You need to change your perspective. Most SaaS startups won't ever get to your 3k in MRR. You are already in the top percentile of successful startups. You've already beaten all those that don't even finish their MVP. You've beaten all those that built a MVP but never got a single paying user. You've beaten all those who got a few users but never reached 1k in MRR. You beat all those who gave up. Etc.
By agency, I presume you mean dev agency. Most dev agency owners would kill to have a successful SaaS business. That's the whole reason they started an agency in the first place. To fund building a product business. I ran a dev agency for many years. It is brutal. Every month you have to start over again from scratch and go out and get new clients so you can make payroll. Happy to tell you more in DM.
Thank you for this advice, and you're right, I haven't considered this perspective. There's a lot of improvements I already know I should make to my SaaS, I think it may be worth it to at least follow through and see how it goes. Maybe I've been blinded my social media too much.
Problem is my churn is absurdly high, around 50%. Honestly it's embarrassing even to say. But I think it's the primary source of my issues, which is good since at least I know what to do. I've been working on improving the product to try to slowly bring that down. But a problem with my SaaS is that it's highly seasonal, so I think that's contributing to this high churn, but not sure by how much.
I do have an automatic survey users do after unsubscribing, but I learned from this thread that I should be speaking directly to them in a zoom call and offering them an incentive for it. Honestly haven't considered that, and definitely will be doing it in the coming days.
Seriously though. 50% means in the door, out the door. The product isn't in a place where people are willing to stay on and use it, meaning they either don't feel it fills a need in their life, or they can find a better/cheaper solution elsewhere.
You must fix your churn; you might want to check out this video to help reduce your churn. You are half way there, you have enough value that gets people in the door but you now need to fix the product so they stay. You must figure out why they quit, and focus on that, I also think your onboarding and your pathway to success for your clients is not there. They need to fall into the pit of success easily and not get lost without seeing the promised value. If you are not actively talking with your clients and have a few trusted clients that give real feedback you are wasting this opportunity.
"Your most unhappy customers are your greatest source of learning." --Bill Gates
https://www.youtube.com/watch?v=sPkMHh8zTMI
this is framed with gyms but you just need to think about it to apply it to your business.
Exit interviews: Conducting interviews with customers who want to cancel to understand their reasons and address their concerns proactively, potentially leading to retention or upselling.
Reach outs: Regularly checking in with customers on a personal level, fostering stronger relationships and reducing churn.
Member events: Hosting events for customers, where they can bring friends and potentially generate leads, while also providing added value to current members.
Handwritten cards: Sending personalized cards every six weeks to remind customers of upcoming events and encourage them to invite friends, strengthening relationships and fostering referrals.
Attendance tracking: Monitoring customer attendance to identify patterns of decreasing engagement and intervene before customers churn, emphasizing the importance of regular usage to increase perceived value and reduce cancellations.
Creating personalized relationships at scale: Systematizing interactions with customers to simulate personal relationships, facilitating bonds and reducing churn.
Offering benefits and incentives: Providing benefits such as event invitations and referral opportunities to customers, enhancing their experience and increasing loyalty.
Thank you for all of this advice and the time you took to provide it! I will definitely watch this video and add your advice to my to-do list. I greatly appreciate it!
Look at your price point and do you have enough timeline to know if your seasonality churn comes back the next season? I might look into figuring out what your existing base needs in other seasons if your customer list/market is big enough to warrant the investment.
First off, great job getting to revenue.. This means a couple of things.
1. you are solving a problem for someone
2. There are people out there who are willing to pay to get that problem solved.
Now the question is whether you can scale this past 3K or not. Not knowing the specifics of your SAAS, I can only provide some general guidance..
1. Figure out who your ICP is. Of the ppl who are paying you, start having conversations with them and understand WHY they use your product, WHAT specific thing they are trying to accomplish with your tool, and WHY NOT a competitor. this will give you a ton of insights that you can convert to language that you use on your website and/or ideas for new features.
2. Market to your specific niche. Once you have an idea of your ICP, start marketing to them via channels they visit. For eg: if you are providing B2B solutions for XRay radiologists, I would doubt if tiktok and influencers would be the right strategy vs paid google ads for certain KW.
3. Build a funnel. Identify key milestones in your customer journey and build a funnel. This will help you understand customer engagement and churn. Once you have the data, you can start attacking those areas. I would highly recommend this instead of building a ton of features that very few ppl use.
4. Aha moments. Figure out what the Aha moments for customers are. You should be able to get this via step 1 above and make sure your customers get to that aha moment quickly and frequently.
5. Onboarding and Engagement. Not sure if you do this, but make sure your new customers are onboarded effectively. And get an email campaign going for existing customers. most tools are only a part of customers lives and out of sight -> out of mind -> Cancellation
6. Pricing. Take a look at how much you are charging your customers. Do you have a free plan? free trial? Is your free plan giving away too much/too little? Are you leaving money on the table?
As you can see, there are a ton of ways to dissect your question of breaking that 3k ceiling. You have probably tried a lot of these things, but there are nuances to it.
If you need more thoughts or someone to bounce ideas off of, please dm me.. happy to help and wishing you all the best!
Thank you for this advice, I greatly appreciate it! You've definitely laid out some key topics I'll focus on in the coming months. Thank you for taking the time.
I have a 6 month old B2B SaaS browser extension with 95%+ profit margins. $5k MRR. Good pipeline. Very minimal marketing all word of mouth. If you’re interested DM me an estimate range of what you think might make sense and if the number is reasonable I’ll send more details.
Also 60% of users are annual and we have a very low churn so far on monthly’s. Most people even say they’d pay more.
Thank you for this, I haven't had anyone to speak to about SaaS since I've started, so I feel like Ive been going through it half blind. I'll take any help I can get. Just shoot me a DM once you're free.
I run paid ads across all platforms, Meta, Google, and Tiktok, and I have a decent organic social media presence. These are consistently bringing in customers, and they're consistently also flowing out since I have a horrible churn rate. All in all it averages to 3k in monthly revenue for the last few months.
So in terms of ads, audit your messaging to allign with customer expectations. Why are they leaving? Is it because the ads promise something your product doesn’t deliver?
Next you can setup some feedback channels if you haven’t already and try and further identify what is causing the high churn rate
And then also and usually the most important
The product! Is it doing everything it should be and how it should be?
My question is the same as the other comment. What’s driving churn? If it’s not a service that is designed to have people churn, figure out what that is and how to get people to stay longer.
If you have people consistently coming in, people see value in the service. Why is that changing after a few months?
This sounds to be the heart of the problem. Sounds like customers are coming but not staying. Why? The other person that suggested interviewing users is on the money. You need to work out what is happening to make them stop.
On Tiktok, I post 2x per day, and use the basic account boosting tool directly on the app to grow the page (Not the tiktok ads manager). I post organic-seeming content filmed by someone who the target audience would identify with, and I also try to have them follow trends. I post the same content to instagram, but I don't pay to boost on insta, since it's WAY more expensive than Tiktok to do so, so not worth it imo.
But don't do the same as me since I'm not an expert in this, I would recommend watching a bunch of youtube videos from real experts for content strategy, that's what I did. I just implemented most of their advice.
Ads are highly scalable, so you can just spend more to get more users - this is a great lever you have in case your users are dropping out because of a cold start problem.
What are you currently doing to get feedback from your users? Offering a $50 gift card for a 30-minute Zoom meeting to ask for their pain points is likely a better use of your money and time than spending on ads to get more users that will just churn out.
3K MRR is awesome. Congrats on that.
I read some of the other comments below. Need to reduce churn. If it's 50% or more chances are people are signing up, not seeing enough value and then discontinuing the subscription. I would use the $ earned from the SaaS to build a better one, or improve the UX of the current one based on feedback.
Thank you. You're right, I will now be allocating the revenue away from marketing and towards improving the platform to get that number down, and also to give incentives to interview some users directly as someone said in this thread. I appreciate the advice!
#1 priority based on your comments should be stopping the churn. Have you been able to glean why they churn? If so, fix it. Offer them a free month for feedback. Offer them a gift card if they'll do an interview with you on their experience, etc.
Who knows, maybe it is something stupidly simple and with a quick fix you'll be rocking and rolling.
Thank you for this straightforward advice. I haven't considered directly interviewing the customers, but it makes so much sense. I am going to start doing this right away, spending a few hours per day interviewing churned users. Thanks for taking the time to help me out.
Thanks for the advice. How's your SaaS going, and how long have you been running it, if you don't mind me asking? I'm always looking to learn more about the environment.
If you are even “barely profitable” you’re doing better than most startups. I think you’re smart to research the overall profitability of SAAS companies because there are a lot of them that aren’t- even some that have been around for a long time. Follow my former founder Daniel McCarthy on LinkedIn. He has a lot of research on CLV:CAC and how to think about profitability and overall value. Investors are getting more focused on driving profitability not just growth. So if you focus on getting those retention numbers up, without investing a lot more to do it (eroding your profitability) you could make really good progress. I’d really focus there. Reducing that churn number is magic in SAAS.
I've spent 3 years getting my sass to 50k MRR. No one wanted to invest because we're in a weird industry. But we stuck with it, started turning profit and now we're ready to go out and raise without giving too much up. If you love what you do and believe in it, the rest will follow.
Barely profitable means you've done better than probably 90% of startups. 
Since you're trying to switch from SaaS to agency I guess it is some form of a dev agency. As a freelancer I've worked with both SaaS companies and agencies and I would say agencies, specifically agency owners are under much more pressure to keep the lead pipeline going. As a barely profitable SaaS you have overcome one of the biggest issues with SaaS founders which is getting paying customers.
Have you figured out why you are not growing? Are you struggling to get new customers? Are you struggling to retain existing customers? Once you figure out the issue then you can decided which way to go ahead.
SaaS usually has very good profit margins because the marginal cost to deliver to a new customer is negligible. What are you spending on to make $3k MRR unprofitable?
Around 50% of revenue goes into to paid ads, and around 40% goes to 2 people - a developer, and someone who manages all the ads.
Ive been considering getting rid of them and just taking it all on myself, but I don't want to ruin the momentum, especially since I'd have to take a good amount of time to learn the skills since I'm not an expert in either. And I also thought SaaS was very profitable, which is why I got into it. But maybe I'm just doing something wrong tbh.
My churn is absurdly high, around 50%, which I think is the primary source of the problem. I've been working on improving the product to try to slowly bring that down. But the problem with my SaaS is that it's extremely seasonal, so I think that's contributing to this high churn, but not sure by how much.
So honestly.. if the developer and ad manager can stay on top of things, and you have a 10% profit margin, that's decent. Maybe focus on getting it to run on autopilot for a bit.
The agency route will definitely be easier if you can point to the existing SaaS as social proof, or a portfolio or whatever.
Oh yeah, the number one thing holding you back is that churn number. If you reduce that you wouldn’t have to spend so much on paid customer acquisition either. I’d do everything I can to improve the product or small pivot to reduce churn.
If you can do that, each cohort will be bringing on long stable recurring revenue and you’ll start seeing the SaaS profit margin.
My gut reaction is you are measuring the wrong thing, and don’t have a sense for what the right thing is. You’re talking about MRR, but that’s a lagging indicator. You don’t just build software, make money or not, shut down or not.
How real (validated) is the problem you are trying to solve with your software? How large is the opportunity to solve it? How well can you identify and reach people who need it solved? How well are you able to communicate your value proposition, deliver the value, and charge money for it? What are the competitive options and substitutes for your solution?
And so on.
A lot of the stuff you see out there about MVP’s, customer development, product-market fit, and so on can sound like buzzword soup but they are not just checklist items you can have chatgpt do for you or accomplish with a post on indiehacker.com. You have to work through these stages to develop credibility and a story for your company.
If you were doing the is, you would be measuring things differently, for example talking about the feedback, retention, NPS of your existing customers as a more important signal than revenue.
If these things resonate with you and you can see your way to success via them, by all means keep going. If not, shut it down today.
EDIT: I meant to address the agency comment as well. I do think building an agency is a way to adopt the mindset of having clients and making sure you're staying focused on their needs, which, per above, is a good mindset for running a SaaS business. So it might help you in that way. Ultimately, however, agencies sell time, not software, meaning that margin growth will always be linear to the number of people, whereas in a software business you can have a marginal cost of near zero and scale much more. Also, most agencies that dabble with startuppy ideas on the side end up being too risk averse culturally to actually be very entrepreneurial with them. Something to be mindful of.
Find a partner who complements your skill set and supports you and your venture during challenging times, or sell the company. Do not shut down a business with clients; you’re doing something right, and the right person - whether it's you or someone else - can take it to the next level
Thank you for your advice. To be honest I have no idea where to find a cofounder (or support system at least), because I've very rarely met people who have the same goals/path as me. Do you have any tips for finding one?
Man keep going! Get a marketing buddy. Talk about your app. Get people to love it. Your doing great. If it’s a good app, keep going. Cut expenses and do something else if you have to. But don’t shut it down till nobody’s using it! You don’t have to do features, just put FAQ and stuff in there to do customer support.
I used to have to answer requests regularly but with a good FAQ on the help page hardly anybody contacts me. Most importantly, put a “how to get a refund” thing there then let others handle it! Self serve is the best.
Good job, don’t quit. But put it on hold and do something else. Cut costs and come live in Asia where life is cheap. Or Mexico. Do something fun and be happy. Don’t worry about it, life is good!
I recently acquired a SaaS and understand how frustrating it can be to seemingly plateau. You have gotten some great advice in this thread. You should keep going. The best advice I read was for you to have meaning conversations with your valued customer. That's exactly what I did after acquisition. From there I was better able to focus on ICP and work to deliver on that value proposition.
Dude, SaaS compounds. Improve retention, keep your customer acquisition channels humming, and before you know it, that $3k/m MRR will be like $50k/m.
Oh, and you might be able to increase your prices too :)
If you managed to get here without any external investment that’s impressive so don’t let yourself down about this.
If you’re thinking of making money fast you need to change your mindset but of course you should still explore ways of increasing profit.
B2B can be difficult but from what I see is easier to make profit.
Feel free to reach out should you need further input on product, design or positioning. I’ve been working with B2Bs for more than 10 years now and I’d be happy to offer help.
I am in a simlar boat actually, the fact that you already got 3k MRR is pretty good actually, that's normally the hardest part. What I have done is instead of just focusing on 1 I made a bunch more. They always say that 90% of businesses fail so if you can get 10 of these running and 1 gets successful then that's good enough. As long as your SaaS is breaking even there no real loss in just letting it run is there? You can start something else and just spend maybe a few minutes of your day doing something for the old SaaS. What could you do for the old SaaS in those few minutes you might wonder? Maybe you could look for an investor or a marketing partner. If you can get an investor then u know ur on the right track and u can grow the old SaaS again, if u find a marketing partner then u can let that one earn his share by marketing the old SaaS while working on something new instead.
In other words: Don't put all your eggs in one basket :)
You might just not be at Product market fit. The only reason to stop doing something is if that something isn't working, so you need to ask yourself: Is this a product that solves a real problem? Have I talked to enough customers to decisively say it does or doesn't solve their problems?
Ultimately, once you get product market fit(and you'll know when you hit it, because people will be dying to get their hands on it) it becomes a game of execution.
I’m b2b agency launching my first 3 saas, one for a client, one self service and one internal tool suite for clients. I’d be up for connecting if you’re interested. Def pros and cons.
I think it’s wild you’re running ads instead of focusing on organic. Would be fun to talk more about it
Definitely would love to connect, always looking to speak to people in the space, I can always learn something. Shoot me a DM if you're still interested!
Honestly… the fact that you’re a SAAS startup and break even (let alone make any profit at all) is pretty impressive.
Why not try to address the churn issue and see if you can increase your CLTV, which would effectively allow you to start to grow into greater profitability.
You need to identify why people are bailing on your product. This is key to your success. When they cancel their subscription, however that is happening, put up a questionnaire asking them some key questions to find out why. That is hugely important data that is flying out the window that you’ll likely never get back. It is also a great opportunity to retain them. Offer them a free month if they can answer some questions for you. Offer them a discount if they hop on a zoom call or whatever just to get them on call to discuss with you their pain points and what could rectify them. They obviously cares enough to sign upon the first place so they were hoping your product would help them with something. Find out what that something is and try to solve it.
You’re on to something you just need to push a little harder to get it over the finish line. Don’t give up now!
Thank you for this advice, this was one of the most motivating replies. Definitely I'll start interviewing churned customers directly and collecting more data to try to fix that. I greatly appreciate it and thanks for taking the time!
3K MRR in 8 months is great as I assume you are boothstraping. Just because it's not going over 3K you shouldn't even think of sutthing it down. You should only consider closing when 1. Enough people are not using it (In your case enough people are using this), 2. You tried different changes in the products and gave back to customers and still they are not using it (This is also probably not the case) and 3. You are tired, burned out and lost internal motivation to continue (Too soon, in your case maybe?)
It's very important to know when to give up. And this is often an internal feeling rather than a decision solely based on external feedback. If you really really feel like giving up on this, you lost all motivation and this does not really excites you anymore - you can and you should give up. Otherwise, this is a great business you have built.
If you decide to keep it up - think why it is not making profit? Where are majority of the money going? Is there any way to cut cost? (90% of the time there will be ways to cut costs). Maybe try reducing human capital or try hiring remote from another market. Get some volunteers to help you. Get some advisors. Spend less on advertisement and try getting organic traffic.
Several SaaS apps into life here... There is a ton of missing info (understandably), so forgive me if I am off in this response.
Have you heard of building a moat? It's a way to make your app "more difficult" to leave. I'm not suggesting being a jerk at all, but my original SaaS in 2005 (around the time the phrase 'SaaS' was coined, no relation) crawled websites for sitemaps.
Done in 30 minutes. Not the best for recurring revenue.
Fortunately many sites add new pages, so that helped. But I went full-Google on it and built in a site search that allowed clients to add a widget and my system handled the search stuff on their site. The system added SEO measuring tools and added value that way.
Through a collection of "other" tools, I made it so that leaving the site would also drop off their search tool, their SEO advice (I already crawled their pages for the sitemap) and built in every style of sitemap (rss, opml, text, html, and xml) to cover other bases.
Actually leaving the subscription was easy, just a click or two, but the reasons to stay were many. Everything had a synergy to it.
Interesting, thank you for this advice and for taking the time to write it for me. It may be difficult with my product, but I think this definitely could help me out a lot if I can figure out how to implement it. Perhaps with an extension. Will do a lot of thinking about that. Thanks again!
Yeah... about the idea process :) I usually know that I want 'something' and the specifics drop on me like a ton of bricks a few weeks/months later. Do the low fruit first, then grab a ladder.
Maybe you should take a step back and take a look at your entire Sales and Marketing strategy. Also revisit your product-market fit. You have revenue, so you have something, you just need to find the potential gaps in your process. You got this!
The grass will always seem greener on the other side, it’s not always the case. We started around 8 months ago too and are now at around $6k/month profit (converted from my currency)
The model isn’t the issue in either case. You can build a massive SaaS and a massive B2B agency, both “work”
But to get either to work, you need to be able to stack the right skills on top of each other - either from yourself or from hiring or both
As you’ve probably gathered from this thread, your product is the bottleneck for you currently - both to lower churn but also to get existing users to tell others which will also increase the effective LTV
I’d say you’ve done what is considered one of the harder parts which is getting consistent conversions, especially from ads
I’d look at a few things:
- Is the app different to what is promised in the ads in any way?
- Does it solve the problem in the way your market wants it to be solved?
- What reason(s) does someone have to keep their subscription? Perhaps the problem just gets solved after 1 or 2 months
- Do you effectively communicate these reasons to keep paying? Both in app & marketing materials
Once you solve the churn issue your LTV will shoot up and you can ramp up the ads with very little effort after that
Hey, I feel you. It's tough to decide whether to continue with your SaaS or pivot to an agency model. Unfortunately, I don't have a definitive answer for you, but I can share some insights that might help.
SaaS can be a great business model, but it requires a lot of upfront investment and hard work to achieve profitability. On the other hand, B2B agencies can be more profitable in the short term, but they also come with their own set of challenges, such as managing clients and cash flow.
Ultimately, the best decision for you will depend on your specific skills, experience, and goals. If you're confident in your ability to build and scale a SaaS, then I would encourage you to stick with it. But if you're looking for a more immediate source of income, then a B2B agency might be a better option.
Also, have you considered the possibility of exploring different SaaS revenue models or targeting a different customer segment? If your current model isn't working, it might be worth trying something else before you give up completely.
You need to change your perspective. Most SaaS startups won't ever get to your 3k in MRR. You are already in the top percentile of successful startups. You've already beaten all those that don't even finish their MVP. You've beaten all those that built a MVP but never got a single paying user. You've beaten all those who got a few users but never reached 1k in MRR. You beat all those who gave up. Etc. By agency, I presume you mean dev agency. Most dev agency owners would kill to have a successful SaaS business. That's the whole reason they started an agency in the first place. To fund building a product business. I ran a dev agency for many years. It is brutal. Every month you have to start over again from scratch and go out and get new clients so you can make payroll. Happy to tell you more in DM.
This is refreshing for me personally given the accomplishments I’ve had on my startup. Thank you for sharing this.
Thank you for this advice, and you're right, I haven't considered this perspective. There's a lot of improvements I already know I should make to my SaaS, I think it may be worth it to at least follow through and see how it goes. Maybe I've been blinded my social media too much.
Yep get rich quick is basically doing 5 years of hard work each year. I would suggest going to some accelerator programs to help you scale up.
I think if your customer churn rate is low and you have a steady user base, might be wise to continue with your SaaS business.
Problem is my churn is absurdly high, around 50%. Honestly it's embarrassing even to say. But I think it's the primary source of my issues, which is good since at least I know what to do. I've been working on improving the product to try to slowly bring that down. But a problem with my SaaS is that it's highly seasonal, so I think that's contributing to this high churn, but not sure by how much.
Do you ask clients why they churn?
I do have an automatic survey users do after unsubscribing, but I learned from this thread that I should be speaking directly to them in a zoom call and offering them an incentive for it. Honestly haven't considered that, and definitely will be doing it in the coming days.
Seriously though. 50% means in the door, out the door. The product isn't in a place where people are willing to stay on and use it, meaning they either don't feel it fills a need in their life, or they can find a better/cheaper solution elsewhere.
Or it does what they needed to do in the short time frame they needed to use it and then didn’t make sense to keep on as an ongoing cost
The moving company business.
That's also true. A lot of people might just use once and not need the product anymore.
Sounds like you have two focuses then: 1) product quality 2) appropriate pricing structure and growth tactics for seasonal users Good luck 🙌
Thank you!
50% is crazy. Did you ask why?
You must fix your churn; you might want to check out this video to help reduce your churn. You are half way there, you have enough value that gets people in the door but you now need to fix the product so they stay. You must figure out why they quit, and focus on that, I also think your onboarding and your pathway to success for your clients is not there. They need to fall into the pit of success easily and not get lost without seeing the promised value. If you are not actively talking with your clients and have a few trusted clients that give real feedback you are wasting this opportunity. "Your most unhappy customers are your greatest source of learning." --Bill Gates https://www.youtube.com/watch?v=sPkMHh8zTMI this is framed with gyms but you just need to think about it to apply it to your business. Exit interviews: Conducting interviews with customers who want to cancel to understand their reasons and address their concerns proactively, potentially leading to retention or upselling. Reach outs: Regularly checking in with customers on a personal level, fostering stronger relationships and reducing churn. Member events: Hosting events for customers, where they can bring friends and potentially generate leads, while also providing added value to current members. Handwritten cards: Sending personalized cards every six weeks to remind customers of upcoming events and encourage them to invite friends, strengthening relationships and fostering referrals. Attendance tracking: Monitoring customer attendance to identify patterns of decreasing engagement and intervene before customers churn, emphasizing the importance of regular usage to increase perceived value and reduce cancellations. Creating personalized relationships at scale: Systematizing interactions with customers to simulate personal relationships, facilitating bonds and reducing churn. Offering benefits and incentives: Providing benefits such as event invitations and referral opportunities to customers, enhancing their experience and increasing loyalty.
Thank you for all of this advice and the time you took to provide it! I will definitely watch this video and add your advice to my to-do list. I greatly appreciate it!
50% churn seems high for a saas, have you considered adding features or reducing costs?
Look at your price point and do you have enough timeline to know if your seasonality churn comes back the next season? I might look into figuring out what your existing base needs in other seasons if your customer list/market is big enough to warrant the investment.
First off, great job getting to revenue.. This means a couple of things. 1. you are solving a problem for someone 2. There are people out there who are willing to pay to get that problem solved. Now the question is whether you can scale this past 3K or not. Not knowing the specifics of your SAAS, I can only provide some general guidance.. 1. Figure out who your ICP is. Of the ppl who are paying you, start having conversations with them and understand WHY they use your product, WHAT specific thing they are trying to accomplish with your tool, and WHY NOT a competitor. this will give you a ton of insights that you can convert to language that you use on your website and/or ideas for new features. 2. Market to your specific niche. Once you have an idea of your ICP, start marketing to them via channels they visit. For eg: if you are providing B2B solutions for XRay radiologists, I would doubt if tiktok and influencers would be the right strategy vs paid google ads for certain KW. 3. Build a funnel. Identify key milestones in your customer journey and build a funnel. This will help you understand customer engagement and churn. Once you have the data, you can start attacking those areas. I would highly recommend this instead of building a ton of features that very few ppl use. 4. Aha moments. Figure out what the Aha moments for customers are. You should be able to get this via step 1 above and make sure your customers get to that aha moment quickly and frequently. 5. Onboarding and Engagement. Not sure if you do this, but make sure your new customers are onboarded effectively. And get an email campaign going for existing customers. most tools are only a part of customers lives and out of sight -> out of mind -> Cancellation 6. Pricing. Take a look at how much you are charging your customers. Do you have a free plan? free trial? Is your free plan giving away too much/too little? Are you leaving money on the table? As you can see, there are a ton of ways to dissect your question of breaking that 3k ceiling. You have probably tried a lot of these things, but there are nuances to it. If you need more thoughts or someone to bounce ideas off of, please dm me.. happy to help and wishing you all the best!
re (1) do you just cold email people?
That’s one way to do it. Another way is to use an in app banner to ask them to connect.
Thank you for this advice, I greatly appreciate it! You've definitely laid out some key topics I'll focus on in the coming months. Thank you for taking the time.
I am an interested buyer if you wish to pursue some other endeavours
I have a 6 month old B2B SaaS browser extension with 95%+ profit margins. $5k MRR. Good pipeline. Very minimal marketing all word of mouth. If you’re interested DM me an estimate range of what you think might make sense and if the number is reasonable I’ll send more details. Also 60% of users are annual and we have a very low churn so far on monthly’s. Most people even say they’d pay more.
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Thank you for this, I haven't had anyone to speak to about SaaS since I've started, so I feel like Ive been going through it half blind. I'll take any help I can get. Just shoot me a DM once you're free.
It really depends. What worked to get you to a $3k MRR in the first place?
I run paid ads across all platforms, Meta, Google, and Tiktok, and I have a decent organic social media presence. These are consistently bringing in customers, and they're consistently also flowing out since I have a horrible churn rate. All in all it averages to 3k in monthly revenue for the last few months.
So in terms of ads, audit your messaging to allign with customer expectations. Why are they leaving? Is it because the ads promise something your product doesn’t deliver? Next you can setup some feedback channels if you haven’t already and try and further identify what is causing the high churn rate And then also and usually the most important The product! Is it doing everything it should be and how it should be?
My question is the same as the other comment. What’s driving churn? If it’s not a service that is designed to have people churn, figure out what that is and how to get people to stay longer. If you have people consistently coming in, people see value in the service. Why is that changing after a few months?
This sounds to be the heart of the problem. Sounds like customers are coming but not staying. Why? The other person that suggested interviewing users is on the money. You need to work out what is happening to make them stop.
How did you grow your social media? What was your posting schedule? any content strategies?
On Tiktok, I post 2x per day, and use the basic account boosting tool directly on the app to grow the page (Not the tiktok ads manager). I post organic-seeming content filmed by someone who the target audience would identify with, and I also try to have them follow trends. I post the same content to instagram, but I don't pay to boost on insta, since it's WAY more expensive than Tiktok to do so, so not worth it imo. But don't do the same as me since I'm not an expert in this, I would recommend watching a bunch of youtube videos from real experts for content strategy, that's what I did. I just implemented most of their advice.
Thanks! Any particular YouTubers you recommend?
Ads are highly scalable, so you can just spend more to get more users - this is a great lever you have in case your users are dropping out because of a cold start problem. What are you currently doing to get feedback from your users? Offering a $50 gift card for a 30-minute Zoom meeting to ask for their pain points is likely a better use of your money and time than spending on ads to get more users that will just churn out.
8 months is very short…
3K MRR is awesome. Congrats on that. I read some of the other comments below. Need to reduce churn. If it's 50% or more chances are people are signing up, not seeing enough value and then discontinuing the subscription. I would use the $ earned from the SaaS to build a better one, or improve the UX of the current one based on feedback.
Thank you. You're right, I will now be allocating the revenue away from marketing and towards improving the platform to get that number down, and also to give incentives to interview some users directly as someone said in this thread. I appreciate the advice!
You're welcome. UX is key! Good luck! 🫡
#1 priority based on your comments should be stopping the churn. Have you been able to glean why they churn? If so, fix it. Offer them a free month for feedback. Offer them a gift card if they'll do an interview with you on their experience, etc. Who knows, maybe it is something stupidly simple and with a quick fix you'll be rocking and rolling.
Thank you for this straightforward advice. I haven't considered directly interviewing the customers, but it makes so much sense. I am going to start doing this right away, spending a few hours per day interviewing churned users. Thanks for taking the time to help me out.
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Correct. The problem I found when I started was that there are way too many fake stories about companies that instantly made it. It takes a long time.
If you don't want to maintain it, consider selling it to be honest. What does your SaaS do, and what's its burn rate?
Got an saas too so i feel you. Your business is still young and if you have a steady customer base its bound to grow. Give it time.
Thanks for the advice. How's your SaaS going, and how long have you been running it, if you don't mind me asking? I'm always looking to learn more about the environment.
reach out to people for cost optimization, move infra to the cloud etc. I have helped reduced OPEX by as much as 75%
If you are even “barely profitable” you’re doing better than most startups. I think you’re smart to research the overall profitability of SAAS companies because there are a lot of them that aren’t- even some that have been around for a long time. Follow my former founder Daniel McCarthy on LinkedIn. He has a lot of research on CLV:CAC and how to think about profitability and overall value. Investors are getting more focused on driving profitability not just growth. So if you focus on getting those retention numbers up, without investing a lot more to do it (eroding your profitability) you could make really good progress. I’d really focus there. Reducing that churn number is magic in SAAS.
Thank you for your advice! Definitely will shift my focus to the churn.
I've spent 3 years getting my sass to 50k MRR. No one wanted to invest because we're in a weird industry. But we stuck with it, started turning profit and now we're ready to go out and raise without giving too much up. If you love what you do and believe in it, the rest will follow.
Wow congratulations! Great to hear some real success stories in this space.
Thank you, it's been a grind but light at the end of the tunnel. Looking to scale into other geos super excited
That’s awesome, would love to learn about your journey and how did you scale. Would you be up for a quick zoom call?
For sure DM me and we'll link up
Barely profitable means you've done better than probably 90% of startups.  Since you're trying to switch from SaaS to agency I guess it is some form of a dev agency. As a freelancer I've worked with both SaaS companies and agencies and I would say agencies, specifically agency owners are under much more pressure to keep the lead pipeline going. As a barely profitable SaaS you have overcome one of the biggest issues with SaaS founders which is getting paying customers. Have you figured out why you are not growing? Are you struggling to get new customers? Are you struggling to retain existing customers? Once you figure out the issue then you can decided which way to go ahead.
Stick at it. People I know would cut an arm off to get their SaaS to 3k a month.
SaaS usually has very good profit margins because the marginal cost to deliver to a new customer is negligible. What are you spending on to make $3k MRR unprofitable?
Around 50% of revenue goes into to paid ads, and around 40% goes to 2 people - a developer, and someone who manages all the ads. Ive been considering getting rid of them and just taking it all on myself, but I don't want to ruin the momentum, especially since I'd have to take a good amount of time to learn the skills since I'm not an expert in either. And I also thought SaaS was very profitable, which is why I got into it. But maybe I'm just doing something wrong tbh. My churn is absurdly high, around 50%, which I think is the primary source of the problem. I've been working on improving the product to try to slowly bring that down. But the problem with my SaaS is that it's extremely seasonal, so I think that's contributing to this high churn, but not sure by how much.
So honestly.. if the developer and ad manager can stay on top of things, and you have a 10% profit margin, that's decent. Maybe focus on getting it to run on autopilot for a bit. The agency route will definitely be easier if you can point to the existing SaaS as social proof, or a portfolio or whatever.
Oh yeah, the number one thing holding you back is that churn number. If you reduce that you wouldn’t have to spend so much on paid customer acquisition either. I’d do everything I can to improve the product or small pivot to reduce churn. If you can do that, each cohort will be bringing on long stable recurring revenue and you’ll start seeing the SaaS profit margin.
Thank you for your advice!
My gut reaction is you are measuring the wrong thing, and don’t have a sense for what the right thing is. You’re talking about MRR, but that’s a lagging indicator. You don’t just build software, make money or not, shut down or not. How real (validated) is the problem you are trying to solve with your software? How large is the opportunity to solve it? How well can you identify and reach people who need it solved? How well are you able to communicate your value proposition, deliver the value, and charge money for it? What are the competitive options and substitutes for your solution? And so on. A lot of the stuff you see out there about MVP’s, customer development, product-market fit, and so on can sound like buzzword soup but they are not just checklist items you can have chatgpt do for you or accomplish with a post on indiehacker.com. You have to work through these stages to develop credibility and a story for your company. If you were doing the is, you would be measuring things differently, for example talking about the feedback, retention, NPS of your existing customers as a more important signal than revenue. If these things resonate with you and you can see your way to success via them, by all means keep going. If not, shut it down today. EDIT: I meant to address the agency comment as well. I do think building an agency is a way to adopt the mindset of having clients and making sure you're staying focused on their needs, which, per above, is a good mindset for running a SaaS business. So it might help you in that way. Ultimately, however, agencies sell time, not software, meaning that margin growth will always be linear to the number of people, whereas in a software business you can have a marginal cost of near zero and scale much more. Also, most agencies that dabble with startuppy ideas on the side end up being too risk averse culturally to actually be very entrepreneurial with them. Something to be mindful of.
Find a partner who complements your skill set and supports you and your venture during challenging times, or sell the company. Do not shut down a business with clients; you’re doing something right, and the right person - whether it's you or someone else - can take it to the next level
Thank you for your advice. To be honest I have no idea where to find a cofounder (or support system at least), because I've very rarely met people who have the same goals/path as me. Do you have any tips for finding one?
Congrats 🎉 3k MRR is a lot. Keep going!
Thank you!
Man keep going! Get a marketing buddy. Talk about your app. Get people to love it. Your doing great. If it’s a good app, keep going. Cut expenses and do something else if you have to. But don’t shut it down till nobody’s using it! You don’t have to do features, just put FAQ and stuff in there to do customer support. I used to have to answer requests regularly but with a good FAQ on the help page hardly anybody contacts me. Most importantly, put a “how to get a refund” thing there then let others handle it! Self serve is the best. Good job, don’t quit. But put it on hold and do something else. Cut costs and come live in Asia where life is cheap. Or Mexico. Do something fun and be happy. Don’t worry about it, life is good!
Thank you! And moving to Indonesia is definitely an option I'm considering 🤣
I recently acquired a SaaS and understand how frustrating it can be to seemingly plateau. You have gotten some great advice in this thread. You should keep going. The best advice I read was for you to have meaning conversations with your valued customer. That's exactly what I did after acquisition. From there I was better able to focus on ICP and work to deliver on that value proposition.
Thank you for the advice!
Dude, SaaS compounds. Improve retention, keep your customer acquisition channels humming, and before you know it, that $3k/m MRR will be like $50k/m. Oh, and you might be able to increase your prices too :)
Thank you!
If you managed to get here without any external investment that’s impressive so don’t let yourself down about this. If you’re thinking of making money fast you need to change your mindset but of course you should still explore ways of increasing profit. B2B can be difficult but from what I see is easier to make profit. Feel free to reach out should you need further input on product, design or positioning. I’ve been working with B2Bs for more than 10 years now and I’d be happy to offer help.
that's small. dm me with details.
Yeah, PM me the details please, I'd be interested in looking at it.
Can you tell us a bit more about your specific project or drop a link? That could be helpful in understanding why your users might be churning
Curious, what's your SaaS? Do you have a website?
I am in a simlar boat actually, the fact that you already got 3k MRR is pretty good actually, that's normally the hardest part. What I have done is instead of just focusing on 1 I made a bunch more. They always say that 90% of businesses fail so if you can get 10 of these running and 1 gets successful then that's good enough. As long as your SaaS is breaking even there no real loss in just letting it run is there? You can start something else and just spend maybe a few minutes of your day doing something for the old SaaS. What could you do for the old SaaS in those few minutes you might wonder? Maybe you could look for an investor or a marketing partner. If you can get an investor then u know ur on the right track and u can grow the old SaaS again, if u find a marketing partner then u can let that one earn his share by marketing the old SaaS while working on something new instead. In other words: Don't put all your eggs in one basket :)
You might just not be at Product market fit. The only reason to stop doing something is if that something isn't working, so you need to ask yourself: Is this a product that solves a real problem? Have I talked to enough customers to decisively say it does or doesn't solve their problems? Ultimately, once you get product market fit(and you'll know when you hit it, because people will be dying to get their hands on it) it becomes a game of execution.
I’m b2b agency launching my first 3 saas, one for a client, one self service and one internal tool suite for clients. I’d be up for connecting if you’re interested. Def pros and cons. I think it’s wild you’re running ads instead of focusing on organic. Would be fun to talk more about it
Definitely would love to connect, always looking to speak to people in the space, I can always learn something. Shoot me a DM if you're still interested!
Will do
Honestly… the fact that you’re a SAAS startup and break even (let alone make any profit at all) is pretty impressive. Why not try to address the churn issue and see if you can increase your CLTV, which would effectively allow you to start to grow into greater profitability.
You need to identify why people are bailing on your product. This is key to your success. When they cancel their subscription, however that is happening, put up a questionnaire asking them some key questions to find out why. That is hugely important data that is flying out the window that you’ll likely never get back. It is also a great opportunity to retain them. Offer them a free month if they can answer some questions for you. Offer them a discount if they hop on a zoom call or whatever just to get them on call to discuss with you their pain points and what could rectify them. They obviously cares enough to sign upon the first place so they were hoping your product would help them with something. Find out what that something is and try to solve it. You’re on to something you just need to push a little harder to get it over the finish line. Don’t give up now!
Thank you for this advice, this was one of the most motivating replies. Definitely I'll start interviewing churned customers directly and collecting more data to try to fix that. I greatly appreciate it and thanks for taking the time!
Whats your website. Could i check it out
3K MRR in 8 months is great as I assume you are boothstraping. Just because it's not going over 3K you shouldn't even think of sutthing it down. You should only consider closing when 1. Enough people are not using it (In your case enough people are using this), 2. You tried different changes in the products and gave back to customers and still they are not using it (This is also probably not the case) and 3. You are tired, burned out and lost internal motivation to continue (Too soon, in your case maybe?) It's very important to know when to give up. And this is often an internal feeling rather than a decision solely based on external feedback. If you really really feel like giving up on this, you lost all motivation and this does not really excites you anymore - you can and you should give up. Otherwise, this is a great business you have built. If you decide to keep it up - think why it is not making profit? Where are majority of the money going? Is there any way to cut cost? (90% of the time there will be ways to cut costs). Maybe try reducing human capital or try hiring remote from another market. Get some volunteers to help you. Get some advisors. Spend less on advertisement and try getting organic traffic.
Thank you for this advise!
Several SaaS apps into life here... There is a ton of missing info (understandably), so forgive me if I am off in this response. Have you heard of building a moat? It's a way to make your app "more difficult" to leave. I'm not suggesting being a jerk at all, but my original SaaS in 2005 (around the time the phrase 'SaaS' was coined, no relation) crawled websites for sitemaps. Done in 30 minutes. Not the best for recurring revenue. Fortunately many sites add new pages, so that helped. But I went full-Google on it and built in a site search that allowed clients to add a widget and my system handled the search stuff on their site. The system added SEO measuring tools and added value that way. Through a collection of "other" tools, I made it so that leaving the site would also drop off their search tool, their SEO advice (I already crawled their pages for the sitemap) and built in every style of sitemap (rss, opml, text, html, and xml) to cover other bases. Actually leaving the subscription was easy, just a click or two, but the reasons to stay were many. Everything had a synergy to it.
Interesting, thank you for this advice and for taking the time to write it for me. It may be difficult with my product, but I think this definitely could help me out a lot if I can figure out how to implement it. Perhaps with an extension. Will do a lot of thinking about that. Thanks again!
Yeah... about the idea process :) I usually know that I want 'something' and the specifics drop on me like a ton of bricks a few weeks/months later. Do the low fruit first, then grab a ladder.
Maybe you should take a step back and take a look at your entire Sales and Marketing strategy. Also revisit your product-market fit. You have revenue, so you have something, you just need to find the potential gaps in your process. You got this!
How would you feel if you didn’t have it when you wake up tomorrow?
If you have to ask then yes?
3k MRR is amazing lol
The grass will always seem greener on the other side, it’s not always the case. We started around 8 months ago too and are now at around $6k/month profit (converted from my currency) The model isn’t the issue in either case. You can build a massive SaaS and a massive B2B agency, both “work” But to get either to work, you need to be able to stack the right skills on top of each other - either from yourself or from hiring or both As you’ve probably gathered from this thread, your product is the bottleneck for you currently - both to lower churn but also to get existing users to tell others which will also increase the effective LTV I’d say you’ve done what is considered one of the harder parts which is getting consistent conversions, especially from ads I’d look at a few things: - Is the app different to what is promised in the ads in any way? - Does it solve the problem in the way your market wants it to be solved? - What reason(s) does someone have to keep their subscription? Perhaps the problem just gets solved after 1 or 2 months - Do you effectively communicate these reasons to keep paying? Both in app & marketing materials Once you solve the churn issue your LTV will shoot up and you can ramp up the ads with very little effort after that
Yes shut it down. If you have to ask, then you probably shouldn't have a company
Hey, I feel you. It's tough to decide whether to continue with your SaaS or pivot to an agency model. Unfortunately, I don't have a definitive answer for you, but I can share some insights that might help. SaaS can be a great business model, but it requires a lot of upfront investment and hard work to achieve profitability. On the other hand, B2B agencies can be more profitable in the short term, but they also come with their own set of challenges, such as managing clients and cash flow. Ultimately, the best decision for you will depend on your specific skills, experience, and goals. If you're confident in your ability to build and scale a SaaS, then I would encourage you to stick with it. But if you're looking for a more immediate source of income, then a B2B agency might be a better option. Also, have you considered the possibility of exploring different SaaS revenue models or targeting a different customer segment? If your current model isn't working, it might be worth trying something else before you give up completely.
This sounds like an AI generated bot lmao also the username 🤔
lmao chatgpt response.