4 Tips to Building a Bootstrapped SaaS Business
So you’re considering (or have even started) bootstrapping a SaaS business. Your entrepreneurial spirit is what makes the world go round, but it’s going to take a lot more than just spirit to build a viable, sustainable business. A level head, a sturdy heart, and a genuine curiosity to learn from your mistakes are some of the keystones in a successful journey and a transforming a company from being a startup to an enterprise.
To be completely straight — the odds are stacked against you. In fact, the term “pulling yourself up by your bootstraps” has been contorted into a phrase of self-built success through grit and determination, even though its original meaning implied an impossible task.
I assure you that bootstrapping a company is extremely possible, and below are a few tips and thoughts that might help you on your ever-changing journey.
Know your space, today and tomorrow
It’s imperative you have a strong understanding and knowledge of the space that your business is entering. You’ll want to know the current market opportunity, as well as which way this market is trending. Needless to say, it’s ideal to enter a market that’s still burgeoning, and essential for one to learn the skills needed to do so. However, disruption can hit any market at any time, so to complement your understanding of the financial opportunity, you should have a strong conviction as to where this market is headed from an offerings standpoint. How does your business change the way things work both today and tomorrow?
For us at Nifty, we entered the workflow market just as it began to boom. We have competition in every phase of a business’ lifecycle — public companies, wildly-funded startups, and long time privately held veterans. We view competition in the space as a good thing, as if our competitive moat is solely a barrier to entry in our market, then we’re asking to be disrupted down the line. We have conviction on how ease of use and project lifecycle consolidation steers daily workflows and believe that these principles outweigh having a feature-laden product whose crux is functionality above ergonomics.
While differentiating your company in a defined space comes with its own suite of challenges. If you’re solving a problem that you feel is currently unaddressed in the market, your challenge will lie more in communication than differentiation, as you likely need to craft the message that frames both the problem and solution for your target audience.
Triple your expected costs
Whatever you anticipate your business will cost you to reach break-even, triple it. Seriously. The costs of scaling development, server resources, app development technologies, achieving security certificates — the amount of expenses that you’ll incur are wide-ranging, and many of which may be totally unforeseen. Whether or not you ever wish to seek investment, you’ll definitely need some disposable capital in order to compete even in a relatively nascent market.
Knowing where, when, and how to invest your capital will be some of the post pivotal decisions you make on your journey. This isn’t to advocate being penny-wise and pound foolish. We’ve certainly had instances (especially during COVID) where a surge of new users forced us to spring for expensive server-side resources that we knew were a result of inefficient code. We elected to bite the bullet and run the inefficient setup to buy time for our technical team to optimize how our solution worked under the hood. The goal is that, while your team might be scrambling to better optimize your resources behind the scenes, your user base never suffers from performance hiccups as a result.
In addition to investing in your tech stack to meet your technical and scaling requirements, choosing the right tool to communicate and collaborate in as well as the right accounting software to manage your business financials are worthy investments that will make your product and team grow quicker and more efficiently.
When investing in growth, however, consider our next segment before launching head first into paid advertisements.
Content is king
Growth and acquisition shouldn’t start with paid marketing. It’s suicide. Trying to compete with others in your space (especially well-funded or public competition) is a race that’s heavily stacked in their favor. Instead, start by building a brand voice and school of thought through content marketing.
Content is dramatically less expensive and a sustainable way of driving web traffic to your site without needing to drain a budget and squeeze those leads into conversions. Identifying keywords that your buyer personas are using to search for you is a fantastic way to determine where to start your content journey. While many popular phrases and keywords will be quite competitive, there are always keywords that have a low volume with solid upside that you can carve out to establish a voice in your SEO presence.
In addition to promoting content, you’ll want to deploy a backlink strategy to boost your business website or blogs authority. By identifying other blogs, publications, and high quality content partnerships that can elevate your websites ranking (often in exchange for another backlink or by monetary incentives), your web traffic will grow in a scalable, genuine way. These efforts often take quite a bit of elbow grease, but can pay huge dividends as your website’s traffic is not at the mercy of your paid ad budget.
Tools such as Ahrefs and Keywords Everywhere are fantastic for helping you forge and execute your content and backlink strategy.
It would be a mistake to rely solely on written content however. Make sure you’re reaching your potential customers in the places they are most active, and with a content format they are likely to consume. Low-cost online video editing tools make it easy to make complimentary videos for your text content, which will not only make it more engaging, but could also lead to you being found on other platforms such as YouTube.
You can also create a list of subscribers and start sending them automated emails to keep them constantly engaged with your offerings and sharing educational material with them to have a better adoption rate of your product.
Play to your strengths
The martial art of Judo is predicated on using the momentum and weight of your opponent’s attacks against them. While you may be spending more time in your office than your dojo, the same philosophy can be applied when adapting your business to compete against larger, funded competition. Your agility can be your greatest strength if utilized properly, which is why every organization is looking to get more “agile”.
Your capacity to sit down and get to know prospective users, understand their frustrations with the problem you’ve set out to solve, as well as their specific gripes with your competition, can help steer your company to implement state-of-the-art concepts that resonate with user’s needs. Additionally, being a smaller, leaner company, you may be able to exploit gaps in the market that a competitor overlooks or cannot adequately service due to scale.
The crux of growth is understanding who converts on your platform, where they found or heard of you, and why they selected you. It goes with out saying that it is very important to have a simple online payment method so potential customers can check out on your website with ease as well.
ChartMogul is a graceful tool to help you track conversions as you grow by providing visibility as to who is purchasing. It’s encouraged to set up some calls with your early customers to achieve answers to the above questions so you can steer your content and product efforts in a direction in which your current and future customers will continue to find value. These calls will also help you have a greater understanding of your customer experience process and what can be improved on a product level at the earlier stages of your business. I have found ChartMogul an indispensable growth companion as it helps us chart our growth since even our formative days.
Understanding your customers helps you sharpen your buyer personas, which in turn helps you calibrate and focus your content strategy as well as paid acquisition when you’re ready to invest in paid growth.
In Summary
There’s an incredible amount that you’ll learn as you start or continue on your bootstrapped journey, but understanding the fundamentals of the space you’re entering, how to prepare for and intelligently select expenses, grow your marketing at a fraction of the price of paid promotion, and use your agility to your advantage for four critical insights that will help you avoid potential pitfalls and expedite inevitable growing pains.
In a world of perceived unicorns, growth can feel slow and painful, but building a business is a marathon, meaning you need to have your sights and expectations set on the long road and have a vision as to how you’ll eventually get there.
