SaaS startups anyone can start

From: myfirstmillionpod

SaaS (Software as a Service) is identified as a prevalent and effective business model in the software industry [02:57:58]. There are numerous opportunities within this space, including those accessible to non-technical founders [01:08:01].

Opportunities for Non-Technical Founders

It is very possible to build a successful SaaS company without being a technical founder [01:11:31]. Approximately 20-25% of independent SaaS companies have no technical founders [01:11:29].

Required Expertise

Non-technical founders typically bring expertise in one of two areas:

• Subject Matter Expertise: They deeply understand the specific niche they are building software for, often having worked in that industry for many years (e.g., an accountant building software for other accountants) [01:11:34].
• Sales or Marketing: They excel at acquiring customers and promoting the product [01:11:45].

Strategies for Non-Technical Founders

If you are non-technical and want to start a SaaS company, several paths are available:

• Acquire an Existing Product: Purchase a small, existing SaaS product and leverage your marketing or sales skills to grow it [01:12:30].
• Hire Development Talent: If you have capital, hire a developer or an agency to build your software [01:12:37].
• Fund Development with a Day Job: Work a day job and use the income to pay developers to build your product [01:12:45].
• No-Code MVP: Build a Minimum Viable Product (MVP) using no-code tools like Zapier or Notion to test the concept and generate initial revenue. An MVP for a SaaS app typically costs between $10,000and$30,000 [01:12:56], [01:16:46].
• Productized Service Approach: Start a productized service in your chosen niche to generate income and build expertise. Use the profits from this service to fund the development of your SaaS product. For example, the founder of Castos (podcast hosting) started by offering a productized podcast editing service called Podcast Motor before building their software [01:13:13].

Recommendations for First-Time Non-Technical Founders

It is advised that first-time non-technical founders avoid building a complex SaaS application immediately. Instead, they should consider a “stair-step approach” to bootstrapping a SaaS company [01:16:15]:

1. Start with a simpler product, like a WordPress plugin, HubSpot add-on, or Salesforce add-on. This is less expensive to build and easier to maintain [01:16:18].
2. Gain experience and generate enough revenue (e.g., $8,000-$10,000 per month) to replace your day job income [01:16:29].
3. Once you have this experience and financial stability, you can then tackle a more ambitious SaaS project [01:16:37].

Identifying Niche SaaS Opportunities

A common approach for finding SaaS opportunities is to identify a problem where people are currently using inefficient methods like spreadsheets (Excel or Google Sheets) or excessive email/text communication [00:42:43], [00:50:47]. These manual processes are ripe for automation and specialized software solutions.

Examples of Niche SaaS Companies

• Builder Prime: A CRM specifically for home improvement contractors. This software streamlines communication and sales processes for a very specific industry, demonstrating how a general tool like a CRM can be tailored for a niche [00:42:30].
• Client Hub: Project management and CRM for accountants [01:08:13].
• Gymdesk: Software to manage a gym business, including CRM and communication features [01:08:20].
• ScrapingBee: A service that allows users to scrape the web by providing servers and bypassing blocking mechanisms. This company achieved over $1 million in annual recurring revenue with only two founders [00:46:18], [00:47:07].

The “Dual Funnel” Business Model

A highly effective business model for SaaS is the “dual funnel,” which combines a wide, low-cost user base with high-value enterprise clients [00:56:31].

• Wide Funnel (Low End): Offers free or very inexpensive plans, attracting a large number of users. This helps build brand awareness and can include viral loops (e.g., sharing links to a recording or document) [00:56:45].
• Narrow Funnel (High End): Caters to enterprise clients who require specialized features (e.g., single sign-on, specific integrations, custom invoicing) and are willing to pay significantly more (e.g., $10,000-$30,000 per month) [00:57:03]. The higher price for enterprise clients often reflects the increased complexity of sales, procurement, and ongoing support, rather than the software being “a thousand times better” [00:58:16]. This model leads to a more stable and predictable business [00:57:37].

Considerations for Building a Successful Startup

• Market Size vs. Business Metrics: While a large market is generally desirable, most markets are big enough for a successful SaaS company. The key indicators for success are strong business metrics, particularly low churn and effective pricing [01:10:02].
• Pricing Strategy: Charging too little (e.g., $10-$20/month) and experiencing high churn (e.g., 10%) makes it nearly impossible to build a multi-million dollar business. However, if the average revenue per user is higher (e.g., $100-$500/month) and churn is low (e.g., 2-3%), almost any market can support a $5 million business [01:10:09].

“The moment someone approaches you a potential customer and says cool we like your software we need to redline your terms of service or we need to invoice with POS or we need single sign-on or we need a salesforce integration or we need there’s there’s this whole list of things that instantly should trigger you should pay about a hundred times more that your price should go because the sheer headache of dealing with procurement and going through that process and the maintenance and all the you know the interaction it’s not that the software is better it’s that the the time and the headache and the pain of making that sale and maintaining that customer is um that’s where it’s at right that’s where the money spent” [00:58:24]

• Risk of Platform Dependency: Building a SaaS product solely on top of another platform (e.g., Salesforce, Shopify) introduces “platform risk.” The platform owner can change terms, pricing, or even shut down your access, which can negatively impact your business and lead to a lower valuation if you try to sell [00:45:00].
• Finding Developers for Non-Technical Founders:
  • Referrals: Ask trusted communities (e.g., MicroConf Connect, Indie Hackers, Dynamite Circle) for referrals to developers or agencies [01:14:46].
  • Referral Services/Aggregators: Services like Trustshoring (for Eastern European agencies) or CloudDevs.com (for Latin America) vet agencies and refer them based on your needs [01:15:10].
  • High-End Talent Platforms: Toptal is known for high-quality, though expensive, developers [01:15:42].