[HN Gopher] State of Independent SaaS 2021
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State of Independent SaaS 2021
Author : einarvollset
Score : 115 points
Date : 2021-02-10 18:25 UTC (4 hours ago)
(HTM) web link (microconf.com)
(TXT) w3m dump (microconf.com)
| kirktrue wrote:
| A love the idea origin breakdown on slide 17.
|
| Over half of the product ideas (~57%) came from experiencing a
| problem/issue firsthand.
|
| The percentage tips to ~90% if you also include experiencing a
| problem/issue secondhand (through friends, clients, customers,
| etc.).
|
| A measly 8% came from research alone.
| Axsuul wrote:
| Would be interesting to see MRR + growth based on this.
| kirktrue wrote:
| Yes. The origin of idea is the easy part.
|
| Personally, I procrastinate starting a product/service
| because I feel that I have to have an amazing idea before I
| get started. (There's nothing new under the sun.)
|
| As this slide reinforces, though, a given person already
| knows many problems/issues that could be used as a starting
| point in a product/service endeavor.
| javier2 wrote:
| Same, especially when there are competing companies well
| under way.
| limedaring wrote:
| Really valuable insights; really shows how different independent
| SaaS is. For instance, 56% of founders are solo in indie SaaS,
| whereas a lot of traditional VC accelerators prefer (or require)
| at least two founders on a team.
| soneca wrote:
| And they say that growth has correlation with the number of
| founders (up to 3 founders), so it makes sense as for VCs
| growth is basically the only thing that matters, not so much
| for bootstrappers.
| randlet wrote:
| It's tough to find two or more compatible and like minded
| people who can afford to make (effectively) zero money for an
| extended period of time. Having VC money makes it possible to
| support a bigger team from the outset with less financial risk
| to the founders. This may contribute to the bias towards single
| founders in bootstrapped companies.
|
| I'm a solo SaaS founder and would absolutely love to have a
| partner but the few people I've discussed it with have not been
| able to tolerate the financial risk / lost opportunity cost.
| codegeek wrote:
| I am a solo SAAS founder and I would say that other than the
| financial risk/lost opportunity cost, the major hurdle is
| finding someone ambitious and driven enough who is willing to
| slog it out with you. The drive, the ambition and will to do
| whatever it takes day in, day out is not that easy to find.
| Especially when you have to find others who may not feel the
| same about your brand/product/business.
| ta1234567890 wrote:
| > VC money makes it possible to support a bigger team from
| the outset
|
| Yes. However, in practice, it is very rare to be able to
| raise money before the founding team has already been working
| on the business for a few months. Hence, by the time VCs put
| money into the company, most likely, the founders have
| already incurred their most significant financial risk.
| kirktrue wrote:
| Additionally, the demographics on slide 7 point to the
| majority of founders being over 30. This age group often
| coincides with a greater likelihood of having a partner,
| mortgage, children, etc. Thus the risk aversion for that
| group is likely also higher.
|
| Finding 2+ people with the risk tolerance alone limiting,
| much less having a complementary skill set, interests, goals,
| etc.
| shoo wrote:
| Regarding "which best describes how you validated your original
| business idea?", is anyone aware of more research around the
| effectiveness or practicality of different validation approaches?
| That is, rough false-positive (validation indicated that business
| idea had sufficient market demand when it didn't) and false-
| negative rates (validation indicated that business idea had
| insufficient market demand when it did) for different validation
| approaches.
|
| Naively it'd be great to have data of the form "given our idea
| for a business was bad specifically because there would be
| insufficient market demand, when we validated the idea by method
| A (e.g. getting verbal commitment from n potential customers),
| validation result indicated there was enough market demand to
| proceed, we decided to proceed, but the business failed later
| specifically for a reason that the validation approach was
| intended to measure (customers willing to buy the service) and
| not for some other reason". I.e. known ground-truth, measurement,
| measurement result, decision to proceed or abort based on
| measurement result, actual outcome.
|
| Probably would be a very tricky thing to isolate the
| effectiveness of the validation approach and tease it apart from
| other confounding factors.
| bandrade wrote:
| 75% of those with free trials do not require a credit card up
| front. This was always my preference as a purchaser because I
| didn't have to bother my boss and get approval to try out a
| product.
| kirktrue wrote:
| I'm with you on that.
|
| But my understanding of slide 55 is that requiring a credit
| card up front doesn't pose much of a problem to growth.
| xcast wrote:
| The lower barrier to entry does show a pretty significant
| uptick from unique visitors to trial customers as well. On the
| other side of that coin, the data shows that converting trial
| users to paid customers is way more likely when you have
| already collected payment information at the start of the
| trial. I think your customer base really defines willingness to
| put up a card up front.
| shoo wrote:
| On another hand, as mentioned in the report, if a SaaS operator
| does manage to close a sale to a larger business then that
| larger business is likely to provide the SaaS operator a much
| higher lifetime value due to lower price sensitivity and lower
| churn rate. But at some point it crosses over into high-touch
| enterprise sales process with multiple approvals from multiple
| stakeholders, long time horizons.
|
| It'd be quite interesting to have survey data on what the sales
| process is like. But probably only relevant for SaaS businesses
| that sell to government / large business customers.
| polote wrote:
| - How the founders were selected ? And where ? initially they say
| "hundreds of non-venture track" but then 14% raised money
|
| - What is a MRR Growth in dollars ? Thats not how we compute
| growth
|
| - Is that data statistically significant ? there 2% of companies
| which had 4+ more founders and still you try to make a
| correlation between growth and founders count.
|
| - There is 66% of companies who have employees but only 66% of
| founders who work more than 30 hours a week ? That doesn't seem
| right...
|
| I like the initiative, but we need more clarity to really be able
| to trust the data from this report
| dbbk wrote:
| > - What is a MRR Growth in dollars ? Thats not how we compute
| growth
|
| It's a company's growth in MRR... I'm not sure what you're
| asking? Also who is the "we" here?
| polote wrote:
| growth is usually in percent. If you make $1000 more dollars
| per month, it doesn't mean the same thing if you do 1M ARR or
| 10k ARR
| whyleyc wrote:
| There is a slide on page 31 showing revenue growth
| expressed as a percentage.
| Silhouette wrote:
| There is? Page 31 of the document I'm seeing shows the
| percentage of businesses in each MRR category.
|
| As polote said above, it's very strange to see MRR growth
| figures given as a fixed dollar amount throughout the
| presentation. As a founder, you might be quite worried if
| your business was only growing by the same dollar amount
| each month over an extended period.
| whyleyc wrote:
| You are looking at page 30. See the next slide. Title is
| "What best describes your company's average Month-Over-
| Month (MOM) growth rate over the past 3 months?"
| icedchai wrote:
| You'd be surprised. I've met founders who were happy
| growing by a few hundred bucks a month. With most of
| these companies doing under 15K/month, the percentage
| growth is going to be pretty low.
| ramimac wrote:
| Slide 62 does present some of that context:
|
| Survey was sent to 25k founders in the MicroConf database, 673
| respondents (534 completed the survey)
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(page generated 2021-02-10 23:00 UTC)