I Went From Zero to $5,000/Month with SaaS – Nathan Barry, ConvertKit

[Music] [Music] so I want to talk to you about one of them working on over the last couple months and this is zero to five thousand it's a work in progress and this is everything that I've done building a SAS application in public so a little bit of a back story I started out writing the book on the right theft is not handbook I didn't have an audience or a popular blog or anything and I you know worked hard on marketing and built it up and it sold really well and so I was quite happy with that rolled in it into a second book and so I now make my living off of selling those two books the downside about that is shown in the these graphs when you sell ebooks the revenue curve especially if you push towards a huge launch looks like the one on top you have this insane spike for designing web applications that spike was twenty six thousand dollars in one day and then it it drops off like crazy which if anybody running a business that's not the the revenue curve you want to have that's not a good thing you can do things for the owing lines you know writing more blog posts things like that that will get you know more sales and and the books continue to sell about ten grand a month and I'm certainly not complaining about that but I want to build a real business that grows continually predictably over time it doesn't have to have a fantastic up into the right curve but it it needs to grow month over month and so basically I started the search for building something that had a recurring revenue and being a blogger I decided that I should do it in public and you know more material for my blog more to write about and try to help people in some way so I announced the web app challenge and the rules of the web app challenge were that I have started on January 1st of this year without an idea with absolutely no clue what I was going to build my goal is build to $5,000 a month in recurring revenue within six months so it's July 1st of this year I was only allowed to spend $5,000 of my own money I wanted to make sure that that this would be a process that other people could follow other people could relate to so if I took all my e-book revenue and spent 50 grand or 100 grand or you know whatever amount to hire a bunch of people and build it out I that wasn't something that I think other people could relate to nearly as well so and then I finally had the requirement of only working on it 20 hours a week that one went out the door and not for the the reason I still probably work on it about 20 hours a week but what I found is I absolutely hate jacking time and so I left jobs and consulting so I didn't have to track time and then I somehow put this arbitrary requirement on myself to track time and that was dumb so anyway so these are the lessons that I learned in the process and I'll tell you a little bit more about what I built along the way but the first lesson is that teaching is the best form of marketing so I learned this actually selling the books and I built up an audience you know through blog posts and tutorials that's how I got people to come and have interest and purchased the books and that worked really well so when I started to go after pick a market that I was going to build software for I knew that you could have a lot of success in any kind of a niche so I years ago I'd built a web application that did scheduling for sign language interpreting agencies and which is really pretty a niche product but it solved the pain they were happy to pay money for it and it worked well so I knew that you could find painful problems in a niche and so I started out saying I will you know do a customer development and I went in all kinds of different directions you know lawyers insurance agents any business and friend of mine Amy hoy said talk to me and said what the hell are you doing you've spent you know this time you've built up this audience the time I had you know 4,000 people on an email list from the marketing of the books you've built this audience and you're looking to throw it away to go after some market that doesn't care about everything you've done before and she was reminding me that I've spent all this time you know I know how wonderful teaching is as a marketing method but I don't have anything that that I can teach to lawyers it's not something and so I started to look at markets that were problems that I had were you know things that the designers in my audience and other and other people products that would help solve their problems that way I could have something to teach and market to them so started down that direction and I did a lot of customer validation so I I called up people a bunch of different friends acquaintances trying to figure out this idea that I had whether or not people would pay for it whether or not it was worthwhile I didn't want to go build an MVP spend my really limited $5,000 budget and fall find out later that nobody would buy it so I hate called up how much people talk to them found out that it was a pain the idea that I was working on is when I was doing when I was selling my books the email was far and above the the best converting method for sales and so I set out to build the email marketing tool that I wish I had in that process and so I'm asking all these friends and acquaintances if they had that pain yes they did would work through it and and I knew to ask would you buy this and without a doubt everybody Oh almost everybody said yes and I knew that friends tend to say like you know you don't want to hurt somebody's feelings or talk badly about their idea so you'd be like yeah that's cool yeah I'd buy that and I knew that that was different than actually paying for it so I pressed further and I said would you how much would you pay and we came in to specific dollar amounts ranging from a hundred to three hundred dollars a month that these people would pay and then I pressed even further and said would you preorder it and I thought okay I've got this taken care of they said they would preorder it so that's good the problem is I didn't have a way for anybody to preorder it so I said I'll set up some of the pre-orders when I'm a little further down the process and I'll get back to you and so I I did get back to them later and it it turns out that just asking somebody if they would pay for it or even asking if they pre-ordered for a specific dollar amount is not specific enough there's always things that are going to come up features that are missing you know it's too much work to move over from another platform or something like that so don't count them as a customer until you have their credit card I've been talking to a lot of people here over the last few days who are working on a product and are saying you know I talked to 20 people and they all said they're going to buy it and don't trust that all that's not worth anything because you're not going to get the real feedback until you ask for their credit card right then and I learned that lesson the hard way when I did find the comment with pre-orders very few or almost none of the people I thought we were certain with pre-order ended up doing it but thankfully there were plenty of other people that did so it validated the idea but not in the way that I expected so the next lesson I learned is that being your own customer is wonderful when I was working on that scheduling tool for sign language interpreters years ago I would go through and test it and you know I'd go here's how to create an assignment here's how to create an invoice and I would test the tool but it was all really artificial because I wasn't building it for myself it wasn't a tool that I had any reason to use so I would just try to follow what I thought the customer how the customer would use it and that resulted in putting in a lot of fake data and and so I couldn't test it very well with convertkit my email marketing tool I'm the biggest customer for it I'm the one who wants these new features and wants it implemented and and built a certain way as quickly as possible so I'm constantly testing it and I can use it in a real-world way so if at all possible I would say be your own your own customer the next lesson is that transparency really works so throughout this web app challenge one of the rules is that I had to write about every step of the process and make it public on my blog and so instead of building something in secret and then six months later releasing say hey guys look at what I've made and launching to crickets I had people helping me and reading along the way and so you know there's a few thousand people that have put in their email addresses to get updates of the blog posts and so what that means is when it came time to hire a developer I didn't post a job ad for developers I said I'd like to work with a great Ruby developer do you know anyone and I had 25 Ruby developers contact me and say we'd love to work on this project and and it made that a lot easier and I had things like when I started to go down the road of targeting lawyers or you know some other random market I had people like Amy who I tell me that's a terrible idea and had I kept that all to myself and worked totally in secret none of that would have happened so being totally transparent has helped me a lot the last thing is that when I started all of this my focus was on fixing my revenue problem right switching from one-time sales to recurring revenues so I was trying to build a product that would give me recurring revenue and that was the entire focus and how that I found that that would result in a change in how I approach support requests and and everything where it was all about me and improving my revenue and so I would give you know the shortest possible answer in support requests and it just it manifested itself in a lot of ways and so about a month ago I realized that my entire goal needs to be helping my customers be successful and so whether that someone else is trying who needs email marketing to sell their ebook instead of just helping them figure out the features I can actually spend the time to help them with their marketing plan and their launch strategy and all these other things that they're really going to need in order to be successful and the more successful I make my customers the happier they'll be they'll continue paying they'll they'll say more wonderful things about convertkit and so this was a huge mindset shift for me and I just wish that I had started with that from the beginning so just as a quick update of where it's at 30% of the way towards the five thousand dollars a month 30 to paying customers and it's coming along pretty well I've got two months left to hit my goal and it's easier to hit your goal I'm finding when you have a product so most of these were pre-orders and so it's easier to sell now that people don't have to wait for the product anyway so you can read about the process on neighthan very calm and then the product I'm building is called convertkit so thanks guys you

Channel: MicroConf

Views: 50,205

Keywords: Startup Videos, Entrepreneurship, Infoproducts, Micropreneur, Startup Community, Startups, Non-technical founder, Co-founder, Technicial Founder, independent funding, Boostrapped SaaS, MicroConf, Founder, Indie Startups, Nathan Barry, ConvertKit, saas MRR, saas profit, saas revenue, saas growth, saas sales, saas ideas, saas validation, saas app, software apps, software business, saas business

Id: hCRMzMnAb40

Length: 12min 48sec (768 seconds)

Published: Fri Apr 03 2020