The best part about their $5,000 is that most of it will be profit.<p>I'm pretty happy with my own SaaS application, but because I provide a telephone service I have pretty low margins. This is by far the most annoying thing about my business (it affects me more than taxes), especially considering that it would have been just as much work to make a SaaS with negligible marginal costs.<p>The lesson is, if you have the choice and don't want hypergrowth + venture funding, provide a service that costs you next to nothing to provide. Another disadvantage of providing a service that has high marginal costs is that your bigger competitors will usually be able to outprice you. If all you need is a few servers, you can differentiate based on product alone and charge accordingly.
Going from zero to $5000/mo is definitely great as that means you've created some value somewhere. But $5k is not really sustainable as a business for three people. It's a great side-job for one person, or good total income for one person who lives in a low-rent / low-cost area.<p>But for a team of 3 people, you can do much better than $5k just selling your time in consulting.<p>It's not clear how you'll get from $5k/mo (nice side-job income) to $50k/mo (Good bootstrapping income for team of 3) to $500k/mo (ok, now you have a business that scales).<p>I'm not being critical here -- It's just that SaaS math has me scratching my head wondering if all that work for all those customers with such small amounts to show for it is worth it.<p>Would you rather service 200 people for a total of $5k a month with 3 bodies to support or one solid consulting customer @ $5k+/month with just yourself to support?<p>I'd imagine that you'd want more revenue so you can have a business and not just lifestyle income to support one person. Going from 0 to $5k is one thing -- the advice here is good for that. But getting from $5k to $50k, where you need to be to have sustainable business for 3 people, will require much more substantial effort that's not clear you can achieve with these methods. Indeed, it is not even clear what your margins are at the $5k/mo revenue point and whether that will even be sustainable given the amount you'll need to spend on Customer Acquisition, Customer Support, and slaying the Customer Churn demons to retain your necessary high monthly subscription rates. This is where most SaaS companies die -- trying to achieve this necessary transition.
I'm glad this worked, so congrats on that. However, I don't agree that this is good, actionable advice.<p>1. Find a problem.<p>2. Get to hacking.<p>3. Soft launch.<p>4. Synthesize feedback, build more.<p>5. Expand the funnel (user acquisition).<p>6. Aha/Win/Rich/Yay<p>...That's the formula for any startup/technology service. It's literally those steps, a little individual secret sauce, and you win or you die (figuratively speaking). I know it worked for you, but things like<p><i>>"In our minds, there is no better way to build a product that people want than to be the customer you plan to sell to."</i><p>...aren't very helpful. It's a broad characterization of how to put yourself in that mindset.<p>But in any case, good explanation of what you did for your own project :)
Thanks for sharing. I wrote similar post here on HN sometime back, would like to share here to add value :<p>After 30 days of launch, I managed to get 7000+ active users, about 100 paying users and $6129 in revenues.<p>My learnings :
1. Build your first main feature really well<p>2. Dont launch with 100s of features, keep the product simple<p>3. Make sure to have some influencers on your board as users from day one and make them super happy<p>4. Use tweet button very smartly - this is make or break up for your side project<p>5. Dont hurry up into making money, let your users ask you for more feature and then roll out paid features.<p>Shared here : <a href="https://news.ycombinator.com/item?id=5600281" rel="nofollow">https://news.ycombinator.com/item?id=5600281</a>
Wow the negativity here is astonishing. $5000 recurring revenue is an amazing accomplishment, and something that most startups never see.<p>Kudos on this achievement, for taking the time to share it, and for the hard work behind it.<p>Wishing you guys the best of success in getting to the next milestone.
> From the initial connections and users we picked up from the post, we were able to convert 20 users into $50/month paying customers.<p>On first take, I was surprised you were able to pick up 20 paying users just from an HN post.<p>But then I went back and read the first part:<p>> First, being in the community, we had a bunch of friends that were great customer candidates.<p>It would be interesting to know the breakdown for those first 20 customers: how many came from personal connections?
For Passive income dreamers, I think it's important to mention<p>1. This is revenue, not profit.<p>2. 3 guys. So $1600/person.<p>3. Seems like they don't have jobs (means taking this full time, probably with consulting).<p>Still a pretty good job, and I'll be interested to see their growth.
I'm impressed that a soft launch[1] brought in twenty users on a $50/month plan ($1,000 MRR.) They really launched with a solid product.<p>[1]: <a href="https://news.ycombinator.com/item?id=5401470" rel="nofollow">https://news.ycombinator.com/item?id=5401470</a>
Nice write-up.<p>When did you guys actually started working on this and how did you transition from a day-to-day consultancy mode (no doubt bringing in a multitude of that $5000 revenue) into working on this full-time. Your blog posts don't seem to contain a creation date :)<p>Did you fund the initial development with your own savings or did you get angel investors on board early on ?<p>I can imagine that after taxes and deducting costs there is little or no profit left but it's a great psychological barrier to cross !<p>I wish you guys the best of luck ! Great idea and great to see people using it (and paying for it)
Fascinating. Thanks for the post. Not sure what your unfair advantage is here, perhaps being part of the community?<p>What barriers do you have to competition from a one or two person company w/ lower costs?<p>This is an excellent talk about what it takes to get out there and find the set of customers outside this bubble that will get you to $50k/mo.<p><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 hope those pseudo-personal emails don't get more frequent. I don't need more "spam", and it makes me feel a little rude not answering direct questions in an email.
So you started charging for the service very early (almost day 1). that's not the traditional startup approach of build a biggish user base, work out the product beyond MVP and then monetize. I like hearing you got to rev early so props but is there a downside to future growth (even in the short term)?
I also think that this is another awesome example how it could work including the steps you should go. There are thousands of ideas out there but most of them never go productive because out of whatever reason so you guys, as all other startups with paying clients, have my biggest respect.
Can this strategy be duplicated? It seems like your main traffic source has been press coverage, but that isn't something that you can plan to have or rely on. Would you have gotten this far otherwise?
Call me a jaded but 60k a year in revenue isn't won't pay the mortgage or put food on the table or clothes on your back. And if you wanted all three... forget about it.