Ask HN: Profitable SaaS? How did you grow your business?

I have a B2C subscription site for digital nomads called Nomad List (<a href="https:&#x2F;&#x2F;nomadlist.com" rel="nofollow">https:&#x2F;&#x2F;nomadlist.com</a>) with about 5,000 paid members.<p>The main site was always free and that became kind of a lead generation &#x2F; acquisition funnel to have people sign up and become paid members.<p>What they pay for is a chat group and forum (and some extra apps I made for digital nomads, like a trip planner on <a href="http:&#x2F;&#x2F;NomadTrips.co" rel="nofollow">http:&#x2F;&#x2F;NomadTrips.co</a>). The price now is $75&#x2F;year.<p>I simply started by adding little features (like a chat), I charged $5 one-time first, because I was getting a lot of spammers. Even with $5, people kept joining. So I kept raising it, to $25, then $50, then $65, and then in April this year I made it annual and recurring. Sign ups have remained the same and even grow.<p>Meanwhile the main site that&#x27;s free (<a href="https:&#x2F;&#x2F;nomadlist.com" rel="nofollow">https:&#x2F;&#x2F;nomadlist.com</a>) keeps being covered in mainstream press like Time, Times and HuffPo. I don&#x27;t do any PR or marketing. So my CAC=$0. It also ranks very well in search as it&#x27;s linked to by so many other sites. Also not actively worked on that, it just happened because people liked my site.<p>I&#x27;ve tried FB ads last month but only saw 4 conversions.<p>So I think organic acquisition works best for me. Which means: Make a cool site, add paid features, make it recurring. Win.<p>This is B2C though, so probably quite different!

Regardless of your market and product, the fundamental equation you need to get right in SaaS is CAC &lt; CLTV, ie your customer acquisition cost needs to be vastly lower than the lifetime value of a customer (= your monthly gross revenue per customer x # of months you&#x27;ll retain a customer)<p>The main tip I&#x27;d share for getting started <i>is to think about your CAC first, ie before pricing</i>. Set up a simple spreadsheet to conservatively estimate how much money you&#x27;ll need to spend to get one customer (this will work with any channel, really). If you have some empirical data based on your own experiments, all the better.<p>That estimated (or empirical) CAC will help you understand much better how much you&#x27;ll have to charge per month (or year) to recoup your CAC within a reasonable timeframe (depends heavily on whether you&#x27;re bootstrapping or are funded), and you can base your pricing strategy on that.<p>Many VCs will look for ratios of 3, ie your CAC needs to be 1&#x2F;3 of what a customer will pay you over their lifetime. VCs specialized in SaaS will have more sophisticated ways of looking at this, of course, but 3x is a reasonable lower boundary.

I launched a free API 4 years ago, and in January 2015 I introduced paid plans, which offered several benefits over the free service.<p>I have done no actual marketing, but the website ranks somewhat okay in search queries. It keeps growing every month, and recently passed $10k&#x2F;month in profits. This is from pretty much word of mouth via stackoverflow or from google searches.<p>From this experience I can say that if your service is competitively priced, good, and needed by a somewhat large audience, even with no marketing you can turn a profit really fast.

Who is your target group and where do they hang out online?<p>In B2C, the fun starts once you&#x27;re beyond the obvious choices. Let&#x27;s say you&#x27;re in the <i>fitness for women</i> market. The obvious channels would be fitness-related forums or blogs. They are also easy to copy and that&#x27;s where everybody else tries to place their products.<p>In addition to these channels, try to think of <i>situations in your customers lives</i> that lead to choosing your product eventually. Maybe that&#x27;d be people who just became vegan. Or women who rethink their birth-control. Or people who just ended their relationship or started a new one. These are situations where people are also open to re-think other choices in their lives and a <i>fitness program for new vegans</i> might fit their needs perfectly and chances are that you&#x27;re the first one to piggyback on this specific channel.<p>The next step would be to identify available resources in that area and create marketing material that fits those channels perfectly. Obviously, you should deliver value with your stuff to the people who frequent this channel and not just dump your product name everywhere.

When you&#x27;re just starting out, a low customer acquisition cost, preferably zero, and organic growth is key. A site like HN or Product Hunt may drive a one-time spike in traffic, but people Googling for a solution will drive new customers day after day, month after month, if you&#x27;re actually solving a real problem. Don&#x27;t worry about SEO too much, but I will say that the more specific your solution is the better you&#x27;re likely to do. If you&#x27;re simply introducing the 57th generic time tracking solution, you&#x27;re going to have a though time. Time tracking for dentists (caveat: I have no idea if there&#x27;s demand for that)? Now that is a clearly defined customer base, and you can probably think of numerous ways to reach them straight away.<p>Other things I&#x27;ve found helpful when starting out:<p>- Is there a subreddit that caters to your ideal customer? Be active and genuinely helpful in that community. Don&#x27;t spam your SaaS, but if people express a problem that your service solves, tell them about it.<p>- Is there somewhere your target audience gathers? Think conferences, trade shows, meetup.com, etc.<p>Remember that being profitable always has two sides to it: You can bring in more revenue, or you can control your costs. Don&#x27;t be that company with 17 employees, spending $100K to make $9K&#x2F;mo. Strive to be a WhatsApp, with 55 employees making over a billion a year. If you have the technical chops, validate your SaaS at least to $10K&#x2F;MRR with just a few persons or even by yourself. Then if you really want, use VC to step on the gas. Because that is what VC is: an accelerant, so be sure you&#x27;re pointed in the right direction and not at a wall.

I convinced patio11 to tell everybody that Tarsnap was awesome but far too cheap.<p>Well, sort of. Tarsnap was quite profitable by the time Patrick wrote that blog post; but its growth has always been driven primarily by word of mouth, and blog posts like Patrick&#x27;s are a large part of that. The only sort of advertising I&#x27;ve found to be useful is sponsoring open source software.

I run a one man B2B SaaS (www.hrpartner.io) and marketing has proven to be a real mystic art for me. I always thought the programming would be the tough bit, and the marketing the easy part, but it has been totally the opposite in my experience.<p>My biggest issue has been finding the right channel to market. I&#x27;ve tried Facebook and Twitter advertising (on a small scale - about 5 campaigns at $100 a pop) without much result. I&#x27;ve spent over $2K on Google AdWords with limited success.<p>In all above cases, I got a lot of people visiting my site, with about one in 20 visitors actually signing up. But after that, very few signups stayed around for more than one or two login sessions, and even fewer signed up for paid plans. (We use Intercom to track conversions and activity)<p>Don&#x27;t get me wrong, I am not really complaining as I have a steady core of users who seems to use the app regularly, but I am mystified at the very low rate of converting visitor and initial account creators into regular users.<p>Next step is to look at specific review sites such as GetApp and Capterra. Our product also integrated tightly with Xero so we just advertised in the Xero User Magazine this month which will be distributed to thousands of users at their US convention soon, so we will see what comes out of that.<p>My biggest struggle is that because I am still actively developing and adding new features to the app, I have problems putting down the coding tools and building momentum with marketing.<p>Oh, and as for pricing, I&#x27;ve got a free forever plan for smaller companies (up to 10 employees), with paid plans after that. Expectation was that smaller companies could onboard for no cost, then as they grew, they would upgrade to a paid plan, but because we have only been live for a few months, still too early to tell if that will be a great strategy. I may drop the free plan later this year.<p>We also built a totally free companion site (www.staffstatus.io) that integrated with HR Partner and made free to ALL sizes of companies to see if we could get some side business (similar to what crew.co are doing with unsplash.com, but so far it doesn&#x27;t seem to be doing what we intended - though it is really early days for that too).<p>Looking forward to keeping an eye on this thread to see what other solo SaaS drivers are doing. Feel free to ask any questions or critique any of my methods.

I previously started Roll20, and it is now a profitable SaaS business. It started off as just myself, then very quickly I added 2 Co-Founders, and now we have 8 people total working on it full-time. For that business, we used Kickstarter to get it off the ground, and then just slowly built through word of mouth and a strong built-in networking effect.<p>I am in the process of starting my next project right now; it&#x27;s a VR small-scale MMO called &quot;OrbusVR&quot;. I&#x27;ve been working on it for about a month now, and I&#x27;ve got a blog up (<a href="http:&#x2F;&#x2F;blog.orbusvr.com" rel="nofollow">http:&#x2F;&#x2F;blog.orbusvr.com</a>) where I&#x27;ve been posting development updates at least weekly; I&#x27;ve also been posting frequently to Reddit in places where potential players are likely to hang out (e.g. &#x2F;r&#x2F;vive). I have around 50 people already signed up on a newsletter, and every time I post about it I gain another 10-15 subscribers. I plan to launch a Kickstarter for this project as well probably in the next month or two; both to &quot;fail fast&quot; if there isn&#x27;t going to be a large enough playerbase to support it, and to get a boost to the funding (which is 100% out of my own pocket right now).<p>So I guess in my experience, the trend has been:<p>1) Make something people really want already, but don&#x27;t have.<p>2) Work on it in the open as much as possible to build up an early evangelist community.<p>3) Do a Kickstarter campaign or other event to gauge actual &quot;I will spend money on this&quot; interest.<p>4) Continue to grow slowly via world of mouth until you reach a tipping point where a network effect kicks in and then just grow from there.

Meat and potatoes selling.<p>1) Found a list of potential prospects<p>2) Called 30 prospects each day<p>3) Repeat steps 1-2 for 4 years

The first step is talking to potential clients. It helps if you have something to show, but it&#x27;s not necessary—you only need to grok the problem, and then keep an open mind, as there might be some things you haven&#x27;t already thought of.<p>You keep working closely with that client, listening but more importantly, watching what he does. Then you find another and you try to fit that solution into their work flow. If that doesn&#x27;t work, keep an open mind and tweak your product. Repeat as needed.<p>Regarding the customer acquisition channels, YMMV: whether you&#x27;re selling B2B or B2C, your target is tech saavy or not, and even if a similar product is positioned or not. Next, you might need to check your competitors and their strategies, there might be a couple of clues there.<p>We have a side project[1] on a similar target group, which helps enterprises calculate a number that&#x27;s not too easy to do by hand or with Excel. We get a couple hundred visits a day, and we have a small ad in there. It has given us some visits and some sign ups, but we might tweak that a little so we can contact them and offer a demo, which is something that has worked for us.<p>Also, we just launched a new home page[2] this month, I suggest you invest in your landings so they look good and professional (or whatever you want to communicate). We have also some automated mailings for potential clients, and it has brought us business, altough indirectly, because we have to demo our product. We now are working on a video, as it might be easier to explain how it works.<p>1: <a href="https:&#x2F;&#x2F;isrmatic.com&#x2F;" rel="nofollow">https:&#x2F;&#x2F;isrmatic.com&#x2F;</a><p>2: <a href="https:&#x2F;&#x2F;www.boxfactura.com&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.boxfactura.com&#x2F;</a>

&gt; Saw this thread from a couple of days ago about profitable one-person SaaS apps.<p>I missed it, can you share the link?

I replaced a crappy tool (think Windows only client) with a web based version.<p>Emailed everyone in the industry.<p>Profitable ever since.<p>(Somewhat simplified, but not really)

Completely depends on where your target audience is. Are they searching for your solution already? If so, where?<p>Whether you&#x27;re selling B2B or B2C is also going to make a big difference here.<p>Our main channels getting started were Google and a review site called Capterra (did paid advertising on both), as well as LinkedIn Marketing. Now we have a few other channels and partnerships but that&#x27;s how the company got off the ground and profitable (I say we to refer to myself and my business partner)

At <a href="http:&#x2F;&#x2F;voucherify.io" rel="nofollow">http:&#x2F;&#x2F;voucherify.io</a> (API platform) we try to follow Zencoder&#x27;s advice<p><a href="http:&#x2F;&#x2F;blog.zencoder.com&#x2F;2012&#x2F;05&#x2F;31&#x2F;selling-to-developers-is-neither-b2b-nor-b2c&#x2F;" rel="nofollow">http:&#x2F;&#x2F;blog.zencoder.com&#x2F;2012&#x2F;05&#x2F;31&#x2F;selling-to-developers-is...</a><p>To put it in a nutshell, this means generating valuable content and implementing helpful libraries and integrations. Then we try to share it with our target (developers, technical product managers, CTOs) through ProgrammableWeb, GitHub and Quora. See e.g.<p>- <a href="http:&#x2F;&#x2F;www.programmableweb.com&#x2F;api&#x2F;voucherify" rel="nofollow">http:&#x2F;&#x2F;www.programmableweb.com&#x2F;api&#x2F;voucherify</a><p>- <a href="https:&#x2F;&#x2F;github.com&#x2F;voucherifyio&#x2F;coupon" rel="nofollow">https:&#x2F;&#x2F;github.com&#x2F;voucherifyio&#x2F;coupon</a><p>We&#x27;re a team of 3.

I&#x27;m not yet profitable, but I think I accidentally stumbled upon a way to get there...<p>My current SaaS app PressKitHero (<a href="https:&#x2F;&#x2F;presskithero.com" rel="nofollow">https:&#x2F;&#x2F;presskithero.com</a>) started out as a Shopify App (<a href="https:&#x2F;&#x2F;apps.shopify.com&#x2F;presskithero" rel="nofollow">https:&#x2F;&#x2F;apps.shopify.com&#x2F;presskithero</a>).<p>I did zero marketing for the Shopify App. All I did was put it in the Shopify App Store. It gets good reviews, and a steady stream of new installs. About 10% of installs then convert into paying customers. Right now (after 6 months), the app is doing about 800$ in MRR.<p>I think for solo software developers, who struggle with marketing, the Shopify App Store is a really good place to get started.

If you invent something new and novel that people actually love, just posting in Facebook groups alone can grow you to xx,xxx USD MRR. Word of mouth will then carry on from there. If you are making something much less interesting, then marketing gets a heck of a lot harder.

I had a marketing application that sort of hacked on the Twitter API. Because of the API TOS, we couldn&#x27;t really tell anyone how to use it, which made online marketing very difficult.<p>The solution I found was to host in-person classes on social media marketing. I would give a high level view of the marketing strategies and then plug my tool as one of the options.<p>This had a few advantages:<p>- Everyone had been &quot;on boarded&quot; before even trying the product.<p>- Everyone now had expertise on the subject they could share with friends and coworkers.<p>- Each class gave me the attention of ~30 genuinely interested people.<p>- The income from the classes really helped as I bootstrapped the startup.<p>Of course - some people were very annoyed by my advertisement. But in all fairness, the information was high value and many people enjoyed it.

I encourage everyone to find a market and a way to gather attention before making a product. It&#x27;s the opposite order of what many people do, and they could learn on mistakes rather than their own.

Direct sales, then customers refer to other prospects. Focus hard on those first 10-100 customers and they will reward with loyalty + referrals.<p>Also, say no to some deals; can&#x27;t please everyone

What if you have a product which the potential customer doesn&#x27;t know yet it needs? I guess you can create the need (or let the customer see that it needs the product) by giving away a free version first for some time.<p>But how would you find the customer in the first place? How would advertising work in such a situation?<p>Example: mobile phones. In the beginning everybody was on landline; how do you convince the user they need a mobile phone? A similar problem may exist for certain SaaS markets.

We blog like crazy mofo&#x27;s.<p>Educate yourself and your consumer all at the same time, and do it daily for two years straight. You can&#x27;t <i>not</i> have some level of results if your writing is decent or better.<p>Combined with excellent technology, it&#x27;s a nice win-win.

Also, Start Small Stay Small book is very useful for this sort of thing.

<a href="https:&#x2F;&#x2F;datamantle.com" rel="nofollow">https:&#x2F;&#x2F;datamantle.com</a> is ran by a one-man-army. At the moment only advertising on hckrnews as SEO catches up and all.

tsurprise.com offers tea subscription on highly competitive market. Primary focus on content to rank, then lead generation with bloggers for PR and coverage. Bootstrapped and profitable in 4 months.