What I’ve learned in 5 years of running a SaaS

Do you think you could do it again?

Let me answer it first in a clumsy-sounding way: I want to be able to do it again, because I want to think of myself as someone who did a few things right and didn't ONLY have a ton of luck.

I think the knowledge I have helps me to do it again. I think that I have a few values and advantages that will enable me to do it again. Namely: I can distinguish between between good and crappy ideas. I can evaluate ideas relatively quickly and tell if I'd do them or not. I'm still down to earth, don't buy the hype and focus on stuff that seems to be a viable long-term business opportunity.

All these things I just listed are also big disadvantages: I dismiss many ideas that might be feasible as utter crap. In fact, I think most ideas are really bad. Even successful ones. Unfortunately, I feel that I can't see problems in a lucid way. For me, for almost everything there's already a solution, which is dangerous thinking, because I don't easily try and start new things. I'm a bit complacent in this way.

Are you working on the next thing or happy enough with this success?

I'm happy with the success and I'm working on expanding the existing business. But sometimes I feel like being on a plateau. No matter what I do, the business simply grows with a small linear rate.

A couple weeks back, I didn't check my analytics and metrics for 2 months or so. Nothing changed. My SEO rankings improved over time by doing...nothing. The amount of active people increased a bit, by doing nothing.

This is a good thing, but it also feels like there's nothing I can do to make it grow faster. I'll try a few things in 2014 though.

Anyways, I'm in a super-comfortable position. I can take vacation whenever I want (and I do), I make more money than I spend, I make more money than in my old 40-hour-week job, I don't have to think about money at all. If I want, I work 4-5 hours a week and still get paid fully. This is the perfect situation to start something new.

So, as I said, I'm happy with my success, but it's also boring sometimes. I want to start something new and I know that the fruits I enjoy won't last forever. I don't know what's gonna happen in 10 years, but I feel like I need a second business to be less dependant on my first one.

The basic question for me was: How do I keep maintaining and improving the website with only the bit of revenue I got from ads and donations? That was maybe 300-500 bucks a month.

The answer was: I couldn't. Not with what I had in mind for my project. It wasn't enough to pay a programmer, an app developer and someone who writes educational articles for the project.

I was just the average IT student back then. Not much sense for business. I mean, I thought about how I could make money from it once in a while. I still have a list on my computer ideas to earn 10,000 euros with my project that I once wrote. Freemium for example, a standalone desktop application, and other ideas.

After a long thought process and endless discussions with an older friend, I came to the conclusion that literally change my life: I had to start charging people for my product. All of them. No freemium nonsense and all that other crap that was in my list.

Being the altruistic student, I anticipated that people would be disappointed. I could almost feel their soon-to-come disappointment and asking them for money was something that didn't fit my world view for a long time. It was hard to accept that I'd lose people. Sounds stupid in hindsight, but that's how I felt.

With this conclusion, a new feeling emerged that got deeply engrained, which I consider a fundamental thing for doing business:

If people don't value what you have to offer, they're not worth your time.

So, even if people were disappointed, it wouldn't be my fault. After all, I offer a truly great service and it should be worth a couple bucks a month.

Despite my newly won enthusiasm, I went ahead and wasted another nine months, before I finalized my decision. I had very sophisticated tactics for sabotaging myself. I got this braindead idea to rewrite everything from scratch in a newer technology to have it maintainable for years to come. I thought I'd have to offer more content, more articles, more whatever. It was madness. And nonsense.

Another friend brought me down and he said: Look, you have a great product as it is. Just charge for it. You don't need anything else.

So, a few days after my graduation and about 4 weeks until my first real job began, I send an email to all my users, telling them that my product would cost a euro a month, starting in 30 days.

I hit Send and thought that I'd either wreck this thing totally, lose many many people, lose my project I spent five years on to improve, or that it'd be a good thing after all and I could continue running and improving my project.

Merely 7 days before several thousand accounts expired, I finished the last line of code on my payment processing.

Two weeks later, I had 20,000 Euros in my bank account.

Why? Security, privacy, performance. GA is probably relatively trustworthy in terms of security, but you never know. Privacy: Gone with GA. Performance: If the included library isn't far away, it's faster.

So, Piwik is good enough for me. I recently installed it on a VPS but from the same hoster in the same location. The performance is still slick, but a tiny bit of work is now off the server and security-wise it's better to have as few third-party libraries and applications running parallel to my web app.

The most limiting thing was that I rent a managed server that doesn't allow too many custom things. Piwik is relatively ineffective memory-wise in generating reports over months or years, if you have traffic like me (about 50K visitors per week or so).

The managed server would always kill the process, because it consumed too many resources and took too long. Never found a work-around. Now, on the VPS, I can do whatever I want and that helps.

This just as a warning if you're planning to run Piwik in an environment that might have limits in resource allocation.

Feature-wise, Piwik is totally perfect. As mentioned before, I don't track many metrics anyways. It's just a reference for keywords, which keywords converted, where people come from.

At first, I used an online banking tool where I copy&pasted all incoming wire transfers into my web application, which would regex for all ordernumbers, do a little plausibility check (incoming amount equals the amount that was set when the order was generated; user has open orders) and set the order to "processed" and extend the account by the according amount of months.

Now, I use a VPS where I installed an HBCI client (AqBanking). It's relatively easy to set up and once a day, it fetches all new wire transfers via cronjob and sends them via cURL to my web app where the same regex and plausibility check happens that I used before.

It feels a bit weird to store your banking PIN on a VPS, so make sure the VPS is properly secured.

The VPS sends me an email whether or not everything worked and that's it.

Most days of the week, there's no problem. Sometimes, you get the wrong amount from people, some people don't put the order number, some people confuse the bank number (BLZ) with the order number and so on. In these cases, the regex parser fails and tells the reason in the email. I then process it manually. Some people think that wire transfers work instantly or that they are also processed by banks over the weekend (which is not the case). I have a few email templates to answer these requests if necessary. Fortunately, it's not that much effort and most of the time, there's no manual work to do.

I didn't adjust the system for the coming IBAN stuff yet. Have to look into that.

There is not much to improve. In the space I'm operating in, the software, as it is, can be considered more or less complete. I mean, I can always add features, but the core mechanics, the way it works, the way it delivers value and the value people expect from the software is more or less complete. There's not much to add that improves the perceived value for people in such a way that they'd be willing to pay more for it.

But the fundamental idea is right: There must be some additional thing that's good for people, that people want. There's also related products, added benefit, whatnot. I won't do Gold membership, but I might be able to sell different things that complete the offering for some people.

Compare this to Microsoft Office. Word is for writing stuff. It's more or less feature-complete. Sure, you could add some stuff, but most people are happy with how it is in its basic edition. So Microsoft offers also Excel and PowerPoint. They are for very similar people, they complete the offering, but they're totally different. A "Word Gold" wouldn't make any sense.

One more thing: Whatever I add and whatever pricing change I introduce comes at a cost. Introducing tiered-pricing (3 wiggles for 2 euros, 7 wiggles for 4 euros etc.) for example has benefits, but it also increases complexity and decision making. I'd do this for my next project, but for the current business, I'm also a bit stuck in the current userbase with decisions I made in the past.

I might offer my service in English as well next year. That's going to be an opportunity to experiment a little bit and a way to grow the business.