The Indie Hackers Podcast October 27, 2020

Trends and Opportunities for Building a SaaS in 2020 with Rob Walling of TinySeed

Episode #178

Rob Walling (@robwalling) and I discuss the state of SaaS in October 2020. What are the newest trends? Who's getting ahead right now, what kinds of companies are they starting, and what channels are they taking advantage of? Is SaaS too competitive, and if not, how do you pick the right niche when it all seems so saturated? Are info products, paid newsletters, and communities a better path for indie hackers than SaaS? And do you really need to listen to this constant advice to build an audience?

Show Notes

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    It's been a couple of days since I listened to this episode. I enjoyed it as always. But one thing stuck in my head so I had to come back and leave this comment.

    You make it sound so easy to build info products compared to a SaaS business. I don't recall the exact words but this is how I remember it (may be exaggerated ☺️):

    Rob says that you simply build an email list or Twitter following of 10k (super easy to do, every cat on Twitter has so many followers). Then you write an ebook or course (also easy to do) and sell it for $100 to your followers. Around 1k of your followers buy (also not too hard) so you have a fantastic $100k launch.

    @csallen in return mentions that it takes a long time to get a SaaS business to profitability and make money off it. With info products there have been lots of huge launches lately and they just started a couple of months earlier. I guess you're referring to @dvassallo and his amazing info products and launches.

    But as someone who has tried to build a business (SaaS and info) I have to say that this is the typical survivor's bias and focus on unicorn stories that is all to common in the founder scene.

    Let me share a piece of my story. I built a couple of software startups. Some attracted a thousand users and some even made a bit of money. But all failed for various reasons.

    I didn't want to invest a lot of time into yet another failing project so I enrolled into a business course called 30x500. They advocate to build an audience and a small info product at first. But they're very honest about it and say openly that it's a lot of hard work.

    Since 1.5 years I run a blog. The first year I got 80 subscribers to my email list. I wasn't very focused and persistent, didn't write a lot of content. But I put in some work. And that was it. A list of only 80 email subscribers.

    Now half a year later I'm used to writing content and I became better at it. Some blog posts were rather popular and I grew my list to 600 subs. I also built a course and launched it to my list. I had a conversion rate from my list of 3.5% and earned almost $2k. Far away from the 10% that Rob mentioned and the $100k launch. But I'm very happy with it. It was a lot of hard work.

    This is a mediocre story that seems insignificant against the huge successful launches. But it's the reality for most people building info products without a prior audience. Some have more and faster success but at the same time many never make it to this point.

    So from my point it's just the same thing as you see with SaaS businesses. Most fail. Some make it to $5k MRR after struggling for a long time. And some just start out and after 3 months they already have $10k MRR or more.

    The punch line: even if it looks and even my be easy for some time build a business don't count on it being easy for yourself.

    I think the approach that increases your chances is to focus on a real and specific problem in an area that you have expertise in, set a time constraint of a few weeks, and build a small product to fix it. That's basically what @dvassallo did with his 2 weeks challenge iirc. Still the chances of making considerable money on launch day are rather small of you don't have a following already. But you might make your first important sale 🙂

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      Refer to @spittet's comment below for some clarification.

      To clarify: when I said 10k people in your audience, I was thinking an email list, which very few people have. Twitter followers are worth probably 1/10th or 1/20th of an email subscriber (we ran tests when we were running Drip). So instead of 10k Twitter followers, think 100k or 200k vs. 10k email subscribers.

      I'll add to that, most people do not have 10k email subscribers - I know this from my experience building Drip - I got to see across 10s of thousands of lists. Very few people make it above a few thousand.

      Re: info vs. SaaS...I've owned 3 info products in tiny niches in addition to building 2 paid online communities (which I consider info products), and 3 books. I've built/grown >10 software/SaaS products. I can say, hands down, if info products had the recurring revenue, scale, and exit multiples of SaaS, I would do info products all day. They are easier than SaaS. There's no two ways about it in my experience.

      Obviously, YMMV.

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      Hey, I listened to the podcast and my takeaway is a bit different. I don't think @robwalling diminished the extend of the work you have to do with info products. If anything he highlighted the fact that he transitioned to SaaS as info products can be taxing long term as you have to keep putting interesting content out (books, videos, tutorials).

      However, if you're getting started, it's probably easier to try to sell an info product first, and then to move into SaaS (he had an analogy about playing minor leagues before moving up). The size of your audience is does not matter much here, and I fully agree with that perspective:

      (1) It's less expensive and risqué to build info products.
      (2) The odds of getting a bit of cash early for it are higher (but the ceiling is lower).

      The point about aspirational purchase stood out for me. I bought a fair amount of books that I still have to read, but I rarely try product that I don't use every day. So, if you write a book with the right excerpt and title, I'm likely to give you money even though I may never consume your product.

      Success is relative and we'll hear about the big stories in places like IH, media, etc. But as a rule of thumb I think it's sage advice to start with a small thing you can sell, learn from it and then iterate. But in this case I believe what was meant is that it's easi_er_ for IHers to start with info products, but it's still hard work nonetheless.

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    This was a great episode! Thanks @csallen and @robwalling. Is the transcript of the episode available anywhere? I wanted to quickly revisit a couple of the topics from the conversation.