A fresh perspective on the stages of building a SaaS business

March 3, 2021

EP2: Continuing with Nate’s most recent SaaS ideas gone bad

Josh and Nate continue their conversation around Nate’s SaaS ideas. Today we go deeper into the challenges of positioning in a competitive space.
Searching For SaaS
Searching For SaaS
EP2: Continuing with Nate's most recent SaaS ideas gone bad

Episode Resources



[00:00:00] Josh: This will be interesting because you’re in that phase, you’re not brand new, but you have some, some scar tissue and you’re hunting and you’re, you’re looking, looking to find, to find your thing.

[00:00:11] So then was status list next? Is that the one or are there other ones? I don’t know.

[00:00:50] Nate: Oh yeah, there’s a, there’s a few other ones. I made a little receipt tracking program for not-for-profits in Canada. Basically, they have like a paper form that all the non-for-profits use to track donation, receipts.

[00:01:03] And they ended up entering the information, like five different places. There’s like a special format of PDF that you’d have to print out for each person and all this kind of stuff. So I was like, Hey, wouldn’t it be neat to track it all in one spot, you know, we’ll import it into your software. We’ll link it up with your CRM, all that stuff.

[00:01:21] Josh:  Right.

[00:01:22] Nate: And and there was a not-for-profits for the most part that I talked to weren’t too excited about paying for that. They were like, we write it on paper. Our volunteers do it.

[00:01:33] Josh: We’ve got lots of volunteers, unpaid interns.

[00:01:37] Nate: Yeah. And I think not, not for profits really got a good mission. Behind why they exist. Right. And so they want to squeeze every dollar until that mission. And I completely understand that, like, that’s that’s great. And I think they’re doing good work.

[00:01:50] Josh: I have heard they’re notoriously hard to sell into like terms of just like, and they  are probably always looking for, is there a way we can get like a prorated amount or is there an it’s like it’s, it’s, it’s a challenge

[00:02:01] Nate: and on $10 a month software, there’s not much room there.

[00:02:05] Josh: Right. Did you build that too?

[00:02:08] Nate: So I built that. I built it very quickly. I think there’s like a three-day project or something. And had MVP had a bunch of beta users. So that one I actually got I think I had like seven or eight. People using that one for awhile,

[00:02:20] Josh: Like as a trial, like as a beta or paying?,

[00:02:26] With the understanding that it would be paid eventually and then I just found the,  sales process was not, not going well with that.

[00:02:32] Nate: And it doesn’t help. I don’t really enjoy  cold calling and that sort of thing so much. So yeah, so that was that was another fit and start. And I think what I had learned without one was  MortarQ was don’t, spend so much time building the thing, figure out if people actually want it.

[00:02:51] And this one was I was didn’t pay attention to the customer insights fast enough.

[00:02:56] Josh: They were there, they were telling you, but at the same time, you’re probably like, okay, yeah, yeah, yeah, I get that. really you want this right?

[00:03:03] Nate: I was just so excited. I think that’s part of the problem. I was excited and I saw the time-saving, but for a lot of these people, the time-saving did equate to dollars.

[00:03:14] Whereas a lot of a lot of people in the for-profit world

[00:03:17] there’s time’s money. Yeah. Right. They’re like time is time, we’ve got plenty of that, but we don’t have money.

[00:03:25] That’s exactly it. Yup. That’s that’s so succinct. That’s great. That’s right.

[00:03:30] Josh: The big thing is   the value proposition, like how are you giving them value?

[00:03:36] And   the fact that you were giving them time was not actually valuable.

[00:03:40] Nate: That’s exactly it.  I wasn’t speaking their language.

[00:03:42] Josh: Okay. So what happened? How, fast was this cycle?

[00:03:47] Nate: So ,that one was pretty quick. That one was actually, I think, over, over about eight months or so.

[00:03:52] So I think first customer interaction was maybe a couple of weeks after the initial idea. And then I had beta customers within a half a month or so because the people that I was connected to a really good networkers, so they really spread it around. And so that really helped to get beta testers.

[00:04:11] And then I did a bunch of email marketing and that kind of thing with it. So I was kind of learning, trying it out. See,

[00:04:18] Josh: you got to learn some of the marketing aspects  well, you were actually doing cold calls though, right?

[00:04:23] Nate: Yeah. So I did do some cold calls. I did most of my cold calls with MortarQ and I was like, I am not doing that again.

[00:04:28] I will do anything to not do that. . So at this one I did a little bit of email marketing and some forum like discussion forums . And so I kind of got exposed to that a bit. I don’t think I was particularly good at it, but it did, work somewhat. I got some people that way.

[00:04:44] Josh: That’s cool.

[00:04:45] Yeah. You’re out there. You’re getting the reps, you’re getting different things, learning at least the basics, the ropes of some of these. Elements, right. These, these different pieces that can make this business work. So it seems like you’re a lot more user focused or at least sales and marketing focused, at least on this one.

[00:05:01] So that’s cool because it’s an acceleration though. It’s still a big jump.

[00:05:05] Nate: Yeah, yeah, yeah.

[00:05:07] Josh: Cool. And then status list,

[00:05:11] Nate: I think. Yeah. I think this came after that.

[00:05:14] Josh: And that came from our friend who was doing some things in the Heroku store. And he’s like  Heroku store’s awesome. Essentially a marketplace. You’ve got people here looking for stuff. And  it may not be as crowded as like,  WordPress plugins or other easy start ideas, but they have like billing built in. They’ve got all kinds of other stuff, infrastructure for businesses sort of built into it.

[00:05:41] Nate: Yeah. So there’s a couple ideas that were swirling around that all kind of came together, which made status list. And the one was like you said, our friend talking about the Heroku store and then the other idea was there isn’t something where you can get all of the statuses of your service providers on one page.

[00:06:01] Josh: Like external other Saas’ you’re working with, right? Like, a lot of people are using email service providers, like  SendGrid Mailgun post,  all of these different email providers. So every Saas as at least a couple of,  other Saas they’re connecting to.

[00:06:19] So that potentially become mission critical for their customers. Is that right?

[00:06:23] Nate: Yeah, that’s, that’s exactly it. And so they could either just have that internally or expose that to clients  as some sort of like SLA background information kind of thing.  So I kind of went down that road a bit and I did a bunch of customer interviews with that.

[00:06:38] And that was kind of different. I. Basically posted it on Reddit. And I think Twitter  basically offering people money in return for talking to me for half an hour or so. And that very quickly told me that people didn’t actually care about those larger service providers going down, because they said, well, if they go down, you know, it’s horrible.

[00:06:58] Anyway, there’s nothing we can do about it. And like how often really SendGrid grade go down.

[00:07:03] Josh: How many people did you end up interviewing?

[00:07:05] Nate: So I think I ended up interviewed  four developers.

[00:07:09] So there’s kind of that idea. And that was kind of swirling around and I had done some customer interviews.

[00:07:13] It’s kind of like, well, that’s not, that doesn’t seem super viable. And then the other idea was, well, like why not just do your regular old status pages because. To this point, I had been

[00:07:23] building the infrastructure built out, right? Like you had some things

[00:07:26] Josh: built out. I had some of the infrastructure, it was very rudimentary at that point.

[00:07:30] So  the idea was to monitor external service providers and. And it jumped back to what is sort of the normal status quo for monitoring.

[00:07:40] Like most people just uptime monitoring for your own stuff. So you have a status page and you can know when it goes down  think of Pingdom.

[00:07:49] Nate: Yep. Oh, dear.app. Uptime robot. There’s a whole slew of them.

[00:07:54] Josh: So you went from a blue ocean idea that was there and for good reason, and then into a red ocean   strategy that said, Hey, there’s there’s cheese down this tunnel. There’s there’s, there’s a meat on the bone over there. What can I do to break me off a piece?

[00:08:12] Nate: Yeah, that’s exactly it. It’s like there’s people making money over there, so you know, why not?

[00:08:17] Maybe I can beat them at that game.

[00:08:20] Josh: And do you feel like  you got led there because you started building the other one and you were kind of. In that scope. Like if we never did the initial idea about monitoring their external services, it probably wouldn’t have jumped to just monitoring their own services.

[00:08:36] Nate: Yeah, that’s exactly right. Yep.

[00:08:39] Josh: Kind of like you had an asset, you had some code, some code, you had some ideas of like this whole thing. You had a domain name, you had all these things before, so it’s like, okay. I pivot. Right.  You attempted a pivot.

[00:08:51] Nate: Yeah, exactly. I totally wouldn’t have gone there   by choice, but it was like, I’m here anyway, and I want to build something and I don’t have any better ideas, so why not?

[00:09:03] Josh: So it’s like, what else am I going to do?

[00:09:05] Nate: Something like that? Yeah. And so , I ended up building my own and trying to find, basically trying to find an edge as to why people should buy my uptime service as opposed to someone else’s. Cause that’s what I started to see right away is like there’s so many uptime services.

[00:09:22] There’s

[00:09:22] Josh: no differentiation, right? There’s no position, no insight, no differentiation among the other ones. Yeah. It’s interesting. Cause like you said, you started with differentiation with your other things. You went from your first idea, it was differentiated. It was positioned differently.

[00:09:37] There just the market wasn’t big enough. And you couldn’t access that market, whether it existed or not. The next one is  the initial value proposition you had did not align well. And you discovered that  saving time for nonprofits is not a thing, yeah, one was, okay, this was a total blue ocean. Like, Hey, this is an idea that maybe is a little untapped. Is this an unmet need

[00:10:01]   then you pivoted  you couldn’t find a position and you couldn’t find an insight. And we also, I guess we, we have, we have, we have pointed that one, a commodity, right. A commodity market.

[00:10:14] Nate: Yeah, definitely a commodity market. Like the definition of commodity.

[00:10:18] There’s no differentiation in everyone is doing it.

[00:10:22] Josh: Right. It’s like  could you look at like how like their database connections? What other , little pieces  could be interesting going deeper.

[00:10:31] Nate: Yeah. Yeah. And so I went down that path a bit to try and get an edge.

[00:10:35] One was to test a database uptime and performance. And the other thing was to really drill into the performance metrics on the uptime checks. And so I had like a full breakdown of  TLS  overhead times of

[00:10:50] Josh: it was cool though. It was cool seeing all that stuff. Oh, it was really fun.

[00:10:54] Nate: So fun to make. Yeah. Yeah, exactly. And then like

[00:11:00] Josh: the problem we ran into , is that. You started to cross over with is with application performance monitoring (APM). . So you started to cross over into APM territory and further drifting into, okay. That’s a deep dark rabbit hole. And then I think a natural progression at APM also goes into like a logging and exception logging and the Splunk territory and all these other rabbit holes.

[00:11:28] Yeah, funny enough rabbit.

[00:11:34] Nate: Yeah, so it was like a lightweight APM basically. And so I was trying to figure out like, is there better alerts that I could give that would help people recover faster? And so we gave like transcripts of the errors and yeah, the email notifications to kind of try to.

[00:11:50] Clean those up. So like, you know, a four Oh three would give you a different message than a 500 would give you. And that sort of thing. And I, the Heroku store, like I learned a lot about lead acquisition and stuff like that. I played around with some, some advertising like pay-per-click advertising.

[00:12:06] And that was, that was a really good learning experience to just figure out how pay-per-click works and optimizing that to working with different ad copy, all that stuff.

[00:12:15] Josh: How many people did you end up having signed up for that?

[00:12:19] Nate: Oh, it was quite a few.

[00:12:20] You have to like part of the Heroku onboarding is you have to get a a hundred people in your beta. Right. So I got the a hundred. Yeah. And I, I think part of the reason I got that was that I offered a free plan. When you’re in beta, you can, you can only offer a free plan. And I found after.

[00:12:38] Moving out of beta when I could offer the paid plans that the pay plan volume really wasn’t there for it, people were just coming for the free stuff and, and just looking through the data to like the large majority was hobbyist users. Right.

[00:12:54] Josh: Right. And which then when you stepped back and looked and go, okay, who’s your Heroku?

[00:12:58] And you’re like, Oh yeah, that kind of makes a lot of sense. Cause it’s like their, their whole claim to fame it’s like, so it’s great for devs to start.

[00:13:06] They give a bunch of free credits. Just like, go, .

[00:13:09] Nate: Yeah, it’s all taken care of. It’s Lego blocks.

[00:13:11] So that, that was, that was pretty neat to see that acquisition channel and to optimize for that. I learned a lot about like SEO and ad copy and that sort of thing, which was really good. I did always have a secondary channel that people could purchase through the website. They didn’t have to be on Heroku.

[00:13:28] And that channel did not do well. Try as I might  the, the SEO wasn’t there and  even driving pay per click through, it just didn’t really give any results.

[00:13:38] Josh: Where is it now?

[00:13:40] Nate: So status list is still around. You could purchase it today if you felt like it.

[00:13:43] There’s no, there’s no free plan.

[00:13:47] Josh: Just so I don’t have to deal. I still

[00:13:51] Nate: have paying customers. And that’s the reason it’s still around is I’m going to continue to support them.

[00:13:56] Josh: Yeah, not adding any new, new things to it, essentially. You’re just like keeping keeping it running.

[00:14:02] Nate: Yeah, I’m just keeping it running at the moment. Just kind of having it there as an asset. I’m not really sure if anything will happen with it. I did kind of look down the road to see how I might be able to grow it just because I was able to acquire some customers by doing enough pay-per-click and enough marketing.

[00:14:19] So it is possible to, Put in a certain amount of effort and get a certain number of customers back for that effort.

[00:14:26] Josh: So, so it’s an asset. There’s plenty of stories in the, in the bootstrap world that people just having things hanging around and maybe they they’re at least a couple of steps ahead on something, or there’s a change of wind or something like that.

[00:14:41] A lot of people talk about  is like convert kit and Nathan Berry right. I think the whole story is they really take it very seriously. And now you look at it today in terms of a whole, you know, creator maker, economy all of this stuff.

[00:14:55] And I think even people are leaving things like stack to kind of own  their channel and go to go to ConvertKit . But, you know took a niche approach and I think that’s an approach that we know and have discussed before that taking a niche approach, or there’s always the, a pricing approach.

[00:15:11] And then when you looked at this status list market or the market for uptime monitoring. Right. But it was like, there were so many competitors that  already played the price game. So it’s like so cheap.

[00:15:25] Like no one, you know, it’s like, is it even worth taking my credit card out?

[00:15:31] Nate: Yeah. Yeah, it was very cheap. Like I think a lot of places were even offering just like straight up free plans. And it’s like, well, you can’t really compete with that. Like  no matter how bad , their product might be or how much better your features might be.

[00:15:46] Yeah, it’s going to be a tough way in there.

[00:15:48] Josh: For something that was like, these probably aren’t going to grow, right. They’re not going to grow like sometimes part of the free thing is like, okay, And I get hooked in like there’s no book, right? There’s no, I’m not investing in. It’s not like a landing page thing.

[00:16:00] I have my landing page built out. I actually have an asset that I’ve invested time into, don’t take that away from me when I hit the third page or, Hey, I actually have customers coming to this page and I have a few paying customers I don’t want.

[00:16:13] Nate: Yeah, exactly.

[00:16:15] Josh: And then I think down that APM route at that, that was probably just a deep dark hole of needing much more depth, meaning much more polished. Whether there’s room in that market or not.

[00:16:26] It’s hard, much harder to get noticed for that.

[00:16:30] Nate: Yeah. There’s, there’s a lot of technology implications going into that market, the sort of infrastructure you’d need to be able to handle the volume of data that that would generate, or it could generate quite a, quite a bit of infrastructure to make that work properly.

[00:16:43] And then just, yeah, you’d have to. Integrate with all the different frameworks and stuff like that. It’s, it’s not a

[00:16:49] Josh: it’s not the bootstrapper friendly type of type of type of business. Right. I think, yeah, this is kind of whittles down to like what you’re looking for. So you want to stay independent and bootstrapped, at least now .

[00:17:02] I mean, that’s kind of like, let me get something. You know, people complain about, Oh, all the good ones are gone. It’s like that, that golden age is over, but I would defer on that saying every new thing out there, there’s just another layer of opportunity that, you know, either a market is growing or a niche isn’t there yet.

[00:17:23] It’s not big enough to have sub niches  where a particular use case is very different. I think I would agree as you saw through the status list stuff, I don’t see an angle. I know we’ve, we’ve bashed our heads a bunch of like, what is there a way we saw some interesting ones? Like the one that it for SEO, right?

[00:17:40] They did it kinda a more SEO specific and there’s there’s so many, I feel like so many people are in there. Cause they know it’s a big market reasonably like with Ahrefs and all these other things. But it’s also hard to get noticed. I mean, you can’t,  out SEO people that are doing SEO.

[00:18:00] So it’s like how to, if I was like SEO tool. Yeah. SEO is or not. Looking at that term? No, no, those are the, actually the most competitive terms. So

[00:18:08] Nate: yeah, yeah, no, exactly. The, that I think it would probably do a whole episode just on the SEO space. But I think you’re right as the market changes, it seems like a lot of opportunities are taken, but that’s just because you see what people are doing.

[00:18:21] You didn’t probably realize that those opportunities were there before they took them. And I think that’s just a, Hey, you just have to look a little deeper, I guess. That’s I think it’s hard to remember that when you’re searching around for an idea, you can sometimes feel a little down and be like, you know, the world’s against me, all the ideas are taken.

[00:18:39] What am I going to do?

[00:18:41] Josh: Yeah, and I think this might be a good closing point. I think tracking back up to, to real time now you have a different idea you’re working on, and I feel like  your head is in a good space with that. But I did see a moment where it seemed like your head was like in a good space with him. When I think we had these weekly check-ins and you mentioned the fact that, you know, you’re when it’s like, Oh, how’s your week going? You’re like, just, it’s just, it’s bad. And we’re like, wait, what’s what’s going on.

[00:19:07] And you’re like and doing all this stuff. And essentially my, my idea is not getting any traction this week and like weak , I think you’re in this stage where. You  want it, you want, you want this to happen and you see Twitter, you see all these, you’re seeing it happen for other people.

[00:19:22] And that’s what I think is kind of interesting about this, you want this to happen. But I think I brought the analogy. It was like, was it getting married or finding, finding your your wife or your city or your spouse? Like, you know, that stuff doesn’t happen no matter how much you want it, you just have to kind of.

[00:19:41] Be out there. Right. And it happens when it happens, you know, what you’re looking for. And I feel like you’re in that stage, it’s like you’ve dated. Yeah. You have an idea. You’re, you’re kind of, you have strong feelings about what types of things you’re looking for. We know it’s bootstrap wins. We know at SAS, I think we talked about that the other day.

[00:19:58] Anytime. I think I’ve thrown info, product related types ideas. You’re like, Hey, that’s interesting. Yeah. And I think you’re in this phase of like waiting and, and I think we’ll probably continue conversations on ideation, how to find ideas and, and validation and kind of just, I don’t know, hopefully we’ll find something over the course of this podcast.

[00:20:22] Nate: Yeah. And if we don’t find something, that’ll be plenty of fodder for for our discussions. Yeah.

[00:20:27] Josh: Plenty of stuff to. Poke fun at Nate for now. I think hopefully everyone will learn too. Hopefully I can lend some, some bird’s eye view of some things, but obviously I’m going through other challenges now, but we can definitely talk about my challenges too. So I think it’s it’ll be, it’ll be interesting to see what.