforms go out of their way to make it easy to get started and spend large sums quickly with settings that may not actually make sense for what you are trying to accomplish.
Which brings me back to the commission thing again. People who know this stuff work on a variety of models. Many of them value their time quite a bit (myself included) and would not be willing to shoulder all of the risk. That said, paying for an initial flat rate consult to evaluate your previous efforts to validate your approach and gauge how much they reach the same conclusion (ads don't work for you) might well be worth the time and money.
[+] [-] jmchuster|5 years ago|reply
First experiment is to see how large a customer base there is. You want to see how often people are looking for a product like yours or your competitors. Make an Adwords campaign with the right keywords, bid high enough to always be shown first, and then run this for a while to get an idea of what the search traffic is like.
Second experiment is to see what portion of that customer base you can capture. So, continuing on from the previous experiment, you now want your site to be set up, and then measure what percentage of those searches result in people actually clicking on your site. And then what percentage of those clicks result in them actually putting in their credit card information and paying for the first month. If you can't have people signing up on their own, then give them a form to submit their information instead, and then make some estimate on what percentage of those will fall through.
Then, that gives you an idea of what your baseline growth is. And then anything beyond that, i'm sure you would've already hired someone who could give you way better industry expertise than you would find by asking HN.
[+] [-] hellcow|5 years ago|reply
But I knew we had something special in the tech.
That little bit of cash helped us hire a great head of sales with experience building companies like ours from the ground up. We couldn't afford to pay him even an order of magnitude less than what he would normally charge, but after seeing the product he turned down dozens (!) of offers from VC darling startups to work with us, for free, on the basis that we would pay him when the sales worked. For most of the next year and a half, we had steady linear growth, but it was enough to attract funding.
Now we've built a great team of 20 people and are on track to way exceed our numbers for this quarter. We still have a lot of work ahead of us.
If you know you have something special, then fight for it. It takes a lot longer than you expect.
[+] [-] radihuq|5 years ago|reply
[+] [-] gcheong|5 years ago|reply
[+] [-] simonw|5 years ago|reply
You win your first one hundred customers one at a time, through massively high touch sales.
Once you've hit a hundred, you might start seeing some organic growth via word-of-mouth - maybe. But you gotta put in the sales effort to get there.
If you're an engineer with no sales experience this can be a painful lesson to learn!
[+] [-] fxtentacle|5 years ago|reply
I built an app that helps people have a better gaming experience and my domain is basically just the best Google Trends keywords concatenated. I immediately had 500 monthly unique visitors just from Google organic search.
But launching a bikini brand, for example, took lots of advertisement and social media presence and sales dropped as soon as we stopped paying everyone for ads.
[+] [-] simplecto|5 years ago|reply
[1] - https://indiehackers.com
[+] [-] throwaway413|5 years ago|reply
[+] [-] fxtentacle|5 years ago|reply
- do your customers know that they have a problem
- is the problem painful enough that people are happy to pay for a solution
- do your customers have money?
I've been running a SaaS for professional freelance photographers for 10+ years now. Customers going bankrupt really drives up my churn rate. It's a frustrating market. I keep the company around because it's profitable, but I would never want to invest additional work in that product.
I also once built a sound plugin to add 3D audio support to existing movie production software. Pretty much no chargebacks and no returns at a much higher price. Here, marketing was easy because a good prospect would buy 20 licenses in bulk for the entire studio. We got featured on magazines, had interviews with famous actors, musicians, and directors. In short, everyone was feeling great about working on it.
I've also released some games that gained no traction even when I made them completely free with no ads. That was pretty frustrating.
What I'm saying is choosing the right market can make the difference between you feeling great and making easy progress, and wasting lots of effort only to feel frustrated later on. Make sure you choose a market that makes you happy.
There is a reason why nobody is making X optimized for broke cynics.
[+] [-] k00b|5 years ago|reply
People really do underweight enjoyment when they choose something to build. There's a lot of dimensionality when choosing something to work on, but enjoyment is one of the most important.
[+] [-] redis_mlc|5 years ago|reply
Your choice is to either slog this one, or use the experience and pivot.
BaseCamp - used Ruby on Rails consulting to promote and finance it
Digital Ocean - rode pre-AWS hosting craze
MailChimp - founders worked full-time until enough revenue, rode moderately-early email marketing craze
Are you riding a craze, and/or funded from side gigs?
[+] [-] mkl|5 years ago|reply
[+] [-] michaelbuckbee|5 years ago|reply
How fast SAAS companies hit ARR milestones:
https://baremetrics.com/blog/how-fast-saas-companies-hit-arr...
[+] [-] gingahbread31|5 years ago|reply
In my very personal opinion, having 8 customers shouldn't give you the sensation that your product is finished and that you can scale (although I really don't know what you do so I may b wrong), so you must figure out what is missing to acquire more customers before thinking in terms of "Growth"
[+] [-] sweeneyrod|5 years ago|reply
Shouldn't this be the other way round? The MVP of Mailchimp is a generic CRUD web app TM hooked up to a mail server, while the MVP of Digital Ocean needs something approximating a data centre.
[+] [-] muzani|5 years ago|reply
"So what are considered some of the best tests for PMF? Rachleff writes that “You know you have fit if your product grows exponentially with no marketing. That is only possible if you have huge word of mouth. Word of mouth is only possible if you have delighted your customer.”"
Generally, if growth is slow, your product is not good enough, or rather there's no market for it. You should try different things until you get to a point where you have more customers than you can deal with. Slack originally worked on a MMO, then shut it down and worked on the messaging tool they used while building it.
[+] [-] throwawayffffas|5 years ago|reply
[+] [-] 135792468|5 years ago|reply
Alternatively to everyone in this thread: find a partner. There are plenty of folks like me who can’t dev but are able to grow businesses, you just have to find the right one that fits the channel your customers hang around in and you enjoy talking with.
One of my partners and I talk all day every day, we met on some random subreddit and three years in he’s one of my closest friends and we have quite successfully generated ARR
The side benefit of this is it allows you to focus on what you’re good at which is building the product.
I don’t have capacity but I could probably connect you with some potential people if you’d like or at least willing to talk through some potential marketing thoughts with you if you’d like to talk. Just let me know how to connect
[+] [-] andrewstuart|5 years ago|reply
I had a business once that was not fast moving and I thought "probably because I'm not much of a salesperson". Then later I started another business and the work started flowing in hard and fast. I was the same person but it was a different business. That was a huge lesson for me - when you're selling the right thing, clients come running to you "take my money!".
If you've built something people want then the difference will be amazing - the work and customers will fly in on their own because they'll hear about it and want it.
Other less compelling businesses will be a grind forever.
From what you describe, there's no reason to think your product will suddenly take off. Sounds like it will be a long slow grind.
[+] [-] dman|5 years ago|reply
[+] [-] drchiu|5 years ago|reply
I’ve been in projects before where things grew very easily due to no effort simply because people wanted that product. And then in other projects where the solution is elegant but people were already satisfied with existing solutions. And so the few who wanted it simply meant the product was niche.
Zapier is one that comes to mind where I could see the solution, before its successes, could have gone either way. Either people were happy with their existing workflows and ignore what Zapier could do, or it would change their lives. If your product is defining a new segment, this could be the problem.
[+] [-] monkeydust|5 years ago|reply
- Very difficult to be successful if this is your side project, if you cant take the leap because of funding then try to raise money, your in a better position than most because you have a product and traction (although without knowing the domain hard to say if someone will be interested).
- If your thinking about giving up, perhaps your not convinced enough to go full time on it (fair enough) then look to potential sell it - OR - merge it with a complimentary offering. There are SO many SaaS products now (just look at ProductHunt) but very few of them I would say are viable businesses on their own right but put together that could be a different story.
[+] [-] zeuch|5 years ago|reply
But don't give up easily! Don't expect you should grow as fast as the popular startups you've mentioned. You can allow yourself to grow slow and steady and still be extremely successful. Growing fast is what investors want, not necessarily what your customers want. Focus on working for your customers, not your investors (or potential investors).
If you're delivering value for those 8 customers, get closer to them, get into their shoes and then find more customers just like them (maybe they can even help you with that).
Then automate your operations as much as possible, and focus on getting your SaaS really stable for them. Then, slowly, deliver the most critical and important features for those customers, always focusing in high standards for quality and security.
Be a strong business, even if a small one. Run your business in a profit first approach. You might grow slow, but you grow healthy and strong this way, and if you persist, you may eventually find yourself grow really fast later.
[+] [-] saluki|5 years ago|reply
The latest episode is right up your alley.
https://www.startupsfortherestofus.com/episodes/episode-499-...
Some ideas/products will grow faster than others. Congrats on launching and having paying customers that is a BIG accomplishment.
Since you have the experience of creating one, start thinking about your next SaaS. Think more about the value it would provide, niche, market size, how would you market to them and idea validation.
I've built and manage SaaS for clients, I'm building my first one for myself right now.
I've been following SaaS for years, some have taken off right away to $10k, for most though the growth is very slow.
I think it depends a lot on your market/niche. How many people have the problem your app solves and what marketing channels you have available.
If you have happy paying customers chances are you're on to something. It just might not grow as fast as you want. Think about how to market it to potential customers similar to your current signups.
Congrats and good luck.
[+] [-] chris_f|5 years ago|reply
Without more information on the business (MRR, vertical, customers, etc.) it is difficult to provide better feedback, but now that you know more about the customers, do you have a plan to grow faster or at least a path of sustainability?
One year in most cases is not enough time to know whether to give up.