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Why is there no Shopify for SaaS? I asked Travis Fischer who tried to build just that.

I recently wondered: Shopify does all the heavy lifting and lets me open an e-commerce store in minutes. Gumroad does the same for digital products. What's the equivalent for SaaS products?

To me that seems like an incredible opportunity.

After I tweeted the question, Twitter did its magic and Travis Fischer replied: "Happy to chat about my experience building Saasify (Shopify for SaaS)".

Some background on Travis:

  • Before he started Saasify, he helped to developed WebTorrent, a highly successful open source streaming torrent client for the web (24k GitHub stars).
  • He also launched Automagical (AI-based video creation tool) that was acquired by Verblio in Fall 2018.
  • And before that, he founded Stamped, which was acquired by Yahoo! in Fall 2012.
  • Right now he's building Senpai, an asynchronous video platform that allows creators to monetize their expertise.

Saasify never really took off, but this isn't necessarily bad news. It just means that the opportunity is still up for grabs and Travis is happy to share everything he learned along the way.

Here is what I learned from our conversation.

Shopify for SaaS

When you want to sell a digital product, say, an ebook, you can focus solely on the product and marketing since platforms like Gumroad handle all the rest. You don't have to worry about payments infrastructure, taxes, or how you can reach your customers if you want to send them updates. It all works right out of the box and takes less than 5 minutes to set up.

The same is true for physical products. Of course you have to find a way to source the products and market them, but Shopify handles everything else.

But when you're trying to sell a SaaS product, the situation is still very different. You can't just focus on the functionality and marketing. Nope. You have to go through the painful process of setting up a payments and authentication infrastructure, find a way to handle taxes properly and to connect with some email service so that you can send your customers messages.

There are of course great services that deal with individual components. Stripe, Quaderno, Paddle, Auth0, Magic Links, Mailgun, Firebase. But everyone still spends a lot of time duct-taping them together and in a sense reinventing the wheel. All of this is a complete distraction from your unique value proposition. At an early stage, you should be focused one-hundred percent on your unique value proposition, your core features and your customers. Everything else is a distraction

Another popular solution are boilerplates like BullettrainJumpstart for Rails, and Laravel Spark. While these certainly help, they still require manual work to set up and maintain. Another downside is that they usually require a hefty upfront investment. As a result, they're not viable for people just starting out (who coincidentally would need it the most) and anyone running lots of small experiments.

Given that Shopify is a billion-dollar company and software is eating the world, a service like Shopify for SaaS seems like a billion-dollar opportunity. At the same time, it also would do a lot of good. Productivity from indie developers would skyrocket and it would become much easier for open source creators to finally capture some of the value they create.

Just as Shopify is arming the e-commerce rebels, a similar service for SaaS would be a weapon for software developers against increasingly monopolistic structures.

Now what are the lessons Travis learned by building Saasify?

Lessons from building Saasify

  • People get very confused if you try to mix SaaS and open source projects (even if the model makes perfect sense). In people's mind, these two terms live at the opposite ends of the software spectrum. So Travis pivoted early away from his initial focus on helping open source creators monetize their projects.
  • Developers want flexibility. Travis' first idea was a service that would turn any NPM module or encapsulated piece of functionality into a SaaS business. Turns out that this approach wasn't particularly attractive to most developers. Travis' idea that they could just use serverless functions for everything was too restrictive. If developers have to rewrite their whole project to make it work with Saasify it probably would be easier to just figure out all the infrastructure stuff yourself. So the next pivot was from serverless functions to "we help you monetize your API".

I want to pause here for a second because to me this sounds like the perfect way to think about the problem. The core functionality of almost any SaaS product can be wrapped in an API. (Here's an excellent primer on the API-first ecosystem. Also, there are of course SaaS products where a lot of the unique value actually comes from the UX, e.g. Superhuman.)

There is already RapidAPI (which recently raised $60M) - a marketplace that makes it easy to monetize an API. However, you can only sell direct access to your API endpoints. Since only developers know how to use APIs, this is the only customer group you can reach on RapidAPI. So a service that makes it easy to sell your API to regular users would be a huge upgrade.

So why then didn't Saasify become this platform?

  • Firstly, Saasify is still around. It's still running, there are happy customers.
  • But a key problem Travis encountered is that most customers were indie hackers, open-source developers, folks who are really good at creating that unique value, but who are not well-suited for marketing and growth and sales and support. These are all things you need to build a successful SaaS business.Most developers just wanted to say, here's my unique functionality, I want to press a button and I want to make money. That's not how SaaS works.This is especially problematic since Saasify didn't charge a flat fee, only a 20% revenue cut. So unless a project made money, Saasify didn't earn a cent.And once a project really starts to take off, they'll leave the platform to save the 20% cut. This is the exact problem that currently, for example, Substack is encountering.

I'm seeing two solutions to this problem. You could charge a flat fee like Shopify does. Their entry plan starts at $29/month, so they make money regardless of the store's revenue.

Alternatively, you can choose a marketplace model like RapidAPI which helps SaaS products get discovered by customers. There are many APIs that earn good money just from the customers RapidAPI sends their way.

However, Travis eventually ran out of steam. He had been bootstrapping the whole time and was running out of money. Also the feedback he got from VCs was not particularly encouraging.

So he took a break. After some time off, he decided that it's time to try something new. Even though Saasify didn't become what Travis imagined it to be, he's still bullish on the opportunity:

"There is an enormous opportunity to do what Shopify has done. Create a business in a box, specifically for API-based SaaS. [...] It is a huge opportunity beyond a doubt."


Thanks for reading!

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  1. 9

    I think Steve Peak nailed it with "If Saasify is for developers: they are more likely to build versus buy."

    Shopify, Gumroad etc. customers are largely non-technical and those services solve the technical problems of selling their products online more or less completely. The dynamics are different for SaaS products and the people developing them (who are going to be "in the weeds" either way), they don't really support a one-size-fits-all pre-packaged solution. Perhaps we'll get there as no-code/low-code tools continue to evolve.

  2. 6

    I'm not affiliated with them whatsoever but https://frontegg.com/ is attempting to do this. I believe they raised a few million dollars to help them out too.

    The problem I see with this is that there are so many different configurations you may need to make with your pricing, authentication, etc and by locking yourself into a closed system, you're potentially limiting your features.

    1. 1

      Oh wow, Frontegg looks awesome. Since I posted the article a few people send me several companies that attempt to do the same: https://saasbox.net/, https://boomsaas.com/

  3. 4

    most customers were indie hackers, open-source developers, folks who are really good at creating that unique value, but who are not well-suited for marketing and growth and sales and support. These are all things you need to build a successful SaaS business. Most developers just wanted to say, here's my unique functionality, I want to press a button and I want to make money. That's not how SaaS works.

    I was a Saasify customer, and this characterization is frustrating. It paints Saasify's customers as lazy and lacking business savvy, when I think the issue was more on the gaps in Saasify's offering.

    I sell access to an API called Zestful. It's not a huge API, but it gets ~$50/month in revenue. I'm a RapidAPI customer, and I hate RapidAPI. I look for alternatives every few months.

    RapidAPI is fine for monthly subscriptions, but they're terrible at pay-as-you go. My API is pay-as-you-go, and RapidAPI makes it unbearably difficult to find relevant information about how much I'm making or how customers are using my API.

    RapidAPI also does payouts in a ridiculously bad way. They send a separate PayPal transaction for each of your customers. I have a lot of customers who consume less than $5 worth of API charges per month. PayPal's fixed $0.30/transaction fee ends up eating a large percentage of my revenue on top of the 20% cut RapidAPI already collects.

    Saasify approached me saying they'd offer a better seller experience than RapidAPI. I agreed to let them add Zestful to their marketplace, but they never delivered the seller experience they promised.

    When I was trialing the service, Saasify didn't even offer a seller dashboard to see usage or earnings for my API. I told them I'd switch over from RapidAPI once they offered that, but I never heard from them again.

    The explanation of "Saasify was good but their customers were bad at earning money" really falls apart when you realize how little lock-in RapidAPI has. If I wanted to switch from RapidAPI to Saasify, it's as simple as changing the "Buy Now" link on my website.

    If Saasify had a better offering than RapidAPI for some niche of dissatisfied RapidAPI customers, it should have been easy for Saasify to poach customers away from RapidAPI. The fact that they couldn't makes me think that Saasify never created an offering that was compelling enough for anyone to switch.

    Some in this thread are attributing the failure to developers preferring to build vs. buy. I don't think that's accurate. Building and maintaining a system for metered billing is hard, and most rational developers would happily outsource that to someone else. Maybe if my revenues reached $5k+ per month, I'd consider rolling my own, but there are tons of developers in the $1-$5k range who have no reason to roll their own system when a vendor like RapidAPI exists.

    1. 2

      Thanks a lot for sharing your experiences! Super interesting to read about the shortcomings of RapidAPI and Saasify. There definitely seems to be a huge opportunity for someone focused on empowering developers in the $1-$5k range.

  4. 3

    As a dev I would love to have a solution that's just attached to authentication (Okta or whatever). Since the service needs to authenticate every API request anyway, the auth provider could also be the source of truth for subscriptions, premium feature access, billing, teams, invites, etc. Even usage-based pricing or billing styles like "$X per active user per month" could be done through the auth integration. Someone let me know if that exists already.

    1. 2

      Yes! Totally agree that at the very least payments and auth should be bundled.

  5. 2

    I enjoyed this article!

  6. 2

    Very intersting read, thank you!

  7. 2

    Jakob thank you so so much for sharing this – fascinating to read and packed with links I'm going to read more. Also, your newsletter sounds great – thanks for sharing.

    1. 2

      Thanks a lot James! Let me know if you have any feedback.

      1. 2

        Jakob, funnily enough I just replied to your post on twitter as well! I just wrote up some thoughts on this inspired by your post – thank you again for sharing!

        https://www.gosquared.com/blog/shopify-for-saas

  8. 1

    Has anyone thought about helping open-source developers to containerizing their software and let customers deploy the app on the cloud? With container technology, users can deploy a software on the cloud with just one click/command and developers can maintain it with container orchestration. I am not saying it's easy but it's definitely possible. Whenever I want to test out a open-source software, I will have to go through pages of readme, and if it's not the technology I'm familiar with, it can easily take hours. This is off-putting to regular users and developers themselves are missing opportunity to put their software in the hands of more users.

  9. 1

    I've been thinking about this post a lot, I listened to the podcast too. I think one of the challenges of a 'Shopify for SaaS' being a developer focused solution is that devs like to build. I think, for me, when it becomes repetitive and I've already learned how to build something - that's when I would turn to something like Jumpstart Rails if I wanted to get an idea off the ground.

    I think the real problem that stood out was not the building but the growing or marketing of the SaaS product. I think the line was ‘I just want to click a button and start making money from it’ This for me was the aha moment. The marketing / sales side of things - Shopify actually does this stuff really really well. Like abandoned cart emails set up in the click of a button. Facebook / Google ads integrations, etc.

    There's a huge opportunity there I think. If you want to grow a SaaS business you need to know a LOT of stuff and use a lot of tools (and a lot of them are awful.)

    Curating that stuff and making it easier for developers or indie hackers I think could make a lot of people happier!

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