7 Proven Ways to Create Profitable SaaS Ideas EVERY Time

0:00these days when a startup founder asks if they can tell me about their startup idea I say don't tell me your idea tell me what problem it solves especially when building B2B SAS you want to solve a problem that businesses need solved and are willing to pay for it in today's video I'm going to talk through seven ways to create profitable SAS ideas every time I'm Rob Walling a Serial entrepreneur with multiple exits I've written four books on entrepreneurship and I've invested in more than 125 startups so seven ways to create profitable SAS the first way alone has five different subparts so I'm kind of giving you some bonuses here the first

0:38approach is to find a problem since I just gave you the advice solve a problem the businesses need solved and are willing to pay for let's talk about five different ways to find a problem that is either currently unsolved or is poorly solved so that you can solve it really well here are the five most common ways I've seen Founders find unsolved problems including ways that I've used myself elf many of these are taken from page 16 of the 2022 state of Independence SAS survey that we run through microcom first way is to scratch your own itch this is encountering a problem in your own life or your

1:14business searching for a solution coming up dry and building it yourself examples of successful startups that have taken this approach include my own startup drip loadster.app which is a Tiny Seed company that does load testing WP engine which was started by Jason Cohen who you've seen in many videos on this channel as well as base camp which was what started in 2005 or six and that was really one of the foremost examples of someone who scratched their own itch to build something people want now the problem with scratch your own itch is some people think that's the only way to do it and if you're not your first

1:47customer then you shouldn't build a startup and I disagree it's just one of many ways approach number two is to find a problem at your day job so this is a variation of scratching your own itch but it involves seeing a problem your day job being unable to find a solution and deciding to go out on your own to fix it and at Tiny Seed which is my accelerator for SAS bootstrappers we have funded many companies that have seen a problem at their day job including companies like riemb deal Forma and ref tab the third approach is to try to solve a problem of a spouse a

2:18relative or a colleague so instead of scratching your own hitch it involves scratching the itch of someone you know SAS startups that I've seen formed using this exact approach include gather which is at gatherit dot Co churnbuster and moreaware software fourth way to find a problem is to have a poor customer experience and try to solve this with software so this is a lot less common than the approaches I mentioned above but this involves having a poor customer experience and deciding to fix it code submit did this they were formed out of the Founder's desire to never solve a contrived programming exercise during a job interview so they built code submit

2:56to help employers give better programming assignments and the fifth way to find problems to solve is one that isn't used by very many people it's to find a problem online which involves going to Facebook groups or core threads private slack groups product support forums and other online resources it can work but honestly it's a bit more challenging if you don't have someone invested in working with you on finding a solution to send problem only a few percent of our state of independent SAS respondents indicated that they have used this approach but if you can't make one of the other approaches in this video work it's always something you

3:30could try Okay so that was number one and that was kind of a blanket idea of solving a problem the second approach to finding amazing SAS ideas is to translate an existing idea to a new Niche so this involves taking a general tool that applies horizontally to anyone who who can use it and focusing it on a single vertical so this has been popular really since SAS emerged in the mid to late 2000s and this approach often called land and expand which is where you go into a single vertical and then later expand horizontally became popular when SAS became really easy to deliver right you could justify building

4:04scheduling software specifically for hair salons or specifically for gyms where you could build accounting software specifically for Freelancers or specifically for construction managers this wasn't really feasible in the days of boxed software that went into a retail store it was just too expensive to produce to Market and to distribute but with SAS we are able to take existing ideas and translate them into verticals so in 2009 Ruben gamma has launched bid sketch and it was proposal software made for designers there was already online proposal software before bitsketch but targeting designers allowed the founder to focus on aspects of the product that mattered most to his target audience and he gained quick

4:42Traction in that vertical later he landed and expanded into a general proposal tool for all verticals another example of this is a Tiny Seed company called Builder Prime they did this with great success by taking CRM and building it specifically for the Home Improvement industry and the founder Jonathan has had amazing success with his efforts the third way to come up with great SAS ideas is to think about entering a large space with hated competitors so while going head-to-head with a billion dollar company may sound like a Fool's errand Until you realize that most large companies are really bad at servicing their customers and they're often pretty

5:17bad at building software usually they charge too much their support isn't any good their products are garbage and this leaves a large opportunity for a young upstart like yourself to price reasonably provide amazing support and build a great product and all the while you're writing the coattails of the larger hated competitors this is what I did with my most recent startup trip I was drafting off of Marketo and pardot and Infusionsoft by offering self-serve pricing pricing ourselves below the competition having an incredibly usable product and offering amazing customer service and we used to steal a lot of customers from these big incumbents because people were unhappy and I used

5:53to call them refugees I'd say we get a lot of Infusionsoft refugees who are just tired of dealing with a crappy product and paying too much zero xero also did this against QuickBooks Shopify did it against Yahoo stores stripe did it against authorize.net and the other clunky online merchant account providers I make in almost any space which has large incumbents there is room for a couple fast-moving startups to succeed through Superior user experience pricing models support and positioning the fourth way to think about building great SAS ideas is to build on your network it's to think about who do I know in a space be that the dental industry

6:33Orthodontics oil wells in Texas or freelance developers and do I know people whether they could be customers or whether they could be influencers people that could help me spread the word and should I take advantage of that Network as I'm thinking about which ideas to build for my SAS you probably should a network is an advantage you can use to gain early product input when it's needed most as well as gain access to other people's audiences we watched Dan Martel do this when he launched clarity.fm which is now called clarity.com he had a strong network of startup Founders and marketing consultants that he was able to fill one

7:09side of the two-sided Marketplace and then all he had to do was go out and find people who wanted advice so we only had to fill the other side of that two-sided Marketplace a fifth approach for coming up with SAS ideas that can work is to enter a fast-growing ecosystem examples of this include building premium WordPress themes back in 2008 when ad PNR launched woo themes which later became woocommerce and then sold to automatic or when Josh Pigford launched a parametrics as a one-click stripe Analytics tool for subscription businesses he was late to the analytics space but he was early to the stripe analytics space when he launched in 2013

7:44and he later sold that company for almost five million dollars another wave that has been building for years maybe a decade you could say is podcasting and tools like castos which is podcast hosting and Squad cast which is studio quality podcast recording rode the popularity of those ecosystems to fast growth I'll say with this one the biggest drawback is finding a fast-growing ecosystem is hard and oftentimes by the time you've heard about it it's a little too far along and so you have to take a big gamble of launching early and hoping that the wave continues to grow at a pace that makes sense for you as a cautionary tale I

8:19want to talk about Derek Reimer who is the founder of savvical but the idea he was working on before this was called Static kit and it was a tool for static website Builders he was betting that static websites would grow similar to Wordpress in other words very quickly but after a year or two with little traction you wound up selling static kit for parts essentially and moved on to his next idea savvical which has been very successful for him so trying to be early to a space can be an advantage but it's also quite risky when you're gambling on the expected growth of a market approach number six for finding

8:52great SAS ideas is to build on an existing product that you already own if you have a product with paying customers you have a unique advantage over most Founders who are just starting out in this case it's well worth your time to determine what other problems you could be solving for your existing customer base whether by observing their behavior or through one-on-one conversations now I often see Indie hacker types getting a little ahead of their skis and they launch a product and it's not growing so they launch a second and a third and a fourth to the same audience sometimes you should just focus on the product

9:22that you're building but other times that first product is a step one business it's one that's not going to get into the millions in revenue and it's something that you may want to essentially use that audience to kick start the next idea that could be 5 10 20 times larger I have two examples of this Craig Hewitt did this with seriously simple podcasting which was a WordPress plugin that he built into a SAS product for podcast hosting that's called castos and so castos is a SAS business that is grown into a seven-figure ARR company really built on a small WordPress plugin and that WordPress plugin was never going to get

9:58into the million in Revenue but by building a complimentary tool that could serve more customers he was able to leverage his existing product and Ruben Gamez saw users of his proposal software bid sketch needing more advanced electronic signature functionality and so he decided to dive head along into the extremely competitive space with steinwell and he's crushing it these days competing against the likes of DocuSign hello sign and all the other incumbents you've seen in a minute I'm going to dive into the seventh and final way to come up with great SAS ideas before I do that microconf masterminds are something we match two maybe three times a year and it's one of the most

10:36successful offerings we've ever offered Mastermind matching will be opening the week that this video goes live if you want to find out more about how to be matched up with other Founders that are like-minded whether you are just at the idea stage whether you're doing literally millions in ARR head to microconf.com masterminds we are approaching 1 000 matches across I forget the number 50 60 countries involving 150 200 million dollars in Combined ARR we've had a lot of success with this program for more info head to microconf.com masterminds applications open on May 3rd applications close on May 12th and matches will be set by May 17th you don't want to miss out every

11:19time we do these matches someone comes in two or three days after the applications close and begs us to let them in and unfortunately we can't so head to microgroft.com masterminds if you have any inkling of wanting to be matched up in a small group of other like-minded startup Founders and finally the seventh way to find great SAS ideas is to look at ways you've spent money at your day job this is such a simple yet an underused approach if you've run a business or you've worked at a day job you've likely been exposed to the large number of subscriptions that you're paying for on a monthly basis these are

11:50things like task management issue tracking email clients scheduling software slack whatever else Communication email when Derek Reimer who started savvical when he was look looking for his next act after moving on from his startup he made a list of all the SAS subscriptions that we were paying for while running that company one of them was calendly the handy scheduling link that we used for customers to schedule calls with our customer success team and so looking for a large proven Market where he could use his product shops to innovate Derek launched Savvy cow and gained quick traction another example of this is Jordan Gaul had an e-commerce business

12:23and when he went looking for his next business idea he looked at all the things he was paying for and he recalled paying quite a bit of money for abandoned cart software that emailed customers who filled a cart but didn't check out the software was not good but the results which were increased sales were noticeable to him he wanted to be close to the money so he started cart hook which was abandoned cart software with a better user experience he later pivoted that company to post purchase upsells and he exited cartook last year after building a great business on the back of this relatively simple idea if

12:54you have startup ideas in your head or you've come up with one using one or more of the ideas I presented in this video your next step should be to validate and to do that check out this video to see my step-by-step process to validate that you are actually solving a problem the businesses are willing to pay for