- When I was first starting out in SaaS, my first SaaS product started
out as a micro SaaS product. Micro SaaS products are
incredibly easy to build, especially if you're an engineer. They're very focused and they're really easy to
actually get traction going. Here's the best part, micro SaaS companies and products can actually
turn into proper big SaaS companies as well. Here's a big question, though. They're so easy. They're so great. Why isn't every engineer
starting a micro SaaS business? Why isn't every single person trying to build a micro SaaS product being wildly successful
in what they're doing? In this episode, I'm
gonna walk you through the three principles that
you absolutely need to know on how to build a proper
profitable micro SaaS business. And when you implement
these three principles, you'll be able to build a
successful SaaS product getting into the SaaS industry,
starting with a micro SaaS, and who knows that could build
into something even bigger. Intro. (upbeat music) What's up, everybody? Welcome to Unstoppable. I'm TK, and on this channel,
I help SaaS founders like you grow your SaaS businesses faster with an unstoppable strategy. Now, if you're new to
this channel, welcome. I drop an episode every single Sunday with actionable strategies and tactics from the trenches on how to grow your SaaS business faster. So if you new, be sure to
hit that subscribe button and that bell icon. That way, you'll get notified
every single time I drop an episode with the TK energy. Now, if you're already
part of this community, if you're part of this challenge,
if you're part of my SaaS go to market coaching programs,
my people, welcome back. It's really awesome to see you over here. Now, the first SaaS business
I ever built started off as a micro SaaS business. It grew and it hit product market fit so aggressively it turned
into a proper SaaS business. We ended up raising
venture capital for it. I scaled it and then I exited it. Since then, since I've
exited that company, I started this channel, I shared
everything that I learned. I've coached over 250 SaaS founders and I've learned that some
of the hardest principles about what it takes to make
a successful SaaS product. In this episode, I'm
gonna walk you through the three principles you
absolutely have to know to build that first micro SaaS business. If you're excited digging, I'm gonna smash that like button for
the YouTube algorithm. Just loves it when you do that. Let's dig right into it. First, principle number one is
you gotta know the difference between a micro SaaS business
and a normal SaaS business. So micro SaaS is
essentially a SaaS business. It's a subset of a type of SaaS business. It's a software company
except it tends to focus on a very, very niche audience. It tends to focus on a very, very specific
ideal customer profile. It could be focusing on engineers that work at B2B SaaS companies. Or it could be focusing
on real estate agents that sell in Texas. It could be as specific as that. Given that, it also tends to
focus on just one feature. So if you are actually
building multiple features, and chances are you're trying to build a proper SaaS business or a platform taking
care of multiple things, whereas a micro SaaS product
tends to focus on one feature that is just 10 times
better than anything else that's in the market. And the third thing that makes
for a micro SaaS is it solves a very urgent and important problem. And this is true for our
normal SaaS companies as well, but it's doubly true
because think about it, why else would someone
buy this one little tool and pay money for it unless it was really important
in their daily lives? So it needs to be solving something that's urgent and important. Now, let's pause here and contrast that to a traditional SaaS business. On the other hand, a
traditional SaaS business is thinking less in terms
of a specific audience, but thinking more in terms
of a broad group of people that it can solve a wide problem for. They tend to be bigger platforms. Instead of just one feature, they tend to think about an entire
workflow that they can own and instead of just an
urgent important problem that you're solving, they tend to think about a massive transformation you're bringing to the company. Now, these are the two edges. There are stuff in between where you can kind of blur
the lines between a micro SaaS and a proper SaaS product. And you might be doing a tally on, "Am I a micro SaaS or a SaaS?" The biggest thing that is
important is most SaaS companies that are starting out from
day one essentially start off with one 10x feature, focusing
on one niche audience. So essentially, they really start off with a micro SaaS strategy and then over time, as
they hit product market fit and customers ask for more
things, they actually grow up to be a proper SaaS business. You're starting out, it's almost
like a little mental trick to start as a micro SaaS business. And then you can always decide, do I wanna grow into a full SaaS offering or keep it as a micro SaaS business? And that's a decision you
can make down the line. Here's the one thing for sure. If you're starting a
brand new SaaS company and you're like, "Look, I want
to go attack the CRM space and we're gonna be a complete platform, we're gonna transform everything and it's gonna be for everyone." If you go for that full SaaS
plate right from the beginning, nine times out 10 and
probably 9.99 times outta 10, you're probably gonna fail because you won't be able
to differentiate yourself in the very crowded SaaS market. So a micro SaaS business
is a great way to start if you're starting off
in the SaaS industry, you focus on a niche
audience, you have one feature instead of 50 bazillion
features that no one wants, and you solve a very urgent
and important problem. And that makes for a
really great SaaS business, particularly a micro SaaS
business that's just starting out. Once you have those baselines, you can intellectually
ask yourself like, okay, what's the market I'm going after? Is it an urgent important problem? What's the 10x feature that I can build that is better than anything else? So if I put it in front
of someone like, look, we don't do everything with
this one thing really well, so put us into your workflow and use us as part of all
the other tools that you use, you can have a winning product. So many founders that I meet and I talk to are trying to
build this massive platform, but they're not differentiated and because of that, they tend to fail. But when I can get them
to think about, okay, if you were to just do
a micro SaaS business, what is kind of the wedge
that you can start with? And you can stay there or you can expand. They're able to hit product market fit and revenues a lot faster. And I've seen this in my own journey in building SaaS companies as well. With that done, that's when
comes principle number two. Now, if you're building
a micro SaaS business, you need to follow a certain framework. The key things that go
into the perfect micro SaaS is pricing, how you can use the product and your sales model. So let's break down one at a time. The first thing is you
wanna price it super low. So anywhere from $10 a
month to $30 a month. I always like to start with $30 a month, even though it feels like a
lot because at $30 a month, it really helps you
decipher if you're solving an urgent and important problem. If a business user is not willing to fork over the credit
card and pay $30 a month, then it's likely not an
urgent and important problem. It'll be really hard for
you to get enough customers, get enough momentum going and
attack enough of a market. And that $30 mark also
communicates to your target buyers that your software is very serious. It solves the problem in a serious way and you're taking your
own product seriously, that's why you're pricing for it. So $30 may seem like a lot,
but it's really $1 a day, and I always like to
start at that price point where every single SaaS
company I've started with because it forces me to make sure that I'm solving an
urgent important problem that will be worth the
user paying $30 a month. If I can't convert at that, chances are I'm not solving
an urgent important problem. The second piece that you
wanna do is you wanna make sure you have a single player mode. A lot of people build
products, SaaS products where you have to sign up and you have to get five other people to use there. You have to integrate
into eight other things for it to be useful. That may work for a SaaS business
where it has a salesperson or a CSM, but it doesn't work very well for micro SaaS companies because they need to be
able to sell on their own. You can't afford salespeople,
you can't afford CSM, you can't white glove everyone forever. So you need to have what I
call a single player mode. A single player mode is where
I can get in the product, I can try it out all by myself without getting anyone's permission, without having to
integrate 50 billion things and getting security reviews
without having to fork up a lot of cash, without getting
my team members in on it. I can just figure it out on my own. And that's kind of a video game where you're just playing single player and you can really enjoy it and you're like, "Oh my
God, this is awesome." And you can actually go
deeper into the journey and it's perfectly okay
to add features later on that involves multiple team members. Totally cool. But you wanna hold that bar where you can charge $30
a month where you say, "I'm gonna solve this problem for you. It's gonna cost $30 a month and you can try it out right now." Which brings me to the third piece, which is you wanna make sure
that it's actually free to try. If you are actually positioning
this micro SaaS product and you're like, "Look, we'll solve this urgent important problem, but the only way you're
gonna know if our product is any good is you have to pay for it," that's gonna be a tougher bar to hit. So I always try to make sure you can have a 30-day free trial or you can try a portion of the
product completely for free, and then when you get to
the most important part, you can actually charge
them so you can monetize. So you wanna make sure you
have a free to try model. With these three things, you'll
follow the key principles that are needed to make sure you have a proper micro SaaS business. If you remember when I said in
the beginning of this video, micro SaaS businesses are so great, if these products are great, why isn't every engineer
starting one of these? The problem is a lot of folks
start these little products, they're not solving an
urgent important problem. They're not charging enough,
they're not communicating it. It's not single player mode. People can't actually try
the product and then pay. All these little things make for a successful machine
for your SaaS business. And I found after coaching 250 founders across the different
stages of the journey, these three things make for the best of micro SaaS experience. If you can hit these three things, you stand a shot at making a successful and profitable micro SaaS business. Now, speaking of profits, it's one thing to build this thing, get it to like $1,000 in monthly
recurring revenue, which is still awesome, but
then you might get stuck and so many SaaS businesses
just get stuck at that level and it kinda remains a hobby project. The big question is how
do you actually turn it into a proper business? How do you make it a proper
profitable micro SaaS business? And how do you make sure
you actually stand a shot at getting it to maybe a
scalable SaaS business? That's principle number three. But before I go into that, let me just pause here for a second. Are you starting to see the power in this? Are you starting to see how powerful micro SaaS businesses are? Are you starting to see how if you take this specific approach, you're
more likely to actually build a proper micro SaaS product? You certainly see how this is a great way to even just start in the SaaS industry. And then you have the choice to to keep it as a micro SaaS business or grow it into a massive SaaS business. You certainly see the power in this. If you are, can I just get
a yes in the comments below? And also smash the like button
for the YouTube algorithm. Just loves it when you do that. Also, if you're thinking
about what's my idea gonna be? How do I know if this is an
urgent important problem? How do I approach this? How do I test this? How do I make sure I don't waste months building the wrong product? Then grab a copy of my 10-point
SaaS business checklist. 10 questions is you should ask yourself before you write a line of code. You don't have to go anywhere right now. I'll tell you more about it
at the end of this episode. I'll link to it below. Let's go to principle number three. Principle number three is
where it all comes together. If you have these two pieces and you're starting to get conversions and people are using the
product and they're happy, and maybe you're releasing version two, maybe you really made it rock solid and you're like, "I'm ready to grow. I wanna make this profitable and maybe even take it
beyond a micro SaaS," this is where the third
principle comes in. That's what makes for a
profitable micro SaaS business. The first piece that you need to turn this into a proper
business is you need a source for organic leads. Organic leads can come from a marketplace where you list your micro SaaS. It could be in a marketplace
for another SaaS company where you integrate with them. It could be part of the Chrome
web store, it could be SEO, it could be posting on social media. Any one of those things are
great sources of organic leads. They're great because they
don't cost you any money. You just keep doing
that, it generates leads and it converts into your
product and converts to revenue. So you need that for starters. The second piece that you
need is you're gonna have successful customers paying $30 a month. You wanna make sure
you add an upsell plan. That's an additional tier. One more feature that you
add to your micro SaaS or a greater way of using the product that charges a little bit more. Could be $99 a month, $199 a
month, or even $299 a month. This does two things. One, you're getting free leads because you are using organic. You're tapping into sources
where you can generate leads for your product, and two,
as customers are happy, they start paying you more. A certain percentage of
your customers will graduate from the $30 a month to $199 a month or $299 a month or whatever it may be. And what this does is it
creates more cash flow in your business. Same number of leads, but
more revenues flowing in. And you can use that money
to either keep profits or you can start funneling that into more scalable sources of leads. This could be ads, this could
be sponsorships, you name it. This could be hiring a
team member to dedicate it to support, so you
increase your conversions, you actually get that cash flow going in that micro SaaS business,
which then allows you to invest in the business and allows you to
actually scale it further even within the micro SaaS context. So those are the three things
you absolutely need to know to build a successful and
profitable micro SaaS business. Let's recap so you know
exactly what they are. Number one, you wanna know the difference between a micro SaaS and a SaaS. And to be honest, most people starting out with a SaaS business should
start with a micro SaaS and you can always
graduate to a proper SaaS. Focuses on a niche audience, one feature, solving an
urgent and important problem. Once you get that going, then you can always expand into more or just keep it as a lifestyle business, which by the way, is a misnomer because even lifestyle
business pay profits and can generate a lot of
profits if you're doing it right. The second piece is you wanna
make sure you follow the rules for what makes for a perfect micro SaaS. Charge at least $30 a month,
10 to $30, user discretion. I like 30 personally. You wanna make sure there's
a single player mode and it's free to try, so you
don't have to do much selling. People can just try out
the product, they'll see how great it is, and they'll
convert with a credit card, no salespeople required. And as you get that going, you wanna make sure you have
an organic source for leads that has people signing up
for your product consistently. You wanna make sure there's
an upsell plan so people that love your products
start to pay you more and you wanna take those profits and invest in a more
scalable channel like ads or sponsorships to actually
drive even more revenues for your profitable SaaS business. You do these three things, you're gonna be able to
break into the SaaS industry, build a successful micro
SaaS product, and who knows? That could turn into a
massive SaaS business, a massive category. That's what happened to me. Now, you know exactly the three principles you need to follow. What you may not know is,
"TK, what idea do I pursue? How do I make sure it's an
urgent important problem? How do I get these leads? How do I make sure I'm not
building the wrong thing?" This is why I created my 10
poin- SaaS business checklist. It's completely free. It's 10 questions that
you should ask yourself to stress test your idea and make sure that
you're not wasting months building the wrong product. To grab a copy of it, just go
to tkkader.com/saas-checklist. tkkader.com/saas-checklist. And also link to it below. Also, if you got value from this video, please smash that like button
for the YouTube algorithm. It just loves it when you do that. We put a lot of love in these videos to service many SaaS founders and pretty founders as possible. If you have a team member,
if you have a fellow founder, if you're part of a WhatsApp group or Slack group of other founders that get value from this video,
please share this with them. It'll just mean the world to us. Also, I drop an episode like
this every single Sunday with ASIMO strategies and
tactics from the trenches on how to grow your SaaS business faster. So be sure to hit that subscribe
button on that bell icon where you'll get notified
every single time I drop an episode. And lastly, remember,
everyone needs a strategy for their life and their business. When you are with us, yours,
it's gonna be unstoppable. I'm TK, and I'll see
you in the next episode or inside the 10-point
SaaS business checklist. Say that 10 times faster. Take care, everybody. (bright music)
