Summary (TL;DR): Micro SaaS is a very profitable way to target specific problems within a narrow market. However, to make sure your particular venture is as successful as possible, it’s essential to do your research and keep your costs as low as possible when you begin.
One of the biggest problems developers face is finding a way to keep their income flowing, even when most of their apps’ popularity has tapered off. Web development can be a fickle industry, so you must find a way to be continuously relevant and profitable. If you’ve never heard of micro SaaS before, you may be wondering how this concept can help you with your troubles.
Micro SaaS is very similar to traditional SaaS, but it’s done on a much smaller scale. It’s sometimes merged with free trials and freemium models, offering developers and small software companies a way to introduce recurring payments through subscriptions into their business.
The popularity of SaaS, in general, is growing, but throughout the past few years, micro SaaS, in particular, is becoming very widely used. There will soon be millions of these companies throughout different markets, so now’s the perfect time to get involved.
Below, we’ll discuss everything you need to know about micro SaaS, as well as some best practices for implementing it. If you’re considering a micro SaaS business idea, keep reading before you begin.
Table of Contents
What is Micro SaaS?
>> SaaS vs. Micro SaaS
>> Types of Micro SaaS
Advantages & Disadvantages of Micro SaaS
Micro SaaS Guidelines
>> Pick Your Market/Niche
>> Get Ideas for Your Product
>> Validate Your Idea
>> Build your MVP (Minimum Viable Product)
>> Launch on Your Selected Platform
>> Automate Parts of Your Business
Micro SaaS Examples
>> Send to My Cloud
Common Ninja — For Platform Integrated Micro SaaS Solutions
What is Micro SaaS?
Even if you have heard the term “SaaS” before, you probably have a lot of questions about what exactly “micro SaaS” is. In short, micro SaaS is almost exactly the same thing as SaaS, just on a much smaller scale.
While SaaS companies work on a large, national or international scale, micro SaaS companies operate on a very small scale and only serve a niche market. Below, we’ll highlight more about what exactly micro SaaS is, who it can benefit, and how it works compared to traditional SaaS.
The term “Micro SaaS” first came into the picture over a decade ago. It’s essentially a smaller version of SaaS, or software-as-a-service, that caters to a smaller, more niche audience.
Micro SaaS was recently redefined by Tyler Tringas, a micro SaaS pioneer, as “a SaaS business targeting a niche market, run by one person or a very small team, with small costs, a narrow focus, a small but dedicated user base and no outside funding.”
In short, the main focus of micro SaaS is to solve specific problems using minimal resources. It helps to improve or provide a missing element to a specific digital service, usually in the form of:
SaaS vs. Micro SaaS
SaaS, as mentioned, stands for “software-as-a-service.” It’s a modern software delivery mechanism where clients pay monthly or yearly to maintain access to the full software and any updates that are released over time.
In the past, people had to buy software on discs, then install it onto their computers. If any updates came out, they would have to purchase an updated version. SaaS takes the legwork out of this equation, providing continuous support for as long as the recurring software subscription is active.
SaaS and micro SaaS have a lot of similarities. Both work with the same philosophy of creating a recurring stream of revenue, but micro SaaS does so on a much smaller scale. While traditional SaaS targets a large audience, micro SaaS focuses on a small niche of customers. It aims to solve specific, small problems or sets of problems for a small group of users.
Types of Micro SaaS
In general, there are three different ways you can develop and market a micro SaaS company. These include:
- Platform dependent
- Platform independent
- Platform integrated
Different types of micro SaaS work best for different businesses. Now, let’s discuss what each type entails.
As the name suggests, platform-dependent micro SaaS businesses are developed to solve a problem with pre-existing platforms. Some platforms that micro SaaS businesses target include:
- Direct Memo
If you do choose to develop a platform-dependent micro SaaS, make sure to choose a stable, reputable platform to limit platform risk, or the risk that a certain platform will cease to exist, as much as possible.
While platform-dependent micro SaaS solutions are developed for a specific platform, platform-independent micro SaaS solutions are standalone software. They often solve a specific problem for an application or program, whether it’s web, desktop, or mobile-based.
One advantage of platform-independent micro SaaS companies is the virtually non-existent platform risk. Since it doesn’t depend on a certain platform to remain functional, it can be moved to a new host if the current one ceases to exist.
Platform integrated micro SaaS solutions bring platform-dependent and independent solutions together. They work with multiple platforms across the web, integrated with different API protocols to increase compatibility.
Because the platforms are diversified, the risk is much lower than it is with platform-dependent solutions. There’s a much lower risk of all the supported platforms ceasing operations than there is for just one to do so.
Advantages & Disadvantages of Micro SaaS
Like with all business models, there are many advantages and disadvantages to micro SaaS solutions. When done effectively, micro SaaS can be incredibly profitable. However, it can sometimes be difficult to pull off. Before you decide to incorporate micro SaaS into your range of offerings, it’s important to carefully weigh your options and then decide if this is something you want to invest in.
Micro SaaS comes with several advantages for developers and software company owners. One of the biggest advantages compared to traditional, one-time purchase software is predictability. Since users agree to a recurring, subscription-based payment model, it’s much easier to predict how much revenue your product will generate over time.
Micro SaaS is also a fantastic way to make passive income. Apart from the initial development and regular upgrades, you’ll do little work while still making money every day. Since the system works 24/7 and users can subscribe whenever they’d like, actually making sales isn’t necessary. Your products speak for themselves, and sales are completely automated.
Overall, the biggest advantages of micro SaaS include high-profit margins and low risk. Since you’re catering to a niche audience and aren’t investing a lot of resources upfront, the profitability is nearly limitless.
While micro SaaS can be incredibly profitable, it does come with its downsides. The biggest disadvantage is that micro SaaS is incredibly difficult to pull off if you don’t know exactly what you’re doing.
When you’re developing your product, it’s essential that you do sufficient research to ensure you’re solving a real, widespread problem that your users are experiencing. If there’s no market for your micro SaaS products, you aren’t likely to make any kind of profit.
Another disadvantage of this business model is that acquiring customers can be difficult. Not only do you need to find a scalable way to keep your current customers and acquire new ones, but you also have to keep your acquisition costs lower than your fees.
Micro SaaS Guidelines
Perhaps after reading about what exactly micro SaaS is, you’ve decided that you want to try developing your own micro SaaS business idea. There are a lot of steps in this process, and each one must be completed thoroughly to ensure your service’s success.
The number one thing to remember is that, although you may have plenty of great ideas, you need to enjoy working on your product. You’ll likely be working to update and improve your service regularly for years, and you don’t want to experience any kind of burnout that could threaten your profitability.
Now, let’s discuss some steps and guidelines for creating the best micro SaaS idea possible.
Pick Your Market/Niche
The first step in your micro SaaS journey should be picking the niche or market you’ll serve. This usually goes hand-in-hand with choosing your product, which is a better first step for companies that are already familiar with a certain market.
Whether you’re already familiar with a certain audience or not, the market you choose can make or break your micro SaaS business venture. Your market can make or break your service’s success, as well as make the difference between easy growth and profitability or high-risk and unsustainable ventures.
The best course of action here is to choose a growing market, especially one that you already know has widespread problems that customers need a solution for. At the same time, you’ll want to keep your niche incredibly narrow to avoid entering an already saturated market.
Get Ideas for Your Product
Once you’ve decided which market you’ll base your services in, the next step is to start coming up with micro SaaS business ideas. Find at least one common problem within your chosen niche, then make a list of several solutions. As you do your research and brainstorm these ideas, ask yourself the following questions to narrow your options down:
- How will I get my first 15-25 customers?
- Is this a service people are willing to pay for?
- Am I the person to provide this solution?
- If this idea works, will it be sustainable?
While doing your research, you should also check all your ideas for any competition. If other developers or companies are offering something similar, you’ll need to either move on to the next option or find a way to make your service significantly cheaper or better than what’s currently available. Remember — above all else, you need to keep your target audience small so you can focus on the features that matter most.
Validate Your Idea
Once you choose a micro SaaS business idea, it’s time to look for validating feedback. Although it may seem small, target audience validation is a very important step in reducing the risks involved in product creation. It ensures that a target audience actually does exist and that your product will solve a widespread issue.
When seeking feedback about your micro SaaS ideas, the best people to talk to are actual members of your target audience. Ask them what problems they’re having, and what they’d be looking for in a solution. You could even pitch your idea and see how they respond to it, giving you a sense of whether or not others will subscribe to your service once it launches.
Starting a micro SaaS company costs time and money, so you need to be sure the investment will be worth it before you get too deep. Define a clear scope, check for competition, and get as much information as possible during this validation phase.
Build your MVP (Minimum Viable Product)
Now that you’ve decided on a market and validated your idea with your target audience, it’s time to build your minimum viable product, or MVP. Your MVP is a version of your product, which allows you or your team to collect information about your potential customers while investing the least amount of time and effort possible.
This is the first version of your product that will be available to customers, so while you shouldn’t invest too much into it, it still needs to be functional. Before you start coding, however, you need to select inbound and outbound sales channels and ensure you have a small list of potential customers.
Launch on Your Selected Platform
You’ve done your research and built your MVP. Now, it’s finally time to launch your service. As mentioned above, you can choose to code your micro SaaS products for a specific platform, as a standalone service, or integrate it with various APIs for use on several platforms. Make sure to take this into account when you’re choosing where to launch your services, as well as things like:
- Payment options
- Customer/developer support services
- Platforms your audience is familiar with
If you do choose a platform-dependent model, make sure the platform you use is stable and reputable. As noted above, platform risk is higher for these models, and you want to do everything possible to minimize your service’s risk.
After officially launching your product, your main focus becomes promoting your micro SaaS business. There are lots of ways to do this, including:
- Social media
- Online advertising
- Traditional advertising
- Partnerships with other businesses
Think about the avenues that are likely to reach your target audience, and organize them based on the likelihood that you’ll reach new customers through them. You can also try to generate organic leads by employing SEO and SEM techniques on your personal website or blog, both before the official launch to generate buzz and after the launch to continuously reach new customers.
If you go with a platform-dependent or platform-integrated method, see if any of your chosen platforms support on-site promotions or advertising. This will help your micro SaaS product rise higher in the search results.
Now, it’s time for the most important part of launching your product — monetizing it. Most of the profits of your micro SaaS business will come from subscription plans. However, if you’re looking to draw more users to your products, offering a freemium model may be beneficial.
A freemium model allows users to download a basic version of your service for free, using certain features at no cost. If customers decide they want full access later on, they can upgrade to a subscription-based plan at any time.
Some businesses have luck offering a free trial instead of a freemium model. The difference is, in a free trial, a credit card is required upon download and, if the trial is not canceled by the end date, users are automatically subscribed and incur recurring charges. The choice is up to you, although many businesses have found success with the freemium model as of late.
Automate Parts of Your Business
It’s often beneficial to automate certain parts of your micro SaaS business to keep costs down and business up. One aspect that’s often helpful to automate is emailing.
When your customers download your service, have them enter their email addresses to subscribe to your newsletter, information about updates, or information about new or upcoming products.
As a digital service provider, you can use automation in nearly any part of your business. This can help you increase your customer engagement, feedback, and support systems without putting in any extra effort on a day-to-day basis.
As you gain more and more recurring customers, you’ll have the resources you need to effectively grow your micro SaaS products. Use some of your profits to:
- Invest in advertising
- Hire additional team workers
- Improve your current offerings
- Automate additional parts of your business
Although growth is the goal, you don’t want to do too much too fast. Start making small changes towards growth, and if you see positive results, keep going.
Micro SaaS Examples
One of the best ways to understand micro SaaS is to see it in action. In the sections below, we’ll highlight a few successful examples of micro SaaS products, including:
- Send to My Cloud
Now, let’s discuss what each of these micro SaaS businesses does and how they stay successful.
Carrd is a one-page website building platform, offering simple, responsive designs. The target audience in this case? Bloggers, artists, and developers.
Carrd is an example of a micro SaaS business that uses the freemium model. Users can sign up to access basic features, then upgrade to Carrd Pro for access to things like:
- Google Analytics
- Branding-free designs
- Custom domain names
- Forms, widgets, embeds
- More sites on a single account
In addition, anyone who signs up for Pro will get a seven-day free trial before they are charged. If they decide to cancel before the trial is over, customers can revert to the basic version without being charged.
Storemapper is a store locator app that brick-and-mortar business owners can embed on their official website. Businesses can list all their store locations on a custom map, then allow customers to look for store locations near them.
Storemapper offers a free seven-day trial and a tiered subscription model, on which they can choose to be billed monthly or annually. The higher the monthly or annual cost you choose, the more advanced features you’ll have access to.
Send to My Cloud
If you’re looking for an easy way to backup or sync pictures, videos, or any other kind of file, Send to My Cloud has the solution. With this micro SaaS product, you can create a website where people can upload documents or files of any kind directly to your Dropbox or Google Drive. It offers encryption for security and can host any size file, even those too large for email.
Send to My Cloud offers a freemium version and a tiered subscription model. The higher the monthly cost, the more features you have access to.
Common Ninja — For Platform Integrated Micro SaaS Solutions
Common Ninja’s Develop Platform enables web developers to create apps once, and integrate them with multiple e-commerce platforms.
With Common Ninja, you can develop for more platforms, reach more people, monetize your solutions easily and do it all in less time — discover how.
Find Your Niche and Start Developing Your Micro SaaS Solution
Micro SaaS is very similar to traditional SaaS, but it’s done on a much smaller scale. Creating a micro SaaS company is all about finding a narrow, specific niche and developing the right products to solve a widespread problem among your target audience.
If you want your micro SaaS business to become and stay profitable, it’s important to conduct as much research as possible before writing a single line of code. Make sure to validate your idea through feedback, keep your acquisition costs low, and continue to grow and expand your offerings over time.