Building SaaS Startups in 2023-2024

SaaS solutions are increasingly becoming ubiquitous with a widespread adoption amongst users. In 2023, the average number of apps used by organizations saw an 18% increase

Building SaaS Startups in 2023-2024
Software as a Service or SaaS, is rapidly growing in popularity among both individual users as well as on an organizational level. The convenience of paying a recurring subscription fee for software that's hosted and managed remotely by the SaaS provider outshines the challenges of installing, updating, and managing security on local machines. The global SaaS market has seen significant growth - reaching $253.62 billion in 2023 with a compound annual growth rate (CAGR) of 7.7%. Looking forward, it's projected to further grow to $328.03 billion by 2027.

Why should you build a SaaS Startup?

SaaS solutions are increasingly becoming ubiquitous with a widespread adoption amongst users. In 2023, the average number of apps used by organizations saw an 18% increase: increasing from 110 apps the previous year to 130 apps now. Gartner reported that end-user SaaS spending will reach $208 billion in 2023 which is a significant increase from $152 billion in 2021.
There are many examples of successful SaaS companies built by individuals without any external funding and becoming highly profitable. This includes both traditional SaaS with rich set of features for a broader customer base as well as small SaaS companies focused on solving a niche problem for a small segment of users, commonly referred to as Micro-SaaS. You can read more about the differences between SaaS and Micro SaaS in 12 Best SaaS Ideas with Examples for 2023.
There are many reasons that make building a SaaS startup attractive and rewarding:
  1. Revenue Model: SaaS pricing is typically subscription-based, recurring monthly or annually. This provides businesses a more steady and predictable revenue stream enabling better financial planning and growth. Moreover, this makes it possible to have long-term contracts with customers, potentially leading to higher life-time value LTV of an indiviual customer.
  1. Lower Barriers to Entry: SaaS startups often have lower initial costs as well as resource requirements. It’s entirely possible to bootstrap a SaaS starting with a product with a limited set of features. Later in this post, we’ll see several examples of founders and entrepreneurs who have successfully built their SaaS startups this manner.
  1. Scalability: As SaaS startups are cloud-based, it’s generally easier to scale to more customers both technically as well as in terms of the required capital.
  1. Reachability: As SaaS products are accessed on internet, they offer the potential to reach a global audience and discover new niche markets with relative ease.
  1. Flexibility: Being cloud-based, It’s easier for SaaS businesses to adapt to changing market trends, technology shifts or customer needs based on insights from data. This flexibility makes SaaS startups more capable of achieving long-term growth.
You can also acquire a SaaS/Micro-SaaS instead of building from scratch. See our guide on buying a SaaS business and SaaS metrics that offers some good insights and tips.

11 Examples of successful SaaS Startups in 2023

There are many examples of SaaS companies which were bootstrapped and became profitable. You can see FounderBeats.com that has over 100 interviews of successful founders who have shared their insights. Here’s a list of 11 examples for inspiration.
  1. UnicornPlatform.com is a landing page builder for SaaS. It was founded by Alexander Isora and reached $16K MRR with 1000 paying customers.
  1. Mike Slaats founded Upvoty.com - a user feedback Software. He has successfully grown it to 35K MRR in 36 Months.
  1. Plausible Analytics is a simple, open source, lightweight (< 1 KB) and privacy-friendly alternative to Google Analytics. It was founded by Marko Saric who grew it to $100K+ MRR in Just 25 Months.
  1. Outseta.com by Geoff Roberts is an all-in-one membership software which hit 25K MRR.
  1. Supademo.com helps to quickly and easily create interactive product demos that can be embedded anywhere on the web. Co-founded by Koushik Marka, it hit $1K MRR within 6 Months and got 60 Paying Customers.
  1. Tiiny.Host is a micro saas to host and share your work online - marketing, prototyping, demos, testing, learning to code, small web apps, and many more use cases. Philip Baretto is the founder who grew it to $6K MRR in 33 Months
  1. Boot.dev is a Micro SaaS for Backend Learning that was founded by Lane Wagner and reached $7K MRR
  1. Vaibhav Sharda built Autoblogging.ai , an AI Writing tool and hits $10K MRR in only one Month
  1. Marie Martens co-founded a micro saas for bulding forms, Tally which crossed $25K in MRR
  1. David Bressler founded excelformulabot a micro SaaS that transform your text instructions into Excel formulas using AI. He Ggot 50K Signups and hit $3500 MRR in the just oneMonth
  1. leavemealone.com is a tool to easily unsubscribe from emails. Danielle co-founded and bootstrapped it, reaching 400+ customers by building in open.
Check out this video for more inspiration:
Video preview

Can I build a small SaaS company?

Many startups founders successfully built their SaaS startups with a tiny niche product, built for a very specific audience, which is often referred to as Micro-SaaS. Some steps to help you build a small SaaS company:
  1. Identify a niche market and problem: Look for a target audience that are having a problem that your product can solve. Analyze the features offered by existing SaaS companies and try to identify a gap. This will help you in picking up the right idea. We discussed more about how to choose ideas for building a profitable SaaS startup in our earlier post.
  1. Validate your idea: Before you start investing time and resources building your SaaS, it’s crucial to find out if people are actually willing to pay for it and if you can reach the right audience. You can do this by creating a simple landing page with a waitlist, or by building a minimum viable product (MVP).
  1. Develop, Launch and Iterate: Once you’ve validated your idea, the key to a successful and profitable SaaS startup lies is rapidly developing with minimal features, launching it on platforms like Product Hunt and others, marketing your product, engaging and getting feedback from customers. Continuously improve your SaaS and add new features on the basis of feedback and market trends.
You can cut down on development time and cost with white-label SaaS solutions. More on building SaaS startups vs Micro SaaS startups

But why do SaaS Startups fail?

It’s possible for a SaaS startup to fail despite being an impressive product technically. This can be due to a number of reasons including:
  1. Not understanding what customers want: Building and launching a great product packed with features without first talking to potential customers and understanding their pain points and problems can be lead to failure. Ensuring the product-market fit and validating your idea properly is fundamental to building a profitable SaaS business.
  1. Not reaching enough customers: It’s important to focus on the right customer acquisition strategies to reach a sustainable customer base. Merely sharing on social media accounts and participating in relevant forums, for example, might not be enough to acquire the customers. You might need to focus on SEO or even start an affiliate program.
  1. Poor Customer Retention: Higher customer churn leads to any startups downfall. Factors like poor onboarding, lack of support, poor pricing strategy, payment issues can lead to a higher percentage of customers leaving despite having higher acquisition of new customers
  1. Growing too fast: Scaling too quickly is also one of the reason which results in early-stage startups to fail as the startup might not be ready to sustain their product and support quality
  1. Lack of focus: It's essential to identify your SaaS's core features and prioritize improving them instead of trying to add every new feature and potentially creating a bloated SaaS product.
  1. Underestimating the competition: Solely focusing on your own SaaS product and ignoring competitors can be detrimental. It's important to learn from their strategies and mistakes to stay competitive.

1. Generate Content from Podcast

Creating content from the podcast is a huge task to manually listen and create a text transcript in place. Create a Micro SaaS solution to solve this issue. The SaaS product should be able to take the Podcast and generate content, transcripts, readily publishable blog posts, and clips from the podcast content. A SaaS product that can leverage the Podcast as an audio source and generate content from it, by converting it into readable text, will help in creating content for any website. The product should also be able to generate blog posts, and clips from the generated transcripts. This is the fastest way for podcast creators and website owners to create content for their websites. Poddin.io solving a similar problem got 7 paying customers in less than 1 monthPoddin made is really special niche tool with features like Speakers Detective, Filler Words Remove, Profanity Filtering, Transcript Player, etc.
There are players adding AI flavor to this conversion to make the output content better and built ‘AI-based tool for converting Podcasts to blogs and social media posts’.
Examples of some players in this space: Dubb.mediaVoicePen.ai and hello.podium.page
VoicePen reached $1,600 in revenue with 65 customers within 30 days of launching.
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2. AI Tool for App Icons

Designing app icons may seem like a simple task, but it can be just as complex as creating a logo. App icons serve as the visual representation of an app and can greatly impact a user's decision to download or engage with the app. This means that designers need to carefully consider the design elements, color scheme, and overall aesthetic of the app icon, just like they would for a logo. In addition to the design considerations, there are also technical requirements for app icons. App stores have specific guidelines for app icon size, resolution, and format, which can be different for different platforms. Designers need to ensure that the app icon meets these requirements while also being visually appealing and consistent with the app's overall branding. IconifyAI.com solved this problem to a larger extent by letting developers generate logos by using AI technology. It’s mostly one time payment. But the App market is huge. With some SEO, this should reach to more App developers. You can also see the growing trend here. For inspiration, see IconifyAI that made $1000 in less than 5 days suiting perfectly for a Micro SaaS. If you are more into tech, may be providing an AI wrapper for this and letting other businesses use the AI wrapper could be a business by itself.
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3. Dynamic Image Generation

There are a ton of use cases of this. The simplest Micro SaaS Idea we are talking about here is to provide API access to users to call the API to create the images. This is important for various reasons - for example, if you want to create simple cards with a profile photo and some text at various places on the card, you let the user create the card manually (using a GUI) or let the user pick from the set of pre-built designs. Now provide an API to the user to create hundreds of cards in the selected design format. If the card has 3 text inputs and 1 image inputs, the user will use the API and will pass these inputs. Your API should create an image and send the image link(after uploading it to some cloud server like AWS S3 or GCP Storage) back to the user via API response. See BannerBear.com for inspiration. Bannerbear’s annual recurring revenue is $580K. More example tools in this space - DynaPictures.comPlacid.app.

4. Personalized AI Story Generator using Kids’ photos:

A personalized AI story generator using kids' photos is an exciting way to introduce children to the world of storytelling. By incorporating technology and personalization, it can help foster a love of reading and imagination in children, while also providing a fun and engaging activity for them to enjoy. Children can feel a sense of ownership and connection to the story, as it is tailored specifically to them. Additionally, the use of AI technology can help develop children's imagination and creativity by introducing them to new storylines and characters. Create a Micro SaaS product that uses AI to analyze the photos and generates a story that incorporates elements from the image, such as the child's facial expression or the background scenery.
Some players in this space: StoryWizard.ai, OnceUpOnABot.com, BedTimeStory.ai, StoryBird.ai
While these tools are primarily into AI generated space, generating a whole story from the kids photo would be more engaging to the kids.
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Internal link building is a crucial aspect of on-page SEO. By linking to other relevant pages on the site, companies/founders can help search engines understand the structure of their website and distribute link equity throughout the site. Internal links also help users navigate the site, improve engagement, and reduce bounce rates. By linking relevant pages and content within a website, search engines can better understand the structure and content of the site, which can lead to improved search rankings. However, manually adding internal links to a website can be time-consuming and tedious, especially for larger sites with many pages. That is where creating a Micro SaaS tool that can analyse current website structure, pages, analytics volume of the pages and can suggest a better internal linking strategy and automate this. The tool should analyze a website's content and structure, and then suggest relevant pages and content to link to based on keywords, topics, and other relevant data. Instead of manually adding internal links to every page on a website, the tool can do so automatically based on a set of predetermined rules and parameters. Additionally, automated internal link building can help ensure that internal links are added consistently and strategically across a website. SaaS products like LinkWhisperer.com are established in this space. The estimated revenue of Link Whisperer is $5.5M.

6. Micro-Saas for Asynchronous Podcasting:

Asynchronous podcasting is a method that encourages conducting audio interviews where the host and guest record their responses at their own convenience. Instead of scheduling a live interview where both parties need to be available simultaneously, asynchronous podcasting allows for greater flexibility. The host can share a set of interview questions or prompts with the guest, who then records their responses on their own time. Similarly, the host records their questions separately. These recorded segments are later edited and combined to create the final podcast episode. This async process eliminates the need for coordinating schedules across different time zones or dealing with conflicting availability. Both the host and guest can participate in the interview when it suits them best. Asynchronous podcasting allows for more thoughtful and focused responses. Since the guest can record their answers without time pressure, they have an opportunity to carefully consider their responses, resulting in more insightful and engaging content. Create a Micro SaaS product that help facilitates asynchronous podcasting. Rumble.Studio is one example that allows companies, creators and agencies to create audio content at scale, using asynchronous interviews.

7. AI-Based Sales Training

With ChatGPT/OpenAI coming into every business, bringing AI into Sales will make things easy for businesses. As businesses look to enhance the performance of their sales teams, AI-powered solutions are becoming more popular for their potential to personalize and scale training programs. To create a Micro SaaS product in this niche, you'll need to have a good understanding of the sales training process and the obstacles that sales reps face. The software can utilize AI algorithms to assess sales reps' performance, pinpoint areas of knowledge deficiency, and recommend personalized training content. The AI-based Sales Training software can provide several features to help sales reps improve their skills and productivity. For instance, you can design personalized training modules based on each rep's learning pace and style, gamify the training experience to maintain engagement and leverage data analytics to identify patterns and areas for improvement. There are players in this space without AI components as well. For example, Showell.com is the all-in-one sales enablement platform to manage, present, share, and track sales content. Showell hit $3.2M in revenue in 2022 but without AI component. SecondNature.ai built an AI-based conversational sales training solution, for sellers and sales leaders, who want to blast through sales quotas. SecondNature raised $15.5M in funding and 2022 it hit $4.4M in revenue.

8. Interactive Presentation Tool

Making presentations interactive is one of the biggest challenges to any presenter. One of the best methods to make presentations interactive is to use engaging polls, and questions and drive the conversations. Traditional presentation decks lack these features usually. Create a Micro SaaS that helps make presentations interactive. A few add-ons for something like this would be to add interactive images, video, and infographics as well where people can click through the images/video and infographics to present better to the audience. Another add-on would be to add a feature where the presenter can track the attention of the audience in real time. This would allow the presenter to make changes to the presentation on the go and make it more interesting for the audience. The presenter must also have access to analytics and reporting tools. This would allow the presenter to understand the effectiveness of the presentation and make changes to it based on the feedback received. AhaSlides.com , Mentimeter.com and Genial.ly are a few examples in this space. For example, tools like Genially are just not only used by businesses but also by a large number of educational institutions. Genially’s estimated annual revenue is currently $8.9M. In 2022, Mentimeter reached $21M in Revenue with 80K customers.
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9. Micro SaaS for CRM and Automation inside Gmail

CRM and Email automation is a big space and many businesses need CRM/automation. As many organizations are already using Gmail for business, building a SaaS that can create a CRM wrapper on top of existing email and automate things like ‘one-click calendar scheduling’, ‘ read receipts’, ‘CRM to tag contacts and update conversations’, ‘built-in analytics’, ‘connecting to other systems’, etc will be a big plus for business. Having an inbuilt plugin for Gmail also makes it easy for businesses without the need to go out of the Gmail ecosystem or sync with other products. For example, boomeranggmail.com, founded in 2010 had an approximated annual revenue of $7.8M by just building for Gmail. DropResponder.com is another example in this space with hundreds of positive reviews of their Micro SaaS application. Streak.com in a similar space received $1.9M  funding with an approximated revenue of $10.9 M.

10. SaaS tools for Real Estate Agents

 Real estate is one of the markets that have good money to spend. Real Estate Agencies need a lot of tools to market the available real estate properties on social channels and forums. Create a SaaS exclusively for Real Estate agencies. By branding the tool exclusively for Real estate agencies and targeting a specific niche, there are higher chances of getting paid subscribers. The tool should be able to automate the creation of social media graphics using the agency logo, and automatically created images/graphics based on real estate properties data. Real estate agents typically spend a lot of time creating posters for each of the available properties, then send emails to their user base looking for properties in a given locality, post the availability on social channels, etc. Create a SaaS that solves all these problems for real estate agencies. theagentnest.com crossed $8K MRR with a similar SaaS solution. Web4Reality.com crossed $100K MRR by building tools for real estate agents.
Quora is one of the most popular tools that drive a lot of traffic. But one of the biggest issues around Quora is often finding the best questions you should put your efforts on. For starters, Quora is the world’s most popular Q&A platform where users ask questions and anyone can answer. The better the answer, the higher the number of upvotes, thus giving more traffic to the links in the answer. Create a Micro SaaS tool that can automate this and give this data of the questions vs the number of current answers vs the number of views for each answer etc. The tools should tag the questions for certain keywords and search topics. When a user searches for interesting topics, the tools should be able to recommend the best questions he/she can answer that would give the highest referral traffic. Users can certainly start answering every question around a topic but this would relatively take more time. Heard of the 80/20 rule? 80 % of traffic is driven by 20% of questions. Help the user find that 20% of questions to answer and drive more traffic. But note that, there is no official Quora API yet, and it’s often not easy to scrape Quora content. So, you should be using power tools to get this data or maybe use browser extensions so that the queries/quick scraping can be done on the client-side or use anonymous IPs to scrape the content. Scraping content is against Quora principles. So, see the legitimate way how you can just index the data without actually scraping the whole content. Tools like these will help build backlinks and generate traffic over the long run. QAPop.com did great work in this space and made $2500 in sales with Life Time Deals. As a growth marketing channel to support this, you can build an Influencer discovery platform around Quora writers so that founders can search for Quora writers around a given topic.

14 ways SaaS startups acquire customers

  1. SaaS Directories: List your SaaS startup on SaaS directories and review sites like Capterra, G2 etc.
  1. Affiliate Marketing: Partner with affiliates who promote and get a percentage comission from sales.
  1. Community Engagement: Share your product in the relevant forums, groups and communities on Facebook, Reddit, Slack etc.
  1. Building In Public: Founders of Micro-SaaS startups use build in public strategy to acquire customers. This mainly involves sharing your journey, insights and revenue on Twitter or LinkedIn.
  1. Search Engine Optimization (SEO): Writing a blog on relevant topics and optimizing it for SEO can drive targeted users to your SaaS website.
  1. Pay-Per-Click (PPC) Advertising: Many SaaS startup companies rely on PPC ads on Google etc. to acquire customers.
  1. Influencer Marketing: Collaborate with influencers on Instagram, TikTok, Facebook. There are many platforms and marketplaces for connecting with influencers
  1. Cold Outreach: Identify potential customers and reach out to them via email or on LinkedIn explaining how your SaaS product can help them solve their problems.
  1. Newsletter Ads: Place ads in newsletters that align with your target audience's demographics.
  1. Free Trials: Offer a free trial of your SaaS product. Once a customer experiences your product, it gets relatively easier to convince them to get a paid subscription with additional features/
  1. Referral Programs: Offer special discounts to customers who refer your product to others.
  1. Social Media Marketing: Focus initially on any one social media account and use it to acquire customers for your SaaS.

How to find SaaS startups online?

ProductHunt and IndieHackers are good for uncovering emerging SaaS startups, where you can directly engage with the founders. FounderBeats.com has over 100 interviews with successful bootstrapped entrepreneurs sharing valuable insights. CrunchBase and AngelList can be used to find details including funding about SaaS startups. G2 and Capterra are SaaS review websites and can be good sources for finding popular SaaS companies and doing research for your B2C as well as B2B SaaS ideas.

 

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Written by

Upen
Upen

Founder, Micro SaaS HQ

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