“The biggest competition in SaaS is a spreadsheet.” — Ross Simmonds
💎 Why It Matters
B2B SaaS gives you a simple, secure and accessible way to solve business problems.
You can solve internal challenges:
- internally by building tools and hiring
- externally by outsourcing the problem
Building your own tools can distract you from your core competency.
B2B SaaS helps you focus on your core competency.
While reaping the benefits of improvements made by teams dedicated to specific problems.
- Make • Build and automate workflows
- InvoiceBerry • Online invoicing for small businesses
- Gusto • Payroll, benefits and HR management
- Hive • Manage tasks, workflows and team’s work
- Lanva • Social video editing app.
- ClickUp • Manage tasks, docs, chat, goals and more
- Plausible • Open-source privacy-friendly web analytics
- Podcast Hawk • Podcast guest booking software.
- Writesonic • AI-driven content creation
- Folderly • AI-Based platform to improve email deliverability.
- Craftar • Build APIs with No-Code
- Budibase • Low-code internal app builder
- LiveAgent • All-in-one platform for live customer support
- SavvyCal • Experience-focused Calendly alternative
- Trends.vc • Community of entrepreneurs discovering new markets and ideas
- MicroConf • A community and event series for bootstrapped SaaS founders
- Indie Hackers • Real stories, advice, and revenue numbers from indie makers
- The Indiependent • A community for founders where you get kicked for inactivity
- MegaMaker • A community for bootstrappers
- 100DaysOfNoCode • Lessons, stories and activities for no-code founders
- TinySeed • An accelerator for bootstrapped SaaS founders
- SureSwift Capital • Buys and grows businesses of independent founders
- Calm Company Fund • Capital, mentorship and community for B2B SaaS
- Dura Software • Invests in hyper-niche software
- Lighter Capital • Invests in companies with $15,000+ MRR
- Calm Capital • Invests in profitable businesses
- LTV SaaS Fund • Focuses on profitable and privately held SaaS companies
- B2B SaaS companies will index into existing markets instead of trying to create new categories.
- Plausible reached $500,000 ARR in 3 years with an analytics tool.
- ConvertCalculator has 15,000 users and $24,000 MRR.
- Checkout Page is a side-project that processed $2,000,000 in payments.
- Paperform reached $2,000,000 ARR. Tally reached $10,000 MRR in less than a year in a crowded market of form builders. The latter has 30,000 users and sits at $17,000 MRR.
- Companies will use open-source SaaS to avoid platform risk and vendor lock-in.
- Businesses will use personalization to nurture leads and convert customers at high-intent moments. Live video sales reps is the second most upvoted idea on Kernal.
- ConvertKit uses surveys to change onboarding paths.
- Candu lets you serve different content to different users.
- Helium lets you talk to web visitors as they land on a page.
- Bonjoro lets you send transactional personal videos to your customers.
- Businesses will use SaaS analytics to improve customer experiences. Data-driven roadmaps and pricing will help reduce churn and maximize revenue.
- Chargebee allows you to run billing experiments with real-time insights.
- Chartmogul helps you measure, understand, and grow your recurring revenue.
- Mixpanel helps you convert, engage and retain users with user behavior analytics.
- Don’t waste time, money and energy trying to create new markets. Solve existing pain points. Not those you wish existed.
- Upvoty • Feedback management tool, grew to $20,000 MRR.
- Potion • Notion to website converter, grew to $4,000+ MRR.
- Headlime • AI-powered marketing copy generator, grew to $20,000 MRR and was sold for $1,000,000+ in 8 months.
- Focus on a specific job-to-be-done. Design simple, powerful features.
- ShareThis lets you add share buttons to your website.
- Hugo helps you manage notes and tasks for your meetings.
- SavvyCal is a calendar scheduling tool that generates $20,000+ MRR.
- Hyperping helps you monitor uptime and manage incidents. It has ~$7,000 MRR now.
- Friendly offers privacy-first marketing automation and web analytics. It’s close to $13,000 MRR now.
- Narrow your target audience. Vertical SaaS targets niche industries and customers. Niching down helps you stand out from competition, clearly communicate your value and find customers.
- The Agent Nest • Social media marketing for real estate that reached $10,000 MRR.
- Aplano • Employee management and time tracking for shiftworkers that reached $450,000 ARR.
- Zenmaid • Scheduling, automation and reporting for maid service that reached $1,500,000 ARR.
- Presell to validate demand. A landing page, mockup or screenshots will do. Don’t waste time building something nobody wants.
- Ch Daniel got $1,000 in presales.
- Alex Pethick received $4,000 in presales for Lanva.
- Brian Casel got $3,000 in preorders with wireframes.
- Aazar Shad reached $560 MRR with Ecomply after 3 webinars.
- Danny Postma got $16,000 in presales in 48 hours for Headlime.
- Kalo Yankulov says Encharge got ~$4,000 in pre-sales with content marketing.
- Feature parity • No-code and low-code tools make it easier to reach feature parity. This is a two-way problem. It increases competitor risk. You can catch up with competitors. They can also catch up to you. Competition lowers margins.
- Low Lifetime Value • This makes it hard to invest in customer acquisition. Paired with other expenses it can lead to negative cash flow and the Valley of Death.
- Platform Risk • Building on other platforms subjects you to their product roadmap, outages and fees. Changes to Notion API broke Super.
🔑 Key Lessons
- Micro-SaaS does not mean low revenue. “Micro” means a specific niche, target audience or set of features. Hubstaff started as a time tracker for field and remote teams. It grew to 75,000 users and $3,800,000 ARR.
- Growth systems > growth hacks. Growth hacks are designed for fast, low-cost user acquisition. Growth systems focus on long-term marketing strategies. Doopoll grew MRR by 800% over 6 months with a growth system using pain point SEO.
🔥 Hot Takes
- The largest SaaS categories will be commoditized by Monetized Open-Source alternatives. Rocket.Chat and n8n are open-source alternatives to Intercom and Zapier. This is counter-positioning. It’s unlikely the latter will open source.
- You need lots of customers, a high customer lifetime value or both to build a great B2B SaaS business. A company without one of these is in a death zone.
- Feature parity is a weakness of SaaS. This leads to commoditization and lower margins. Low prices and complementary services become your key differentiators.
“Markets are crowded. How do I stand out?”
There’s a marketing strategy for every taste. AJ from Carrd says a massive market has room for many solutions. Canny got to $1,000,000 ARR in the crowded market of user feedback management. Ruth and Eric built and grew Reconvert to $120,000 MRR, competing with 750+ Shopify cross-sell and up-sell apps.
“Sales will always have a place in B2B SaaS. Self-serve does not always work.”
You’re right. Especially when selling to governments and large organizations such as hospitals. Self-serve, product-led models are increasingly effective with high lifetime value customers.
“Lifetime deals seem risky. What if I shut the product down?”
Lifetime refers to the lifetime of your product, not your lifetime. It’s more like a “pay-once-and-use-forever” deal. Despite associated risks, some SaaS companies choose lifetime deals over subscriptions. Infinity ran a lifetime deal before official launch and decided to keep their pricing that way forever.
“Using open-source tools means self-hosting and taking on other responsibilities.”
There’s no free lunch. That’s the price of agency. Open source alternatives often offer hosted versions as well.
- Who should we talk to about B2B SaaS? • The tweet behind this report.
- The Stair Step Approach to Bootstrapping • A model from Rob Walling on increasing the odds of success by “stair stepping.”
- B2B SaaS Marketing Guide • SaaS-centric marketing guide.
📁 Related Reports
- Micro-SaaS • Solve specific problem for specific audience
- Competitor Risk • Indexing into crowded markets
- Product-Led Growth • Build a product that sells itself
- Value-Based Pricing • Get the right pricing
- Programmatic SEO • Acquire high-intent customers
Thanks to Rob Walling, Reza Saeedi, Stewart Townsend, Prabhjot Singh, Uwe Dreissigacker, Tarun Muvvala, Soma Mandal, Kimsia Sim, Darren Travel, Ben Alexander, Ab Advany, Yun, Niklas Nielsen and Vladislav Podolyako. We had a great time jamming on this report.
✏️ Emin researched and wrote this report. Dru researched and edited this report.
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