“If you’re selling to everyone, you’re selling to no one.”
❓ What You’ll Learn
- What’s Micro-SaaS?
- How to increase your odds of success?
- What are the advantages of Micro-SaaS?
- How do small teams solve big problems?
- Why should you buy instead of build?
💎 Why It Matters
Micro-SaaS helps you design your life without optimizing for investors and large teams.
It can also be a wedge into larger markets. Morphing into SaaS. Or even a platform. Big things start small.
🔍 Problem
Large SaaS apps solve lots of problems for lots of people.
💡 Solution
Micro-SaaS apps solve a specific problem for a specific group of people.
Some traits:
- Run by a solo founder or small team
- Focused on a single feature or minimal feature set
- Extends a platform such as Shopify, Stripe or Intercom
🏁 Players
Micro-SaaS
- Potion • Create custom websites in Notion.
- TextRetailer • Let customers shop using text messages.
- Placid • Generate social share images.
- Elon Stocks • Trade on Elon’s tweets.
- Super • Turn Notion pages into websites.
- Plausible • Simple, privacy-friendly analytics.
- PermanentLink • Prevent link rot.
- ilo • Understand how your tweets perform.
- Benji • Tax write-offs for Canadian freelancers.
- Control • Financial management app for small businesses.
- Userbase • User authentication.
- ScreenshotAPI • Programmatic screenshots.
🔮 Predictions
- We’ll see more Micro-SaaS apps built with no-code tools like Bubble and Bildr. InvestorFuse reached $50k/mo using Podio and Zapier. SendPilot.co runs on Bubble. The first version of Shoutout was built on Bubble.
- Open-source, SaaS alternatives will continue to emerge. A few examples:
- Baserow • Alternative to Airtable
- Joplin • Alternative to Notion and Evernote
- Athens • Alternative to Roam and Obsidian
- Papercups • Alternative to Crisp and Intercom
- Supabase and Nhost • Alternatives to Firebase
- Calendso • Alternative to SavvyCal and Calendly
- Bitwarden • Alternative to 1Password and LastPass
- Platforms will continue to clone popular plugins. Shopify now offers native abandoned cart recovery. They are outsourcing R&D.
- Micro-SaaS will thrive despite platforms cloning features. Abandoned cart apps, like CartHook, Consistent Cart, and Privy solve problems missed by Shopify. They can move faster than large apps and design for thousands instead of millions of people.
☁️ Opportunities
- Index into an existing market to reduce market risk. Find fast-growing form factors like AI-Generated Copy, Notion-to-Site and Sheet-to-Site tools. Don’t try to recreate the wheel.
- Build a Micro-XaaS. See NurtureKit and Gloat. Services are typically faster to revenue than software. This is another way to stairstep your way to SaaS.
- Buy instead of build to save time. XOXO Capital owns a feedback tool, screenshot service and sheet-to-API tool. See more examples in the Micro Private Equity report. Time is not money. It’s non-renewable.
- Look at digital product subscriptions. See Page Flows, GoRails, Storytale, JustDjango and Start React Native. Content can offer a faster route to revenue than software. Stairstep your way to SaaS.
- Make the leap from services to SaaS. Tyler Tringas got the idea for Storemapper while freelancing. Craig Hewitt ran a podcast editing service before a podcast hosting service.
🔑 Key Lessons
- Micro-SaaS is about focus. Large, monolithic apps may have more features, financing and people. But they lack focus. Micro-SaaS apps can make design concessions for specific groups of people.
- Technical moats are fading. Code is being commoditized. Distribution matters more than ever.
- Micro-SaaS is an example of the increasing leverage of individuals. Solo founders and small teams can build more and faster than ever before. This meta-trend also shows up in Million-Dollar, One Person Businesses, No-Code and Low-Code.
😠 Haters
“Your definition of Micro-SaaS doesn’t mention revenue.”You’re right. It doesn’t. A revenue ceiling may be correlated to small teams and hyper-focused features. But making money doesn’t make you less of a Micro-SaaS.
“What if a customer outgrows my Micro-SaaS?”Some will. Productized Services are similar. Their ability to streamline operations stems from their ability to focus. If you’re selling to everyone, you’re selling to no one. Focus isn’t free. Don’t lose a diamond chasing glitter.
“You say index into markets. What about well-established markets?”It’s not a hard rule. Slow-growing markets with embedding effects may be hard to break into. Or the market is already small. Consider opportunity costs. Some battles aren’t worth fighting.
📁 Related Reports
- Micro-SaaS • The first version of this report.
- Million-Dollar, One-Person Businesses • On highly-leveraged individuals.
- Micro Private Equity • Micro-SaaS apps are being rolled up.
- Competitor Risk • On indexing into markets.
- No-Code • Bubble and Bildr can build most web apps.
- Low-Code • Allows solo founders and small teams to build more powerful apps.
- Productized Services • On Software with a Service (SwaS) and the importance of focus.
- Presales • On reducing market risk.
- Marketing Funnels • On customer acquisition.
- Lifetime Deals • When and why to offer lifetime deals.
- Referral Programs • Align interests and borrow trust.
- Data as a Service • Examples of hyper-focused Data as a Service companies.
🔗 Links
- Who should I talk to about Micro-SaaS? • The tweet behind this report.
- The Stair Step Approach to Bootstrapping • “In my experience, the biggest pitfall that trips up first-time product people is trying to create something too complex.”
- SaaS Market Predictions • “In my mind, the ‘micro’ in Micro-SaaS referred not to the size of the company or product, but to the scope of the problem being solved.”
🙏 Thanks
Thanks to Rob Walling (TinySeed), Stewart Townsend (Channel as a Service), Whit Anderson (Bad Unicorn), Natwar Maheshwari (Engineering Brew), Noah Bragg (Potion), Jeremy Abraham (Spiffy), Ramy Khuffash (Page Flows), Yarty Kim (Bourne Fighter), Will Hankinson (IntroCave), Vishal Srivastava (Trainedge), Thomas Jacquesson (TweetHunter), Kimsia Sim (GreenDeploy), Héctor Reyes (Control), Sam Julien (SamJulien.com), Ray Deck (ShieldNumber), Shashank Agrawal (Omdena), Jamil Abreu (Substack) and Lu Doan (Agent Shield). We had a great time jamming on this report.
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