the biggest problem for any new SaaS

The biggest struggle for any new SaaS

The biggest struggle for any new SaaS is growth. And while building a potential money machine can be an intoxicating journey, it’s a slow one. Anyone who’s launched a product has felt that knot in the stomach that screams, “This wasn’t what all those success stories told me”.

Nusii is growing, but for my taste too slowly. So what can we do about it, if anything?

Conversions are good

Michael and I regularly dive into our numbers, and when we do we generally feel pretty good about ourselves. Our visitor to trial signup is a respectable 2.4% and our trial to paid customer is 30%. Of course this data is limited in it’s reach as we’re such a new SaaS. But as it stands, I think most any SaaS, especially a fledgling self-funded one would be happy with these numbers…So the problem’s not here (bare in mind we request a credit card to sign up).

content is king, but marketing is queen

The SaaS slow ramp of death

It was Gail Goodman who coined the phrase, The Long, Slow SaaS Ramp of Death“. And boy was she right! SaaS is SLOOOOOW. If you want to make a quick buck then rob a bank. Software as a service won’t bring you a quick fix. The folks who launch to multiple thousands of dollars are in the minority. Even Nathan Barry has struggled to reach his original goal of $5K MRR. It’s taken him two years to get there.

I knew all this this going in, but you’re never fully prepared for the slog.

Build it and they will come…If they know about it.

When people talk about month on month growth it can too easy to make any old figures sound good. “Ye man, we have a consistent 20% growth, month on month!” The thing is, most folks are dealing with tiny numbers.

Say you launch your new service to a handful of customers: It’s launch day and you snag yourself 20 keen signups. They like your product, they stick around and you continue to grow 15%, month on month. These stats are awesome when you’re wearing your rose tinted Ray-bans, but after a long 12 months you’re still looking at a mere 107 customers! On one hand, congrats! On the other, it’s hardly gonna buy you that new house or even keep you out of consulting.

So what are you gonna do until you reach say, 300 customers? How will you live? I still having to take on the occasional consulting gig. In fact I landed a new one today, thanks to Nusii 😉

But you need alternative income sources until you’re able to reach the point where it all clicks. I’m publishing The Creative Professional’s Guide to Better Proposals shortly, and my hope is that it will help take up some of the slack. But whatever you do to keep the money rolling in, make sure it doesn’t take your eye off the ball. I’m speaking from experience when I say that just one week away from a new product can have serious ramifications for your traffic, signups and conversions.

So, I knew it was going to be slow and that we’d have to fight to keep our heads above water, but strangely it’s not our month on month growth that’s our biggest hinderance either (at least not directly).

If plan A fails, you have 25 letters left

Churn’s a *”!*

Churn is the bane of any founder’s existence. If only we could keep each and every one of our customers. We’d all be very rich! But unfortunately it’s not the case.

There are several factors that affect our churn:

Not the right customer: From the very beginning Nusii was aimed at people like me. After all, I kind of built it for myself (I’m selfish like that). But of course, one creative professional is not like another. We all have different needs and thankfully different tastes. Not to mention that an independent consultant doesn’t typically have the same requirements as a Studio or an international marketing Agency. I still think we’ve yet to find our perfect customer. But that of course, is on us.

Missing features: Regardless of where your product’s at, you will always have requests for new features. It may be that you have no intention of building these features or that you simply haven’t had time yet. Either way you’re sure to hear, “It would be cool if I could do this…” on a regular basis. Sometimes those features are a deal breaker, and hey presto, someone churns out. Of course this can go the other way too. There’s no better way to make a customer feel special than by building a feature they’ve asked for. If it fits with your startup’s vision, and you can add it then go for it!

Either way you’re sure to hear, “It would be cool if I could do this…” on a regular basis.

Too expensive: Again, it doesn’t matter where your product is at, it will always be too expensive for some people. Always. And that’s OK. Ye, some people sign up, give it a whirl and then decide it’s too much cash. It just means they’re not your audience. So is price our biggest problem?

Nope.

focus on a blog thats great for your readers

And what about failed payments?

No one told me that failed payments would be so common. Every month cards fail. The information you get back from Stripe can be vague, and getting clients to update their card details has turned into a SaaS business all of its own. But even with the dunning services that are available, we still lose money every month to failed payments. Yet again, this isn’t our biggest problem.

No one told me that failed payments would be so common.

So if we’ve got 99 problems and conversions, churn rate and failed payments ain’t one. What is?

It’s a numbers game

Build it and they will come…If they know about it.

It doesn’t matter how cool or useful your product is. It doesn’t matter how high your conversion rates are or how low your churn rates are. And it sure as shit doesn’t matter how many features you have.

If you don’t have enough traffic then you, or rather “I”, will fail at building a financially successful SaaS. You need those people hitting your site every, single day. Every thing else comes after, and without that crucial level of traffic you’ll be left floundering in the cruel SaaS sun.

When you try to do something big

As above, so below

I was speaking to one of my mentors the other day and he asked how we got our first 100 customers. I replied, “Via the blog, you know, content marketing”.

His reply was, “Wow, you must have really fought tooth and nail for those”.

We did, and we continue to do so. Nusii is still very much an all-hands-on-deck kind of startup. Both Michael and I are involved in everything, which is how we win the support of our most fanatical users. We’re all in! But I digress.

Our blog has been running since early 2013. And in that time it’s been forgotten about on a couple of occasions. BUT, apart from those odd instances where I have dropped the ball, I’ve actually published content on a pretty regular basis. We’ve had some great posts, some regular posts and some posts that have gone on to achieve near viral status (at least in my mind’s eye).

And even so…

Our traffic levels are just way too low to keep us permanently off the consulting merry-go-round. Maybe one day I’ll go into our actual figures and you can see just what’s going on. But to be honest I’ve never been convinced by this wave of, “I’ll show you mine, if you show me yours”. If you’ve read any of my previous posts then you’ll know that I’m pretty honest in what I write, but airing figures and numbers never really sits well with me. Maybe it’s my working class roots.

What’s a bootstrapped SaaS to do

So what can we do? Accept our lot? No!

We’re looking at letting go of our content marketing altogether. It’s hugely time consuming, and according to the figures we obviously need to improve somewhere.

Having someone else take over our content would be an awesome win, it will also be a very expensive one. I know just how much effort goes into writing good content, and having that done properly comes at a cost.

In the past we’ve worked with some freelance writers but it’s never really been “right”. At least not all the time. We’ve also never had an overarching content strategy. It’ll be nice to see what one of those looks like.

So over the coming weeks we’ll be working closely with Brian Casel of Audience Ops to up our game. I have all my fingers crossed on this one, and I’ll be sure to report back on how it pans out.

Another area we’re testing, which will hopefully make better use of the traffic we do have, is removing the requirement for a credit card during signup. Of course making a credit card compulsory on signup has lowered our conversion rates, but it was always going to do that. And believe me, we’ve received our fair share of flack for doing this, but we have our reasons. I’ll be sure to go into those reasons in another post, when I have some real data on how this experiment works out.

So our biggest problem?

Traffic. We need more traffic. You need more traffic. Everyone needs more traffic. Except for Baremetrics, I hear they’re doing OK.

nathan powell signature

photo credit: Graph_Analytics_Line_Blue via photopin (license)

16 Comments

  1. Great post Nathan!

    I’ve worked with a handful of SaaS companies, and I’ve learned that the sales cycle is a lot *longer* than most of us realize.

    It takes multiple touch-points for a customer to go from “passively looking” to “actively looking” to “buying.” I talk about this here:
    http://justinjackson.ca/play-the-long-game/

    This is where I’ve seen ongoing content marketing efforts really pay off: consistent content helps you stay “top-of-mind” when someone in Slack says: “What was that tool that does x?”

    • Nathan Powell

      Thanks Justin!

      I totally agree with you. In fact we hear from creatives who tell us they didn’t even know they had a problem with proposals. Education forms a large part of what we do with our content, and that of course is a far longer cycle than someone hitting the landing page and signing up.

      And you gotta love that word of mouth, “Ye, I hear that Nusii is doing interesting stuff with proposal automation”! :)

  2. Nathan, I think I know where you can get inbound leads and sign-ups for Nusii. I recommend using GospelPro.com with your Twitter account and targeting followers of creative marketplaces like @envato, @Upwork and others that you think they follow. Let me know if this worked. I’m confident that it will.

    • Nathan Powell

      Hey!

      Thanks for the recommendation. I’ll take a look and see what it has to offer. Thanks.

  3. Thanks Nathan

    I always struggle to find my sustainable marketing channel. Often considered the content marketing route but looks too time-consuming at the moment and/or expensive.

    Any ideas on other channels that work well?

    • Nathan Powell

      Hey Michael.

      Well, I can confirm that content marketing is indeed time consuming, but it can also be more than worth it. Our first 100 customers came as a direct result of this. But content marketing is also a long game, that can be collected now, and in the future. But I guess it depends on your product or service.

      We’ve tried very few channels outside of this so far. We’re beginning to experiment with Adwords, we’ve done a little with Engineering as Marketing (see http://weeklydesignjobs.com/ ) and we’ll surely be looking at other areas soon.

      if you haven’t already, I recommend you read Traction, a great book.

      Good luck
      Nathan

      • Thanks Nathan – great advice. Been meaning to read Traction so will get that read soon.

        Engineering as Marketing – I like that. I’ve made some free tools that compliment the main product in the hope to drive in traffic. I think that’s what you mean here and I remember hearing on a podcast that tip (probably from Traction)

        Will experiment more with that and would be great to get my first 100. I’m “scatter-gunning” my approach until then.

        Good luck with Nusii – will recommend to freelance friends. Looks useful :)
        Michael

  4. “it’s not our month on month growth that’s our biggest hinderance” – maybe grammer is? 😉

  5. To me, the hardest part is the test/check to finding your best channels. It sometimes feels like pushing a mountain goat up a hill with greased up shoes and a bum knee. Especially with a niche audience, reading, sorting, posting, content brainstorming, all while refining your own knowledge of content marketing by researching great articles like this one…well I feel like I live in a giant bucket.

    • Nathan Powell

      Wow, ye. Tell me about it. And of course it all takes time. You need to wait for results for each channel to see if it’s something worth pursuing. It’s no wonder that SaaS is so slow. Or any product for that matter.

      Thanks for dropping by!

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