Are you interested in creating your own micro SaaS? Let's find how you can quickly build it using no-code or low-code tools. Wondering if you can do it solo?
We'll also discuss how to launch a micro SaaS with no money or with a tiny budget. Plus, I'll share insights on utilizing an AI to get a huge competitive advantage. And finally, we will dive into proven strategies for selling your SaaS to achieve a six or seven-figure exit.
Let’s begin. I'm Dennis Babych, the Director of a software development company, we created more than 100+ different SaaS businesses and I wanna share with you my experience and the experience of my clients on how to build SaaS products. My goal today is to guide you through the framework of SaaS creation process, highlighting the pitfalls to avoid and offering those 'cheat codes' that can propel you to success and quick exit.
Now, I'd like to be 100% transparent here. This video is not about how to code a SaaS within 5 or 10 hours. No!
Many YouTubers are doing that but it’s just a huge fake. If so many companies out there hiring software engineers paying them huge salaries to create a SaaS with a 6 month period, then why do you think yet another YouTuber will give a silver bullet on how to do that in 5 hours? Also, I’m not gonna share marketing nonsense regarding no-code tools.
Look, from a marketing point of view it's a great clickbait but in reality, it’s just a tool for super simple and super basic apps. Nothing more. Let's be realistic.
So, in this video I will share with you a framework that you can utilize to build your SaaS software. There will be many small, manageable baby steps that you can repeat to create your SaaS. I’m not gonna say that it will be easy or super fast but I'll show you the light at the end of the tunnel, and I will give a simple system that you can repeat.
Let’s go. When you start your micro SaaS journey, many beginners fall into these standard traps. First, they often put all their energy into coding the product, especially if they come from a software development background, so at the end of the day they have a software diamond but they do not know how run a business, how to do sales and marketing, how to manage finance, how to do a market research, how to build a team from scratch, how to fund the project and how to adapt it to a rapid market changes.
Or they get caught up in an endless cycle of adding features, chasing an illusion of a perfect product. One of my previous clients was so obsessed with adding more and more features that he is still trying to improve his food delivery service over the past 8 years. He is still dreaming about adding one more thing.
And his product is still not live. The next trap is when people jump into creating simple clones of existing products, which have lack of real value and don't address the real needs of their audience. It’s those 1000+ clones of AI text-to-image tools with MidJourney or Stable Diffusion API on the background, Notion templates that no one is using because founders do not have the audience or funds for promotions, sometimes even Uber clone but with the subscription instead of one-time payments, it's probably one of those game changers, right?
Or endless TikTok clones for clothes, or even yet another AI psychologist SaaS with ChatGPT in the background. This approach is driven more by the founder’s vision than by market demand, which leads to a quick failure: no clients, financial loss, and bankruptcy. Now, before you start your SaaS project, there are two crucial things.
First, shift your focus from creating a micro SaaS product to creating a business that solves real problems for your audience. This means that you have to understand their needs, pains, and desires, and only then create your SaaS as the solution. Second, remember that your resources – time, money, and motivation – are limited.
Business is a war according to Sun Tzu. And here is another twist, you have to make one quick strike to break the reality and market defense and win this initial war quickly. It's not about just doing more; it's about doing what's right and effective.
You just have to utilize proper frameworks, tools, and strategies to achieve your goals with laser-focused and efficient actions that we will discuss right now. Also, do you know why investors are right now investing mostly only in startups that already have paying customers? Well, because this means that the founders managed to pass the reality check, break the market defense, use minimum resources to create a business from scratch, and make this war strike properly.
When your business model is viable, then it’s reasonable to scale it and invest in innovative services that can be a real game changer in the market. So, what is the first step to achieve that? Create the MVP.
Minimum Viable Product. MVP is not just a buzzword. It's a philosophy of every process in your business, which means that you have to put all your focus and attention on things that are really important and get rid of all the unimportant nonsense.
Picture this, you're aiming to build something like Uber Eats for the corporate sector with a subscription for meals. You're looking at a users app, drivers app, kitchen app and an admin zone for restaurants. But hold on a minute.
Do you truly need a dedicated app for drivers right now? Could you, perhaps, use a third-party service for drivers and delivery? Same thing for a kitchen app.
And that feedback system for your client app – is it urgent? Maybe it's one of those things that can wait until your version 2. 0.
Take my friend James and his startup; at the beginning, we managed to create a simple client app where users can order food with a basic design, basic functions, basic logo, and so on. Only when he received the first 1000 orders, we adopt his strategy and utilize the power of branding to create a new logo, new design which helped him secure $1M in funding. So, a logo at the beginning is not important at all, simple text can be more than enough for you.
The same thing applies to the name of your company; nobody cares about your company name, just use ChatGPT to generate the name. But here is the thing, features are not solving problems of your audience and feature obsession, as I said earlier, can kill your SaaS startup. Let’s be honest, no one expects that you will create the best product from day one, but people are always looking for a tool that will solve their specific problem, even if this tool is not yet perfect.
Picture this: Your potential customer managed to create a video for their YouTube channel and they spent 2 hours recording the video. In the end, they find out that their audio has a huge echo. So, they have an urgent problem about how to get rid of this echo.
They will go to Google, YouTube, and forums, and they will find a tool that will help them save their audio and remove the echo. And if your service doesn’t have a Google or a Facebook login, I’m sure that your users would ignore that and still use your service. So, your job is to create a good enough solution, not a perfect solution.
A good enough solution. But here is the tricky thing, if you are creating a clone of an existing solution then you have to find a different angle on how you will present your solution to the market. Because if you are creating a 15th solution that can transform audio to text without any advantages then you will be a commodity in your customers' eyes and they will choose just the cheapest solution.
Alright, each and every business starts with a business plan. But I’m sure you already getting bored when you hear these words, that’s why you should use the MVP approach even in the business plan creation process, and for this Lean Canvas modified tool is the best tool. It's like a business plan on a napkin that uncovers all hidden aspects that you need to focus on.
This knowledge comes from 3 different sources, Lean Startup Eric Ries book, Ash Maurya and his basic lean canvas and the experience of my 1000+ Lean Canvas workshops with my clients. So, it starts with understanding your user groups and their main pain points. What are their struggles?
What issues can your service address and make their lives easier? Next, explore your competitors and the solutions they offer. Identify their advantages, disadvantages, and their strategies that you can adapt.
Your goal is to find the space where you can outshine your competitors by creating a unique solution for your specific niche without reinventing the wheel. On top of that, look at the industry giants for inspiration. They've mastered the game, and you can learn from them by studying their user flows and proven methodologies.
However, don't limit your research only to the big players! Expand your scope and explore startups in smaller niches and different countries. You never know what you might discover - there could be a hidden gem that gives you a competitive edge in the market.
Trust me, this exploration could be the most beneficial factor in your startup's success. On top of that, you can learn which startup ideas were successful and which ones fails. Next, your unique unfair advantage.
This is the most powerful factor that sets you apart from your rivals. It could be your personal charisma, your YouTube channel, networking, secret or unfair knowledge, real AI utilization, and so on. For example, my friend Carl when he was working in the corporate sector found that many employees ordered food from different restaurants to their office.
Luckily he had access to these corporate companies' contact databases which became his unfair advantage when he decided to create his own food delivery service for the corporate sector only, and he quickly received $25M in funding. Ok, once you've identified your unique edge, it's time to target your early adopters. These individuals will be the pioneers who will test your service and give you the most valuable feedback at the early stage.
Discover where they spend their time online and create a cool marketing hook to engage them. Give them something truly unique and powerful. Broadcast your unique offer via social media, Discord, Telegram, Influencers or just regular ads.
By keeping a close eye on how your app's doing and really diving into the feedback from your users, you can shed light on what needs to be changed or improved and so on. But how to save money during the software development process? Well, you have to identify your product market fit which is basically a simple features list that will solve your users' problems.
When you have this list then you can develop only these features and cut all other nonsense. This leads us that you have to offer innovative and disruptive solutions that address the pains and gains of your target audience. Thus completing your Value Proposition table is the key to achieving that.
Picture this you have an exciting idea for your SaaS let’s say text-to-voice. Before starting the software development phase, it's important to identify pains and gains of your users. It could be something like: how to translate your YouTube video to a different language, how to create a podcast and modify it, how to create a voice for my ads and so on.
Once you have identified all these issues, it's the perfect time to leverage your platform to tackle them. You can provide solutions such as: create a SaaS platform that will allow your users transform their English text or audio into another languages and give the possibility to your users to modify the file and auto upload to YouTube, or give to your users possibility to create a podcast using voices from a library or generate your own voice and other podcast host voice and modify them, or you can create library of different AI generated voices that anyone can utilize to create the voice for their ads in no time. Look, when you prioritize the platform value for your audience on front and keep that at the core of everything you do, you're setting up your business to become a money-making machine from day one.
Remember, small companies and startups can easily outperform industry leaders by being agile, flexible, and focusing on unique problems and local niches. You don't have to compete with everyone in the market. Instead, concentrate on a specific audience and provide them with the best possible value.
And always keep in mind that it's crucial to fall in love with your customers' problems and not just your solutions. When we are talking about love, one of the most fundamental things that you have to keep in mind it’s your personal care and love for your customers. Your customer it’s your God and you have to serve them, solve their issues, and find a way on how you can disrupt old fashion market by adding small things but what makes all the difference.
Let me illustrate this with an example. One crypto company funded two software development teams simultaneously to develop two different crypto wallets. At the end of the day, they had two different but similar products.
Both functioned, but only one gained a huge fan base while the other was really unsuccessful. What made the difference? One team, during the design and programming stage, fully missed or ignored an issue in one crypto network where a transaction often required from 5 to 10 attempts due to network glitches.
Their solution was just a simple popup with an error notification. It was not the part of their job description, so they just ignored that. The other team, however, came up with a system solution where all these repeated attempts happen in the background, showing the user only a beautiful progress bar.
Once a transaction was completed after 5 or 10 attempts, a congrats popup appeared. Can you guess which approach brought user engagement and satisfaction? Look, the love and assistance that your app provides should always aid your customers in addressing their problems.
Offer them unique care; that can truly make a world of difference. Okay, once you've done a deep dive into your customers' needs, pinpointed all your customers' problems, finished competitors' research and come up with a bunch of software solutions, it's a perfect time to properly prioritize your software features to create your MVP. You have to figure out which features are must-haves, should have, could have, and won't be developed.
This savvy approach not only gives you a solid game plan for the essential features your app needs without busting the budget, but it also lets you pivot as necessary without burning through all your resources. Plus, it helps you find the path to your app's core idea and crystallize your project's main objectives, translating them into the software features that should be on your development list. Hidden gem: you would have to pivot a few times until you find a really perfect solution that will suit all your users' needs, that’s why limiting yourself with the number of features for the MVP is so important.
And that's where a story map comes into play. With a well-crafted story map, you can break down the user requirements and map out the essential features that need to be developed and launched quickly But hold on, there's more! To ensure maximum user engagement and satisfaction, it's important to develop separate story maps for each user type.
Think of it as providing each user group with their own treasure map, guiding them directly to the features that are most important to them. By doing this, you can identify the specific needs of each group and prioritize the features accordingly. This way, your MVP will meet their crucial needs and provide the best possible value at this stage.
Thus, the real power of a story map lies in its capacity to help you save funds on one side, while simultaneously enabling you to concentrate on providing the most value to your audience at the right stage on the other side. Alright, let's talk about the business logic of your app and the UX design. Please, please keep in mind that this is the most important part of the design stage.
Trust me UI is worth nothing if the UX is bad. Picture this, a few years ago many of my clients came to me with the existing UI design of their services, it was a diamond from a UI point of view but it was a mess from a business logic and UX point of view. Chats that do not explain how they work.
Can I upload an image or not? What about chatting one-to-one or many-to-many and so on and so on? It was an endless list of issues.
So my clients have 2 options. Option number one, re-do everything from scratch: business logic and UX of their app and then re-do UI once again or option number two start the software development and ignore these issues and pay an arm and a leg during the software development phase when it comes to clarification process of the business logic of these blocks and modules. Hidden gem: Never ever use those fancy UI agencies or freelancers that will produce problems and issues for your MVP and business logic, but yes, it will definitely look nice and cool.
So, the UI it’s like a skin and the UX it’s like a skeleton. UX design is the blueprint of your app business logic, where you create every possible user case and scenario. It helps you uncover all the hidden or unexpected user flows.
For example, let's say you're in the process of creating your micro text-to-voice SaaS. You've covered the basic functions like login, main function, subscription and so on. But what about situations where the user wants to create more unique voices than you have because of your system your limits?
Have you incorporated a feature or a functionality to solve that? Can they purchase an additional package inside your subscription block? These are the types of issues where mockups and UX design business logic will help you identify potential gaps.
Look, once again, the UX design serves as the foundation for your app's functionality and user experience, and it's crucial to make this foundation rock solid. Next, let's discuss UI Design, where two key aspects are crucial. In the early stages of your journey, UI design might not be a top priority, unless you are targeting a specific niche or community.
For an MVP, the UI design should be accessible to users of all age groups. This means the UI should be modern but not too fancy. Also, your UI design should facilitate users in solving their problems with the fewest clicks possible.
Because each additional click will cost you a user and their engagement. So, your job here is to incorporate well-known icons, design intuitive elements, their locations, and a simple color scheme that will help your users swiftly and effectively navigate your app. Forget about branding, fancy logos, animations and other visual design nonsense.
At the early stage, this won't bring value neither to you nor to your customers. Center your design around your users' problems, minimizing clicks, accelerating user goal paths, and simple but modern design esthetics. Consider the example of my friends Tim and Brian, who successfully created a tax SaaS system using just a basic bootstrap design.
Within a few years, they managed to achieve a successful exit by selling their SaaS to HappyTax. However, branding, logos, and animations become valuable assets only when your app is operational and you're planning to attract investors and raise funds. This is precisely what happened with my friend James and his food delivery app, Foodstuff.
Initially, the logo was just simple text and the UI design was basic. - Later, we transformed it into a unique design with branding colors and more, in order to secure funding via crowdfunding. Here's a helpful pro tip for you - to generate really cool UI design style and ideas, explore portfolios on websites like Behance or Drbble.
Search for web and mobile apps, and incorporate design elements that catch your attention. And remember what Picasso said, "good artists copy, great artists steal. " One of the most fundamental concepts in marketing is the framework of 'selling dollars with a discount.
' It’s a powerful strategy that you have to master and apply to all your offers. Imagine this scenario: if someone was able to create a legit smart contract offering you to buy only one Bitcoin for $500 price, I will repeat legit smart contract, would you have any doubts and concerns, or would you immediately inform all your friends and family to buy as much as possible? So, your marketing offer must have the same compelling power, which leads us back to a fundamental thing I want to emphasize again: your SaaS service must solve a real problem of your audience.
How does this work in real life? Take 11Labs, a startup that can emulate your voice. You upload a 5-minute audio file, and then their AI can replicate your voice from the text you type.
Initially, this innovation was their unfair advantage. But they are advancing now, offering their audience the ability to transform their YouTube video's audio track from English to Spanish, German, French, and many other languages. For just a few hundred dollars, you can do what Mr Beast does when he adds different languages to his videos, thereby gaining more views, subscribers, advertisements, and promotions.
This is a prime example of how simple text-to-audio conversion can be leveraged into a 'dollars with a discount' mechanism. When creating your standout marketing offer, it's essential to explore different angles and ideas for presenting it. Test these offers using platforms like Facebook or Google Ads, and then proceed with the most effective one.
Remember, always make data-driven decisions. Also, consider that it's generally easier to sell 100 subscriptions at a $10 price point than 10 subscriptions at $100. People are more likely subscribe to your service if it's priced like a cup of coffee.
However, this doesn’t mean you should be cheaper than your competitors. No no no, you should be more expensive, and to achieve this, two simultaneous actions are required. First, increase the value of your services and effectively communicate this using the 'dollar with discounts' framework.
Second, provide options for your users to purchase additional services within your software, similar to what AWS or SemRush do, where customers can buy subscriptions within their existing subscription. Next, looking for a way to generate leads for your MVP quickly and with tiny budget? It's quite straightforward.
Start by finding communities on Discord, Telegram, Reddit, Quora, or even Facebook groups. Engage in conversations with members and opinion leaders, and then introduce your offer to them. In the early stages, this approach is crucial.
As a business owner, you need to understand your users' problems and needs personally and how your offer can solve these issues. These community members will be your early adopters, testing your project, and potentially becoming your first paying customers. Alright, now we have to find a way how we can develop our micro SaaS MVP quickly and here we have a few different options.
First, you can build it solo using no-code tools like Bubble IO, Flutter-flow, and Firebase. It’s an absolutely legit option if you wanna spend the next 3 to 6 months full-time creating only the code for your micro SaaS. Why so long?
Because you have 0 experience and creating something legit would be a huge job that will require a lot of your personal time resources. Keep in mind, that the solution that you will create using these tools would be a basic tool that will help you only quickly test your idea and nothing more. It’s not scalable, it will have bugs and glitches and at the end of the day if your project is growing you would need to re-do everything from scratch.
Please keep in mind, that no-code tools are a legit option for some cases but it’s not a silver bullet that everyone is trying to present right now. Option number two. You can utilize the power of custom code if you want to build your MVP fast.
Therefore, choosing the right tech stack and architecture is vital to avoid challenges such as slow user interfaces, non-scalable and non-maintainable cloud infrastructure, high costs, payment and subscription issues, and the risk of your app going offline during traffic spikes. So, if you're planning to create a micro SaaS, it's essential to select the appropriate tech stack that enables rapid development of your minimum viable product. Flutter or React Native are excellent choices for the mobile app.
For back-end development, Python, Django, Node. js plus Amazon Web Services are perfect options. The web app can be created using frameworks like Angular, React or Vue.
js. Also, keep in mind that you will need to scale your app after you launch your MVP so choosing the right tech stack is like receiving an accurate diagnosis after a blood test. Hidden gem, sometimes you would have to re-write your software from scratch many times because at different stages you would have different business goals, and re-doing everything from scratch can be cheaper rather than scaling your MVP Frankenstein monster.
Now, let’s discuss the price of your custom software SaaS product. It will include basic functions like authorization, subscription block, user profile, admin zone, and so on. Also, there are several things you have to keep in mind such as quality assurance, bug fixing, project management, maintenance, and risks.
Estimating the cost of developing unique features, I mean your core idea, at this stage, can be quite challenging. But don't worry, I'm here to provide you with pricing for the basic skeleton MVP functionality. Here's a pro tip for you: if an investor contract requires an in-house development team, you'll need to allocate a budget based on US or EU rates.
However, you always have the option to outsource your software development expenditures to Ukraine, which can be a significant game-changer when you are seeking value for money. Ukraine is an absolute hidden gem in the software development world. Many successful startups such as GitLab, Grammarly, and Jooble have already recognized the huge value of hiring Ukrainian developers to build top-notch software.
Ukrainian developers have excellent English skills, extensive experience in outsourcing development, strong math background, they have innovative thinking which helps them always think outside of the box, on top of that they are hard workers. OK, when you already jumped into this journey you have to choose the right framework to follow. I recommend you utilize, for your MVP, the Agile process, one of the most powerful methodologies out there that can significantly speed up your development process.
However, did you know that in some situations, it can actually slow down your project by up to 30%? Picture this: you have a team of 5 developers who understand their roles, communicate effectively, and have made significant progress in coding the product, they could use simple tools like Trello, Notion, Asana, Google Docs, and quick Zoom meetings. However, as your team expands to 15 or more people, you may face some challenges such as: losing your key developers, complex and time-consuming onboarding processes, reduced team productivity, communication issues, missed deadlines, and a decline in code quality and architecture.
To avoid these problems, it's important to: * Hire a tech lead to oversee the team and code architecture. * Find a project manager with a tech background * Implement SCRUM, Sprints, Backlog, and Retrospective processes. * Conduct daily standups to keep everyone updated on pending tasks.
* Utilize advanced tools like Jira to manage tasks and track your team's velocity. Choosing the right tools at the appropriate stage can accelerate your progress toward achieving your Minimum Viable Product. However, keep in mind that even the best tools can lead to failure without the necessary knowledge or expertise.
Ok, when your project is up and running you have to grab valuable data. Collecting user analytics is a crucial practice in the tech industry, allowing you to uncover essential metrics like unique visitors, user behavior, and session frequency. Using powerful tools such as Google Analytics, Sessionstack, Firebase, and Mixpanel will enable you to gather valuable data.
I remember, around 7 or 8 years ago, we created an app for an Austrian multimillionaire that focused on education about investments in real estate. The app included features like a forum, video courses, events, a map, and more. Imagine our surprise when, after integrating analytics, we discovered that 95% of the time, users were only using the video watching and audio listening functions.
We then moved his unique webinar offers to this page, and as a result, his revenue increased from $1. 5 million to $3 million in just 4 months. This experience underscores the importance of creating an MVP (Minimum Viable Product) and making data-driven decisions.
By consistently tracking your app's performance and analyzing your users' feedback, churn rate and conversion rate you can pinpoint areas that require improvements to ensure your users' engagement, satisfaction and your app's profits. Now, let's talk about a real game-changer that you must leverage in your micro SaaS business: the Uberization philosophy and framework. Consider this: 10 years ago, Uber revolutionized traditional taxi services.
Similarly, Airbnb and Booking. com transformed the hotel and booking industries. Your goal is to identify a real problem and apply this framework in the classic Uberization manner.
However, if your niche is highly competitive, you should consider the new wave of Uberization, which involves AI and called AI-isation. Utilizing the power of AI can be a real game changer. But please, please, do not be charmed with these “genius” ideas something like SaaS AI services with ChatGPT in the background or yet another Chrome extension using only OpenAI as the main source or any other AI API that can easily be replicated from free storage as the main source.
Let’s be honest, it’s not a business it’s a parasite that will die during the next year or so. When I mention AI, I'm referring to tools like LangChain, Hugging Face, Agents utilization, custom AI products developed by you and so on. Picture this, the power of LangChain and the right SaaS model can be used in the corporate sector.
Imagine a SaaS platform that enables companies to upload their support guidelines into your database. Then, their support staff can use your chatbot assistant to ask questions about their job or client-related issues. This is a true game-changer that can help companies reduce expenditures on staff and training.
This means you can create a powerful, unique offer, and not just yet another useless MidJourney clone. Alright, when we are talking about SaaS we are talking about business, and when we are talking about business we are talking about money and your potential exit. How to do that easily?
Let’s say you wanna sell your SaaS startup with a $1,000,000 price. So, first, you have to get the right number of your paid users. Picture this, you have a service where you are charging let’s say $60 per subscription, that’s means that you have to get at least 300 users per month to get your $18k per month, which translates to $216,000 per year.
And using the SaaS business multiplier from X5 to X11, your startup could easily be valued from $1 million to $2. 3 million dollars easily. When you have these numbers you can go to a website like acquire.
com and post your startup there with your yearly revenue, profits, number of users and so on. And then you will receive offers from potential buyers. Just take a look at Apple's path and how many different startups they managed to acquire.
The same thing for Google and the services that they are purchasing. Google has made most acquisitions among others focusing on Artificial intelligence. Or you can be proactive and start looking for companies that can acquire your startup like Drpbox for example.
Over the last 5 years, they managed to purchase 7 different startups and they added them to their ecosystem, you just need to find them and start a conversation. Look, the business selling process, job interview, lead generation, and raising funds process it’s just simple math and conversion rates. So, just repeat the process till you get the desirable results.
It’s really simple. It will take some time to get the results but the rewards definitely worth it. Now truth.
You may need a few attempts to get your $1,000,000 by creating multiple different micro SaaS businesses. Some of your tries would be successful and some of them not. But here is the thing, your goal is to create SaaS startup generation machine where you can replicate the process again and again till you get your desired 7 figures.
And another secret, you may not be successful from the first attempt. Which leads us to a very interesting framework where you have to collect all your business, marketing, and coding experience to modify it and use it again in your next SaaS startup. So just create a fabric where you will produce these SaaS startups one after another utilising the same code base, same marketing technologies and experience, business and hiring process and so on.
Keep in mind that systems always beat talents and luck. Stephen King and his first novel, "Carrie," was rejected 30 times. Before Microsoft, Bill Gates founded an unsuccessful Traf-O-Data startup.
Before founding Uber, Travis Kalanick started a company named Scour, a peer-to-peer search engine, which ended up filing for bankruptcy. Now you have 3 options. Option number one.
You can take all this knowledge and do everything by yourself. Option number two. You can join my Telegram channel where I share tons of business insights and host live chats where you can ask your questions.
Link in the description. Option number three you can shoot me a message via Calendly, and we can have a 30-minute call about your problem and how we can transform it into a money-making machine. Yes, my software development services will cost you a dollar, but at the end of the day, you will have your mobile or a web app with the right set of features to disrupt the market and maybe even utilize the power of AI opportunity before it's too late.
So, what are you waiting for? Schedule a meeting; let's make it happen. See you!