How did you get into SaaS?
So many of us here are into SaaS. I'm curious, how did you get into SaaS in the first place? Were you working for another company first and saw an opportunity? Did you read about SaaS from a magazine? :) Share your story here.
SaaS is the closest thing for us software engineers to creating a cash flow asset out of nothing.
There are a ton of online businesses that we can start, e.g. YouTube, affiliate, courses, content, blogs, ecommerce, etc. etc.
However, there's one crucial difference between SaaS and content-based businesses.
The former is a lot more passive and feels a lot more like getting dividends from a cash flow asset in that your users continue to get the same or even increased value out of the same, untouched code base.
The latter is a constant hamster wheel of churning out new content on a regular basis to satiate the appetite of your audience for new fresh content, thus approximating traditional "hours for wages" employment a lot more closely. This is because old content very often loses "value" upon first consumption and has a predictable decaying "half-life", while old code doesn't.
The best example I can think of is LAHWF, who went from a multi-million-subscriber YouTuber to Amazon warehouse worker.
LAHWF was a YouTube prankster who made $250k/yr from AdSense + sponsorships + merchandise in the early-2010s. Instead of doubling down and creating more content to grow his audience further, he got sidetracked and started upgrading his lifestyle, renting an expensive LA apartment, new car, new women, partied too much, travelled the world, recklessly spending beyond his means, etc. etc.
He thought this "free money" would last forever or at least a few good years, but it didn't. The income tailed off rather quickly, and, before he knew it, he was owing money on back-rent and on taxes to the IRS.
Why did this happen?
Because there's a big difference between AR and ARR.
You can't assume AR will behave like ARR, and, while ARR doesn't last either if you don't keep your users happy, at least you can predict how it decays based on an assumed churn rate.
AR can literally go from $100k one year to $30k another, just like what happened to my friend's tutoring business.
And this is why -- consciously or subconsciously -- we all strive to make it through SaaS and not other forms of online business. This is also why I focused on my SaaS, instead of just going the consulting or affiliate route (I have 30k+ followers on my alternate Twitter account), which I must admit is very tempting at times for the easy money.
Even Nathan Barry walked away from the lucrative ebook market (he was pulling in mid-6 figures from selling ebooks) to focus on his then-$1k MRR email marketing software.
Because he understood MRR is infinitely superior to MR.
And so do we.
Wow. Thank you for your response. Really made me think.
I'm curious, what do you think about communities as a business model (say Indie Hackers?) If you get them to a certain point, they tend to run "on their own" so to say (as long as you control spam, etc.) They also churn out user-generated content on their own.
I don't know how communities make money, so I can't say for sure.
I can only assume it's ads and/or affiliate commissions? Like Reddit.
In my opinion, SaaS subscriptions are a lot more reliable and predictable (and most have a vendor lock-in advantage going for them) than, say, ads or affiliate commissions, which can vary wildly from month to month.
Consumers really have a large range of communities to choose from these days, including subreddits, Slacks, Discord servers, Telegrams, a large variety of forums, etc., so I'm also assuming the competition is a lot more cut-throat.
People can jump ship anytime if they're not "feeling it," and it takes a lot more effort than just controlling spam to build a thriving, growing community.
Hi, this is a great question. I work for a FINTECH company and we specialize in helping entrepreneurs acquire Saas business. In my experience, the best way to get into Saas is to purchase a company that already has a track record. By acquiring an established business, you will see a faster rate of return than if you were to build a brand from 0.
Now you are probably wondering, how can I afford to purchase a Saas? As you probably know, the Saas market is huge, and there are many investment options.
My company uses a revenue-based lending model, what this means is you pay back your loan based on monthly revenue; this gives you flexibility in payback. Also, we do not dilute your business, and we do not ask for personal guarantees.
Don't hesitate to contact me for more information.
Best regards,
John
I started a web agency with a friend in 2012, and we had a client that need an outbound telesales platform designed and built - it was the first time I’d really encountered SaaS or SaaS design as a discipline to be honest. Prior to starting the agency I’d been studying Architecture undergrad and Fine Art postgrad and doing graphic and web design a bit on the side - but once I dabbled in SaaS design I was hooked. Ended up leaving the agency to join a cloud accountancy startup and then have been working in a succession of SaaS companies ever since 😊 What about you?
actually, IH's created what I am now.
I always wanted to create website templates, since I started to learn how to write HTML and so, I enjoyed it so much, but I still did not have the skills, while learning I found Indie hackers, and by then I only had colorsandfonts.com made, so I made it very popular and I even had a newsletter, to grab addresses for the future, when I had my saas build I could sell to this emails.
Strategy learned here.
I recently sold the SAAS that I was creating templates together with a web app that was related to it.
For me it was scaling what I was doing for each individual company I worked for.
Whether it was a DevOps role, or developer role, I was dealing with the infrastructure and I noticed I can automate a big chunk of what I was doing and offer it at an insanely low price, so I ended up creating Utopiops.
I've followed a number of individuals who went from building apps on the side to building SaaS empires that allow them to do whatever they want with their newfound financial freedom.
I think SaaS is a pillar of wealth that only a small percent of the world can pull-off, but is a ticket to generational wealth of sorts. You can do so many more things like content creation, digital products, coaching, or even working for a big tech company to make the same amount of money, but SaaS tends to be a product and/or software person's easiest avenue.