Below is the introductory chapter to my upcoming ebook on building Micro-SaaS businesses. To get it for free when it launches go here.
1. What is micro-SaaS and what is this book about?
Micro-SaaS is a term that I started using to describe my business, Storemapper, a simple app that helps merchants add a store locator to their website. If you’re reading this book you likely know that SaaS is Software as a Service, the defining feature of which is that customers pay a recurring subscription fee for access to a hosted version of your app. To an IT geek the key difference is that the code is hosted on a server in the cloud, rather than on the user’s computer. But in reality the biggest difference is that customers pay monthly or annually for continued access, as opposed to a one-off purchase, like back when you bought MS Office 2000 in a plastic-wrapped cardboard box. This is a huge shift for reasons we will dig into later.
And “micro” just means small. A SaaS business targeting a niche market, run by one person or a very small team, with small costs, a narrow focus, a small but dedicated user base and no outside funding. Hence, micro-SaaS.
This book is about my experience building and running a micro-SaaS business. I won’t claim to be a world expert — I’ve built exactly one successful micro-SaaS business — nor will I make any guarantees that anything I have done is replicable. But I think a micro-SaaS business is one of the most powerful business models and lifestyles I’ve ever heard about so in this book I’ve tried to distill some of the things I’ve done right and the many things I’ve done horribly wrong into some more generalized principles. I probably didn’t invent a single one of these principles and in many cases they were blatantly stolen from writers and entrepreneurs who’ve been around the block several times. Where possible I’ll link to the people and resources that were tremendously helpful to me.
Why would you want to build a micro-SaaS business?
This is the standard “Who should read this” section. I’ll assume that you, the reader, have at least some vaguely entrepreneurial sensibilities and want to build something. So specifically why SaaS relative to other businesses like consulting, online courses, mobile apps, ebook writing or food trucks.
Warning: below are some buzzwords like lifestyle design and digital nomad that have (rightly) developed some groan-worthy connotations. I’m using them here simply to avoid re-defining the whole lexicon from scratch. Bear with me.
Owning a craft
One book that had a huge impact on my thinking is Shop Class as Soul Craft. The author leaves his think tank job for a life as a motorcycle mechanic. The book constructs a very compelling ethical and philosophical argument that, in a world filled knowledge workers obsessed with abstract career ladder-climbing, the life of an artisan practicing a simple craft can be as purposeful and rewarding a life, if not more so. His craft is fixing motorcycles, but the idea is more generalizable and can apply to software. People have problems, the artisan builds a solution that people pay for and everybody is happier than they were before.
If you’ve spent a career as just one small component in a vast Rube Goldberg machine, it can be very rewarding, bordering on glee, to build a product yourself and see people get immediate value out of it. micro-SaaS offers the opportunity to see the fruits of your labors delivered. Your customers arrive, behind schedule, stressed and with too many things on their plate. You artfully and gracefully remove one of those things from their plate, in exchange for a reasonable sum of money. I find the process very fulfilling and regularly get unsolicited emails of delight from customers who found the experience of using my app — and paying me money — so pleasant they decided to write me about it and make my day. Seriously!
Time leverage: the magic of recurring revenue
You get some of the above benefits from any remote software business but there’s something special about SaaS. Recurring revenue is unequivocally the most powerful revenue model in the world today. Evergreen content, ebooks, dropshipping, affiliate deals, AdSense, ecommerce, all pale in comparison to how magnificent it is to know that the vast majority of the customer who paid you last month, will pay you the same amount again the next month and the month after. Once recurring revenue reaches a comfortable level, that predictability let’s you carefully start spending less and less time on your micro-SaaS while still making the same or more money. I doubt it’s possible to get it down to zero (the mythical “passive income”), but it’s certainly within reach to make as much money as a full-time salary on 15, 10 or even FOUR (wink wink) hours a week. SaaS can be a business that not only yields money, but starts to give you back your time.
I freaking love to travel. I only got my first passport when I was 20 but it’s been one of my top priorities ever since. A huge part of why I invested the time and energy to build a micro-SaaS business was a burning desire to have a business that I could work on while traveling.
Before 2011 I knew literally nothing about coding. I never took a coding class when I was kid and never mucked around with HTML on geocities or angelfire. I dove in head first because I wanted to build a software company and I couldn’t convince anybody to build an app for me for equity in my non-existent company (I tried). Writing code for a living is the most powerful tool in the lifestyle design toolkit because it is completely, 100% location-independent.
I started writing this book from Chiang Mai, Thailand, procrastinated on it through much of Southeast Asia; picked it back up a bit for a bit in Budapest and Cape Town and hope to publish it while I’m in Bali (fingers crossed). I have no plans and can travel wherever I want in the world on a whim. In the past few years I’ve spent at least a month in Barcelona, Cusco, Buenos Aires, Bali, Tonsai Beach in Thailand, New York City, San Francisco, Washington DC, Budapest and counting.
You can certainly do things like freelance consulting, or work for a startup that allows remote work but it isn’t the same. In the past two months I spent nearly two full weeks completely offline hiking Kilimanjaro and going on Safari in Tanzania. My girlfriend and I did a 2 week road trip across South Africa. I’ve tried doing this kind of thing while managing client work, and it’s possible but very stressful. With a micro-SaaS business up and running at scale I’m able to really travel and disconnect and when I come back the business is still basically fine without me.
Building a financial platform
Venture backed startups get all the glory these days while “lifestyle business” is treated as almost a dirty word. But I don’t know. During the same period where I built Storemapper, I bootstrapped, raised money for, and ultimately closed a venture-scale startup. It was the most stressful thing I have ever done and it did damage to almost every other aspect of my life: relationships, health, sanity. Getting my micro-SaaS business to a point where it pays me a full income has given back and enhanced all of those things: relationships, health, sanity. Freeing up my time to experiment and collaborate on projects, invest time in myself and others, and yeah, write an ebook.
I doubt that will be my last punishing round in the startup ring, but one of the biggest problems by far was that as soon as I quit my job to start my startup, my income evaporated. I was trying to run a startup while drawing down on my meager savings and frantically trying to raise more funding just to cover mine and my cofounder’s cost of living.
Now that I own a micro-SaaS business under my belt, I can work on a new startup without drawing a paycheck indefinitely, as opposed to being forced to grovel to VC funds just for money to pay for my rent and fancy coffee addiction. If you are interesting in starting a big ambitious startup some day, micro-SaaS could be the perfect launchpad.
2. Who is the author and why should you care?
About the author
I’m Tyler Tringas. In a former life I was an Economics major and a consultant for investors in cleantech. In 2011 I quit my job to build a cleantech software startup, SolarList. SolarList took a long time to get traction, then we launched, raised some money, and in early 2014, we shut it down. There’s a whole epic story there in itself, but through the same period of time I taught myself to code, built a consulting and software development practice for ecommerce startups, and built a ton of side projects. One of those, Storemapper, was a nice little micro-SaaS business that did well and now generates over $150,000 in annual recurring revenue. I started blogging very transparently about my experience with Storemapper and it turned out owning a micro-SaaS product was an aspirational goal of a ton of people. So I wrote this ebook. I hope you like it.
The least BS book I could write
Books about making money are a messy business. For every half-decent piece of advice there is a giant mountain of bullshit to wade through. I never in my life had the slightest desire to write about how to make money or do business things. When I decided to write this book I committed to myself that I would only publish it if I managed to write “the least BS book I could possibly write.” This is harder than it seems but here are a few principles that I have tried to stick to.
- Narrative focused. I have only one person’s experience. Too often entrepreneur have some little bit of success and immediately try to extrapolate that into a 17 part plan to fabulous wealth and happiness. Wherever possible I’ve constrained my commentary to the actual narrative of what did and didn’t work for me. Sections of the book may come across as a tad narcissistic as a result but I’m fine with that.
- Not my primary income. The first version of this book will be free. I may experiment with charging for later versions or “pay what you want” pricing, but at no point do I want my primary income to be teaching other people how to make money. The second a small group of people show interest in what you have to say, there’s a temptation to capitalize, to immediately start monetizing your knowledge. I think this is a road that leads unavoidably and directly to BS. I will remain primarily a doer of business or I will stop writing.
A Final Disclaimer
I genuinely don’t think I’ve done anything truly impressive in my life… yet. I don’t consider myself a guru on micro-SaaS or entrepreneurship in general. I’ve done some things that worked and a lot of stupid things that didn’t work. But I’m learning from my mistakes and devouring as much of the wisdom out there as I can get my hands on. This book is not a prescription, a script or a template — just me trying to contribute to the collective body of bootstrapping know-how out there. Please treat it as such :)