Archive | SaaS From Scratch

Uh oh, it’s going mainstream

Something pretty funny happened today.

A great guy I’ve been talking to about a potential product called me up and told me about this “spam” email he received. It was almost a word for word rendition of the “strange question” email popularised by Dane Maxwell’s Foundation stuff (of which my journey is based).


In his words, he didn’t bother replying because “he’s some stranger, why would I spend my time for free so he can make something to make money.”

A couple of interesting things came of this.

First, it explains why my email response rate has been awful. This definitely seems like an industry where people are getting emails like this all the time. One business owner previously told me she gets “spam” emails like this all the time. All in all,

The strange question email has got to go.

Second, I had a quick look into the sender on LinkedIn. Apparently, this guy who worked at a fast food chain had a whole lot of endorsements in software development, SaaS, online marketing and more. Props to him for giving this a go, even though the endorsements are a little misleading.

From the endorsers themselves, you could probably build a list of everyone who is doing the Foundation this year. Lots and lots of people endorsing each other for the same “skills”. Most of them also have changed their professional headline to “Software entrepreneur” or something similar.

I’d be curious to see how this effects their results.

It may just be a matter of time before the “strange question” email becomes a running joke to business owners, comparable to the “who lies more” line in the pickup industry…


What’s your why?

Something that has come up a few times now is knowing WHY you are doing what you are doing. In other words, what is the reason you want to run your own business.

This always seemed a bit like fluffy boring mindset stuff. But when a business coach actually got us to write down a massive list of things we do and don’t want in life, it seemed to trigger something that I hadn’t felt in a while. To do this and refer back to it every so often seems like an effective way to reinforce what you’re doing, and give you a bit of purpose. It’s pretty similar to some of the exercises you’ll find in The On Purpose Person, a good book on the topic, and a pretty quick read.

The lists we wrote were massive. Not just like 3 or 4 things you want from life, you just keep going for 5 or so minutes until you have a big list. Among mine were being location independent, not caring if I blow $60 on a round of drinks for everyone, not having to answer to people, no alarms in the morning, and being able to take naps on the bean bag behind my desk in the middle of the day. The combination of what you want and what you don’t want is powerful.

Vision boards fit into this category as well. In my opinion, creating a board of stuff you’ve already achieved, or places you have already been is equally important. It makes you appreciate where you are right now instead of always wanting more.

So, take a few minutes to build a list of everything you do and don’t want. With a bit of purpose comes a lot of motivation.

The video below if my biggest “why”. It’s also why I went off the grid for a while.


Researching and hanging out with your audience

One of the common themes among any good resource on learning about your audience will tell you to find where they hang out, read their problems and even get into the discussion.

In my experience there are two goldmines when it comes to finding your audience. Forums and Facebook.


Facebook is great for the validation phase because you can target specific groups of people with ads based on a whole lot of criteria. These include their interests, what pages they like and what groups they are a part of. There are some tricky methods for the later stuff. You might be thinking “but my target audience doesn’t live on Facebook”. There are a lot of “interests” that Facebook discovers about people that aren’t very helpful for targeting, but you may be surprised at the number of groups and pages out there that have a ton of followers in your target audience.

For finding your audience on Facebook, graph search is awesome. It allows you to search for some pretty exact things in plain English. Things like

“people who are members of GROUPNAME”

and you can extend to

“people who are members of GROUPNAME and like the page PAGENAME and are female from CITY”
“women over the age of XY who like PAGENAME and ….”
You get the point.

You can pretty quickly build a big list of people that fit very specific criteria, and see what stuff they like. You can also get involved in their groups and ask questions. Just make sure you offer value before being a pest.


target audience_sm

Forums are arguably the best way to get involved in communities of your target audience. Finding these forums is as easy as going to Google and searching for your niche and the word “forum”.

For example, if you wanted to find some dog owners, Google “dog owners forum”. You could find some plumbing professionals by searching “plumber business forum” or “professional plumber forum”.

A lot of searches will also turn up sub-forums which fit your niche. For example, you might find a small business owners forum with a tradesman section where there are some plumbers that hang out.

Tracking it all

In one session, you can easily find a whole lot of resources on Facebook and Google. As you go along you’ll discover some extra keywords to search for and may end up finding more options than you know what to do with. It’s a good idea to keep track of everything you find for future reference.

Depending on how many pages you are trying to find, simply using a text file in Notepad can keep track of all the Facebook pages and forums you want to follow up with. Alternatively you can put them in Excel with some notes like “5,000 members, very active etc”.

One awesome tool I’ve found for this is the Diigo Chrome extension. With a couple of clicks you can save the current page you are on, and break them into lists. I name my lists something like “Plumbing – Facebook – Australia”, “Plumbing – Forum”. You can add notes and tags so they are easy to find later, and Diigo lets you export them all to CSV later if you need.


Things fall into place when you take focussed action

You’ve probably seen about a thousand posts on “taking action”.

If you’re anything like me you probably has thoughts along the line of “well… duh”, and brushed it off as new agey rubbish. Personally I’ve taken all kinds of action. But, instead of moving in a specific direction towards a specific goal, my actions have been more like a shotgun blast – hoping something hits the target.

Add in a little bit of focus and it’s crazy how quickly things can fall into place.

The whole “foundation” approach to creating a SaaS from scratch provided that direction. After absorbing an insane amount of freely available information on their model, I condensed it into a cheat sheet of what needs to be done to build a SaaS (which will come out in a future post).

Having a clear-cut list like this is unbelievably effective at getting you to take action, and get shit done. And more importantly, get the right stuff done that will take you directly towards the end goal.

The first goal was to actively find business owners who had shitty processes or who could benefit from a software solution.

Through Facebook groups and, I went to three events in the first week and one the second. These weren’t necessarily networking events, but if you get there early and hang around after, there’s always people willing to have a chat.

Actual Event I've been to

Actual Event I’ve been to

A few key points about networking for SaaS creation:

  1. Go in with an open mind. You never know how much awesome someone will bring to your life, even if they look silly
  2. Remember their name and get them to talk about themselves. Don’t lead with your own sales pitch. If you do, people will tell stories about you later as “that annoying dude”
  3. Inevitably, they’ll eventually ask what you do. My normal response is along the lines of “build software to help businesses to cut their paperwork or fix their crappy manual processes”. Technically I haven’t actually done this yet, but I’ve convinced myself this is what I do
  4. Depending on their response, you can casually probe them about their own business and see if “there is anything that seems to take you forever to do or that you hate doing”

And a bonus point is don’t dress like a dag. Not caring what other people think about you isn’t a bad thing, but why give them the opportunity to judge you poorly before they’ve even met you.

In two weeks, the results are 5 great contacts who either have something they want resolved, have a client who wants something resolved or have identified problems in industries they work in. On top of that are loads of people I’ve met who will be at future events, and active business owners, and who now know someone who builds software for businesses (the point here being they will refer people, and already have).

This is by doing nothing more than the four points above.

On top of this, in week two I had a coffee or burger date with two people I’d met at an event on week one. Both guys who are super keen to have some kind of software tool built in their industry.

Moral of the story: Things just call into place when you take focussed action.


Con Yourself – Convince yourself you’re awesome

Just finished watching American Hustle (which by the way is a pretty awesome move). Somewhere in the middle, Irving (the main character) says “Everyone is conning themselves”. While he says this from a negative angle, there’s also a positive spin. I kind of see it the same as the old adage “fake it till you make it”.

It just so happens I have a list of things on my whiteboard that I’m conning myself to believe.


Before I started sticking to this, when someone asked me the well overused “what do you do” question, they’d usually get some shitty boring spiel about how I used to be a control systems engineer and now sell SEO software to webmasters, and am trying to come up with a new software product to launch.


These days, the same question receives a response like “I work with businesses to save them time and money by building software to solve problems”. A bit more direct, wouldn’t you say? If they ask to elaborate I’ll go into eliminating paperwork, making things easier & faster, saving money and so on.

Have I actually done these things yet? You could probably say I have with Chimp Rewriter, but that’s not the point. I know for sure that I have the knowledge, capability and drive to make this happen and there is no reason to not start telling people that this is what I do.

Telling people regularly has two effects.

  1. I’ve actually started to believe it, and I really feel this is what I do. Partly because I’ve built up so many solutions for things in my head already during conversations with business owners. These are solutions to real problems, not hopeful startup ideas.
  2. Every so often someone will say something along the lines of “Oh really, well where I work has this awful system….” or “Oh really, we have SO much paperwork to do and I HATE IT”

Seems like a win-win.

And it doesn’t even take long to hit this point. I’ve been to 3 networking events since adopting the attitude and had good conversations with probably 12 new people. I’m now in regular emails with 5 of them. All of them people with some seriously cool problems to solve or people who have clients who would benefit from what I can do.

Without even developing any software around any of the problems, I already feel like this now what I do. To tell you the truth, it feels awesome.

In that picture above, you can see two other things on my con list -> that I eat well and work lots…. Given my current achievements in these areas, for the moment I guess we’ll have to work on one thing at a time….

And here’s a picture of the only other thing on my whiteboard.



Cold calling doesn’t suck! (Pursuing the first idea)

Who would have thunk it?

Initially, I assumed cold calling would be the worst thing ever. With this in mind, where better to start searching for the first idea than your own friends? Facebook friend culling is a pretty common practice. I knew that not partaking in this would lead to something good eventually. With contacts from school to uni to business, it could potentially be a goldmine for business ideas.

Going through 624 Facebook contacts, I ended up with a total of 31 contacts who were either

  • A business owner
  • Are a manager
  • In a position where they are involved in some kind of management

Not bad.

Sending out Facebook messages or emails to the 10 that seemed most in a position to benefit, there were a mixed bag of responses. Everything from having no awful activities through to doing through to wanting to start a business with me.

The most notable response looked a little like this:

Read a little about —– systems brother. F**king Bane of my existence. So much paperwork and so many checks. If someone could make a decent and standard system for dealing with —– they would be a rich motherf**ker indeed

Wow. Sounds painful right?

After a bit of research, I learned a little about the systems he spoke of. Basically, it came down to almost any business in the food industry. The most prevalent small business in this industry is of course restaurants.

Now there’s an obvious downside here. Restaurants are almost always on a super fine margin, meaning they aren’t going to be as willing to shell out $100/month unless you can really prove you’re going to save them a lot. Still, there’s nothing lost to call a few of them and gauge interest.


Yay, cold calling time…

I didn’t want a script, because I know I’d just end up reading it, and sounding like a robot. Still, I felt there should be something I could glance at in case of getting lost or running out of stuff to say. A fair middle ground was a cheat sheet I could glance at if required.

It looked like this. I’ve replaced specifics with XXXX and YYYY so you can see how these same lines could be used in any industry.

Can I please speak to the person in charge of XXXX

Have a bit of a strange question for you. I’m from Aktura Technology and am reaching out to find some ways to improve XXXX

Do you have a minute for a really quick question on XXXX and YYYY

Basically we’ve identified a bit of a pain point. From what we’ve been told, people hate the reporting and paperwork involved

Just wondering how you manage your XXXX and YYYY

It sounds like it’s something we could seriously improve with a software solution. Something involving tablets or PCs to record data, create schedule, generate reports etc

Is that something you would be interested in?

How much time do you think it would save you a week?

How much would you be willing to pay for something that removed this pain

Ten calls was the goal. So, I found 10 restaurants in the middle to high priced range on Urbanspoon in my area. Then, just started calling.

Call results

  • 1 sounded very interested
  • 1 sounded a little interested but were mostly streamlined already
  • 4 requested more info via email
  • 4 not interested as they didn’t spend much time on it thus didn’t have any associated pain

The biggest takeaway was that clearly the smaller restaurants had no need for the angle I was coming from.

At the end of the day, the best part of all of this was the realisation that cold calling is nowhere near as bad as I expected.

Cold Emails and Email Follow Ups

So there were 4 above that asked for more info. On top of this, I pulled 40 email addresses and contact form URLs for higher priced restaurants using Urbanspoon. I used the “strange question” template popularised by the Foundation. It looked like this:

My name is James, and I am currently doing research on making restaurant management more fun, productive and profitable.
During the management of XXXX, what are the biggest problems you face on a day-to-day basis?
As an example, at least one pain point I have identified is XXX YYY.
This is not spam and I am not going to try to sell you anything. I’d just like to learn about the pain points you experience.
I’d love to hear back from you, even if it is only one sentence!
Real Name, Real Email
I personalised each of these with the name of the restaurant, and used this method to do a mail merge with gmail. For the contact form ones, I manually personalised and set each one.
The results were nothing short of shite.
Two weeks later and I’ve received a single response from a lady who said that the biggest problem she had was paying wages.


Simply put, I’ve decided to stop pursuing this idea for now, for a few reasons – low response rate, I’m already losing excitement for the product idea, and low margins in restaurants.

Forty emails is not huge, but I definitely expected a better response rate. The calls seemed far better, but took a lot longer. This is probably due to the nature of the hospitality industry with people trying to spend as little time on computers as possible (a common theme during the phone calls I made).

I also don’t like the email template. It doesn’t feel like ‘me’. Apparently this template has achieved some great response rates, but next time I’ll modify it a bit.


The quest to build a SaaS business from scratch

Here’s the way a lot of startups work:

  1. Come up with an idea that sounds awesome
  2. Get really excited about how everyone will want to use it
  3. Ask all your friends and family if they think is a good idea, to which they will of course say it is a great idea
  4. Spend 6 months and $50k+ building the product
  5. Start selling it

Then one of two things happen

  1. It turns out to be an awesome idea and people really want it, or
  2. No one actually wants it and you make no money

Of course there are some in betweens. Maybe it didn’t cost 50k (or maybe it cost more!) or maybe you made a little bit of your money back from a limited audience.


Whatever the reason, a huge amount of startups never get off the ground. The exact percentage varies by industry, what source you read and what you classify as failure. Still, the fact remains that almost all of them fail.

That’s a lot of dreams and aspirations that have been squashed.

Not fun.

Truth be told I’ve nearly gone down this road a few times. I learned about idea validation from AppSumo, Noah Kagan and Neville Medhora. For a good starting point, see this course.

Product Idea Validation

The big mindshift change that is important from this is that you need to know that people really are interested in your stuff BEFORE you waste a ton of money creating a product, buying business cards, registering a business name and other silly stuff.

For a while, I set up some reasonably decent landing pages using a one pager theme with a privacy policy and a basic email submit with a MadMimi form (these are one of my favourite email providers). The landing page had a heading, sub heading and four benefits of the software. Then I threw Facebook ads at them, optimised for “action” in the Facebook ads interface.

For the ones that showed a reasonable conversion rate, I added an email follow up saying thanks for signing up, and a link to a Google Forms survey. For example, for a video related product the survey asked a couple of things about how they used video in their sales, if they would be interested in a product that did what we were proposing, and if they would be prepared to upfront 3 months of payment for a 10% discount for life, once the product launched.

Feedback was OK but I still wasn’t convinced enough to hire a developer.

Enter Idea Extraction

Then I discovered the Foundation and Dane Maxwell.

While I didn’t end up joining the Foundation, there was a lot of value in Mixergy interviews of Dane Maxwell and former students, Foundation podcasts and blog posts from former students (I have a big list of resources on this if you want it). In the end, I thought I’d built up enough info to work the concept of “Idea Extraction” by myself.

At the most basic level this means contacting real businesses and finding something that they do that sucks. Something people in the business HATES doing, something that takes up stupid amounts of time & resources, or something that needlessly costs them money.

After that, the idea is to confirm the problem exists in a few businesses, mockup the app, get some businesses to front up the cost of the first 3 months (at a discount) then find a developer to build a minimum viable product (MVP). After that begins the growth.

What happens now

Right here you’re going to be able to read the entire process of finding my next business. I have no doubt I’ll get there eventually. Maybe (definitely) I’ll screw up a few times, have some crappy ideas and methods but in the end we’ll have something.

At first, the primary focus will be networking – both leveraging my existing mates and contacts, and making new ones.

This isn’t entirely in line with the Foundation approach of picking a market then using cold emails & calls, but is something I think will be massively effective. That said, I’ll also be cold contacting real businesses, which is going to suck.

Time to kick some ass.



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