Is passive SaaS income even possible?

I've run a SaaS for 10 years. Here's what I've found.

It's a passive as you design it and your lifestyle.

B2B is hard to make passive if your price point is high enough to matter to your clients. The more mission-critical your service, the more of a headache for you, particularly as a solo. Unless you can outsource the headache and don't mind losing a few clients, that won't work.

B2C works better, but marketing becomes the challenge if you don't have built-in virality.

If you can build something that is simple to understand and operate, customer service can be minimal. If you make enough, you can outsource some customer service. knowledgebases and chatbots are your friend.

My SaaS is not as passive as an ebook, but what's more important to me is that I can make it more or less passive based on my needs. When my day job is busy, I can ignore all but the most pressing customer service or outsource it. If something goes wrong, I have a developer that knows enough to fix it without me.

When I have more time, I can invest in blog writing or other marketing activities and then "go dark" when I want.

I picked a small niche which has the drawback of smallish opportunity and the benefit of very little competition. I thought technology would have developed to make my solution obsolete over 10 years, but instead I was able to expand my product mix and stay relevant.

If you truly want passive, try an ebook or course. If you want relatively reliable recurring revenue that builds over time, SaaS is still better IMHO.

You’re absolutely right, there’s no such thing as passive income in any context. Even with stocks you (should) review your investments on the regular, and doing that effectively requires significant research if you aren’t actively working in the industry you’ve invested in.

I think people use the term passive when the effort you put in is much lower than the gains. The effort would never be 0. But if you have a person or team managing a SaaS (or any business) for you, and all you need to do it check in with them every few weeks, that’s a pretty good place to be.

Or you could sell for millions and only give yourself a little but at a time. That’s also pretty passive 😅

I think you got it exactly right.

Not possible. e-books and blogs maybe.

Yes, it is possible. You have to develop systems in place and remove yourself from the company after you reach profitability. Read EMyth Mastery: https://www.amazon.com/dp/B000RO9VIQ/

Passive like owning a million dollars in an ETF and withdrawing 4% every year? Nope. Never.

But would you really want that? My favorite situation would be a high income with steady work and new challenges along the way.

No, I don't think it is possible. You'll always have to put effort in (1) in the beginning to set things up and (2) to maintain it later on. Even if you outsource things, you have to maintain the maintainers. If there was a things such as passive income and it was easily attainable, wouldn't everybody already be doing it?

I personally don't think Saas is a good example of passive income, as running a Saas is a full-time job in the first few years at least. Even when the product is finished, it can always be improved, and the marketing tasks are never-ending.

There is always another newsletter, another blog post, another ad, another social media post, right? Those things take time and require daily attention.

I will counter and disagree, with the caveat that even if you can, you shouldn't.

I have had some SaaS before generating passive income so know that it is possible.
By passive I mean no involvement for a month or more at a time, so comparable to most stocks or other passive considered incomes.

But in each case there was automated support, no focus on growth and surprisingly, no growth.
Truly passive SaaS is basically in a coma.
Like a coma this is a last resort survival method, when trying to keep a project alive while waiting for a cure.

But if you are wanting to start a SaaS you likely don't want a coma. In that case you need to spend a steady focus on it, with the time increasing as you find traction.

Support, bug fixes, marketing, sales, management, these are anything but passive.
Or if you truly manage to automate all of them, that is the holy grail of Passive SaaS!

Totally agree, I'm living this at the moment. I'm technical co-founder of a SaaS product for about 5 years now and while it took time for it to finally start bringing in extra income, it's still not even enough to hire a full-time developer. I still moonlight doing maintenance and adding new features. Our target market is mid-to-small businesses because their demands will have less burden on the system which translates to fewer bugs/outages :). The few outages we get so far I can usually resolve which is why I'm always against aggressive marketing that my co-founder wants because it will greatly increase the risk of outages and bigger consequences than it is worth. The organic growth is slow but it allows me to keep any unexpected demands of the product manageable.