Build Your SaaS

In 2013, I interviewed Jason Calacanis, the angel investor.One of the things I asked him: "Why do venture capital investors take these big risks with their money?" "There's a lot of money in the world. There are trillions of dollars just sitting around, and people are bored. The money is bored! Money wants to burn! Money does not want to sit in a safe."Uh. What an interesting idea: "the money is bored."Jon Buda and I are bootstrapping Transistor.fm and Spots.fm. We've invested our own money into both of these projects.When you're self-funding a startup, your money is the opposite of bored. Your money is stressed. You're caught between these two realities: you're investing real time and money into the product, but the product isn't yet giving you anything back.For example, we're launching Transistor.fm on August 1st.Right now we have 51 early access customers and $781 in MRR.Let's say that when we launch on August 1st, we double MRR to $1,500.To get to $21,000 in MRR (enough for Jon and me to focus on Transistor full-time), it will take five years (assuming 10.0% exponential growth and 5.0% churn).Five years. 60 months. That's a long time to wait for a paycheque.There's this tricky tension when you're bootstrapping a SaaS. On one side, you're investing in this product that could be an incredible asset.If Transistor hits $20,000 a month, that's dependable, recurring revenue.But on the hand, investing all that time and money in something that isn't a sure bet is a risk.It's easy to see why bootstrapped founders get stressed. It's easy to see why many experience burnout and have to quit.That's something Mike and Fred talked about on their podcast, Hit Reply.Bootstrappers who are building something new have to walk this fine line:We need to invest a considerable amount of effort to launch our product.But we also need money to live, and it can be years before a SaaS can support you full-time.Which has me thinking about Basecamp.What Jason Fried and DHH achieved with Basecamp is what most bootstrappers aspire for. Heck, most of us would be happy for even a fraction of their success.They've long been the example of how you can self-fund a product, bring it to market, grow it, and have it succeed.But the story many of us are telling ourselves about how they achieved that success isn't quite right.Yes, they've bootstrapped Basecamp since 2004. But in 2006 they didn't something a lot of us bootstrappers haven't paid a lot of attention to. They took investment!I recently read this interview with DHH on Startup.co. The interviewer asked:"As you’ve built Basecamp you’ve been very vocal about resisting the temptation of unicorn culture. How have your perspectives changed?"David's answer is interesting:It wasn’t without temptation or struggle to stay like this. Especially in the early years, before our bombastic views on venture capital, the IPO rat-race, and other ills of funding were known. We had, I think, close to 50 different VCs get in contact. Ironically, part of what did give us the confidence to turn down that whole world was a small sale of equity to Jeff Bezos. That gave our personal bank accounts just enough ballast that the big numbers touted by VCs and acquisition hunters lost their lure.This is something the bootstrapping culture doesn't think about a lot.37signals, the poster child of the bootstrapped world, took investment two years after they launched the product.That Bezos money didn't go into the company. It went into their personal bank accounts.Jason and David were able to hedge their bets. That Bezos investment removed a lot of the stress and risk that comes from bootstrapping a product.Bootstrappers have created a religion out of building something from scratch and self-funding the entire thing.But what if that ideology leads to burnout? Or bankruptcy? Or not being able to go the distance?Here's David again:"I really wish that more founders who are on to something could find ways to diversify their accounts just enough to dare go the distance."It's something we need to think about.What do you think?Leave a comment on Breaker, the podcast app for Android and iPhone.Leave a comment on CastBox, the podcast app for Android and iPhone.Otherwise, get us on Twitter: @transistorfm or email us: mail@transistor.fmWant to get notified when we launch? Sign up at transistor.fm Show notes:Product People, 33, with Jason CalacanisForecast your MRR (a tool by Baremetrics)Hit Reply, ep 3, with Fred and MikeFoundation podcast, 26, Jason Fried interviewStartup.co interview with DHH★ Please review us in iTunes – it helps other folks find the show! Thanks to our monthly supporters Rewardful.com Greg Park Mitchell Davis from sixsides.co Marcel Fahle, wearebold.af Bill Condo (@mavrck) Evandro Sasse Austin Loveless Michael Sitver Colin Gray Dave Giunta 🎙️ Podcast hosting is provided by Transistor.fm.📺 Learn how to start your own podcast! ★ Support this podcast on Patreon ★

Three tweets TuesdayJustin Kan: "B2C is a gamble while B2B is (more) within your control."Stephanie Hulburt: "We have a philosophy of “no hard sells” and it has served us well. If someone’s not convinced we move on; we don’t hang on trying to convince one person. It’s tempting to defend yourself, but not good for business."Naval on making decisions:"If you can’t decide, the answer is no. If two equally difficult paths, choose the one more painful in the short term. Choose the path that leaves you more equanimous in the long term."Show notesJohn FogertyJustin Kan: “Why I Love B2B over B2C”Naval: How to get rich(without getting lucky)Muneeb Ali: “Hard conversations, easy life. Easy conversations, hard life.”Follow Stephanie Hulburt on Twitter!Book: Difficult ConversationsTransistor.fmTransistor.fm on InstagramTransistor.fm on TwitterJon Buda is back on Twitter: @jonbudaJustin Jackson on Twitter here: @mijustinLeave a comment on Breaker, the podcast app for Android and iPhone.Leave a comment on CastBox, the podcast app for Android and iPhone.★ Please review us in iTunes – it helps other folks find the show! Thanks to our monthly supporters Rewardful.com Greg Park Mitchell Davis from sixsides.co Marcel Fahle, wearebold.af Bill Condo (@mavrck) Evandro Sasse Austin Loveless Michael Sitver Colin Gray Dave Giunta 🎙️ Podcast hosting is provided by Transistor.fm.📺 Learn how to start your own podcast! ★ Support this podcast on Patreon ★

How to build anticipation for your product launchHave a mailing list! Email them consistently during development.The week of launch you should send the following emails:Pre-launch announcement: "We're launching in a week!"Day before announcement: "The launch is tomorrow. Here's how much it will cost."Launch day email: "We're launched! Sign up here"Day after email: "You've still got time to sign up."Launch discount is ending email: "This is your last chance to register"Use services like Product Hunt, Product Hunt Ship, BetaList, to build anticipation.On Twitter, FB, LinkedIn, Instagram: constantly send out product updates.Building anticipation before you launch is the most underrated tool you have for your product launch.Show notesSpots.fm - “what if advertising on podcasts was as easy as advertising on Facebook?”Taylor Otwell, creator of LaravelSee you at Laracon!Video: Buddy Guy'Meet Me in Chicago' at the Hollywood Bowl 8-21-13.Product Hunt ShipBetaListAdam Wathan at MicroConf talkThe Best Pizza in ChicagoChicago vs New York Hot DogsAnthony Bourdain on ChicagoWe’re going to XOXO 2018!Transistor.fmTransistor.fm on InstagramTransistor.fm on TwitterJon Buda is back on Twitter: @jonbudaJustin Jackson on Twitter here: @mijustinGive us some love on Breaker, the podcast app for Android and iPhone.★ Please review us in iTunes – it helps other folks find the show!Check out these new shows on Transistor:Goodstuff.fmatU2 podcast Thanks to our monthly supporters Rewardful.com Greg Park Mitchell Davis from sixsides.co Marcel Fahle, wearebold.af Bill Condo (@mavrck) Evandro Sasse Austin Loveless Michael Sitver Colin Gray Dave Giunta 🎙️ Podcast hosting is provided by Transistor.fm.📺 Learn how to start your own podcast! ★ Support this podcast on Patreon ★

Jon and Justin are still moving forward with Transistor. We're planning to launch in July. But we're being realistic: this could be a slow-growing business. The good news? We're both okay with that. We talked through different funding scenarios – VCs, fund-strapping, bootstrapping – and realized what really matters is building something meaningful with people we like. In the meantime, Justin is exploring a side project called Spots.fm (think Calendly for podcast sponsorships). The plan is to start manually, helping a few podcaster friends fill their ad slots, before we build any software.Show notes:Spots.fm – "what if advertising on a podcast was as easy as advertising on Facebook?"Spots.fm/story - the Spots story so far.SaaS Your LaterDerek Sivers - Start now, no funding neededTransistor.fmTransistor.fm on InstagramTransistor.fm on TwitterJon Buda is back on Twitter: @jonbudaJustin Jackson on Twitter here: @mijustinGive us some love on Breaker, the podcast app for Android and iPhone.★ Please review us in iTunes – it helps other folks find the show!Check out these new shows on Transistor:Remote RubyThat's a thing?Tech Nest - Real Estate podcast Thanks to our monthly supporters Rewardful.com Greg Park Mitchell Davis from sixsides.co Marcel Fahle, wearebold.af Bill Condo (@mavrck) Evandro Sasse Austin Loveless Michael Sitver Colin Gray Dave Giunta 🎙️ Podcast hosting is provided by Transistor.fm.📺 Learn how to start your own podcast! ★ Support this podcast on Patreon ★

Show notesJustin’s Instagram TV episodeMegaMaker.coIndie VCCanada’s Startup VisaTransistor.fmTransistor.fm on InstagramTransistor.fm on TwitterJon Buda is back on Twitter: @jonbudaJustin Jackson on Twitter here: @mijustinGive us some love on Breaker, the podcast app for Android and iPhone.★ Please review us in iTunes – it helps other folks find the show! Thanks to our monthly supporters Rewardful.com Greg Park Mitchell Davis from sixsides.co Marcel Fahle, wearebold.af Bill Condo (@mavrck) Evandro Sasse Austin Loveless Michael Sitver Colin Gray Dave Giunta 🎙️ Podcast hosting is provided by Transistor.fm.📺 Learn how to start your own podcast! ★ Support this podcast on Patreon ★

Show notesTransistor.fmTransistor.fm on InstagramTransistor.fm on TwitterJon Buda is back on Twitter: @jonbudaJustin Jackson on Twitter here: @mijustinGive us some love on Breaker, the podcast app for Android and iPhone.★ Please review us in iTunes – it helps other folks find the show! Thanks to our monthly supporters Rewardful.com Greg Park Mitchell Davis from sixsides.co Marcel Fahle, wearebold.af Bill Condo (@mavrck) Evandro Sasse Austin Loveless Michael Sitver Colin Gray Dave Giunta ★ Support this podcast on Patreon ★

Guests Ben Orenstein, Derrick Reimer, Jon Buda, and Justin Jackson discuss building a SaaS on the side. Topics include generating interest in a product launch, pricing strategies, customer success in SaaS, and transitioning to a new role as a thought leader.

Jon and Justin are probably 1-2 months away from the launch of Transistor.fm. That means we need to figure out pricing.“In your early stage two things are essential: your customer focus, and your value metric. If you can nail these two things (even if you get everything else wrong) you’re typically fine." – Patrick CampbellWe've both worked in SaaS before, but we're trying to not pretend we know everything. We want to do this right, so we reached out to two experts this week: Patrick Campbell (from Price Intelligently) and Rob Walling (from Drip)."I can only think of a couple ways to charge more than your competitors. First, have features that no one else has (that people are willing to pay for). Or, you can position yourself differently by saying: 'we are the podcast host for businesses.' Or, you can do high-touch sales. The sales process allows you to charge more." – Rob WallingShow notesFull interview with Patrick Campbell on Product PeoplePrice intelligentlyPatrick Campbell, founder of Price IntelligentlyRob Walling, founder of DripTransistor.fmTransistor.fm on InstagramTransistor.fm on TwitterJon Buda is back on Twitter: @jonbudaJustin Jackson on Twitter here: @mijustinGive us some love on Breaker, the podcast app for Android and iPhone.★ Please review us in iTunes – it helps other folks find the show! Thanks to our monthly supporters Rewardful.com Greg Park Mitchell Davis from sixsides.co Marcel Fahle, wearebold.af Bill Condo (@mavrck) Evandro Sasse Austin Loveless Michael Sitver Colin Gray Dave Giunta 🎙️ Podcast hosting is provided by Transistor.fm.📺 Learn how to start your own podcast! ★ Support this podcast on Patreon ★

Today's show is not a full episode! Jon and I have been busy with our day jobs, plus Memorial Day, and didn't have time to record a show.But, to be honest, this pricing discussion isn't something we can solve in a 30-minute conversation. We've realized it's going to require more research. We need to talk to folks who know more than us. So that's what we've been doing. This week, I have a call booked with Patrick from Price intelligently, as well as Rob Walling (who just his company Drip). I'm hoping to get some useful insights on pricing from these folks. Mostly so we don't make the same mistakes that other SaaS companies have made. These chats will also benefit you, the listener, because we'll be sharing as much as we can in future episodes.As a teaser, I'm going to share a phone call I had with Nathan Barry.  He has one of the fastest growing SaaS products in existence right now: ConvertKit.They just crossed 1 million dollars in MRR. That's an Annual Run Rate of $12.8 million! They've grown fast, and Nathan's had to learn fast. So here are some of his thoughts on the pricing of podcast hosting. Show notesPrice intelligentlyNathan Barry, founder of ConvertKitConvertKit's revenue numbersTransistor.fmTransistor.fm on InstagramTransistor.fm on TwitterJon Buda is back on Twitter: @jonbudaJustin Jackson on Twitter here: @mijustinGive us some love on Breaker, the podcast app for Android and iPhone.★ Please review us in iTunes – T-shirt contest!  Leave a review you’ll be entered to win a limited edition Transistor t-shirt! Thanks to our monthly supporters Rewardful.com Greg Park Mitchell Davis from sixsides.co Marcel Fahle, wearebold.af Bill Condo (@mavrck) Evandro Sasse Austin Loveless Michael Sitver Colin Gray Dave Giunta ★ Support this podcast on Patreon ★

We're hoping to launch Transistor officially in July 2018.And that means we need to figure out a pricing strategy. What types of tiers and plans should we offer?SaaS pricing examples:HootsuiteWPEngineSumoStatusPagePatrick Campbell, from Price Intelligently, says there are three aspects of a pricing strategy:Positioning: who are the right customers for your product? How will you target and attract them?Packaging: what features are included in each tier? What value does each type of customer want from your product?Pricing: putting a price on your tiers that reflects the value your customer receives.Where did we get stuck? Jon and I started by looking at who had signed up for early access to Transistor:Hobbyists – podcasting for fun, two people talking, no advertising.Prosumers – side-project podcasting, may have a bit of income, want to go pro.Solopreneurs – solo founders building smaller tech products. Small tech teams – teams of 3-10 people building larger software products.Bigger brands / enterprise companies.This list brought up a question: how do we define our target customer? Is "podcast hosting and analytics for professionals" too broad?Here's our homework for this week: we're going to let this simmer, we're going to talk to smart people about pricing, and we're going to come back to this next week.Question of the week:Tweet to @jon and @mijustin and let us know: how should we price our SaaS?Show notesJason Fried - Ass pricingPatrick Campbell - Price Intelligently Jason Cohen - WPengine tiered pricingTransistor.fmTransistor.fm on InstagramTransistor.fm on TwitterJon Buda is back on Twitter: @jonbudaJustin Jackson on Twitter here: @mijustin★ Please review us in iTunes – T-shirt contest!  Leave a review you’ll be entered to win a limited edition Transistor t-shirt! Thanks to our monthly supporters Rewardful.com Greg Park Mitchell Davis from sixsides.co Marcel Fahle, wearebold.af Bill Condo (@mavrck) Evandro Sasse Austin Loveless Michael Sitver Colin Gray Dave Giunta 🎙️ Podcast hosting is provided by Transistor.fm.📺 Learn how to start your own podcast! ★ Support this podcast on Patreon ★