Ask HN: When did people start paying for your SaaS and why?

169 pointsby n_coatsalmost 12 years ago

When did people start paying for your SaaS?How many times did it take before you got it right? I don't suspect most people get it right on their first go, so what have you taken from your failures and what have been the biggest factors in your success in terms of gaining traction with your SaaS?In particular, what marketing/promo tactics have served you best?

19 comments

patio11almost 12 years ago

I got the first paying customer for Appointment Reminder the first day it was open for business. (DB id #22, after a bunch of test accounts and friends & family demos.) ~2.5 years and ~$1,000 later he still happily pays $29 a month. This was not unknowable prior to launching the site (though I was still on pins and needles): I had already walked the sales pitch for it to enough businesses in downtown Chicago that I was pretty sure some number would buy what I was selling if it were put in front of them.I think people who are pre-business vastly overestimate the difficulty of getting the first sale and probably vastly underestimate the difficulty of reaching scale. Gail Goodman has a presentation on the Long SaaS Ramp of Death. When you say those words in a group of SaaS entrepreneurs you'll see pained recognition on everybody's faces, even those (of us?) whose businesses are fairly successful. Dear God does figuring out the scalable marketing piece take time. (I've got it figured out for Bingo Card Creator, but have only isolated bits and pieces of the orchestra playing in disjointed fashion for Appointment Reminder.)<a href="http://businessofsoftware.org/2013/02/gail-goodman-constant-contact-how-to-negotiate-the-long-slow-saas-ramp-of-death/" rel="nofollow">http://businessofsoftware.org/2013/02/gail-goodman-constant-...</a>I kind of feel like I beat on these drums to death, but organic SEO, AdWords, lifecycle emails, and an optimized first-run experience are sort of my favorite arrows in the quiver for increasing sales. That and a whole lot of just grinding it out.Also, tie a string around your finger for Rob Walling's presentation from Microconf 2013 where he takes HitTail, a SaaS he acquired, from ~X to ~30X in recurring revenue over the course of a year. (There are numbers in the presentation but I remember him asking us to be circumspect about them.) He goes into month by month detail of what he was doing, and you'll understand the level of sheer frustration involved until hard work and ingenuity starts to reveal "flywheels" (his word for scalable/repeatable acquisition channels). As far as I know, this isn't on the Internet yet, but I expect it will be late this year.

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chaddeshonalmost 12 years ago

I launched BromBone a few months ago. About 150 people signed up and tried it at least once. Most of them never came back after that. No one ever paid.A few weeks ago, I refocused BromBone into a subset of what it was before. I've already got a handful of paid accounts and I expect a few more soon. I'm not rich yet, but some people paying is way better than no one paying. There is hope this time.For BromBone, I think there are two main things that have made the difference:1) The first version of the service would make developer's lives a little easier but still leaves a lot of development for them to do. The new version completely eliminates a pain for them with very little work on their part.The first version could have been helpful to a lot of different people. I thought a bigger market would be better. Instead it meant: * I couldn't focus on one community * I had to try to market to communities I didn't really understand * It fix half of a lot of people's problems, but didn't completely fix anyone's2) The new version has a landing page that looks more like a traditional SaaS landing page. I tried to go my own way to much with the previous landing page. I'm not a designer, and I didn't pull it off. I think the new landing page looks more legit to people and makes them more likely to recommend it to their boss.--BromBone v1 was a "Headless Browser as a Service". BromBone v2 is "Make your AngularJS, EmberJS, or BackboneJS website Crawlable by Google". <a href="http://www.BromBone.com" rel="nofollow">http://www.BromBone.com</a>

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pbiggaralmost 12 years ago

This is for <a href="https://circleci.com" rel="nofollow">https://circleci.com</a>. It was about 6 months in.We started making a very general CI service, and it took 3 months to realize that we should refocus on web-apps only. At that time, we started to get a bit of traction: maybe 10ish customers were using it, and after a month we asked them to pay.Most said they would, but for many, the service was too slow and it caused their tests to fail. So we spent another 6 weeks rewriting the backend to make Circle incredibly fast (we had been using t1.micros, we changed to huge machines with LXC, and many custom tweaks), and then our first paying customer, Zencoder, paid.So we only got it slightly wrong once in this startup, but we had both fucked up a startup before, and learned a lot from it (mostly talk to your customers, and make sure what you're building is something they really need and want).For us, it wasn't marketing/promo tactics at all, it was just to focus on a great product. Our biggest growth has come from word-of-mouth, and our biggest customers (eg Kickstarter, Shopify, a few more I can't name) came in organically. We got a reputation as being best of breed, and spent a lot of time focusing on how to improve lives for customers.Rather than thinking in terms of tactics/promos, I would focus on making sure that people want your product, and they want it so much they tell their friends (in our case, colleagues at meetups and over twitter). That's long-term sustainable growth. (You certainly do need short-term growth tactics too, but its harder without the great product behind it).

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josh2600almost 12 years ago

I work at 2600hz and I'm the head of marketing so I feel pretty comfortable chiming in here :).>When did people start paying for your SaaS?I think the earliest indicator I had that people would pay for our product was when someone said "Wow" when they saw it. We started the company out as a consulting venture because we couldn't raise VC money. The launch of the SaaS platform coincided with the V2 of our GUI, and so we had a strong indication from the consulting that folks would pay, but it was quite relieving to actually see dollars coming in to our coffers.>How many times did it take before you got it right?I think it's honestly still a work in progress. The first time I felt ok about asking someone to pay for our product was when I was comfortable using it myself and when I could see real value when positioning it to people. This was roughly a year after I started (I'm in my 3rd year now) because we didn't get it right on the first iteration at all.>What works for traction?Content. We started doing Expert Q&A sessions that attract a lot of attendance, but they're active traffic acquisition channels for us. Each presentation nets about 1000 views a month right now, so there's a lot of value in continuing to develop that kind of high-quality content. I think people in your industry value expert commentary, so if you're in a position to provide it, do it. (We are at $X,000,000 in revenue in a little over 3 years, bootstrapped, so I know it can be done).>What promos work?Promos usually don't work. We're not in PayPal land where your cost of acquisition can be $20 per customer. That's insane. What works now is great content, syndicated effectively.>What marketing tactics?1) Great content2) Speak at conferences3) Charity (Not because it's going to pay you back, but because people love the things you're passionate about)I think the best promotion/marketing advice I can give you is to be passionate about what you do and represent that passion with class. That's the ticket to success, in any walk of life :).TL;DR: Content Marketing + Syndication. People will buy your SaaS when it solves a problem you yourself experience daily.

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jeffblakealmost 12 years ago

When I first started goodnights <a href="http://www.goodnights.me" rel="nofollow">http://www.goodnights.me</a> & <a href="http://www.guestmanager.com" rel="nofollow">http://www.guestmanager.com</a> I had a grand vision to take on a huge goliath, raise money, get employees, yada yada, the whole "start up dream". The product took many turns, adapting to customer demands.After realizing event ticketing is quite the classic commodity, I asked myself, how can I differentiate my offering? I can't compete on features, service fee kickbacks, venue relationships, etc. So I built a guestlist component and targeted it directly for nightclubs. And so, after a couple failed fundings, working with crap people, I had a great product, a couple loyal customers, poor marketing. I've spent (am spending) tons of time to clean up the company (get it down to just me, no overhead, etc) - I've dropped the whole 'startup thing', now I'm building a SaaS company for myself & my customers, and see where it will take me. I prefer the freedom and debt-free lifestyle of living that it affords me, over being a CEO of some venture funded company.But to really answer your question, I got my first (SaaS) customer by hanging out every night at nightclubs, getting a couple people to evangelize using my software through the beta's. Once it was good enough, such that I didn't have to do anything for the club to operate itself, I went to another nightclub and just sold them on it. It wasn't that hard because the product is good. The clinching feature in my case is the ability to add a guest to the iPad via SMS - promoters love that. Now I am trying to figure out how to scale up my efforts, see if any partnerships make sense, maybe move geographically (I'm in Vancouver, but American)

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josscrowcroftalmost 12 years ago

<a href="https://openexchangerates.org" rel="nofollow">https://openexchangerates.org</a> was running as a free, no-signup-required ad-hoc currency API for about 8 months before a friend of mine kicked my ass and made me install a signup. I spent months playing with PayPal, test accounts, sandboxes, writing features nobody has yet used - but ultimately, when I put a "pay now" button on, I got my first subscriber the same day.The old advice rings true: the hardest thing was asking for money. People were happier to pay than get it for free, because it ensured this service they needed and loved would still be around, and its developer could eat :)The service really only grew thanks to the feedback of those early (and future) paying customers, too. They have asked the hardest questions, requested the most useful features, etc. - that has shaped the product and business more than anything.

bdunnalmost 12 years ago

I launched Planscope in February of 2012, and by the end of the first month, a little less than 30 people converted from a trial to a paid account, many of which are still around.I credit a pretty aggressive campaign of relentlessly understanding my first batch of announcement customers businesses, their needs, and what was keeping them from having an über-consulting business with the lack of crickets on launch day. Then again, I really didn't make launch day that big of a deal, outside of it being the first day I flipped the switch on the marketing site.I'd have a LOT more customers if I knew what I know today about why people buy / don't buy project management software, and I likely would have focused first on audience building over building a SaaS. But that's sort of the point, right? Get something out there that people pay for, figure out why people are buying and why (more) people aren't, and continuously improve on that. So it's not as much of a Eureka moment that suddenly made Planscope take off as it was a lot of shots fired in a dark room, and inching up the brightness with each subsequent shot.One thing that has worked really well for me: Gaining a customer through something other than my SaaS. I sell books, workshops, host a newsletter and podcast, etc. All of these are focused on making some component of a consulting business better. Planscope also helps better a few select parts of a consulting business, but has considerably higher adoption friction than a book purchase (e.g. ditching your current PM software and convincing yourself, your team, and your clients to shift somewhere else is not an easy task.)So after someone's "entered my ecosystem" and started getting value from me through information, there's a good chance they'll discover Planscope, and by then they'll be familiar with my consulting philosophy and have enough trust placed in me to adopt my SaaS (there's more than a good chance, actually — there are autoresponders in place to ensure it.)And the proof is in the last few months of signups: more than 60% of all new accounts come from my newsletter or have read one or more of my books, and the overwhelming majority of support requests start with "Hey Brennan" :-)

czbondalmost 12 years ago

It took a while. We went from 0 to $100k in a year - with $500k before year 2, but we're SaaS for SMB's within a well defined niche. It was a long hard slog of pitches, demos, and conferences. I've since left as CTO because I didn't want to be in the niche we needed to pivot to.

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griffordsonalmost 12 years ago

When?Year 1 - 5 figures Year 2 - 6 figures Year 4 - 7 figuresWhy? We knew the industry and knew the problems before we started. We had someone nearby who was desperate for a solution and confirmed they were willing to pay the high rate we were looking for. Technically, we had an interest in the types of technical problems they had and had spent years playing in those areas on side projects.While working on an MVP we continued selling the vision to other prospects using nothing but balls and a PowerPoint presentation. We landed a second customer for year one and worked hard to keep them happy. Our MVP was barely that and we iterated based on the feedback we got from the first two customers.Our fee structure puts us in a position where we only make money when our customers do. That makes it very easy to prioritize features based on how valuable they will be to our customers. This creates a nice tight feedback loop. When combined with our fanatical customer support, we have many die hard fans who do a lot of marketing for us in an industry where many of the prospects are good friends with each other and use trade shows as a chance to get together and drink with old friends and brag about the cool stuff they are using to help them with their business.

theflyingkiwi42almost 12 years ago

I've launched a few different businesses, two SaaS business and one software product.In all three cases people bought it on day one or the first day after the trial expired. The first SaaS business I just posted on a few forums to come check us out. I was shocked when people purchased a yearly plan when we were still very much in beta.However, it took two years before it started taking off, and then it suddenly did take off due to word of mouth. That was great, but also a double edged sword. Once better funded competitors arrived in the market, word of mouth went to them, and our sign-ups started to drop off.To counter it, we did competitive upgrades. That was really our most successful campaign though it only worked online. We did advertise it in magazines but few people every signed up because of it.With my latest SaaS, we had access to a huge opt-in email list. Lots of sign-ups on day one, and quite a few converted to paying customers once the trial ended. That said, having now done that for a year, we're still experimenting with different pricing and feature options.I think the key to a successful SaaS business is to really understand your lifetime values, and how churn affects it. It can really help you define a successful marketing campaign.Every model I've ever run on digital marketing shows that it will take approximately 5 to 12 months for it to start paying off. Add in your other overhead and it takes 2 years before you really start making money. But at that point, you will start making serious money.To summarize, the most effective marketing tactics I've used are:- competitive upgrades - referrals credits - e-mail marketing - white label branding of the same service with a major player in your industry (yes, you'll cannibalize some of your other sales but can be worth it) - google adwordsOnce they are in, try to quickly onboard them. Once people start deriving value, churn decreases significantly.

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thibaut_barrerealmost 12 years ago

I launched my first SaaS (<a href="https://www.wisecashhq.com" rel="nofollow">https://www.wisecashhq.com</a> - cash flow forecasting for freelancers and SBOs) in private beta one year ago.I enabled the (upfront) paywall a couple of weeks ago and have currently 15 or so paying customers (the early adopters got a 20% lifetime discount).For marketing, I'm going to use twitter, useful blog posts (educational, howtos) related to cashflow AND how to start your own SaaS successfully.In terms of getting traction, I think that putting a very basic landing page a year and a half ago helped me get traction - I mentioned the product quite often on twitter while working on it.

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sr3dalmost 12 years ago

I launched <a href="http://marrily.com" rel="nofollow">http://marrily.com</a> early December 2011, and within a few days I had the first sign up. I didn't advertise at all but had a soft-launch on HackerNews. Since then Marrily got mentioned on a few magazines (Brides, and NYMag) and totally via organic sources (they found me and reached out). I did a bunch of give-aways and sponsored-posts too. Building partnership is important since it creates endorsements and synergies. Depends on the industry, but for wedding in particular, traditional prints still give very good results. Even 6 months after the printed article on NYMag, I still have vendors contacting me for partnerships and new customers signing up via that source.My current pending failure is that I haven't made much progress since the launch but ended up getting a full time job for a while to rebuild my savings. I spent all my money working/not-working on Marrily and I was pretty broke when I started working again. I'm not giving up, but more or less spend some time to grow personally and professionally so when I resume, it will be another exciting stage of the journey.BTW, Rob Walling's interview in babuskov's comment is really good, full of food for thoughts.

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jdlshorealmost 12 years ago

I run <a href="http://letscodejavascript.com" rel="nofollow">http://letscodejavascript.com</a>, which is a screencast for professional JavaScript developers. It's not exactly a SaaS, but as a subscription business, it runs on the same fundamentals: rate of acquisition, churn, customer lifetime value, cost of acquisition, etc. We have X00 subscribers and gross low six figures. The show is bootstrapped and profitable, but not yet enough of a success to allow me to hire additional employees. I launched five months ago, at the beginning of February.> When did people start paying for your SaaS?I launched on Kickstarter, so in a sense, people started paying right away. There were two pivotal moments in the Kickstarter: First, I got a nice bump from posting it here on HN[1]. Second, I sent announcements out to a bunch of JavaScript blogs and newsletters. The only one that posted about it was JavaScript Weekly, but that led to a lot of people backing the project, and that led to an additional surge of publicity and backers. Part of the reason JS Weekly posted the project was because it was already successful, thanks in part to the HN surge, so there was this definite sense of success leading to success.When I launched to the public, the series had already been airing to KS backers for about seven months. I had been collecting email addresses the whole time from people who wanted to subscribe but missed the Kickstarter, and I had somewhere north of 1,000 addresses by the time I went public. So I sent out three "you can subscribe now" emails to that group, over the course of a month, and got a large number subscribers as a result. One of those people posted to HN[2], which led to about 70 more new subscriptions, and JS Weekly posted about the announcement as well.[1] <a href="https://news.ycombinator.com/item?id=3977240" rel="nofollow">https://news.ycombinator.com/item?id=3977240</a>[2] <a href="https://news.ycombinator.com/item?id=3977240" rel="nofollow">https://news.ycombinator.com/item?id=3977240</a>> How many times did it take before you got it right?This particular venture was a modest success from the beginning, but I'm still working on getting it right. :-) I have a pretty compelling product (based on subscriber feedback), and it's profitable, but I think it could be a lot more successful than it is.However, this is the latest attempt out of several to launch a SaaS business. The rest were all complete failures, in that they never generated a dime.> What have been the biggest factors in your success in terms of gaining traction with your SaaS?1. Let's Code JavaScript is based on a similar screencast I produced for free on YouTube[3]. That screencast was done as an experiment, but it got pretty good traction. So one smart thing I did was to recognize the appeal of the format and turn it into a subscription product.2. The timing was right. JavaScript is essential to the web, and increasing numbers of people are dealing with large codebases that need serious software engineering. I'm filling a significant need that a lot of programmers are facing.3. I'm well known in the Agile community and already have a decent following. That provided the "seed capital" to make the Kickstarter successful--and as I said before, success has bred success. It's also made it much easier to get the word out once I opened the show to the public.4. Posting to twitter, then my blog[4], then Kickstarter, allowed me to conduct a series of low-cost market tests and fine-tune my pitch. The Kickstarter took a surprising amount of effort, but it was all focused on the market. Building the market first and the product second was a great experience, especially compared to previous product attempts, and I can't recommend it highly enough.[3] <a href="http://www.jamesshore.com/Blog/Lets-Play/" rel="nofollow">http://www.jamesshore.com/Blog/Lets-Play/</a>[4] <a href="http://www.jamesshore.com/Blog/Proposing-Test-Driven-Javascript-Screencast.html" rel="nofollow">http://www.jamesshore.com/Blog/Proposing-Test-Driven-Javascr...</a>> In particular, what marketing/promo tactics have served you best?1. My existing network and reputation.2. The copy on the Kickstarter page resonated with people[5], and I've gotten a lot of compliments on the demo video[6]. Both of these reinforce the existing need people have for professional JavaScript.3. Being linked on news sites (such as HN and JS Weekly) and link aggregators (such as [7] and [8]).I wouldn't say that I've found the "right" marketing and promo tactics yet, though. I put a lot of effort into a "press tour" after the public launch in February. I spoke at a user group and several international conferences. It took a huge amount of effort (mostly because I had to pre-produce videos to air while I was away on those trips) and I can only point to eight subscriptions that directly resulted from those talks. I'm sure it helped raise awareness of the series, so it wasn't a total loss, but it seems pretty low bang-for-buck.Next I'm going to focus on (free) content and in-bound marketing. I've always been good at this, so I have high hopes. My conversion numbers are very good, so if I can get more people to visit the site, I think I can go from "scraping by" to "major success." Time will tell.[5] <a href="http://www.kickstarter.com/projects/188988365/lets-code-test-driven-javascript" rel="nofollow">http://www.kickstarter.com/projects/188988365/lets-code-test...</a>[6] <a href="http://www.letscodejavascript.com/#demo" rel="nofollow">http://www.letscodejavascript.com/#demo</a>[7] <a href="http://pineapple.io/resources/lets-code-tdjs" rel="nofollow">http://pineapple.io/resources/lets-code-tdjs</a>[8] <a href="http://devblog.avdi.org/2013/06/21/a-list-of-programming-screencast-series" rel="nofollow">http://devblog.avdi.org/2013/06/21/a-list-of-programming-scr...</a>I hope this helps! One last note: I found this video from Constant Contact about their experiences marketing their SaaS to be enlightening: <a href="http://businessofsoftware.org/2013/02/gail-goodman-constant-contact-how-to-negotiate-the-long-slow-saas-ramp-of-death/" rel="nofollow">http://businessofsoftware.org/2013/02/gail-goodman-constant-...</a>Good luck!

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JonoBBalmost 12 years ago

I founded <a href="http://www.accountportal.com" rel="nofollow">http://www.accountportal.com</a> about 4 years back. We had our first paying subscribers within the first month, but growth over the first 12 months was very slow.Things continued to grow at an moderately increasing rate after that. Our initial app was based on Adobe Flex (i.e. flash backend); worst decision ever. The iPad was released - initially we thought (hoped!) that the decision to not support flash would be overturned in time. After a few months it was clear that we had to change.It took us 6 months to completely rewrite our app, during which time growth pretty much flat-lined. However, the rewrite was probably the best decision ever, since it has allowed us to move much faster then we ever could before, and subscription rates increased.I'd say that it took us 3 years to get it "right". There are still loads of things we need to improve (product tours, engagement emails, etc), but we're getting there. Those first years were tough, and many times we thought of giving up. We're now doubling numbers every 12 months. We're up against some pretty huge competition, and those kind of growth rates suit us just fine given that we have always been 100% bootstrapped and that we're now cash positive.The two biggest factors in gaining traction were: (i) Trying loads of different approaches. Different marketing channels, different prices, different emails, different anything. Having said that, we sometimes get some really weird stats coming through that have no rhyme or reason. Why is one month 3 times more subscribers than the previous month, and then back down again? Sometimes it just feels like a "roll of the dice". (ii) Not giving up. We were in the fortunate position of being able to stick it out for a long time (some may say longer than we should have). I sometime heard stuff like "good entrepreneurs know when to give up", and I'd guess that some (most?) would have in the same position as us after a year or two. The early years were an absolute slog - so be prepared to think in terms of years, not months.

somid3almost 12 years ago

they never did. everyone said they would, but when push came to shove, no one.

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martydillalmost 12 years ago

Well, for <a href="http://surveylitics.com" rel="nofollow">http://surveylitics.com</a>, they haven't yet. ~50 people have registered for the free plan, or created a free survey, but no paid signups yet. The site's been up for a few months now.I haven't done much marketing yet, though. Or reaching out to potential users or industries. Or really, any of the things that you're supposed to do... so it's nobody's fault but my own.There are lots of great tips in this thread. I'll definitely be giving some of them a try.

mtkdalmost 12 years ago

I see a lot of SaaS marketed directly at 'users' e.g. developers etc.In 'enterprise' the person you need to be pitching is the CFO/FD - when finance teams see SaaS they love it - even if net it costs more than existing solutions over same period.1) It helps to qualify/budget projects - splitting the service cost monthly by default2) SaaS can be turned off - unlike massive cap-ex or long-term op-ex commitments

dexcsalmost 12 years ago

I run <a href="https://www.dozeo.com" rel="nofollow">https://www.dozeo.com</a>, a online meeting tool, and we had 2 minor changes in our software. We listened to customers and coded what they wanted to have. A public API was our biggest move towards a bigger customer base... My guess is that everyone wants to build his own thing and we can provide them a good software...

ngcodersalmost 12 years ago

We started <a href="http://wpoven.com" rel="nofollow">http://wpoven.com</a> , 2 weeks back , first signup was 3 days in.We never did any launch page, pre launch advertising ( actually a mistake) etc. But we own some other sites where we placed our banners. A one to one chat helped us secure our first client.