Here's the fastest way to $10K MRR

Hey there 👋

Charlie here...

I'm a SaaS Product Manager by day and an indie hacker and newsletter creator by night.

I get to meet a lot of founders through my various pursuits and often what I hear is that $10k MRR is the 'golden number'.

It’s the number most need to achieve to replace their income and go full-time on their SaaS.

But there are so many different ways to get there that it can often be difficult to know what the best path to follow is.

This post is a breakdown of the most common SaaS models and a comparison of what's required to break that $10k milestone.

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1) B2C with a free trial

B2C SaaS products usually fall into the following categories:

• Utilities (e.g. calculators, VPNs etc.)

• Entertainment (e.g. news or music products)

• Travel

• Health

• and many more…

Most of these operate the following model:

• Free trial limited by time or features

• Paid plan usually ~ $10/month

With 6,000 new customers each month, 30% converting to paid, and 60% sticking around after 30 days:

You’ll make $10,800 a month.

This is why B2C SaaS is a hard space to build in. It's really difficult to bring in 6,000 new customers every month. Plus the 30% paid conversion rate here is optimistic, for many B2B SaaS products, it can be a lot lower.

2) B2C paid-only

In this scenario, I've simply removed the option of a free trial. Let's see what this does to the equation...

With 1,700 new customers each month and the same 30-day retention of 60%:

You’ll make $10,200 a month.

That’s the same revenue as the previous example but with less than 30% of the new customers each month.

That means far less marketing, customer outreach and support tickets. Your life will be much less frantic running this SaaS than in the previous example, but you'll be making the same revenue each month!

It’s clear that free trials are good at keeping you busy - but they don’t pay the bills!

3) Low-ticket B2B SaaS

In this category i'm including products like:

• Social media management

• HR

• Niche tax and compliance products

Products in this category often solve a niche problem for a specific user, most likely SMEs.

Ignoring a free plan like before, products generally follow a tiered model:

• 60% of users on a ‘basic’ plan: ~ $19/month

• 15% of users on a ‘middle of the road’ plan: ~ $49/month

• 5% of users on a ‘pro’ plan: ~ $99/month

With 450 new customers a month and 70% sticking around after 30 days:

You’ll make $10,665 a month.

Now we start to see the real power of B2B SaaS. Generating 450 new customers every month is still difficult, but it’s much easier than 6,000!

Plus, your customers are much higher value than in B2C - businesses are usually far less likely to churn than consumers.

4) High-ticket B2B SaaS

Here I’m not talking about the likes of Salesforce or Workday.

I’m more thinking of products that solve a high-value problem for businesses in a new or disruptive way

These products aren't don't just offer incremental improvements on existing ways of working - they provide a fundamentally new way for someone to do their job, often in less time or with less human interaction.

Pricing models vary but often it’s 3 tiers again so for the last time let's plug in the numbers and see what we get:

• 60% of users on a ‘basic’ plan: ~ $99/month

• 25% of users on a ‘middle of the road’ plan: ~ $199/month

• 10% of users on an ‘enterprise’ plan: c. ~ $1K/month

With only 60 new customers a month and 80% sticking around after 30 days:

You’ll make $10,039 a month.

It's clear high-ticket B2B SaaS could be the fastest way to get to $10k MRR. And what's more, it's not uncommon for some products in this category to command pricing of up to $5k/month.

You might think what kind of SaaS could ever cost $5k/month. But it's much more common than you think.

Think about it this way - if you can consistently save a business $100k/year then a $5k/month investment is a no-brainer right?

So there we go - a high-ticket B2B SaaS product might be the fastest way to reach $10k MRR.

To build one successfully, you'll need to provide a fundamentally new way of solving an existing high-pain problem.

Thanks for reading!

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