If you're bootstrapping, can you sell a $10 product?
Was reading through Webflow's No Code Conf recap here https://webflow.com/blog/kickstarting-your-no-code-career-no-code-conf-workshop-day-recap
and saw that Tara Reed (CEO of Apps without Code) mentioned you really need to be targeting a niche audience and charging premium prices if you're bootstrapping. While I agree with this to an extent, I'm wondering if there's anyone bootstrapping and also selling a low-priced product.
Are there products out there like this? Are any of you selling a low-priced product and also bootstrapping? What's it like?
I work for a SaaS company and was one of their early employees so I know how they grew to what they are today. Even when they were bootstrapping they never sold their services at low prices. Their average sale size back then was about $100 a month from each customer. The Sales team went for only guys who can pay $1000 a month because there is always some negotiation. I still remember our sales guy telling the founder that its embarrassing sometimes to quote $1000 for a product which is not worth more than $10 in the customers eyes. Yeah, we lost a lot of deals because of the price tag but the few who regularly paid us $100/month were the ones who kept the office lights on. And now after 4 years, the average deal size is no less than $10000/month. Its a lot easier to close deals now because of all the good name we have in the market. I am certain we would have closed our shop long ago if the price was even a dollar less than 100.
I really appreciate the story! This puts it into context for me.
If it's all self serve, yes you can sell $10 items. There's potential for upsells. Sell something for $10, and try to add on features people ask for $50 or $100.
Hell, I'd argue that a $10 self-serve product is worth more than a $100 product where you have to hunt the customers down, follow-up incessantly, close them, and then continue to hold their hand and manually set things up even after they've purchased.
@simplisticallysimple I like where your head's at. Keep it simple and so many problems go away that would otherwise require more money to solve.
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Yeah that's a good point - if the plan is to create many opportunities for cross/upsells then it might make sense.
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+1 for thinking about CAC/LTV
If you can acquire users for $10 and each one pays for an average of 5 months, then $10/mo is a perfectly fine business!
Where can I learn more about CAC/LTV?
Plus sign so heavy it turned into a black square.
Coming from a $3/mo, bootstrapped, b2c founder... I think it's only possible to sell sub-$10 products if you have primary distribution channels that don't depend on advertising. You just aren't earning enough at first to re-invest into growing the business.
With my app, Happyfeed, it's been difficult to grow to substantial income without ads. It seems pretty clear to me that you either need a little outside capital OR a growth channel like viral word of mouth.
If the product has natural network effects, I think this is possible, but it's really challenging. Working on a few ideas myself right now... will see how they play out!
On a side note, is there an option for Happyfeed to send me fewer notifications?
I find it hard to justify keeping the notifications on when it's between "daily" and "never."
Is there a frequency you would prefer? Weekly? Generally, Happyfeed is meant to be a daily habit and most of the app is designed around that, but I agree it's worth testing out some flexibility around reminders.
Every time I add more, retention goes up, so maybe it's time to explore less too :😄
This is interesting. I'd love to know what products have natural network effects. Like it's a part of their DNA. Do you have some that come to mind?
Social networking is the most obvious one, but probably not very repeatable these days, so better examples might be:
Dropbox is a great example - gotcha. Yeah, I suppose products closely tied to communities would also be ideal. Thinking about Makerpad and how it relies heavily on the strong and growing no code community.
Indie Hacker Rule #1: There are no F*&%'ing rules.
It's just a math problem. She is right that life is a lot easier when you can charge more but attracting leads/users is also part of the equation. In theory, a lower-priced tool can attract a wider audience and increase the top of the funnel.
Our ARPU is $12 and we are at $800k ARR. Our churn is even pretty high at 10% but there is so much volume entering the funnel that we can sustain and pretty good bootstrapped business. Not sure if that fits her model of success though.
On the flip, it was tough AF getting this business off the ground. But we always felt the market was large enough to sustain growth even at our price point. "Bootstrapping" meant making ends meet until we hit critical mass.
Side note: What is Indie Hacker rule #2?
I built a ~$5M/year company on $60 selling <$10 web hosting and Ventrilo servers. It sold to Lease Web. Strongly disagree with this advice.
This is one of the tricky questions that I'll have to tackle eventually, since the first iteration of my product will be pay-per-use. I believe in some cases it comes down to a couple of things:
If it's a white paper, then I can see $10 being an appropriate price. But if it's a product that achieves one or both of the above, then I think selling it at a low price would (1) generate mistrust with end users and (2) hurt its reputation more than anything.
Happy to hear thoughts on this though.
Take Zapier as an example. The lowest paid plan is $20/month. I'd consider this to be pretty low... it also has a free tier. Pricing is very much tied to saving time and this translates into "Tasks." And for the most part, pricing is based on number of tasks. Pretty obvious pricing model.
Not every app can "quantify" the time saved cleanly, but I think if there's a creative way to do this and it makes sense for your app, then it's a super valuable way to think about a pricing strategy.
I think that pricing low can still ensure trust with end users if it's cleanly tied to time saved or some other clear value-metric. But it probably involves having multiple tiers.
One of my side projects is a product that sells for $17, one-time.
This past month we sold around $2,125 gross. After advertising, expenses, fees etc, the profit will be much less (more than half).
However it’s entirely passive, evergreen, and scalable. I will never ever get rich from it, but it’s like owning a rental house and never having to deal with tenants.
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Book (paired with a free online course)
Depends on the product, if you're selling a course on udemy $10 it might be fine.
If you're selling a SaaS for $10 a month it becomes a lot harder, getting 1000 customers takes years. Then you have to deal with customer support. Churn is also high at lower prices.
I think starting a high cost productised service is the easiest path for an indie hacker. You learn a lot of useful skills while earning money from day 1.
I tend to agree that this is the easiest path for an indie hacker. Curious, why do you think getting to 1000 customers with a low-priced SaaS is a lot harder?
To find 1000 customers you will need to show it to 100,000 - 1,000,000 people.
Doing that is very hard.
When you have a higher price point you can do sales so the conversion rate is much higher.
Plus as I said churn is much higher when the product is cheaper so every customer you get in one will churn out.
Not to pick on you, but that's one of those very commonly stated myths that aren't true ;)
It comes from VC-backed startups which have to grow to 1000 customers very fast (ie are constrained by time, not money). So the best way for them to do that is blast everybody and pick out 1000 who buy.
As bootstrappers, you can sell to 1000 customers without (actively) showing your product to more than 10k people.
Not saying that happens every time, but it's a lot more common than you might think :)
For Versoly we have had 8k+ visitors and the numbers I gave above seem to hold true.
We of course can improve on a lot of things, but we have got paying customers who enjoy the product.
If you can get a conversion rate of 10% for visitor to paid, I will pay whatever is needed :)
Ah okay I see the angle. That makes sense.
This makes me wonder, if the low-priced product is super niche (and serves the niche really well), wouldn't the conversion rate go up?
But yeah, with low-price there is still the churn factor to consider. Either way, it's a tough situation.
Thanks for your thoughts!
Conversion rates are low because the buyers don't have much money and shop around a lot.
I work with SaaS companies and founded a small bootstrapped company. The larger premium prices often means sales and negotiation with a company. Those customers expects the world often. Now, with the side company I have we charge sub $10 and people just signup. It’s largely passive income.
We are pushing into more expensive plans with custom options for businesses but this means more sales on our side and possible client management. A bootstrap makes this a little harder. At the same time, support for a bunch of lower tier plans can be tiring.
Thanks for your input. It's really good to know people are charging <10 and it's working.
Do you see the support piece of it as a major problem at this point? Or is it manageable?
Two issues to think about. (1) What is the CAC? Is it ultra low? (2) Low average sale price requires low operating expenses and high volume customer transactions.
Maybe $10 per user if each customer buys multiple seats
We bootstrapped systeme.io, and our plans start at $27 per month, which is a lot cheaper than our competitors do. We went from 0 to $80k in MRR in 1,5 years, so for us it has worked like a charm. The lower your price, the bigger your market share. Mailchimp is bootstrapped and they're gonna do $700M in revenue this year
I think this is where having a free tier really comes into play
We don't have a free tier and we are doing great (because we are cheaper). It's really about having a better offer than your competitors
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