Are there any good software as a service or SaaS business and startup Ideas left? You BET there are. It’s entirely a marketing exercise.
Here’s my thinking. Forget about emulating the marketing model of 37 Signals, Joel Spolsky or other celebrity software bloggers. Forget SEO campaigns that take at best 3 – 6 months to move the revenue needle. Forget Gary Vaynerchuck’s seductively simple but mostly unattainable social media and video blogging approach. None of those are realistic models for many SaaS entrepreneurs for simply bootstrapping a small, profitable SaaS business idea when the marketing budget is zero, and marketing and relationship building needs to start happening today.
Consider the argument put forth in this post mentioned in this Hacker News thread about SaaS startup ideas being taken. The author advocated an approach where the idea is ‘still available’ as long as users are ‘still available’ (due to lack of awareness, happiness or resonance).
Here is an excerpt from the post:
So, how does one decide if the idea is to be dismissed when there are similar products?
I’ll start the answer with a story. Drew Houston, founder of Drop-box, pitched the idea of file sharing across computers to a bunch of investors. The leading objection was “there are many file sharing services out there”.
Drew Houston turned to an investor who dismissed the idea & asked “Do you use any file sharing service?”. The answer was “No”. In the following discussion, he established that prospective users were not yet taken.
That is how you find if the idea is already taken – by checking if the prospective users are already taken.
If prospective users are still available, the idea is still available. If the need is real, all you need is to reach and resonate with those users, in a way earlier entrants could not.
For ambitious subscription software entrepreneurs, old-school relationship building in person, through email, and on the phone is where it’s at. No, it doesn’t scale. And yes, it’s more work and much higher impact than any other form of marketing out there.
I see a large opportunity right now and plenty of SaaS startup ideas for entrepreneurs to reach, educate, and alleviate the universal pain points of the Fortune 500,000 – the self employed individuals and small business owners in America and around the world who might purchase and use SaaS apps in their business, but have never been reached or educated by existing players in the market because established players would rather focus understandably on ‘low hanging fruit’ prospects who are easily reachable online through scalable means such as: SEO, PPC and social media.
To illustrate, consider the SaaS CRM opportunity that’s out there – right now, for ANY SaaS entrepreneur or small team willing to create an elegant solution that resonates.
CRM is a highly competitive product category with hundreds, if not thousands, of existing solutions and companies. The main question to ask is - are there prospects who are not aware of, and not using present solutions?
If yes, there IS an opportunity. Users are still ‘available’, and might consider your solution if you can reach, educate and alleviate their pain points.
Is every single self-employed individual and small business owner in America, and around the world aware of the powerful benefits of using a CRM system? Taken a step further, is every self employed person, small business owner and professional in America using Highrise or Saleforce as their CRM? We all know the answer is no. There are plenty of individuals and organizations using a CRM system they hate, or perhaps none at all.
This lack of awareness and education equals at least a small to medium sized opportunity to market proven-selling SaaS products (such as CRM or email marketing or even web hosting) to individuals and organizations who have never been reached or taught.
I’m willing to bet that there are still hundreds of thousands of self employed people and small businesses in America waiting to be reached through old school methods (email, telephone, tradeshows and FAX) who would be willing to discuss their pain points, and eventually become paying customers for SaaS apps such as CRM, email marketing, invoiving and accounting systems. You only have to look to the ultra spammy yet somewhat effective marketing and sales systems employed by the SEO industry to reach, educate and sell overpriced solutions to a very naive small business audience. The reason these sketchy companies employ these strategies and tactics is because they work. Marketing and selling WORK – for powerful psychological reasons.
What’s so bad about building a great SaaS business the old school way by just building great relationships – early, and for the long term?
SAAS PRODUCT IDEA EVALUATION CHECKLIST
Here is a checklist you can use to evaluate the potential of a SaaS product idea or opportunity. We’ll use CRM as an example (not that I am advocating CRM as a product category, for many reasons).
1. Define your target market
Self employed individuals and small business owners (or a tighter niche if you wish)
2. Estimate market size
4,800,000 in USA (probably much lower, but work with me)
3. Estimate number/% of market with NO awareness of the benefits of using ANY type of web-based software (SaaS) for their business
48,000 / 10%. This conservatively implies that 4,752,000 / 90% ARE aware of the benefits of web-based software.
2. Which SaaS product are these folks likely to purchase first?
Perhaps CRM to get their customer list online, log communication, track follow up and maintain great relationships.
Most of these prospects won’t buy from you right away anyway, so just get them in your CRM and subscribed to your email list, and you’re golden.
Are There Any Good SaaS Opportunities Left?
We have established that there is a decent market opportunity to reach, teach and sell approximately 48,000 self employed individuals and small business owners in America. That equals at the very least a mini opportunity for an ambitious solo founder or small team to start telephone, email and perhaps even fax campaigns (an overlooked channel?) to start forming relationships with these folks.
The golden egg is out there, folks. People are making money by selling SaaS apps to self employed individuals as well as small business owners and decision makers.
There are plenty of opportunities to build a great SaaS business around a focus on relationship building through old school methods.
So get out there, get going, and make some money!
Edit: for specific Saas ideas in the recruitment industry check out the blog called Recruiting Function.
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