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The 8 SaaS mistakes we made (that seem obvious in hindsight 🤦)

In this post (my first), I’d like to run through the main mistakes my partner and I made in our latest attempt to start a SaaS business. The whole thing - from kicking around ideas to pulling the plug and selling - took five months. The mistakes we made seem rather obvious in hindsight, but perhaps posting about them will be useful to other IHers anyway.

Here’s what happened:

A while ago, a colleague and I realised that we were both interested in entrepreneurship and began discussing business ideas. We became interested in payments because right now in the UK there are lots of companies releasing cool APIs in this space thanks to Open Banking.

Mistake #1 ☝️: wandering around with a hammer looking for a nail.

We decided to start doing customer interviews to see which businesses would be interested in using a new payment system to save on card fees. Because we thought they would be easiest to approach, we started reaching out to SMEs.

Mistake #2 ☝️: targeting SMEs.

We ended up speaking to lots of microbusinesses and sole traders. This was just as lockdown was being imposed, and a lot of health and fitness professionals were starting to move their services online. Most of the pain points seemed to be around admin, rather than the cost of payments - partly because of the low transaction values, partly because payment fees were just seen as the cost of doing business. So we started focusing less on payments and more on how we could help online service businesses reduce their admin.

Mistake #3 ☝️: moving away from saving money (objective value) to saving time (subjective value).

Yoga teachers seemed to be giving us the most positive feedback. Many had never run online classes and were just posting Zoom meetings to social media and hoping attendees clicked on a PayPal link. Most that we spoke to didn’t really know how much they were making.

Mistake #4 ☝️: selling tech to non-technical people.

Taking in all the feedback, we decided on a product that we thought could help: a simple booking tool for independent yoga teachers. To test demand, I mocked up a demo video that we posted to a yoga Facebook group. It got a lot of attention and a few (<10) signups to a mailing list, which we persuaded ourselves was the same as validation.

Mistake #5 ☝️: confusing enthusiasm with willingness to buy.

So we decided to build an MVP and a mailing list.

Mistake #6 ☝️: not building an audience before building the product.

I started on the product in my spare time while my partner blogged on the website to try to build a mailing list. After two months we had a working prototype and ~50 subscribers. But getting sign-ups to the mailing list had been tough and he’d been banned from Facebook groups for self-promotion a few times.

Mistake #7 ☝️: not having a clear way to access target customers.

Once we had the MVP, we got a few beta users signed up for some early testing. Then we started the launch. We blogged about it, posted about it and offered a time-limited discount but still got zero sign-ups. Only after reaching out directly and offering extended free trials did we manage to get a handful of users.

After reading Start Small Stay Small and realising that no one was going to sign up after only one touch point, we decided to focus on growing the mailing list. But after another few months of slow subscriber growth and no further sign-ups, we decided to pull the plug and sell. This was the only part that went smoothly: we posted on Flippa for $1000, got a lot of interest and ended up selling early for $3500.

Mistake #8 ☝️: underpricing on Flippa.

And that was that. My main takeaway from the experience is to think about distribution first. For whatever I do next, I’m determined not to build anything until I have validated demand and have a clear sales channel. For the time being, I’m starting a free newsletter to force myself to start learning about growth. I’d be interested to hear if anyone else has had similar experiences!

All the best,

  1. 5

    These are not just mistakes, it's called Research and Development. It's an investment that results in Intellectual Property: knowledge, skills and processes. IP is part of what makes a business valuable and it's one of the most valuable resources in the modern world.
    Thanks, for sharing your experience.

    1. 1

      Thanks for commenting!

  2. 1

    These are great insights. Looking forward to following your success.

  3. 1

    It seems point 1 was carried around for the whole story in a way. The yoga teachers/studios didn't need any custom coding probably, either a training or a service to setup a few systems would have been what they really needed.

    I don't really think savings money is a great focus in terms of mindset to offer a new service... It's the easiest and sounds like the right thing, but often is a trap similar to saving time... Also just offering to do something better is a common trap. What should be the focus is what a group of customers you have easy access to want and you can economically fulfill.

  4. 1

    For mistake number 6, what would you do different if you don't have an audience?

    My goal is to build in public which will hopefully gain traction from the indiehackers community, which is kind of what you're doing with this post here 😊

    1. 1

      I’m not sure but it feels like it has to be audience first. Exactly how to do that is a good question...

  5. 1

    Thanks for sharing your story. From my previous attempts to build an online business I can relate a lot with many of your points. I also made a list of mistakes and what I would do better with the next idea.

    One thing that ALWAYS pops up is building an audience early on. Your #6 (not building an audience before building the product) and #7 (not having a clear way to access target customers) are exactely about this issue.

    I am also trying to build an audience before launch and it is frustrating hard. From what I read, you actually tried hard to build an audience using a blog and writing to social media. Do you already have an idea what you would do different next time?

    1. 2

      Thanks for reading!

      Yeah, we did try to build an audience but we only started doing this once we had decided on (and started building) the product. The advice I hear a lot is to build an audience first then start thinking about a suitable product. I don't think the tactics (blogging and posting to social media) were wrong, but the strategy was.

      What are the main difficulties you're facing building your audience?

      1. 1

        One thing that is for sure true about audience building: the earlier the better.

        However I have the feeling I used it sometimes as excuse why the endavor has failed. Like: "If I would have build an audience early on I think this might have worked out".

        I think the real problem is, that I don't know how to build an audience. And this is something I struggle a lot. It seems like you have had the same problem.

        So I am wondering how others build their audience. Whenever I read a book or watch a video about this topic it either looks so easy or the point about audience building is "played down". Like: "If you have a great free offer as top layer in your funnel the people will come". But that is nothing I have encountered yet -perhaps the offer was not great enought?

        The main issue I face on building an audience for my current project is that there is no huge online community of my target customers out there. So I can totally emphasize with your point #7 (not having a clear way to access target customers)

  6. 1

    Great read and definitely a lot of points I can relate to!

    Could you get into more specifics around #2? Do you think targeting SMEs is a bad idea at all or would you propose to structure the offering in a different way?

    I tried to sell to enterprises in the past and that's another challenge given their long decision making process. At the end of the day the chance of an Indie Hacker selling to large corporations / institutions is almost 0 so I'd be curious what market you'd propose to target.

    1. 1

      Thanks - glad you enjoyed it.

      I'm no expert, but something I found in this attempt and previously is that SMEs don't always measure their time in £, which can make time-saving products difficult to sell. Perhaps this is because in larger companies responsibilities are split between roles, so automating a task means that you can reduce headcount. But in smaller companies where you have jacks of all trades, saving time doesn't map as cleanly to saving money.

      But you're right that selling to larger companies also has issues so 🤷‍♂️. I guess it depends on the product / market / person.

      1. 1

        Ah, interesting! Thanks for sharing that. Haven't thought about it that way 🤔

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