How to build a $1m SaaS
Solo Sunday (Edition 14/01/2024)
I am often asked how to scale to $1,000,000.
And while it's true, it obviously depends on how good of a product you build.
Scaling from $100,000+ is much more about the scaling strategies.
Here are my 8 criteria for scaling to $1m.
1) Large TAM
it stands for "Total Addressable Market," which tells you how much rev you can make. You want to look for markets that are big enough to earn $1m/year.
2) Lots of competitors
Sounds controversial, but this actually shows the idea and product are validated.
(in next week's email, I'll share my learnings on how to beat the competition)
3) Pricing of min. $50/month
You want to attract customers that can spend some money.
B2B will always be my way to go.
4) Makes users money
If the cost/benefit ratio is high, you're on the right track.
If someone pays $50/month for your product, but its business is making more money because of it, you're set.
5) Saves users time
Same thing, but with time.
6) Sticky
Make sure they can't switch easily (e.g., collect data, let them build their business on top of your product so they'll become "platform-dependent", etc.)
7) Solves a real problem
If you're building a "fun-to-have" product, you're not going to be able to charge $50/month.
You need to build a product/solution that really kills your customers' pain.
8) Recession-proof
Make sure to diversify your clientele.
A buddy of mine was building software for restaurants. He had a big problem when C hit.
Hope this helps :)
Let me know if you're building something that does one of these things in our private SaaS community.
Take care.
Mike
Had a tweet going "viral" this week - you might enjoy it as well.
Things I discovered...
📱 App: I get most of my leads through content, it's still king! If you want to start a beautiful blog quick and easy, you should check out this app.
🍿 Video: Watch Alex build a SaaS in public!
🎧 Podcast: The founder of ConvertKit shares his story.
📚 Book: Reading the Alchemist.
PS: I read 1 book a week with this app.
When you're ready...
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