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The 2021 State of Independent SaaS Report

We've just released MicroConf's 2nd State of Independent SaaS Report!

It includes answers to questions like:

  • How do most non-venture track SaaS founders validate their idea?

  • What percentage ask for a credit card before a free trial?

  • What is the correlation between the number of co-founders and a company's MRR growth?

This is the 2nd year for this first-of-its-kind survey of bootstrapped and mostly bootstrapped SaaS. As with last year, we've put an extensive report with our findings.

Check it out! You can download it for free at: https://microconf.com/sois-report-2021

  1. 4

    What do you think is the most important trend or result for founders to pay attention to?

    I like to see that 84% of founders are validating their ideas now — it suggests that the massive amount of startup education out there is having an effect!

    …although it looks like by far the most popular validation method is building an MVP/prototype, which could just mean people are doing what they've always done (jumping into building) but are now calling their early versions MVPs.

    1. 3

      Here are some trends I found interesting:

      • More startups are offering free trials and free plans, and fewer are asking for credit card before starting a trial.
      • Only 8% of founders arrived at their business idea using research, while 90% started with a problem either they were experiencing, or someone they know was experiencing.
      • More companies have raised funding this year (14%, up from 11% last year). You and I have talked about this on your podcast, but I believe it comes with more availability of bootstrapper-friendly funding, and less of a stigma with raising.
  2. 2

    Hey Rob, thanks for sharing this.

    Just wondering, in your dataset do you have any correlation between types of validation (page 18) and success rate (not sure how to define it, but probably either achieving some level of revenue, or maybe years in business).

    Would be interesting to know which types of validation produce stronger signals than others.

    Also, would be interested to see how the respondents who did not validate fared.

    1. 2

      You know, we didn't run this but we do have the data to do this. 2 years ago when we first talked about this report that was an idea I had thrown around.

      Let me see what I can do to have the analyst run growth comparisons across those validation approaches. Correlation != causation but I'm still curious :-)

      1. 2

        Cool. I feel like the validation hurdle is where most people trip up, so I'm definitely interested in this topic.

        Great presentation, lots of interesting insights.

    2. 1

      Ok, I finally had a chance to get this data analyzed. Below are the validation approaches and the average MRR growth per month for the companies that used that approach.

      As always, correlation does not equal causation, but nonetheless interesting to see fastest growth from copying a competitor and pre-selling.

      No validation is in the middle, and purchasing the company or getting verbal commits is at the bottom.

      I copied a competitor $1,942.16
      I pre-sold the product $1,866.52
      Asked my audience $1,090.31
      Built a prototype or MVP $1,084.93
      I didn't validate before building $868.64
      Landing page smoke test $799.42
      I purchased this company $624.69
      Verbal commitments $606.51

      1. 1

        Hey Rob, thanks for the follow-up on this.

        I think you could say that methods 2, 3, 4, 6 and 8 are types of "market research" validation and I would expect #2 (pre-sold) to be the strongest signal of these.

        Copying a competitor strategy is really interesting because it seems like a lot less work than doing the market research and it makes sense because if a competitor is doing well, that seems like a shortcut to demonstrate that a viable market exists.

        This is really fascinating stuff. I think the hardest hurdle for indie hackers is just finding an idea that's actually viable -- if there are ways to mitigate that risk, that's a huge win.

        Thanks!

  3. 2

    Very insightful. Thank you for taking the time to share your findings.

  4. 1

    Hey Rob! thanks for insights!

  5. 1

    damn that correlation with hours worked...
    a case for working harder

    1. 2

      That one's tough for me, because I have been a 30-40 hour/week founder for most of my career. With short bursts of 60 hour weeks when needed.

      I think the hours worked show that full-time focus makes the biggest difference, rather than hacking on a side project after work. Next year I want to ask whether people are focused FT on their project or if it's something they are doing on the side. That might help make this data clearer.

  6. 1

    Thank you @robwalling for the awesome report! Always looking forward to these :)

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