
Ask HN: What are some things you should know before starting a SaaS? - nkkollaw
I&#x27;m wondering if folks who have a SaaS can list a few things that they learned after running it for a while.<p>I&#x27;m trying to start one, and I realize that there are many things that I have to consider—like dealing with spammers, credit card fraud, common mistakes, etc.<p>I&#x27;ve read many, many articles, but I wonder if there are some important things that you only learn with experience that I should prepare for.
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tarikozket
Most of the SaaS companies pretend that their website generates 99% of their
revenue. Don't believe to them.

70% of the money will come from the enterprise/offline sales you do and the
rest will come from your website.

~~~
nkkollaw
Yes, I thought so as well.

For the kind of sites I'm making right now, I can ask ~1000 for a heavy use of
the service I'm building.

That's like gaining 100 customers in a hour.

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brudgers
If you are not familiar with HN'er Patrick 'patio11' Mackenzie, I would
recommend looking at what he has written and said regarding building and
running SaaS businesses.

[http://www.kalzumeus.com/archive/](http://www.kalzumeus.com/archive/)

Good luck.

~~~
nkkollaw
Oh, wow! That's a lot of stuff he wrote.

Thanks, I'll try to take a look.

~~~
brudgers
It's the tip of the iceberg:
[https://hn.algolia.com/?utm_source=opensearch&utm_medium=sea...](https://hn.algolia.com/?utm_source=opensearch&utm_medium=search&utm_campaign=opensearch&query=author:patio11&sort=byPopularity&prefix&page=0&dateRange=all&type=comment)

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saluki
There are lots of SaaS tips/advice in the StartUpsForTheRest of us podcasts.

[http://www.startupsfortherestofus.com/archives](http://www.startupsfortherestofus.com/archives)

~~~
nkkollaw
Thanks.

This is particularly useful: [http://www.startupsfortherestofus.com/greatest-
hits/](http://www.startupsfortherestofus.com/greatest-hits/)

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codegeek
Few things I learned running a bootstrapped SAAS:

\- On-boarding and acquiring new clients is still a lot easier than
sustaining/retaining them. A lot of us focus too much on marketing, getting
new clients etc. but not on sustaining them. For some businesses, that works
but for SAAS, customer retention is a big deal and really hard.

\- Every month, a small percentage of Credit cards will fail to renew the
client's subscription. Sometimes it is just the banks being stupid, sometimes
the cards expired or reported stolen. You need to have a process to ensure
clients are aware and fix this asap. Fancy word for this is "dunning"

\- Unless you have a solid team with good funding, offering a free or freemium
version will be difficult for you since you will get tons of tire kickers and
time wasters. So you will be spending too much time talking to them when they
are probably not going to be paying customers anyway. Hint: If after 2
discussions/emails/calls, someone still asking questions are most likely the
ones who will never convert. Yes, there are a few who take time but in my
experience of doing this for 3 years now, I almost know who will convert and
who won't.

\- Not all clients are same. You may have to be partial at times depending on
the client. For example, some clients just want the whole world and don't get
the idea of a SAAS. Learn to keep them in check while it is ok to pamper the
good ones a bit more. Hint: Keep track of support emails/questions/tickets for
each client. If you see too many unreasonable requests from a client, be
polite but frank with them about what is possible vs not. Often times, clients
mean well and just don't understand why a feature cannot be built just for
them. It is your job to explain that to them.

\- Reduce friction when it comes to on-boarding. A lot of clients leave
because they find it difficult to get started. This is not the same as
building an easy software. This is about ensuring that your clients learn how
to use that software when early on. Documentation, FAQs, Guides whatever you
call it. And no, don't listen to people who say that only badly designed
software needs documentation. Everything needs documentation. Trust me.

\- Backups. Remote backups. Not on the same server. Don't take this casually.

\- Learn to Sell. Only way is to actually do it. Don't "outsource" your sales
specially in the beginning. You being able to convince someone that your
product is worth it is what matters.

\- If you start growing and think you need to hire, be very careful. Hire
really slow. Fire really fast. If you can, hire a freelancer/sub-contractor
instead of full-time. Then go from there as needed.

\- You will need to do some basic accounting yourself to understand your
business numbers. Learn how to create a simple PnL statement. If you don't
know, talk to a good CPA (or equivalent in your country).

\- If you are making some money, don't forget to incorporate AND also hire a
good CPA if you can afford. For small businesses or SAAS products, a good CPA
can cost anywhere from $500-$2000 for the entire year (depending on what you
ask them to do)

Finally, I will leave you with this. Running a SAAS is awesome once you get a
hold of what matters and what doesn't. You will learn with experience and
probably make a few mistakes. But don't give up and keep fighting. Nothing is
better than seeing recurring payments hitting your bank every month and
knowing that you are providing value to some people in the real world.

~~~
nkkollaw
Thanks, this is exactly what I was looking for.

Great points.

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goatherders
Get a customer first. Then build it. Find someone to give you money to be a
customer. That is the only way to qualify if you should even bother getting
started.

~~~
siquick
this x 1000

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pryelluw
Try and sell it for a one time payment first and then try to sell it with a
monthly payment. Might be the product is seen as a great one time purchase but
bad as recurring.

Focus on sales. Did I say sales? Have you ever sold anything? Did you write
your prospect list and started setting appointments?

Sales. If you are bad at those, anything else wont matter.

~~~
nkkollaw
I can sell my services as a freelance developer very well, but I've never
tried selling a product.

~~~
pryelluw
Selling a product is about the same. Dont second guess too much and get to it
asap.

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jwilliams
I've run with many bad SaaS ideas, some good ones and one great one.

It takes great to get liftoff. The bad ideas aren't the hard ones. The hard
ones are the good ideas .. Maybe people are paying. Maybe they even like it.
Sadly good isn't good enough in SaaS. For a SaaS product to really win it
needs real, measurable velocity.

If I could offer one big of insight I've managed to pick up - genuine traction
in SaaS is hard won, but then it's really (really) obvious. If it's not
slapping you in the face, then time to change tack. Maybe that's a tweak or
it's a pivot, but keep trying till you have that clarity.

~~~
nkkollaw
> genuine traction in SaaS is hard won, but then it's really (really) obvious

Can you give an example? :-)

~~~
jwilliams
I have a few! One mildly churlish one -- I was at a SaaS event way back and
got asked how you know you have traction. My (rather uncharitable) answer was
"you stop showing up at events like this".

Traction is really when the business starts driving you rather than vice-
versa.

I suspect the reality is every SaaS startup out there will have a different
metric or moment of realization. Could be a pulling in a big customer, or a
piece of content marketing that really hits home. If I really had to hone in
on just one, it's cash.

If you've got a business that's getting by -- If you're charging monthly, I'd
ask how many customers you can get to commit to annual payments. If people are
paying $100 month, I'd ask how you double it. If your sales cycle averages to
a month, I'd wonder if it can be a week.

My dataset of successes is limited, but plenty of misses The meta-point is
that it's really obvious when it hits. It's obvious when it misses.

The tough calls are when it's just creeping along. Doesn't mean it is a bad
idea, just that you need to keep iterating -- your marketing, features,
onboarding, whatever you can.

Good luck!

~~~
nkkollaw
Thanks. This is helpful.

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canterburry
From my experience you'll spend 20% of your time building your SaaS and 80% of
your time selling, marketing and supporting your SaaS.

The kicker is, how well you do on the 20% determines how hard your 80% will
be.

