Micro SaaS Ideas (A Guide to Building a Profitable Startup in 2021)
Profitable Micro SaaS Ideas for 2021.One of the biggest growing trends in SaaS is the idea of Micro SaaS businesses. They are becoming all the rage because t...
One of the coolest things about Saas businesses
is that they come in all shapes and sizes.
So, even within my coaching programs,
we've got venture-backed businesses that are hyper scaling.
We've got bootstrap business that are profitable
and we've got businesses just starting out,
they don't quite know whether they're gonna be bootstrapped
or they're gonna raise a bunch of capital,
so it's super early.
They come in all shapes and sizes,
and one of the biggest growing trends in SaaS
is the idea of Micro-Saas businesses.
Micro-SaaS businesses are really cool
because they're never gonna raise money,
most likely not, they're never gonna IPO,
they don't need to, but they're run by one to five people,
sometimes part-time and they're wildly profitable,
they just print cash every month
and they get better and better.
It's kinda like buying a condo and renting it out,
that asset, the Micro SaaS business similarly,
is gonna appreciate in value and just keeps spitting out
more profits as long as you keep maintaining it properly,
just like a condo, and this is why Micro SaaS businesses
are becoming all the rage.
Investors want them, operators want them,
there's a huge marketplace for buying and selling them
and there's lots of founders that are just building
Micro-SaaS businesses and making more money
and replacing their regular salaries.
Super powerful, but here's the big question,
what makes for a great Micro SaaS business?
What are the core parameters and make
for a really successful Micro-Saas business?
This is something I'm personally really passionate about
because one of my separate goals is to operate
a set of Micro SaaS businesses with my business partner
and so, we dug into what makes for a really great
how do you develop the right idea for it?
So in this episode, I'm gonna walk you through
the three principles you absolutely need to know
to develop your Micro SaaS idea,
or to buy the right Micro-Saas business and grow it
and really adopt this lifestyle.
Intro. (upbeat music)
What's everybody, welcome to Unstoppable,
I'm TK and on this channel, I hope SaaS founders like you
grow your SaaS businesses faster
with an Unstoppable strategy.
Now, if you're new to this channel,
be sure to hit the subscribe button
and that bell icon because I drop a video like this
two to three times a week with actionable strategies
to grow your SaaS business with TK energy.
Now, if you're already part of this community,
if you're part of my SaaS coaching programs,
welcome back, it's really good to see you over here.
Now, when I was first starting out in SaaS,
this company, 37signals, they're known as Basecamp now,
was all the rage and they were talking about this phrase
called bootstrapped, profitable and proud.
Bootstrapped, profitable and proud,
and I just loved it.
Now granted, we went onto build a venture back business,
but I always loved that ethos,
because typically when you're in the venture bubble,
you're either doing a venture back business
that's highly scalable, or you're doing a lifestyle business
and they look at it in a derogatory way.
And the 37signals guys were one of the first ones
to say no, we don't want the venture capital,
we're not operating a lifestyle business,
we're bootstrapped, profitable and proud
and I just loved that ethos,
and that ethos is really what makes
for a Micro SaaS business.
You're likely gonna be bootstrapped,
you're likely gonna be profitable, wildly profitable,
highly efficient and you're gonna be proud of it.
And the reason you don't hear as much about it is,
if a founder raises three million dollars of a seed round,
they have to go promote it.
They have to say, look at us,
we raised three million dollars.
If a founder made three million dollars in a year
from a Micro-SaaS business and was wildly profitable
and they just took three million dollars home to the bank,
they're not gonna write a (mumbles) article about it.
They're just gonna stay quiet, they're gonna buy a Ferrari,
they might not even buy a Ferrari,
they might just go on a really nice vacation,
reinvest the money and it might stay
super stealth wealth about it.
No one needs to write an article about it,
so you don't hear as much about them
and VCs always said, these are lifestyle businesses
and the people that are actually doing it are like,
don't tell, don't tell, don't correct them.
It's okay, we'll just keep our money
and that's why Micro-SaaS ideas are so, so sexy
in this ethos of bootstrap, profitable and proud.
So in this episode, I'm gonna walk you through
the three principles you absolutely need to know.
Let's jump into principle number one.
By the way, if you are excited to dig in,
go ahead and smash that like button
for the YouTube algorithm if you haven't already.
Let's go to principle number one.
So principle number one for an effective Micro-Saas business
is you wanna solve a problem,
ideally for the individual contributor.
This, I think, what I found in all my analysis
of Micro SaaS businesses that are doing well,
the ones that were scoping out to build as well,
were gonna be building a few or testing,
we've been testing a few,
is to solve a problem for an individual contributor.
Here's why, Micro SaaS businesses work better
when you're just solving for the user
and the user is the one buying and that's end of story.
As soon as you have a SaaS business
where it's selling to a decision maker,
that's a manager and there are other users
that are gonna be using it,
chances are, it's gonna get a little bit more complicated,
you're gonna require sales people,
it won't truly be self-service or product led,
there's gonna be multiple people to convince
and it becomes a little bit harder
and the beauty of a Micro SaaS business
is it's got a very efficient sales and marketing process.
It's nearly self-service, nearly automated
and it just needs to convince one person
that hey, we can solve your problem
and they're like cool, swipe the credit card,
whether it's their personal credit card
or their business credit card.
What's the quick hack to this?
The principle is literally,
look for individual contributors, ICs,
individual people in specific jobs
that need problems solved through SaaS and sell to them
instead of tryna get a whole team involved.
Now, it doesn't mean that you may not have a team plan,
you may have viral effects inside of the thing,
but that's not the primary thing.
The primary thing is you have a single player mode,
one person can get value out of it
and solve the major problem,
that's the first principle of a Micro SaaS business.
Okay, so that's principle number one.
Principle number two is, how do you make sure
that this is gonna actually work?
So the principle number two is,
you should follow the jobs to be done framework.
The jobs to be done framework is essentially a framework
that helps you look at, okay,
this is an individual contributor, this is our ICP,
what are the jobs they need to do
to be effective in their job.
What are they compensated for?
You literally map out using the jobs to be done framework
and what does this person do?
What does their day look like?
What do they have to accomplish?
What tools do they use?
And what you wanna find in that workflow that they have
is what is an urgent and important problem
in their workflow?
And your SaaS tool needs to solve an urgent,
important problem in their workflow.
That's super important.
A lot of times, ultimately, whether you're building
a Micro SaaS business or a SaaS business,
you need to make sure you're solving an urgent,
important problem, if you're not,
then you gotta spend a lot of time marketing
to these people, convincing them it's an important problem,
they might not have any money left over
to actually turn on a profit on that user.
But, if you map out their jobs to be done
for the specific individual contributor,
you need to look at, what are they compensated for,
what are the results they need and where in the workflow
it's broken that your Saas product can plug in and solve,
that's when the magic happens.
It is a bonus caveat to this principle number two
on the jobs to be done,
you wanna make sure your Micro-Saas business
clearly integrates into their existing workflow.
One of the toughest things with Saas period
is to acquire customers and to get them to come back.
Churn is a big issue, people forget about it
even though they're on trial,
so if your Micro SaaS tool is designed to integrate
into their current workflow so they never forget about it,
say it's a Chrome extension
that embeds into their workflow or it's a core integration
or it's email notifications, whatever it may be,
then you're more likely to actually retain
and activate and convert that customer to proper revenues
in that Micro-Saas business.
So super important to make sure jobs to be done,
what's the important, urgent problem,
how do you solve it and how do you solve it
by integrating in to their workflow?
That's principle number two.
Now let me just pause here for a second
before I go to principle number three,
are you starting to see the power in this?
This is what makes for really awesome Micro SaaS businesses
and if you can crack the code in one,
you can start to scale it over time, which is super powerful
and then you can use the common services from that
to build other Micro SaaS businesses
using these same frameworks, super powerful.
Are you starting to see the power on this?
Can I just get a yes in the comments below.
Also, if you disagree, put it in the comments below,
tell me what's wrong with it.
I would love to have a debate.
I answer every single comment
and make sure that I engage with you guys
and I love hearing from you guys.
Also, if you haven't done so yet,
be sure to hit that like button for the YouTube algorithm
in fact, smash that like button for the YouTube algorithm,
it means a lot to us when you do that.
YouTube really likes it when you do that too,
I don't know why.
Also, if you're in this stage where you're building out
your Saas business and you're tryna develop your idea
and craft your idea, I invite you to check out
my 10 point SaaS business checklist.
It's a 10 point checklist that helps you evaluate
where you are in the SaaS business
and works with the critical components
of building a SaaS business and starting a SaaS business.
I'll tell you more about it at the end of this video,
you don't have to go anywhere right now,
let's go to principle number three.
Principle number three is how you price your Micro SaaS.
Now, this is a core principle for any SaaS business,
but it's infinitely more true for a Micro SaaS business.
Ultimately, you're gonna have to figure out
how much to charge for it
and typically, Micro SaaS business,
it's anywhere from 30 dollars a month
to maybe 99 dollars a month, maybe more.
But it's not a lot, it's something that you wanna do
on a monthly basis and maybe give 'em a discount
for doing annual, but not amounts
where they wanna talk to sales.
And typically on the internet,
if you're spending more than a thousand dollars,
then they'll wanna talk to sales,
that's just the way it goes, but if you have it,
and if you're doing a webinar and then they buy
on the webinar, then maybe they'll spend 2,000 dollars
but that's the max.
But for software, what tends to happens
is 99 bucks a month or something like that
and so you wanna make sure
that you're pricing this appropriately.
How do you know how to price it?
Well, what you wanna do is you wanna justify
and express 10x ROI.
10x ROI, meaning if you're charging 100 dollars,
you need to show how they're gonna get 1,000 dollars back.
And usually, you wanna target people,
you wanna make sure these individual contributors
you're targeting from principle number one
actually have disposable income and or are high earners.
Why? Well chances are, these individual contributors
at the onset, are not gonna have access
to a corporate credit card.
They don't wanna go to a manager and bother them,
so a lot of times, if it's priced properly
and they have disposable income,
they'll just swipe the credit card
on their personal credit card
and as they start to see value,
they'll start to expense it on their expense report
and as they start to see value,
they'll maybe tell their manager, just say,
hey, let's just get this for the whole team.
That's the progression on how it goes.
But if you're starting out with people
that are inherently don't have a lot of disposable income,
they're not high earners, then chances are,
they're not gonna be able to afford software,
they're just gonna try and grind it out
and do their job and make the money and pay the bills.
And so, this is a one two thing, one,
you really wanna target the right individual contributors
that have disposable income and you can show, look,
if you take that disposable income and you actually spend
99 bucks a month on this, you'll get 10x ROI
and you'll have more money.
Great example of this is sales people.
ToutApp sold to sales people
and we charged three dollars a month at start
and by the time we sold, we were 125 dollars a month.
And our self-service plans went up
to I think about 79 dollars.
And sales people would literally just reach
into their pocket and swipe their own credit card
because they knew that if they had more pipeline,
then they would close more deals and get more commission
and then their personal investment would pay for itself.
And so they're very willing to make that spend
'cause they had that disposable income
and they could see how they would make that money back,
and then over time, they would tell their manager
and the manager would buy for the whole team
and then we would go and top down with our sales team
and sell it to the whole team.
That's how it worked.
So, super important, principle number three
is you wanna price in a way where you can show 10x ROI,
you wanna communicate that ROI
and you wanna double check that these people
can actually afford it so that you're targeting
the right group of people.
So those are my three principles, now you know.
Just to recap, number one,
solve for an individual contributor.
Number two, follow the jobs to be done framework
and make sure you're solving an urgent, important problem
with your SaaS product and integrate it into their workflow.
Number three, price it in a way where they can get 10x ROI
and then double check to make sure
that these folks are high earners or have disposable income
so they can make their money back,
or at least expense it to the company,
that they have the type of company
and the type of role where they can expense it.
Those are my three principles on making sure
that you're picking the right Micro-Saas ideas
to build these incredible type of SaaS businesses
that your bootstrap, profitable and proud,
and it's a sure awesome mantra that I still love
so that you can do that too.
Now, if you got value from this,
be sure to smash that like button,
but I have something for you.
If you're building out a SaaS business
and you wanna make sure,
these three principles are great places to start,
but we just wanna make sure, hey,
I wanna make sure my SaaS idea is valid.
I wanna make sure I validate it in the right way.
I wanna make sure I get the initial revenues
without building too much product.
I wanna make sure I'm not stuck in the one more feature trap
as I'm building this product,
then I invite you to check out
my 10 point Saas business checklist.
My 10 point SaaS business checklist is completely free,
it'll walk you through the 10 key questions
you should answer to really validate your SaaS idea.
It's completely free, just go to tkkader.com.saas-checklist,
It's completely free, you'll get access to it right away
and then we're off to the races to help make sure
that you don't waste months developing the wrong product,
you actually validate your core SaaS idea,
whether it be a Micro SaaS idea or much more in-depth one.
That checklist works really well
for Micro SaaS ideas particularly,
but will also extend to bigger SaaS ideas as well.
If you got value from this video,
be sure to smash that like button.
I drop a video like this two to three times a week
with the TK energy so be sure to smash that subscribe button
and that bell icon so that you get notified.
If you have a fellow founder, fellow engineer friend
that wants to get into becoming a founder,
please sure this video with them,
it'd just mean the world to us,
we put a lot of love into these videos
and lastly, remember, everyone needs a strategy
for their life and their business,
when you are with us, yours is gonna be unstoppable.
I'm TK and I'll see you in the next episode.