Thursday, October 11, 2018

5 Steps To Transform Your Service-Based Side Hustle Into A SaaS Startup

The astonishing growth of cloud-based technology has resulted in the explosion of SaaS (Software as a Service) becoming a multibillion-dollar industry. From managing sales leads to organizing your personal finances, SaaS tools plays a key role in countless organizations.

As such, it should hardly be surprising that many entrepreneurs and programers have decided to throw their hats into this potentially lucrative space. A few weeks ago, I was fortunate enough to speak with one such person who's turned a software tool originally built for personal use, into a thriving SaaS startup—Josh Pigford, the founder of Baremetrics.

During our conversation, Pigford revealed some great insights into what helped his company become successful today—and how you too, may be able to grow your own service-based side business into a scalable startup.

1. Build For Yourself

SaaS products won’t become successful if they don’t address actual customer pain points—and there are few better ways to know you’re achieving this than by building software that addresses your own needs first. This way, you’re not just guessing that others will be interested in your software.

“I was just building something internally for me, and then I mentioned it to some other founders I knew, and they said, ‘Hey, we need the exact same thing,’” Pigford recalls. “I just built what I needed at the time. That was how I kept it focused—I worked on it until it did what I needed it to do.”

2. Create Strategically And Solve Individual Needs

Many SaaS tools eventually become seen as a commodity—but because of this, it can become all too easy for your side hustle to simply get lost amongst the crowd of other tools attempting to offer the same service. To truly stand out in the marketplace, you need to emphasize the strategic elements of your software, and (in the early days) be willing to assist individual customers with fine-tuning certain elements of their strategy as well.

Pigford is not alone in this assessment, either. As fellow podcast guest Junaid Shams, cofounder of mobile payment app Rooam also shared with me, “Anybody can design an app or program. The days when you could make money simply by contributing to the pool of software are long gone—now you have to actively add value to specific customers’ business models.”

Producing a helpful software product is one thing. But by emphasizing the strategic benefits your tool has to offer, you’ll craft a much more persuasive pitch that actually encourages new users to sign up.

3. Charge Money To Get Better Feedback

When you first start marketing your software, it can be tempting to offer it for free, so more people will join and give you feedback about what works (and what doesn’t).

Yet as Pigford explains, this is actually the wrong strategy if you want to gain insights that will build a successful SaaS business. “Start charging for it right away. Don’t hesitate to ask people to pay for what you’re building. Otherwise, the feedback you’re getting will be from people who aren’t necessarily willing to pay for it anyway… and you don’t want to build stuff for those people.”

Build your product for those who are willing to pay for it—otherwise, you’ll just waste time adapting your software model for people who wouldn’t pay anyway.

4. Get Social

If you think Twitter and other social media platforms are a waste of time, think again.

“Most of my first customers came from just talking about my service on Twitter,” says Pigford. By consistently sharing information with his followers (who were mostly entrepreneurs themselves), Pigford was able to generate social media shares and word-of-mouth referrals to build his initial group of customers.

Pigford’s social media posting is also notable because it wasn’t directly self-promotional, he never asked for email signups or purchases. Instead, by posting screenshots and explaining what he was working on, he was able to build enough interest in his software for a successful launch.

Never underestimate the power of engaging with others online. Building your social media presence now—and forging relationships with your future target customers—can pay big dividends once you’re ready to launch your software.

5. Build A Strong Referral Model

Of course, you’re not going to find all of your customers on Twitter. In the early stages, when you don’t have much of a marketing budget, if you have any marketing budget at all, you’ll largely rely on word of mouth to grow your brand.

As Arash Asli of the Forbes Technology Council explains, “Reviews matter to customers when choosing which SaaS business is best, but word-of-mouth referrals are typically what generate the best results, with 82% of consumers saying they want recommendations from family, colleagues and friends about considering buying products and services.”

The easier you make it for your current customers to make referrals, the faster you’ll be able to grow your SaaS startup. Incentives like a promotional discount or free access to additional software features will go a long way in motivating your current customers to offer up referrals.

Begin The Transformation

The right software can transform lives and businesses—and of course, help you achieve your own pursuits toward financial freedom in the process.

Regardless of whether you’re still in college or working on your own business after getting from work every evening, implementing these steps can help take your projects from side hustle to rapidly growing SaaS product.

Image Credit: How Baremetrics founder Josh Pigford transitioned from running a service-based side hustle, to growing a seven-figure SaaS startup. JOSH PIGFORD

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