What I’ve learned in 5 years of running a SaaS(mir.aculo.us)
mir.aculo.us
What I’ve learned in 5 years of running a SaaS
http://mir.aculo.us/2013/11/27/5-things-ive-learned-in-5-years-of-running-a-saas/
79 comments
Your posts here are very educational and inspirational. Thanks a lot for the thoughtful responses to all of the questions. Congratulations on your success and good luck with any future endeavors.
Thank you :)
Out of interest, what is your SaaS?
Sorry, won't tell. I decided to keep a low profile on HN :)
It's consumer-oriented, it costs 2 euro a month, it has several thousand users.
It's consumer-oriented, it costs 2 euro a month, it has several thousand users.
Would you be willing to say how you came up with it? Was it in a problem domain you were solving for yourself, or was it something you had to research on before tackling it?
Luck and it's in a domain I'm indirectly in. A friend of a friend said:"It would be nice if X existed." At first, I didn't want to do it. After a few days I thought that it would be interesting to do some PHP coding (this was in 2006) and tried a few things. I posted the prototype in a forum related to the niche, the first 100 users came, they gave suggestions and I kept improving it and it kept growing.
Only after 5 years did I turn it into a business. Until then, it was something like a project for me as a student.
So, there really was no formal process. I did a few things right, I learned a lot along the way, but there's nothing to copy or to model. It was mostly luck and an opportunity I took.
Edit: I once read: "The perfect time to start a company that is successful in 2013 was 2007" or something in that sense. This is what happened. I took this opportunity. I would do things differently today, but to be honest, I have the same hard time as everybody else to come up with a new business and a viable idea. Because everything changed since 2006. So what I did right back then wouldn't work now, process-wise.
Still, I did a few things right I guess that are still valid in 2013. Mostly: I concentrated on important things, I do customer support myself, I listen to people, I'm friendly, I help people solve their problems. I care about them, about their privacy and do everything to protect it. I write emails that take me 30 minutes if it's necessary. Why? Because I only get a handful of emails per day. It's not scalable but then, it doesn't have to be. I do some SEO and rank well for my niche keywords. About 50-70% is word of mouth.
What I don't do: I don't have a blog, I didn't integrate any social network crap, I don't use Google Analytics or any other fancy third-party application that must be included via JS. I use Piwik that I check occasionally (sometimes every week, sometimes only every few months). I don't have big metrics. My most imporant metrics are: Money earned per week/month. Amount of active (paid) users. Signups per week.
Edit2: My product has nothing to do with PHP and doesn't target IT people. Just in case this is misinterpreted. I mention PHP only, because people on HN hate PHP that much and sometimes forget that it doesn't matter if it's PHP or anything else, as long as it pays the bills. PHP is fast, PHP is reliable and I get shit done in PHP. That's why I use PHP.
Only after 5 years did I turn it into a business. Until then, it was something like a project for me as a student.
So, there really was no formal process. I did a few things right, I learned a lot along the way, but there's nothing to copy or to model. It was mostly luck and an opportunity I took.
Edit: I once read: "The perfect time to start a company that is successful in 2013 was 2007" or something in that sense. This is what happened. I took this opportunity. I would do things differently today, but to be honest, I have the same hard time as everybody else to come up with a new business and a viable idea. Because everything changed since 2006. So what I did right back then wouldn't work now, process-wise.
Still, I did a few things right I guess that are still valid in 2013. Mostly: I concentrated on important things, I do customer support myself, I listen to people, I'm friendly, I help people solve their problems. I care about them, about their privacy and do everything to protect it. I write emails that take me 30 minutes if it's necessary. Why? Because I only get a handful of emails per day. It's not scalable but then, it doesn't have to be. I do some SEO and rank well for my niche keywords. About 50-70% is word of mouth.
What I don't do: I don't have a blog, I didn't integrate any social network crap, I don't use Google Analytics or any other fancy third-party application that must be included via JS. I use Piwik that I check occasionally (sometimes every week, sometimes only every few months). I don't have big metrics. My most imporant metrics are: Money earned per week/month. Amount of active (paid) users. Signups per week.
Edit2: My product has nothing to do with PHP and doesn't target IT people. Just in case this is misinterpreted. I mention PHP only, because people on HN hate PHP that much and sometimes forget that it doesn't matter if it's PHP or anything else, as long as it pays the bills. PHP is fast, PHP is reliable and I get shit done in PHP. That's why I use PHP.
Firstly congrats on both delivering genuine value to ppl and making a nice living from it :-)
> I don't use Google Analytics or any other fancy third-party application that must be included via JS. I use Piwik that I check occasionally
I'm not trying to be a dick, genuine question, I thought Piwik was a JS include? Or do you feed it web server logs or something?
I ask because I currently run a niche site that is doing very well. I'm currently turning this into a general purpose platform for others to use. For the former site I just went with Google Analytics, but for the latter I'm now trying Piwik and am curious about other peoples experiences.
> I don't use Google Analytics or any other fancy third-party application that must be included via JS. I use Piwik that I check occasionally
I'm not trying to be a dick, genuine question, I thought Piwik was a JS include? Or do you feed it web server logs or something?
I ask because I currently run a niche site that is doing very well. I'm currently turning this into a general purpose platform for others to use. For the former site I just went with Google Analytics, but for the latter I'm now trying Piwik and am curious about other peoples experiences.
Piwik is a JS include, but it is on my own server. My statement wasn't accurate: I don't use third-party external hosted JS files.
Why? Security, privacy, performance. GA is probably relatively trustworthy in terms of security, but you never know. Privacy: Gone with GA. Performance: If the included library isn't far away, it's faster.
So, Piwik is good enough for me. I recently installed it on a VPS but from the same hoster in the same location. The performance is still slick, but a tiny bit of work is now off the server and security-wise it's better to have as few third-party libraries and applications running parallel to my web app.
The most limiting thing was that I rent a managed server that doesn't allow too many custom things. Piwik is relatively ineffective memory-wise in generating reports over months or years, if you have traffic like me (about 50K visitors per week or so).
The managed server would always kill the process, because it consumed too many resources and took too long. Never found a work-around. Now, on the VPS, I can do whatever I want and that helps.
This just as a warning if you're planning to run Piwik in an environment that might have limits in resource allocation.
Feature-wise, Piwik is totally perfect. As mentioned before, I don't track many metrics anyways. It's just a reference for keywords, which keywords converted, where people come from.
Why? Security, privacy, performance. GA is probably relatively trustworthy in terms of security, but you never know. Privacy: Gone with GA. Performance: If the included library isn't far away, it's faster.
So, Piwik is good enough for me. I recently installed it on a VPS but from the same hoster in the same location. The performance is still slick, but a tiny bit of work is now off the server and security-wise it's better to have as few third-party libraries and applications running parallel to my web app.
The most limiting thing was that I rent a managed server that doesn't allow too many custom things. Piwik is relatively ineffective memory-wise in generating reports over months or years, if you have traffic like me (about 50K visitors per week or so).
The managed server would always kill the process, because it consumed too many resources and took too long. Never found a work-around. Now, on the VPS, I can do whatever I want and that helps.
This just as a warning if you're planning to run Piwik in an environment that might have limits in resource allocation.
Feature-wise, Piwik is totally perfect. As mentioned before, I don't track many metrics anyways. It's just a reference for keywords, which keywords converted, where people come from.
Do you think you could do it again?
Are you working on the next thing or happy enough with this success?
Are you working on the next thing or happy enough with this success?
That are interesting questions, thanks for asking:
Do you think you could do it again?
Let me answer it first in a clumsy-sounding way: I want to be able to do it again, because I want to think of myself as someone who did a few things right and didn't ONLY have a ton of luck.
I think the knowledge I have helps me to do it again. I think that I have a few values and advantages that will enable me to do it again. Namely: I can distinguish between between good and crappy ideas. I can evaluate ideas relatively quickly and tell if I'd do them or not. I'm still down to earth, don't buy the hype and focus on stuff that seems to be a viable long-term business opportunity.
All these things I just listed are also big disadvantages: I dismiss many ideas that might be feasible as utter crap. In fact, I think most ideas are really bad. Even successful ones. Unfortunately, I feel that I can't see problems in a lucid way. For me, for almost everything there's already a solution, which is dangerous thinking, because I don't easily try and start new things. I'm a bit complacent in this way.
Are you working on the next thing or happy enough with this success?
I'm happy with the success and I'm working on expanding the existing business. But sometimes I feel like being on a plateau. No matter what I do, the business simply grows with a small linear rate.
A couple weeks back, I didn't check my analytics and metrics for 2 months or so. Nothing changed. My SEO rankings improved over time by doing...nothing. The amount of active people increased a bit, by doing nothing.
This is a good thing, but it also feels like there's nothing I can do to make it grow faster. I'll try a few things in 2014 though.
Anyways, I'm in a super-comfortable position. I can take vacation whenever I want (and I do), I make more money than I spend, I make more money than in my old 40-hour-week job, I don't have to think about money at all. If I want, I work 4-5 hours a week and still get paid fully. This is the perfect situation to start something new.
So, as I said, I'm happy with my success, but it's also boring sometimes. I want to start something new and I know that the fruits I enjoy won't last forever. I don't know what's gonna happen in 10 years, but I feel like I need a second business to be less dependant on my first one.
Do you think you could do it again?
Let me answer it first in a clumsy-sounding way: I want to be able to do it again, because I want to think of myself as someone who did a few things right and didn't ONLY have a ton of luck.
I think the knowledge I have helps me to do it again. I think that I have a few values and advantages that will enable me to do it again. Namely: I can distinguish between between good and crappy ideas. I can evaluate ideas relatively quickly and tell if I'd do them or not. I'm still down to earth, don't buy the hype and focus on stuff that seems to be a viable long-term business opportunity.
All these things I just listed are also big disadvantages: I dismiss many ideas that might be feasible as utter crap. In fact, I think most ideas are really bad. Even successful ones. Unfortunately, I feel that I can't see problems in a lucid way. For me, for almost everything there's already a solution, which is dangerous thinking, because I don't easily try and start new things. I'm a bit complacent in this way.
Are you working on the next thing or happy enough with this success?
I'm happy with the success and I'm working on expanding the existing business. But sometimes I feel like being on a plateau. No matter what I do, the business simply grows with a small linear rate.
A couple weeks back, I didn't check my analytics and metrics for 2 months or so. Nothing changed. My SEO rankings improved over time by doing...nothing. The amount of active people increased a bit, by doing nothing.
This is a good thing, but it also feels like there's nothing I can do to make it grow faster. I'll try a few things in 2014 though.
Anyways, I'm in a super-comfortable position. I can take vacation whenever I want (and I do), I make more money than I spend, I make more money than in my old 40-hour-week job, I don't have to think about money at all. If I want, I work 4-5 hours a week and still get paid fully. This is the perfect situation to start something new.
So, as I said, I'm happy with my success, but it's also boring sometimes. I want to start something new and I know that the fruits I enjoy won't last forever. I don't know what's gonna happen in 10 years, but I feel like I need a second business to be less dependant on my first one.
Boring indeed.
Being on "vacation" always has its perks, but as you allude to, you know that you need to diversify by building something else.
Start that fire and get cracking and then you can resume your boring lifestyle and sleep a bit better at night :)
Being on "vacation" always has its perks, but as you allude to, you know that you need to diversify by building something else.
Start that fire and get cracking and then you can resume your boring lifestyle and sleep a bit better at night :)
At what point did you start charging for it ?
While I was still in university writing my final thesis paper, I came to the conclusion that, once I graduate from university and got a regular 40 hour per week job, there wouldn't be much time left to work on my project.
The basic question for me was: How do I keep maintaining and improving the website with only the bit of revenue I got from ads and donations? That was maybe 300-500 bucks a month.
The answer was: I couldn't. Not with what I had in mind for my project. It wasn't enough to pay a programmer, an app developer and someone who writes educational articles for the project.
I was just the average IT student back then. Not much sense for business. I mean, I thought about how I could make money from it once in a while. I still have a list on my computer ideas to earn 10,000 euros with my project that I once wrote. Freemium for example, a standalone desktop application, and other ideas.
After a long thought process and endless discussions with an older friend, I came to the conclusion that literally change my life: I had to start charging people for my product. All of them. No freemium nonsense and all that other crap that was in my list.
Being the altruistic student, I anticipated that people would be disappointed. I could almost feel their soon-to-come disappointment and asking them for money was something that didn't fit my world view for a long time. It was hard to accept that I'd lose people. Sounds stupid in hindsight, but that's how I felt.
With this conclusion, a new feeling emerged that got deeply engrained, which I consider a fundamental thing for doing business:
If people don't value what you have to offer, they're not worth your time.
So, even if people were disappointed, it wouldn't be my fault. After all, I offer a truly great service and it should be worth a couple bucks a month.
Despite my newly won enthusiasm, I went ahead and wasted another nine months, before I finalized my decision. I had very sophisticated tactics for sabotaging myself. I got this braindead idea to rewrite everything from scratch in a newer technology to have it maintainable for years to come. I thought I'd have to offer more content, more articles, more whatever. It was madness. And nonsense.
Another friend brought me down and he said: Look, you have a great product as it is. Just charge for it. You don't need anything else.
So, a few days after my graduation and about 4 weeks until my first real job began, I send an email to all my users, telling them that my product would cost a euro a month, starting in 30 days.
I hit Send and thought that I'd either wreck this thing totally, lose many many people, lose my project I spent five years on to improve, or that it'd be a good thing after all and I could continue running and improving my project.
Merely 7 days before several thousand accounts expired, I finished the last line of code on my payment processing.
Two weeks later, I had 20,000 Euros in my bank account.
The basic question for me was: How do I keep maintaining and improving the website with only the bit of revenue I got from ads and donations? That was maybe 300-500 bucks a month.
The answer was: I couldn't. Not with what I had in mind for my project. It wasn't enough to pay a programmer, an app developer and someone who writes educational articles for the project.
I was just the average IT student back then. Not much sense for business. I mean, I thought about how I could make money from it once in a while. I still have a list on my computer ideas to earn 10,000 euros with my project that I once wrote. Freemium for example, a standalone desktop application, and other ideas.
After a long thought process and endless discussions with an older friend, I came to the conclusion that literally change my life: I had to start charging people for my product. All of them. No freemium nonsense and all that other crap that was in my list.
Being the altruistic student, I anticipated that people would be disappointed. I could almost feel their soon-to-come disappointment and asking them for money was something that didn't fit my world view for a long time. It was hard to accept that I'd lose people. Sounds stupid in hindsight, but that's how I felt.
With this conclusion, a new feeling emerged that got deeply engrained, which I consider a fundamental thing for doing business:
If people don't value what you have to offer, they're not worth your time.
So, even if people were disappointed, it wouldn't be my fault. After all, I offer a truly great service and it should be worth a couple bucks a month.
Despite my newly won enthusiasm, I went ahead and wasted another nine months, before I finalized my decision. I had very sophisticated tactics for sabotaging myself. I got this braindead idea to rewrite everything from scratch in a newer technology to have it maintainable for years to come. I thought I'd have to offer more content, more articles, more whatever. It was madness. And nonsense.
Another friend brought me down and he said: Look, you have a great product as it is. Just charge for it. You don't need anything else.
So, a few days after my graduation and about 4 weeks until my first real job began, I send an email to all my users, telling them that my product would cost a euro a month, starting in 30 days.
I hit Send and thought that I'd either wreck this thing totally, lose many many people, lose my project I spent five years on to improve, or that it'd be a good thing after all and I could continue running and improving my project.
Merely 7 days before several thousand accounts expired, I finished the last line of code on my payment processing.
Two weeks later, I had 20,000 Euros in my bank account.
How do you collect the money? I had imagined, wrongly obviously, that payment processor fees would make €2/month infeasible.
Your assumption is correct. I use Paypal, wire transfer (cheap in Germany) and might use Stripe or Paymill soon.
The solution is simple: People can buy only 3 months at minimum. This makes the transaction fee comparably small.
The solution is simple: People can buy only 3 months at minimum. This makes the transaction fee comparably small.
3 months minimum: a neat solution.
How do implement wire transfer? I'm also in Germany and would like to offer the same to my SaaS customers.
How do implement wire transfer? I'm also in Germany and would like to offer the same to my SaaS customers.
I have a site that contains the banking information and a custom number (order number or billing number) that people must put in the wire transfer. It's generated like that XYZ, where X = some random number, Y = zero-padded userid, Z = increasing number for that account. If a user visits this page, a new order is created in the background with status "unprocessed", or the same order number is used again, if it wasn't "completed" by an incoming wire transfer before.
At first, I used an online banking tool where I copy&pasted all incoming wire transfers into my web application, which would regex for all ordernumbers, do a little plausibility check (incoming amount equals the amount that was set when the order was generated; user has open orders) and set the order to "processed" and extend the account by the according amount of months.
Now, I use a VPS where I installed an HBCI client (AqBanking). It's relatively easy to set up and once a day, it fetches all new wire transfers via cronjob and sends them via cURL to my web app where the same regex and plausibility check happens that I used before.
It feels a bit weird to store your banking PIN on a VPS, so make sure the VPS is properly secured.
The VPS sends me an email whether or not everything worked and that's it.
Most days of the week, there's no problem. Sometimes, you get the wrong amount from people, some people don't put the order number, some people confuse the bank number (BLZ) with the order number and so on. In these cases, the regex parser fails and tells the reason in the email. I then process it manually. Some people think that wire transfers work instantly or that they are also processed by banks over the weekend (which is not the case). I have a few email templates to answer these requests if necessary. Fortunately, it's not that much effort and most of the time, there's no manual work to do.
I didn't adjust the system for the coming IBAN stuff yet. Have to look into that.
At first, I used an online banking tool where I copy&pasted all incoming wire transfers into my web application, which would regex for all ordernumbers, do a little plausibility check (incoming amount equals the amount that was set when the order was generated; user has open orders) and set the order to "processed" and extend the account by the according amount of months.
Now, I use a VPS where I installed an HBCI client (AqBanking). It's relatively easy to set up and once a day, it fetches all new wire transfers via cronjob and sends them via cURL to my web app where the same regex and plausibility check happens that I used before.
It feels a bit weird to store your banking PIN on a VPS, so make sure the VPS is properly secured.
The VPS sends me an email whether or not everything worked and that's it.
Most days of the week, there's no problem. Sometimes, you get the wrong amount from people, some people don't put the order number, some people confuse the bank number (BLZ) with the order number and so on. In these cases, the regex parser fails and tells the reason in the email. I then process it manually. Some people think that wire transfers work instantly or that they are also processed by banks over the weekend (which is not the case). I have a few email templates to answer these requests if necessary. Fortunately, it's not that much effort and most of the time, there's no manual work to do.
I didn't adjust the system for the coming IBAN stuff yet. Have to look into that.
Thanks for the info, much appreciated. It's a simple, effective system.
[deleted]
You should raise your prices.
Charge at least 5 euro a month, or 50 euro a year.
Charge at least 5 euro a month, or 50 euro a year.
I heard that before and my sibling-poster is correct: You have no idea what my product is, so you can't say anything about the price. If my product were MP3s, 5 bucks per MP3 wouldn't work.
Anyways, your point is not totally invalid. I did a mistake when I changed from free to paid. I started with 99 Cent per month. The goal was to convert as many users as possible. This worked well. Only about 10-20% stopped using my service. However, it made future price increases harder.
Some people would pay more. For some people the service delivers a a lot of value and they'd probably pay 10 bucks a month. However, there are also quite a few people for whom 2 euro is the limit, especially since the long-term costs would explode for them.
And I can't experiment with pricing. The niche is too small to have this go unnoticed. I know, because I tried. Either I increase it globally for everybody or not. To be honest, maybe I didn't find the perfect pricing point yet, I don't know. But it's okay, because I can live quite comfortably.
Anyways, your point is not totally invalid. I did a mistake when I changed from free to paid. I started with 99 Cent per month. The goal was to convert as many users as possible. This worked well. Only about 10-20% stopped using my service. However, it made future price increases harder.
Some people would pay more. For some people the service delivers a a lot of value and they'd probably pay 10 bucks a month. However, there are also quite a few people for whom 2 euro is the limit, especially since the long-term costs would explode for them.
And I can't experiment with pricing. The niche is too small to have this go unnoticed. I know, because I tried. Either I increase it globally for everybody or not. To be honest, maybe I didn't find the perfect pricing point yet, I don't know. But it's okay, because I can live quite comfortably.
Couldn't you make different levels of subscriptions? So find a new idea to improve you product, and have only those with Gold membership be able to use it. This way you don't make and enemies with the old subscription, but you can still convert more to the more expansive price tag.
I thought about that as well but I have a luxury problem:
There is not much to improve. In the space I'm operating in, the software, as it is, can be considered more or less complete. I mean, I can always add features, but the core mechanics, the way it works, the way it delivers value and the value people expect from the software is more or less complete. There's not much to add that improves the perceived value for people in such a way that they'd be willing to pay more for it.
But the fundamental idea is right: There must be some additional thing that's good for people, that people want. There's also related products, added benefit, whatnot. I won't do Gold membership, but I might be able to sell different things that complete the offering for some people.
Compare this to Microsoft Office. Word is for writing stuff. It's more or less feature-complete. Sure, you could add some stuff, but most people are happy with how it is in its basic edition. So Microsoft offers also Excel and PowerPoint. They are for very similar people, they complete the offering, but they're totally different. A "Word Gold" wouldn't make any sense.
One more thing: Whatever I add and whatever pricing change I introduce comes at a cost. Introducing tiered-pricing (3 wiggles for 2 euros, 7 wiggles for 4 euros etc.) for example has benefits, but it also increases complexity and decision making. I'd do this for my next project, but for the current business, I'm also a bit stuck in the current userbase with decisions I made in the past.
I might offer my service in English as well next year. That's going to be an opportunity to experiment a little bit and a way to grow the business.
There is not much to improve. In the space I'm operating in, the software, as it is, can be considered more or less complete. I mean, I can always add features, but the core mechanics, the way it works, the way it delivers value and the value people expect from the software is more or less complete. There's not much to add that improves the perceived value for people in such a way that they'd be willing to pay more for it.
But the fundamental idea is right: There must be some additional thing that's good for people, that people want. There's also related products, added benefit, whatnot. I won't do Gold membership, but I might be able to sell different things that complete the offering for some people.
Compare this to Microsoft Office. Word is for writing stuff. It's more or less feature-complete. Sure, you could add some stuff, but most people are happy with how it is in its basic edition. So Microsoft offers also Excel and PowerPoint. They are for very similar people, they complete the offering, but they're totally different. A "Word Gold" wouldn't make any sense.
One more thing: Whatever I add and whatever pricing change I introduce comes at a cost. Introducing tiered-pricing (3 wiggles for 2 euros, 7 wiggles for 4 euros etc.) for example has benefits, but it also increases complexity and decision making. I'd do this for my next project, but for the current business, I'm also a bit stuck in the current userbase with decisions I made in the past.
I might offer my service in English as well next year. That's going to be an opportunity to experiment a little bit and a way to grow the business.
An interesting tactic that I see repeated by successful bootstrapped internet businesses is to really dig into the pain of their current audience. You've got this group of thousands that have proven to pay for things on the internet. You are in a position of trust, since you provide them value already.
What are their other pain points?
That is the question I'd be studying them to answer.
What are their other pain points?
That is the question I'd be studying them to answer.
Thanks for your advice. I probably didn't dig deep enough into the pain points. But I know what you mean. I gonna try something and go from pain points to product ideas. I mean, I talk to people and ask for feedback, but maybe I'm asking the wrong questions.
Is your product of use to companies as well as individuals? If so you may be able to produce a "company" account at a much higher price point, offering the same functionality but with extras such as multiple logins, Google Apps integration (which provides SSO for free for companies that use Google Apps) more logging, usage reports and more.
Also consider patio11's favourite trick of offering people a 10% discount if they pay for 12 months up front - this can massively increase your cash flow.
Also consider patio11's favourite trick of offering people a 10% discount if they pay for 12 months up front - this can massively increase your cash flow.
Nope, it is consumer-oriented only. There's not even a remote chance a company want to use it :)
Cash flow is not an issue. While not everybody pays for 12 months in advance, I do offer that option and some people use it. The disadvantage would be that there are legitimate reasons to NOT use my service a couple months per year and come back later. So by offering a discount for 12 months up front, it might lead to more people asking for refunds or general customer dissatisfaction. I could think about a service-branch that fills these couple months off, but generally speaking, it also increases perceived complexity.
You got me thinking, but I'm reluctant, because it's not as easy as writing that email patio11 recommends :)
Cash flow is not an issue. While not everybody pays for 12 months in advance, I do offer that option and some people use it. The disadvantage would be that there are legitimate reasons to NOT use my service a couple months per year and come back later. So by offering a discount for 12 months up front, it might lead to more people asking for refunds or general customer dissatisfaction. I could think about a service-branch that fills these couple months off, but generally speaking, it also increases perceived complexity.
You got me thinking, but I'm reluctant, because it's not as easy as writing that email patio11 recommends :)
I think it's very mature to respect users like you do and don't experiment on them with new pricing/structuring ideas. That's one thing I don't like about Google - they keep reinventing their services (basic consumer stuff like gmail, youtube) and they put all those irritating notifications about it (some of which require actions/decisions), which are a cognitive burden.
What a silly statement considering you don't know what the app is actually doing.
Is it a spreadsheet written in PHP?
It serves users in a certain niche. They enter some data, it runs some algorithms and outputs the data in a different way. Also, it educates users on the overall niche topic.
Look, what it does, is not that important. You wouldn't learn anything from it about running your own business :)
Edit: Note: Parent changed his post.
Look, what it does, is not that important. You wouldn't learn anything from it about running your own business :)
Edit: Note: Parent changed his post.
[deleted]
Number 5, "don't believe the hype," reminds me of this interview with the creator of Pinboard...
> The Pinboard about page says: "There is absolutely nothing interesting about the Pinboard architecture or implementation; I consider that a feature!"
> Can you explain why you think that's a feature?
> I believe that relying on very basic and well-understood technologies at the architectural level forces you to save all your cleverness and new ideas for the actual app, where it can make a difference to users.
> I think many developers (myself included) are easily seduced by new technology and are willing to burn a lot of time rigging it together just for the joy of tinkering. So nowadays we see a lot of fairly uninteresting web apps with very technically sweet implementations. In designing Pinboard, I tried to steer clear of this temptation by picking very familiar, vanilla tools wherever possible so I would have no excuse for architectural wank.
http://readwrite.com/2011/02/10/pinboard-creator-maciej-cegl...
> The Pinboard about page says: "There is absolutely nothing interesting about the Pinboard architecture or implementation; I consider that a feature!"
> Can you explain why you think that's a feature?
> I believe that relying on very basic and well-understood technologies at the architectural level forces you to save all your cleverness and new ideas for the actual app, where it can make a difference to users.
> I think many developers (myself included) are easily seduced by new technology and are willing to burn a lot of time rigging it together just for the joy of tinkering. So nowadays we see a lot of fairly uninteresting web apps with very technically sweet implementations. In designing Pinboard, I tried to steer clear of this temptation by picking very familiar, vanilla tools wherever possible so I would have no excuse for architectural wank.
http://readwrite.com/2011/02/10/pinboard-creator-maciej-cegl...
I just upgraded my laptop from a 4 years old mbp to a brand new one, got a 27" second screen display, and i can tell you my productivity has been skyrocketing.
Performance gains are obvious, but the psychological aspect is also a factor. After working for a year on the same project, new hardware can bring some new joy, and a new boost to your project.
I found out that psychology and well-being are indeed super important, especially while bootstrapping + freelancing in the same period.
I upgraded our machines and phones recently and everything just "feels" SO much better. The machines literally got out of the way.
Work appears more lightweight once this is done :-)
I upgraded our machines and phones recently and everything just "feels" SO much better. The machines literally got out of the way.
Work appears more lightweight once this is done :-)
Do you have more pyschology and well being tips? Mine would be: live healthy (diet, social life, exercise, sleep) and do what you most feel like doing, even something premature optimization (within limits).
4 years is reasonable. But the OP just says 'upgrade often' which might mean anything and as such reminds me too much of iDiots [1], which is imo not what your upgrade strategy should be like (i.e. upgrading for the sake of upgrading).
Over the years I tried different upgrade schemes, and it seems 2 or 3 years works best for us. Over the course of that timespan there is an overall performance gain large enough to notice and worth money. If you go with less, say 1 year, the gain is much smaller, and you essentially pay for something that's the same but just looks newer. Also depending on the country you live in, there's a certain amount of time you can use hardware as an actual cost on your tax form. As such keeping it much longer than that time means loss, keeping it much shorter as well.
The psychological aspect (which we all know since childhood already and basically is set in our genese: new = interesting) does do something, of course, but has in my experience no long-term effect whatsoever apart from it costing money. Especially with short upgrade cycles the 'wow, new' effect gets less and the money effect more.
[1] http://vimeo.com/79695097
Over the years I tried different upgrade schemes, and it seems 2 or 3 years works best for us. Over the course of that timespan there is an overall performance gain large enough to notice and worth money. If you go with less, say 1 year, the gain is much smaller, and you essentially pay for something that's the same but just looks newer. Also depending on the country you live in, there's a certain amount of time you can use hardware as an actual cost on your tax form. As such keeping it much longer than that time means loss, keeping it much shorter as well.
The psychological aspect (which we all know since childhood already and basically is set in our genese: new = interesting) does do something, of course, but has in my experience no long-term effect whatsoever apart from it costing money. Especially with short upgrade cycles the 'wow, new' effect gets less and the money effect more.
[1] http://vimeo.com/79695097
(I'm the author of the article)
I replace my main computer (MacBook Pro) every 1-2 years with a maxed out top of the line model. I keep the one I had before around as a backup in case my laptop breaks or gets stolen.
Yes, it doesn't make too much sense tax-wise. However, it would cost me much more in productivity to wait 2-3 years longer to replace it. This thing needs to run bunches of stuff for development, like various DB servers, multiple VMs (yay 4 different versions of Internet Explorer) and should be as light as possible so I can take it everywhere easily (usually servers go down when you're mid-vacation).
So it might save a few hundred dollars by taking advantage of tax laws, or I might earn thousands more because I can develop faster and things are just more enjoyable. I know what to pick.
I replace my main computer (MacBook Pro) every 1-2 years with a maxed out top of the line model. I keep the one I had before around as a backup in case my laptop breaks or gets stolen.
Yes, it doesn't make too much sense tax-wise. However, it would cost me much more in productivity to wait 2-3 years longer to replace it. This thing needs to run bunches of stuff for development, like various DB servers, multiple VMs (yay 4 different versions of Internet Explorer) and should be as light as possible so I can take it everywhere easily (usually servers go down when you're mid-vacation).
So it might save a few hundred dollars by taking advantage of tax laws, or I might earn thousands more because I can develop faster and things are just more enjoyable. I know what to pick.
Adding extra ram or a second monitor would be upgrading, you don't need to replace every component.
This is true - must admit I didn't consider it/forgot it as I'm not a big fan of saving on these from the start: when we buy new workstations, we immediately get them with plenty of ram (which is rather cheap anyway) and screenspace (which is productivity-wise way more important for me than raw computing power)
My homegrown saas application grosses ~$225k USD per year and growing. I started it in 2003 with $0 capital. I don't currently advertise, new business comes from seo and referrals. I am the sole developer/designer. (I use those titles loosely.)
What I have learned:
- Try to think about/plan for ten years out - Make your application easy/pleasant/fun to use for you and your customers - Limit third party dependencies at all junctures - Log everything, it makes support and monitoring easy and fast - Customers don't care what language/platform/db you use - Have a support ticket system - Have a coding convention/style and stick to it - Life work balance is important, take vacations - Run lots of backups - Keep it simple and thank yourself later!
Of course YMMV. Hope that's helpful to someone starting out.
What I have learned:
- Try to think about/plan for ten years out - Make your application easy/pleasant/fun to use for you and your customers - Limit third party dependencies at all junctures - Log everything, it makes support and monitoring easy and fast - Customers don't care what language/platform/db you use - Have a support ticket system - Have a coding convention/style and stick to it - Life work balance is important, take vacations - Run lots of backups - Keep it simple and thank yourself later!
Of course YMMV. Hope that's helpful to someone starting out.
moneyrich4, who is hellbanned, has a good question for you:
i have a question for you. i have a software product, and its so informative it would almost assist someone who copies it. any advice on planning 10 years out for a software product with this problem? planning x years out is not my strong suit.
i've thought a bit about removing stuff that would help competitors but that would hurt my customers. i will probably do this though anyway.
i have a question for you. i have a software product, and its so informative it would almost assist someone who copies it. any advice on planning 10 years out for a software product with this problem? planning x years out is not my strong suit.
i've thought a bit about removing stuff that would help competitors but that would hurt my customers. i will probably do this though anyway.
> software that allows you to concentrate on developing your application’s features rather than configuring servers
If you are running a SaaS, how is system administration less important than coding?
Now if the author had written "software that allows you to be more productive on both fronts", fine. But the notion that operations is somehow less important than development is exactly what fucks up so many SaaS companies in the long run.
Your users want your service to be 24/7 available and responsive. That's not a static goal (unless you fail to gain traction), and an essential and highly integrated part of what you deliver.
Maybe the author is lucky that his particular SaaS is easy to deploy and scale, but dismissing system administration as a distraction that can be solved with software is not universally applicably advice.
If you are running a SaaS, how is system administration less important than coding?
Now if the author had written "software that allows you to be more productive on both fronts", fine. But the notion that operations is somehow less important than development is exactly what fucks up so many SaaS companies in the long run.
Your users want your service to be 24/7 available and responsive. That's not a static goal (unless you fail to gain traction), and an essential and highly integrated part of what you deliver.
Maybe the author is lucky that his particular SaaS is easy to deploy and scale, but dismissing system administration as a distraction that can be solved with software is not universally applicably advice.
The context of the snippet you quoted is "Spend money on tools that make you more productive." In other words, don't skimp on a tool or service that can simplify an operations task, if the result is that you can focus more time on features. I don't see the implication that operations is unimportant.
Having a laptop/PC that you can develop on is important to developing a product, but no one would suggest that the author design one from scratch. Everyone (excepting perhaps Richard Stallman) would say it's better to just outsource that task to Apple or Lenovo.
Having a laptop/PC that you can develop on is important to developing a product, but no one would suggest that the author design one from scratch. Everyone (excepting perhaps Richard Stallman) would say it's better to just outsource that task to Apple or Lenovo.
I read the point as not to spend time away from your core skills in order to save money - in his example, hosting.
For the owners of a small bootstrapped company, pretty much anything that doesn't increase revenue is a distraction and should be delegated to someone else, or some other company.
That doesn't mean you always can delegate them. Or that things like ops aren't important. It just means that a company's founder isn't the ideal person for the job, even if they can do it well.
That doesn't mean you always can delegate them. Or that things like ops aren't important. It just means that a company's founder isn't the ideal person for the job, even if they can do it well.
I especially agree with item #2. I have been involved with several web based projects that have "failed" only because someone loosely associated with the project put a release date and the dev team made the mistake of agreeing (it seemed like a sure thing at the time). However, this deadline took its toll on the team's moral. As it became more and more evident that we would not meet the deadline we became more and more grumpy with each other and started shooting down great product ideas because the couldn't be done NOW. It resulted in lots of bad blood and several resignations.
That being said - I do think there are certain situations where release dates will exist in a SaaS product. For instance, if you market tends to start and stop activities on a set calendar (ie: school year) or if there are a handful of trade shows that are critical to demonstrate new features at. I think it is about being insanely pessimistic about how much you can actually achieve. Figure out the minimum you need to demo at a date and work on that first, but never commit to a set of UI diagrams with features that are not insanely flashy for a demo.
my $0.02
That being said - I do think there are certain situations where release dates will exist in a SaaS product. For instance, if you market tends to start and stop activities on a set calendar (ie: school year) or if there are a handful of trade shows that are critical to demonstrate new features at. I think it is about being insanely pessimistic about how much you can actually achieve. Figure out the minimum you need to demo at a date and work on that first, but never commit to a set of UI diagrams with features that are not insanely flashy for a demo.
my $0.02
There is a distinct difference between internal milestones/targets and publicly announcing "feature X will be ready by xx/xx/xxxx!"
As someone who runs a SaaS company, I agree with everything in this article. The importance of point #1 cannot be overstated!
"2. Never promise dates for a feature launch"
Reminded me of a sponsor who once offered me a bonus if I could put together a schedule with delivery dates for each and every product feature.
"Hmm, no thanks. I prefer to leave it (the bonus) for when we go to market."
Reminded me of a sponsor who once offered me a bonus if I could put together a schedule with delivery dates for each and every product feature.
"Hmm, no thanks. I prefer to leave it (the bonus) for when we go to market."
All the side projects I've ever done have had hard deadlines. E.g. systems that had to be ready for a campaign the client was already committed to.
But for something that's entirely your own, yeah creating artificial deadlines doesn't make a lot of sense.
But for something that's entirely your own, yeah creating artificial deadlines doesn't make a lot of sense.
5. Don't Believe the Hype - really good points there, too. "Use technology that's proven (to you)."
I agree but also don't ignore newer technologies just for the sake of familiarity. Especially if it has an active, supportive community.
I agree but also don't ignore newer technologies just for the sake of familiarity. Especially if it has an active, supportive community.
Really agree with #3 with regards to software. I've been focused on getting a VPS and the flexibility but it's lead me to not focus on my application/service. The configuration and maintenance of the VPS is chewing up my time, time that I could have spent working on validtaing my idea. Maybe I'm just not focused enough but I'll try to get something going on Heroku so my application/service gets the attention it needs. Any thoughts?
"It’s your job to make your customer more awesome. Every decision you make for your product and business should revolve around that."
Unless of course your customer requires knowing a date that a certain feature needs to be in place by. In which case, point them to Number 2. Which really means Number 2 should be Number 1 because Number 2 negates Number 1 if the two come in conflict.
Unless of course your customer requires knowing a date that a certain feature needs to be in place by. In which case, point them to Number 2. Which really means Number 2 should be Number 1 because Number 2 negates Number 1 if the two come in conflict.
"Never promise dates for a feature launch" - Gem of a point.
In a dull corporate environment, the equivalent is "No ETA yet".
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I like that there is a perspective of time. A six month sprint would not care so much about working hours, ignoring hype, and investing in productivity tools.
Post would benifit from examples or stories. Also genuinely curious how author can stay afloat in the rough and tumble world of note taking SaaS.
You mean of time tracking?
I know Thomas and Amy well, and trust me when I say they're doing quite well with Freckle. And there are much, much bigger fish in the pond. The great thing about building business tools is that the markets they typically serve are SO BIG that you only need a few hundred / thousand accounts to have a healthy and profitable company.
I know Thomas and Amy well, and trust me when I say they're doing quite well with Freckle. And there are much, much bigger fish in the pond. The great thing about building business tools is that the markets they typically serve are SO BIG that you only need a few hundred / thousand accounts to have a healthy and profitable company.
The related posts section has some posts with stories and examples.
> software that allows you to concentrate on developing your application’s features rather than configuring servers
I wonder if Amy and Thomas would use a PaaS like Heroku if they were doing a new product. Or would that be considered too expensive?
I wonder if Amy and Thomas would use a PaaS like Heroku if they were doing a new product. Or would that be considered too expensive?
I can't answer for Amy and Thomas, but I guess the answer would be it depends on the project. If you are building a freeminum project with lots of pageviews, you'd have to watch server costs more than a SaaS with only paying customers. Just do a quick estimation and you will get an idea how much it will cost you.
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[3] ... software that allows you to concentrate on developing your application’s features rather than configuring servers.
Can somebody please explain what he means by this using some examples? Thanks!
Can somebody please explain what he means by this using some examples? Thanks!
Here are some examples, some based on personal experience.
- You could set up and configure an email server to send email to your users, or just use a service with an API like Mailgun or Mailchimp.
- You could write your own Wordpress theme and plugins from scratch, or just pay $10 for a slick theme and $50 for a few plugins that meet all your needs.
- You could spend time each week backing up your system with a set of external drives, or just pay a monthly fee to Crashplan or Dropbox.
- You could buy a discount VPS account and spend all your time keeping it patched and running, or just pay for a fully managed server until you outgrow it.
In each case, the former solution is "free," but may require you to spend tons of time getting it working and putting out fires. Often it's better to pay a little money to just remove the problem from your critical path. The reason for this is that you only have a finite amount of time and mental energy each day. Try to use them on the things that matter.
- You could set up and configure an email server to send email to your users, or just use a service with an API like Mailgun or Mailchimp.
- You could write your own Wordpress theme and plugins from scratch, or just pay $10 for a slick theme and $50 for a few plugins that meet all your needs.
- You could spend time each week backing up your system with a set of external drives, or just pay a monthly fee to Crashplan or Dropbox.
- You could buy a discount VPS account and spend all your time keeping it patched and running, or just pay for a fully managed server until you outgrow it.
In each case, the former solution is "free," but may require you to spend tons of time getting it working and putting out fires. Often it's better to pay a little money to just remove the problem from your critical path. The reason for this is that you only have a finite amount of time and mental energy each day. Try to use them on the things that matter.
A specific example would be hiring someone to manage your server.
Some examples of the general principle I've used in my own business: upgrading to latest Macbook air, hiring a maid so I don't have to clean my home-office.
Some examples of the general principle I've used in my own business: upgrading to latest Macbook air, hiring a maid so I don't have to clean my home-office.
An example of what I think he means: When you get more traffic, you can buy a huge but cheap server from Hetzner, or you can just spin up more dynos on Heroku.
Of course a SaaS is a "make customers awesome" company but you'll need use technology to make it awesome. Sure, clients don't care about the technology but that is not the same as "You’re not a tech company".
Did you learn something about privacy of users?
2.: Couldn't agree more. I tried it a few times, could never make it, because something came up. So I don't tell release dates. I hardly tell about new features. Nobody cares. Perfect.
5.: My PHP application without any fancy technology makes me close to 100K euro in revenue per year. It delivers, it keeps delivering, there are no problems.
I want to add one more thing:
6. You hear critics' voices the loudest, if you don't do anything against it. I changed pricing once and about 50 people complained. I tried to justify myself (won't do this again) and the 50 people became a mob with the respective mentality. No chance to say anything. I might have lost another 50 users because of the discussion. In my mind, I completely forgot about the other few thousand people who did not complain.
Happy people hardly contact you, only the critics and haters. Don't let it sink in too deeply. Or use an easy mitigation strategy: If people reach a certain goal, ask them for feedback by writing a personal sounding email (that you send automatically, for sure). You'll get mostly positive feedback. This is important from a psychological point of view: You see that people are happy with your product and you can handle the critics in a better way.
Most emails I get are like:"There's nothing to improve, thank you so much for this product". Nice :)