Should I just create a boring B2B SaaS?
I’ve been talking to a lot of founders lately. A pattern I noticed is that some of the founders doing a lot of MRR are running boring B2B SaaS businesses. For example, dental management software, senior living placement software, etc.
Software that is inherently boring and not many people really want to develop or run.
As someone who wants to build a successful software business, would it be best to cut out the product market for aspect of building a product and choose a market that’s already proven in a space that not many people want to build in?
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I don’t think that’s a fair characterization. Have they worked in that industry a while to see the need? Is it something they are really passionate about? There’s a niche for everyone in this world—it may be boring for a lot of people, but that doesn’t matter if you and your users love it. They can probably talk your ear off for hours about their business. You can make a B2B for so many industries, why would you ever pick one you find boring?
I love boring SaaS. I usually think of it as "not B2C, often in an unsexy vertical."
You can build and grow a boring B2B app pretty repeatably since it doesn't rely on the luck you often need with a B2C or highly-competitive space. You build something people want and are willing to pay for, figure out where those people hang out (actually, you should do that before you write a line of code), market, optimize your funnel, repeat.
One caveat, though: pick a niche where you have some interest. Toiling away for years on something you don't care about sucks. You'll want to like the niche and like the customers you'll be serving.
Most of the companies I've built and sold (several 7-figure companies, even more 6-figure companies) have been what I would consider "boring."
loved hearing you on MFM! How would you go about picking an industry for a "boring" SAAS? Interest is awesome but how do you think about things like TAM, growth rate, marketability, etc.
Depends on your goals. If you want an awesome lifestyle business that provides you with a FT income (or maybe more), but aren't looking to grow something into the millions of ARR, then TAM is pretty much irrelevant. There are thousands or tens of thousands of smaller niches where you can build a $10k or $20k/mo business.
If you want to build a more ambitious bootstrapped business into 7 figures of ARR, TAM is only slightly higher on the list of things to think about. For example, we have several TinySeed-funded companies working in tiny niches like SaaS for home improvement contractors, a CAD add-on, and electrical commissioning. We believe all of them can get to 7 figures (as long as they are priced correctly, in smaller markets, if you underprice you can screw yourself pretty easily).
Growth rate just depends on whether you focus on a niche and how many of those folks are online vs. offline + whether they adopt new software quickly or slowly. If they are online and adopt quickly, should be straightforward to grow. If they are offline and adopt slowly, expect to attend in-person events, do old school selling, and to grow more slowly (thus you need to charge a lot more).
yeah that makes sense – I'd imagine if they were online and adopt quickly, it'd be harder to find opportunities to serve those audiences (because more people would have gone after an easier target)? Is it usually a tradeoff between difficulty in adoption and saturation?
The point about pricing is really interesting. how do you price high enough but not alienate the SMBs who are your customers (assuming their budgets aren't very high)?
It's usually a trade-off between customer pain and competitor pain. Competitor pain means you're dealing with a lot of competition. Customer pain means you're dealing with customers who are hard to find online, don't adopt new tech quickly, need a lot of sales help and support, etc. These days, you're basically choosing one or the other.
The worst businesses are in spaces with both customer and competitor pain :-)
SMBs have money to spend on the right problems. If you solve a large pain for them, they will pay for it. If you're not talking SMBs and actually pro-sumers (like etsy sellers or many indie hackers), then you won't be able to price very high, and by nature the business will have high churn. You can still build a great small SaaS company catering to those markets, but it'll be very, very difficult to turn into a 7-figure company.
yeah that makes sense, appreciate you dropping some knowledge here :)
how do founders that you've seen living in areas like SF/NYC/Miami ever connect with the businesses/SMBs with customer pain? Seems like those businesses would be in less urbanized areas given that they are more offline and harder to reach
There are tons of SMBs online. Most web design or marketing agencies are SMBs, for example. Every SaaS startup is an SMB for a while. I’d consider freelancers vSMBs (very small), but there are loads of them.
Then you have brick and mortars that hang out online, in Facebook groups, Reddit, etc.
Re: finding pains, usually it’s a pain you’ve experienced yourself, you’ve seen the pain at work, experienced it as a customer, or a spouse/friend/colleague has experienced it. Those are the most common places people find pains to solve with SaaS, 90% come from one of those four, according to our State of Indie SaaS Survey we do each year.
Only 7% found their idea through research.
https://microconf.com/state-of-indie-saas for last year’s report. 2022’s will be up next week.
looking forward to it, thanks :)
B2B is a different game then B2C. Eg Seth Godin has some nice thougts about it :https://seths.blog/2012/05/a-hierarchy-of-business-to-business-needs/
Are you thinking long-term or build to sell asap?
This strategy seems to only work well when you have domain expertise or genuine interest in the industry you’re building for.
Double that. There are a lot of stories when for example lawyers create great law related startups, which seem to be boring, but due to their expertise in this field are skyrocketing
That's what I thought when I built a dental payments platform in 2018-19, but I ultimately made $0 out of it.
Why?
Because it takes real effort to sell it.
"Offline" customers actually require sales, either through phone or in-person, to close, especially when you're an unknown startup in the nascent stages.
These people just aren't going to go online and look for your SaaS, sign up for a free trial, and then enter their credit card info to begin a subscription, not typically at least.
They're mostly very busy and occupied with their own customers during business hours.
A solo indie hacker just isn't advantageously-positioned to handle B2B verticals, in my opinion.
This is also something Patrick McKenzie grappled with with Appointment Reminder.
He had to sell it actively, in-person, to salons, clinics, etc., and even then uptake was poor.
I'm not saying this is something that you wouldn't excel at, by God that's not what I'm saying.
I'm just saying you need to be aware of this potential pitfall.
"Online" customers are so much easier to sell to.
If you are doing something that you don't really love then isn't it better to work for a company? You probably will get higher pay with less work XD
It's very difficult to build a business in a market you don't have experience with. If you also find it boring, it will be even harder.
If you do have experience with an underserved market, it can be a great opportunity. Just know that if you're not using the product yourself, you'll have to spend way more resources on things like user testing, QA, etc vs if you're making something that you use yourself.
Don't look too much at the MRR charts people post.
If it's "boring" then that means there's a huge opportunity to create a company that
a) makes money
b) completely shatters the status quo
c) with (probably) limited competition (at least to start)
Like plenty of people have said - if you have zero interest you'll probably get bored and quit.
But if you fall in love with your way of problem solving - the brand aspect of it + the dopamine hit of fixing what's driving someone insane - then you can keep going and have a great company!
Frying chicken is boring. Chick-fil-A makes it feel like an honor.
Build excellent software and have a company with personality in an industry used to terrible software with worse customer service and you'll make money and be proud of what you do.
“Startup CEO Yaro Bagriy transforms vertical with status quo shaking <<solution/company/product >> taking on the boring industry of <<industry name>>” is really a story that writes itself.
I have a friend that built a software (~15 years ago, so not SaaS) to help restaurants manage orders in store (not take away). He did very very well for himself. But he owned and operated a restaurant for many years, and was able to install the software in his friends / colleagues restaurants quickly. It then caught on and was relatively easy to sell further. The same principle applies today, but the software can be served through cloud and as SaaS. You still need an entry....
Some questions that I would ask myself if I would be in your position. Am I ready to spend a significant amount of my time on something I'm not necessarily interested in? If the reward seems pretty high, and I'm building it to sell, then rationality tells me it would be worth trying. However, my personal opinion is that life is too short to spend a lot of time on something that I don't love, moreover, when there are still an option to work for/ build a product that wouldn't be boring for you.
I think many depends from your skills an work needs. I decided during creating my nex project to implement mysql tuning The official MySQL documentation does not explicitly denote the disk space or memory settings required for running MySQL server efficiently as they primarily depend on the size of the potential database or databases.
It strongly depends on what motivates you. My previous job was Enterprise SaaS and I know I don't want to build my own product in that direction (so much more pressure with large enterprise customers and contracts IMO).
It's clear to me that the stuff I want to work on are creative or educational products for consumers or individuals. There's not as straightforward of a "playbook" to follow for these types of products, so I've found a happy medium by working part-time as a contractor at a small indie company to cover living expenses and then spending the rest of my time on the products I enjoy building (games & writing).
Do you enjoy working with dentists and seniors?
If so, this doesn't sound boring at all!
If not, you probably won't keep at it.
Yes. But they're not boring.
Yes.
I do agree B2B SaaS is a bit difficult to build if you have no experience in that area. Non-technical founders are at a huge disadvantage in this world.
It’s unfair that they are out of the game especially when they carry so much talent.
However, you can always use tapflow.app to help if you're willing to start your B2B SaaS.
But I wouldn't recommend working on something that you have no interest in either. Chances are you will feel demotivated pretty easily.
Not sure if you should cut out the product-market fit part. Categories like "dental management" are bigger than you realize, with people doing hundreds of tasks in them. Maybe you'll find a particular task (or a set of tasks) that existing solutions fail to do and build a SaaS around them.
Also, by "boring" you probably mean things that have been around for a long time. There are "boring" things using that definition that you may not find boring, and that's where the sweet spot lies.
I wouldn't recommend building software you find boring. That will just make you more at risk for burn out and quitting early. I'm sure the founders you spoke with building software for boring industries have at least some interest in what they're working on.
If you don't have any ideas or can't risk failing to find a market for your idea, there's absolutely nothing wrong with solving problems in a proven space.