What is a Micro-SaaS and How to Create One

Have you ever had a problem that concerns such a small amount of people that made you think "I bet there is no product that solves that."

You might be wrong.

Even though its market is small, what you're looking for might exist; developed, marketed, and managed by just one person.

Welcome to the world of Micro-SaaS.

What is Micro-SaaS?

Micro-SaaS, as it can be understood from the word itself refers to a small SaaS, focused on particular needs.

It targets a niche market and uses minimal resources while solving the problem. For example, under the e-commerce market, a micro-SaaS can focus on Shopify's e-commerce stores. 

Tyler Tringas is the one that coined the term and his company, Storemapper is the first-known and basic example of the Micro-Saas model.

StoreMapper app allows merchants to create a store locator service on their website without any coding, so anyone can use it.

StoreMapper defines Micro-SaaS 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. Hence, micro-SaaS.”

Here's Tyler Tringas explaining his journey with a micro-saas:

Benefits of running a Micro-SaaS business

Once you have the idea, building your business is a straightforward process.

You can build a Micro-SaaS business rapidly since it involves fewer resources. Also, there are SaaS App builders you can use that will help you produce your MVP in even less than 24 hours. 

Micro-SaaS solves very specific problems and a small team runs the business so you can directly communicate with your customers. Direct feedback and satisfaction can make you appreciate your craft.

It is location independent. You can work from anywhere and grow the business while you are traveling around the world.

You can easily support your Micro-SaaS business as it has less functionality, a focused approach, and a niche market. 

How is it different than SaaS? (Is it better or is it worse?)

Here are Micro-SaaS’s differences from the conventional SaaS model:

• Appeals to a niche market
• Run by very few people 
• Low costs
• Small user base
• May generate revenue without funding
• Lower profits
• Appeals more to individuals and freelancers
• Less bureaucracy, fast decision making 

Like in all the things, both conventional SaaS and Micro-SaaS have their pros and cons.  

Micro-SaaS business needs more hands-on management since you are the sole founder.

You will be directly communicating with customers.

There is a trade-off between responsibility and flexibility in the Micro-SaaS business. You will have high responsibilities and need a flexible schedule to make it work.

But it all starts with an idea...

Finding a good idea

Even if building a Micro-SaaS is relatively easy, coming up with an idea that will work isn't.

And first of all, you should have a realistically achievable idea as you have few resources. Tyler Tringas suggests the Meat Grinder method to test if an idea is good for Micro-SaaS. 

The method proposes that you should constantly be thinking of business ideas and put them through the meat grinder. When you face a problem think of ways to solve it and outline your solution, your business idea.

There are some questions in Tyler Tringas’s meat grinder:

• Can I make this? Do you or your close circle have the skills to build this product without any outside help?
• Are people currently spending money on it? If people are not already tackling what you are going to offer maybe it is not a problem. 
• How will I get the first 25 customers? Then the next 250? How can you make your business go viral? Think upon your stakeholders and your inner circle to use the word of mouth. 
• If it works will it be sustainable? Think about how you will make a profit. Will there be extra costs along the way? Will customers stick to your business in the long-term?
• Am I the person to build this business? You should enjoy dealing with the problem you are referring to and the people facing this problem. You will spend a lot of time with these people so make sure you are also interested in the topics they like to talk about.

Note: answer these questions honestly.

Put your idea into the meat grinder. If there are all positive answers, if your idea survived through the meat grinder, here are other aspects to consider. 

Your idea should be 5x better than the existing solution.

It could be 5x cheaper or functionally 5x better.

If customers are already spending money on it, it is easier to convert them and convince them that your service is better than the competitors. 

Know your audience.

You are serving a narrow market and you have limited resources.

So you need to market your service efficiently.

Once you know your audience you can identify the places they hang out and reach them without wasting time in other unrelated fields.

It should be an idea and market you enjoy thinking upon.

It is your business and you will spend time and effort growing it.

It should excite you otherwise how can you convince other people that it matters?

Address to small businesses.

Large businesses have complex and long bureaucracy that makes them harder to reach and close a deal, sell your service in this case.

Individuals and freelancers are easy to reach and flexible, more open to new products, ideas. But they have smaller budgets of course.

Since you now know the characteristics of a great Micro-SaaS, let's see where you can come up with an idea:

Where to look for Micro-SaaS ideas?

Analyze existing SaaS businesses so you can come up with a niche version of them.

Large SaaS businesses have varied user base, each of them using the business for their specific problem. You can select the most common problem out of them. 

Pick an already growing market rather than a stagnant one.

A growing market means there is a need and competition in that field. There should be similar products or services similar to yours to ensure the existence of need and market. 

Look around.

Talk with freelancers and consultants.

Try to find a service that they offer over and over again. It means there is a need for such a service. Recognize manual tasks that need to be done periodically.

You may automate those tasks. 

The path from idea to product in a Micro-SaaS

Once you have an idea do not wait. Take action. It is the execution that matters for your business. 

Set deadlines for yourself.

Build your Minimum Viable Product and test it.

Note: build first, launch later:

Pre-launching takes a lot of time. It aims to see the potential customers beforehand but Micro-SaaS has a narrow focus and it is not like a blog or podcast. You need customers to use your product immediately so that you can grow your business through feedbacks. 

What to consider while building your Micro-SaaS MVP

You have few resources so your MVP should not take more than 3 weeks to build; otherwise, it means that you are doing something wrong.  

Don’t waste time!

Your MVP is to see what works well and what doesn’t so start from the basics. 

Focus on delivering value to your customers. Think upon both your current and upcoming customers. 

Don’t pretend to be a big professional business. You are a small business learning things along the way and your audience will understand it.  

Don’t exaggerate branding. In the beginning, you don't need a fancy logo or a fancy landing page. You will be gaining customers manually so you can give direct info. Your website will not be the place to impress and catch customers. 

Having different price points will be harder so MVP has a single price point. Do not have multiple pricing and payment options.

Do not allow multiple users per account. Having multiple options would require a lot of effort and coding. Do not make things complicated from the very beginning.

Use existing services to build your MVP. Search your options that will make it easier for you to build your product.

Leave out the manual things you can do later. Do the most important things for your MVP. 

Now that your MVP is ready, you need to reach customers.

Getting your first customers

It is hard to find the first customers whether it is a regular SaaS or a Micro-SaaS..

Try going to forums that your customers hang out.

For example, if you are making an e-commerce Micro-SaaS look to the forums of Shopify, Bigcommerce, Volusion. Look for popular comments and comments that involve the problems of customers. Add helpful comments and leave the link to your product. Further, look for industry blogs, conferences, online journals.

Be where your target audience is. 

Once you reach your first customers it is all about retention.

You should build deep connections with your customer.

You are a Micro-SaaS and it is okay to sometimes mess up. Do not cover up your mistakes, rather use them to engage with your customer. If you apologize and explain the reason behind it customers will understand.

Those customers are more likely to stick to you. 

After a while, you might think of raising prices but it may decrease your overall customer satisfaction even if it does not affect your revenue. 

Higher prices will raise your customer’s expectations. Which may lead to greater dissatisfaction. Think deeply about the trade-off between price and customer retention.  

Make sure that higher prices do not change your relationship with the customer. The long-term happiness of your customers is important.

Conclusion

Keep in mind that there are big players around in the SaaS market.

Even if it is more achievable to build a Micro-SaaS business you need to have a loyal customer base in a niche market to make profit.