Software-as-a-Service (SaaS) business models are increasingly popular among technology firms. Usually offered on a monthly, quarterly or yearly subscription basis, the SaaS model allows businesses to make a regular income from their service.
SaaS is a good deal for both vendors and clients. Vendors get a steady income. Clients get a contractually-sound service that includes customer service, technical support, and regular updates as standard. That’s why companies like Netflix, Spotify and Hubspot offer SaaS products.
The SaaS model has now started to filter through into the startup world. More and more entrepreneurs are beginning to set up micro-SaaS companies.
But there are challenges to starting and running a micro-SaaS business. So what exactly makes a successful SaaS startup? And is it the right choice for your next venture?
- What Is A Micro-SaaS Business?
- What Makes A Successful SaaS Business?
- Why Start A Micro-SaaS Company?
- How To Start A Micro-SaaS Business
- Do You Need To Be A Developer To Start A Micro-SaaS Business?
- Things To Consider When Starting Your Micro-SaaS Business
- Successful Micro-Saas Business Examples
- The Best Sectors To Set Up A Micro-SaaS Business In 2022
- Start Planning Your Micro-SaaS Business
What Is A Micro-SaaS Business?
Like a regular SaaS company, a micro-SaaS business offers a service — usually software — in exchange for a regular subscription fee.
The key difference is that micro-SaaS companies are usually run by one person or a very small team. This person or team is responsible for operations across the business, from developing the product to delivering customer service.
What Makes A Successful SaaS Business?
The best SaaS businesses put one thing above all else: fantastic customer support.
After all, a great product is worthless if your customers can’t trust you to deliver it to them. As a micro-SaaS company, you’ll need to go above and beyond for your customers so they don’t turn to more established software firms.
But this isn’t the only thing you need to build a successful SaaS company. You’ll also need the development nous to create a brilliant product and the marketing expertise to sell it. If you don’t have these skills, consider teaming up with freelancers or business partners who can help with these crucial skills.
Why Start A Micro-SaaS Company?
Once your initial business is set up, running a micro-SaaS company is relatively inexpensive. You won’t have as many regular overhead costs as other businesses, since you won’t need to buy inventory or pay lots of staff members.
As more businesses turn to software to solve their day-to-day problems, there’s also great demand for customer-focused software companies in 2022. With the right positioning and marketing approach, you’ll be able to access huge marketplaces in which you can grow your business.
How To Start A Micro-SaaS Business
While there are lots of reasons to start a micro-SaaS company, it’s not the easiest type of business to get off the ground. You’ll need to plan, prepare — and put in a whole lot of work before you even think about launching your product.
Here are 6 steps to starting a micro-SaaS business.
1. Find A Great Idea
Businesses in all kinds of sectors need new technology to get ahead of the curve. So wherever your interests and experience lie is a good place to start.
Conduct market research in sectors you’re interested in. What are the biggest frustrations they face day-to-day? What software do they currently use? Is it fit for purpose? What could be better?
When you’ve spoken to a wide pool of people, you’ll be able to use this data to figure out what tech the industry is missing — and the kind of product you could create to fill the gaps.
2. Discover Your Ideal Buyer
When you’ve got your great idea, you need to know who you’re going to sell it to. Is it teachers? Sales representatives? Plumbers? Parents?
Every demographic needs a different marketing approach, starting with the language you use and your product’s functionality. There’s no point perfecting an incredible AI function if your target buyer won’t use it.
Find out what their problems are and solve them. It’s as simple as that.
3. Write A Business Plan
With your product and audience in place, you can start writing your business plan.
A great business plan is concise, clear, and relevant. It’s the skeleton of your business: it doesn’t go off on tangents or set out detailed roadmaps.
Your business plan should include:
- The problem you want to solve
- The solution you’re going to build
- The market research you’ve completed, including a brief analysis of your competitors
- A SWOT analysis
- The strategy you plan to use to bring your business to life
4. Build your MVP
Now you have a strong plan of action in place, you can begin building the minimum viable product (MVP). Your MVP is the smallest possible incarnation of your product that still has market appeal.
Ultimately, you may want to build an all-singing-all-dancing CRM system — but that could take years to build. To start seeing returns sooner rather than later, you can build an MVP and build on it once you have some customers under your belt.
This strategy isn’t just good for ROI. It also means you can get feedback on your existing features from your customers and finetune them before you roll out new features.
5. Test your MVP
Put your MVP through its paces before you let any customers loose on the platform. Ask someone you trust to use the software and see what they think. Do they find it easy to use? Is the software intuitive and easy to navigate? Did they find any broken links or errors?
Remember that it’s often difficult to find flaws in your own work. That’s why it’s important to get someone to test it before you launch.
6. Find Your First Subscriber
Once your MVP is built, it’s time to put your marketing into fifth gear. Get the word out about your new product across social media, and through a strong content marketing strategy.
Make it as easy as possible for people to sign up for your service through your website. Use video tutorials, onboarding plugins and secure payment gateways to ensure a seamless sign-up process.
Some SaaS companies — especially if they’re selling to other businesses — choose to demo their services to potential buyers before they sign up. This is great if you’re asking for a heavier investment into your service. If you go down this route, make it as easy as possible for your customers to book a demo with you.
Do You Need To Be A Developer To Start A Micro-SaaS Business?
In short, no — but it does makes things easier.
If you’re not a developer, you’ll need to partner closely with someone who shares your enthusiasm for building a micro-SaaS business. Building software from scratch takes serious time and energy, so you’ll need to be patient with your freelancer or business partner. This is especially true if they’re working on the micro-SaaS as a side hustle alongside their full-time job.
Together, you should create a realistic roadmap for development, testing and launch. This will allow you both to start with the same expectations, which can prevent conflict down the line.
While your service is in development, you can focus on the operations and marketing. Ramp up excitement about your new service with regular video snippets, launch date teases, and an intriguing informative website.
Things To Consider When Starting Your Micro-SaaS Business
Starting a micro-SaaS business is a brave but rewarding career move. But that doesn’t mean you should jump into it blindly.
Make sure you consider these 6 factors before taking the plunge and starting your own micro-SaaS business.
1. Your skillset
If your skills are more entrepreneurial than technical, a SaaS business isn’t the easiest route to success. Without extensive software development experience, you’ll be reliant on others to bring your vision to life. This isn’t necessarily a barrier — but you should consider carefully whether you want to take on a business partner, or whether you want to go it alone.
2. The cost to build your MVP
Like all startups, you’ll need some capital to get your initial product off the ground. Whether you use your own money or find external investors, you’ll need to carefully consider the cost of the initial product build. This should factor into your business strategy. How long will it be before you or your investors see a return on this? Does your MVP make financial sense?
3. The cost to find your first customer
Marketing is another expense you’ll need to consider. From online ads to influencer marketing to strategic copywriting, there are literally hundreds of ways to spend your marketing budget — so choose your strategy wisely. When conducting your market research, ask your ideal buyers questions about their buying habits to find out the best places to reach people like them.
4. The marketplace
Ensure you understand the challenges impacting the marketplace you want to enter. A thorough SWOT analysis will help you here. If your customers are affected by economic uncertainty or other widespread trends, you need to know about them before you start your SaaS business, as they can impact buying decisions.
5. Your marketing strategy
You can’t sell a product without a good marketing plan. Even if it’s a basic cold email strategy, you need to know how you’re going to find, connect with, and convince your customers to buy. Bear in mind this will sometimes mean persuading them away from another solution — so what value does your service have that others don’t? Knowing your value is the first step to launching any marketing campaign.
6. Your potential for growth
Most startup founders love to innovate — but they love to grow, too. Make sure there’s ample scope for your business to expand, whether it’s via new markets or a broader service. That way, even if you decide to sell your SaaS startup further down the line, investors will be attracted to the growth potential of your business.
Successful Micro-Saas Business Examples
Lots of micro-SaaS companies are thriving across modern marketplaces. Let’s take a look at some successful SaaS startups running with a small team.
Snappa allows non-designers to create flawless graphic design elements with ease. It’s a great way for freelancers and small businesses to upgrade their presence with slick online imagery.
With a 7-strong team, Snappa is a flourishing micro-SaaS company that’s used by thousands of people around the world.
Carrd is similar to website builders like Wix in that it offers a free and a paid version. With the paid subscription version, you can attach your own URL — a must-have in today’s tech-focused climate.
Carrd was started as a side project by a single person, and has enabled thousands to create stunning responsive websites on its free and paid plans.
Productivity is a key focus of every business — and Complice makes it easier for people to achieve more every day. Complice focuses on helping people create fresh, achievable goals to boost productivity.
Complice was started by 2 people in 2013. Almost 10 years later, it’s still operated by this 2-person team, showing the true potential of a well-executed micro-SaaS business.
Everhour is a time tracking add-on that integrates with many popular project management apps, including Asana, Trello, and Github. It helps people and companies track time spent on tasks and projects to improve time management and productivity.
Made by a small team in Belarus, Everhour is a growing micro-SaaS enterprise. They currently have more than 145,000 active users and just 18 employees.
The Best Sectors To Set Up A Micro-SaaS Business In 2022
Some of the most successful micro-SaaS enterprises — particularly those related to productivity — appeal to audiences across many industries.
But if you don’t have an idea for your micro-SaaS company yet, here are some of the sectors clamouring for tech solutions in 2022.
Education is one of the most sought-after products in the world. As the cost of education soars — and more classes are undertaken online — schools, colleges and universities are under pressure to provide excellent value for money.
Micro-SaaS companies can take advantage of this by building money-saving solutions that also enhance the student experience.
Healthcare is a huge global priority in the wake of the COVID-19 pandemic. With existing healthcare bodies under severe scrutiny from governments and patients, technology can help them provide better care.
From personal health monitoring apps to medical consultation software, there are huge opportunities for micro-SaaS entrepreneurs to provide solutions in healthcare right now.
High-risk investment strategies are booming in 2022. From NFTs to cryptocurrency, more people than ever are looking for new ways to make money. Plus, as economies continue to waver under the weight of the pandemic, people with more traditional financial portfolios are also looking for new ways to manage their money.
As a result, people from banking backgrounds can build software to help people navigate the notoriously cryptic finance world. That said, there are lots of regulations you need to follow in banking and finance, so be prepared to do a lot of research before you start building the next Monzo.
As the world opens up after the pandemic, international travel is likely to boom over the next few years. That means it’s a great time to plan and launch a micro-SaaS service that helps people or businesses plan their next adventure.
Travel is thrilling, and with millions of people expected to book holidays in the next few months, this is a super exciting sector to build your micro-SaaS venture in right now.
Start Planning Your Micro-SaaS Business
Now you know what it takes to build a micro-SaaS business, it’s time to get started. Here are 3 actionable steps you can take today to get started.
1. Browse the Reddit page for your chosen sector. Which questions keep cropping up? What common pain points do people experience?
2. Decide if you’ll need to hire other people to help you launch your micro-SaaS company. Will you need a developer or a marketing expert on board?
3. Start researching other software companies in your sector. What do their social media pages look like? How about their website? You can use this information to inform your SWOT analysis later.