How to Start a SaaS Company with Only a Few Hundred Bucks
Today, I would like to introduce someone that probably doesn’t need much of an introduction if you’re in the Amazon FBA world. We have a guest post written by Greg Mercer (who shares an insanely great name with me), the founder of the product research tool Jungle Scout.
Jungle Scout has grown explosively over the last few years, serving hundreds of FBA entrepreneurs around the world with useful data.
While they help FBA entrepreneurs, this article is a bit different.
This article describes how Greg with no technical or background in coding, built an absolute SaaS empire with Jungle Scout. If you’re in the trenches coding away or dreaming of recurring revenue with a SaaS of your own despite lack of coding skills, then keep on reading. And of course, feel free to schedule a call with us if you’re looking to acquire a profitable SaaS business. Or, schedule an exit planning call with us to sell the one you’ve built.
Take it away Greg!
Last October, all 80+ employees of my software company, Jungle Scout, came together in Puerto Vallarta, Mexico, for one of our biannual meetings: Jungle Camp.
On the first day of camp, I got up in front of everyone and spoke about how the company got started. It really made me think for a minute.
I can’t believe that less than four years ago, this software company didn’t even exist, I thought to myself.
Now Jungle Scout has three offices around the world, hundreds of thousands of customers, and close to a hundred intelligent, hardworking people located on six different continents.
In the words of Talking Heads’ David Byrne, “Well… how did I get here?”
Find an Opportunity
In February of 2015, I was just a guy selling my own products on Amazon. However, performing market research for Amazon products was pretty tedious and time-consuming, and other sellers I knew voiced similar concerns.
“What if there was an easier way?” we asked ourselves.
That’s when I got the idea for Jungle Scout, a software tool that could estimate Amazon sales at the click of a button.
But how would I create it?
Business ideas and opportunities seem like hard to come by, but what if I told you that you probably come up with opportunities three to four times per day?
Any time you catch yourself complaining about a product or its features, or how difficult it is to do something, you’re shining a light on a potential opportunity.
These opportunities are called ‘pain points’.
As you go through your day, think about the various pain points you come across. It can be anything. Maybe you wish you had a spoon that made getting into a cup of yogurt easier, or perhaps you dislike the layout and functionality of a popular website. It can even be something simple like discovering a way to stop your recycling bin from falling over when it’s windy.
By the way, these are all pain points that I came up with this morning before I even had my first cup of coffee!
Plan and Source
Despite being the CEO of a software company, I don’t know how to code.
Sure, I know a little HTML and CSS, and understand a majority of coding principles, but I can’t do a lot of the fancy back-end stuff that really makes software sing. For that reason, I knew I had to hire someone to get my idea made.
The problem, though, was that while my Amazon FBA business was doing well, it wasn’t doing well enough to warrant bringing on a full-time software developer who could bring my idea to life.
I’ve had an entrepreneurial mindset since I was a kid, so I’m not averse to risk; but I’ve learned the hard way, on more than one occasion, that until you’re 100% sure you’ve got a product people want, don’t put more resources into it than is necessary.
So I did a little research on how I could get my software made inexpensively, and that’s when I discovered Elance. Elance allowed me to find and hire a freelancer for this one project. That way, I figured, if the software was a flop, I would only be out a little bit of money.
It was there that I met developer Mohammad, from Gaze. He was exactly who I was looking for and, more importantly, he was up for the challenge!
After putting together some crude drawings of my software vision, I explained my idea to Mohammad, who used this information to help me create Jungle Scout’s first product: the Chrome Extension.
Once you settle on an idea, be sure you do plenty of research to verify its potential profitability. Do a Google search to see if a) other people share your pain points, and b) there are good solutions for the pain point out there already. In addition, estimate what it would cost to create your own solution from scratch. For me, this involved checking freelancer rates on Elance (nowadays, it’s called Upwork).
If you want to create a physical product, I recommend checking out a website like Alibaba to see what it would cost to manufacture your product.
Or, you might even be crafty and possess the ability to develop the solution yourself!
Just don’t go wild when you start the creation process. Instead, try to create a Minimum Viable Product (MVP).
Create an MVP
The first version of Jungle Scout was pretty basic and only included the “must have” options; the epitome of an MVP.
Before I went too wild with design wants, I wanted to first make sure the basic features—the needs—worked properly. More importantly, I wanted to be sure people would buy it, even as a prototype.
An MVP is a product with just enough features to keep its first customers happy and provide feedback for future product development.
Nearly all software companies, big and small, use MVPs to test new products and features (Greg: To add to this MVP point, building your SaaS with an MVP in mind can help you avoid these SaaS mistakes). However, MVPs aren’t limited to software companies. Film studios, game makers, and even politicians have all used MVPs to test product-viability and get early feedback before spending money unnecessarily.
Lean Test and Iterate
Once you have your MVP ready, you will want a limited audience to test it out. It’s in your best interest to select people that you trust to give you honest, constructive feedback. You also want your testers to represent your target audience, working as a model for your product’s early adopters.
Once you’ve chosen your testers, try to get as much detailed information as possible:
- What did they like? What didn’t they like?
- What would they pay for the product?
- How often would they use it?
Be as scientific as possible, too. The better the test, the better the product.
Once you have plenty of feedback, make the necessary changes. Focus on the “must haves” that you discovered from your test audience. It doesn’t hurt to go back and test again either, once you’ve adopted the recommendations from your first test.
Some of my friends in the Amazon seller community were the first to test the Jungle Scout Chrome Extension. The goal was to get as much feedback as possible, and using their critiques, Mohammad and I improved the product.
After a few tweaks, we were ready to go to market!
The testing paid off. Immediately upon launching, the Chrome Extension was a huge success.
In fact, it only took three months before I was getting more business than I could handle. I had to ask my awesome wife, Liz, to help out with some of the customer success emails I was getting slammed with.
She soon left her high-paying retail job to work full-time as Jungle Scout’s first employee.
There is a lot of fear that comes with presenting a new product to the world.
“What if it doesn’t work? What if people hate it?”
That fear holds many folks back. The good news, however, is that if you do your research, create an MVP, test it, and iterate, the launch is crazy easy.
Up and Over to the Left
Three and a half years later, Liz and I are in Puerto Vallarta with the dozens of amazing people that we’ve since hired.
Although we’re a successful company that continues to grow beyond even our wildest dreams, we still use these same methods:
1 – Find the Opportunity. What is a pain point that you have? Do other people share similar pain points? Are there solutions addressing this pain point already?
2 – Plan and Source. What is the best solution for your pain point? How can you create a solution without spending too much money?
3 – Create an MVP. What is the most perfect version of your solution? What are the must-haves for your solution?
4 – Test and Iterate. Who do you trust to test your MVP and provide feedback? Once you have this feedback, how can you improve your MVP?
5 – Launch. How can you get your solution in front of more people? As your market expands, how can you continue to improve your product?
Thanks for Reading
Hopefully, this information has been helpful!
Whether you are someone looking for a side hustle, or you have dreams of owning a multi-million dollar SaaS company, these five simple steps can guide you to success.