Why Micro-SaaS is the ideal startup today.
For the highest chance of go-to-market success, I would create a Micro-SaaS product. Here's why...
The hardest part of go-to-market for any startup is building ‘market momentum’.
I.e. Getting buyers to notice you, finding first customers & getting product-market-fit (PMF).
Here is why this is hard:
The market is flooded (more on this here):
There are more products than ever. Buyers have abundant options.
It’s hard enough to get their attention, let alone convert them.
Customer expectations are rising. Especially for minimal viable products (MVPs)…
Everyone sounds the same - strong messaging is tricky:
If you’re lucky enough to get their attention, you have about 3 seconds to communicate your value.
SaaS can have multiple value props for multiple buyers - so positioning is complex.
If you can’t quickly convince them to proceed, you’ll be left behind.
Competition (supply) has increased, but buyers (demand) is somewhat the same = so price is naturally going down.
Economics 101: Supply ⬆️ + Demand 😑 = Price ⬇️
I.e. What was ‘luxury & high-priced’ 10 years ago, is now ‘stock-standard & ideally free’ today. E.g. ChatGPT.
So you now need to work harder for customers who expect to pay less.
The cost of building SaaS is expensive:
Building an MVP to validate the market is becoming harder.
Long-term success will require investing in a big enough team to meet expectations.
SaaS has huge fixed cost, but low variable cost, so:
It’s expensive to run with only a few customers.
But very cheap to run when you have a lot of customers.
Investor expectations add pressure to perform:
Founders with investors have to constantly juggle their expectations as well as the expectations of customers, staff, the market, etc… Whilst staying true to their vision… 😑
Short runways pressure results prematurely and can cause bad decisions (preventing long term growth).
The final sale of your startup can be hard:
If you’re luck enough to reach this point - finding a buyer can be tricky.
Finding one that has a compelling reason to purchase you (at a reasonable price) is even harder.
So how does Micro-SaaS fit into this?
Well, firstly, what is Micro-SaaS?
Micro-SaaS is:
Small-scale software-as-a-service (SaaS) that targets a specific market or customer need, typically operated by a small team or even a single individual. Unlike larger SaaS companies that aim for broad markets, Micro-SaaS businesses focus on providing specialized services that solve very specific problems or cater to a particular segment of users.
Here are some examples:
Eightify - Summarise YouTube videos with AI.
Value: Save time on long videos, get key ideas & insights instantly.
Cost: $3.95 per month.
LaunchList - manages product launch waitlists.
Value: Enables brands to create excitement around upcoming products.
Cost: $19 - once off payment.
Carrd - Simple one-page sites for pretty much anything.
Value: Tailored landing pages for faster and higher conversions.
Price: $1.5 per month ($19 per year).
So why is Micro-SaaS the ideal startup today? Well:
Product positioning & messaging is simple:
1 use case + 1 buyer = 1 message.
Making it clear & compelling will create interest quickly.
Customer perceived effort is low:
1 use case makes it’s much easier to adopt and use.
Lower effort means faster decisions and thus shorter sales cycles.
Low objections to pricing:
If people aren’t willing to pay you $3 - they’re either terrible customers or not the right fit. Either way, let them self-select and leave. Focus on the product.
Less sales effort required.
Low running costs:
Many micro-SaaS companies can be run by 1 person (some even part-time).
Low fixed cost, means longer runway, means more opportunity to find PMF and scale.
Lower price = lower expectations = lower support effort:
When someone pays $5,000 a month - they want $5,000 a month of value. This can create huge support and opportunity cost to growth.
Less time spent on supporting adoption, more time spent improve the product and market growth.
Less need for investors:
With low fixed costs means lower need for investment/runway.
Retain full control over your startup - both strategically & financially.
Easier final sale, easier to integrate.
If you nail a small part of (say) a CRM, you could sell this to one of the larger CRM players as a value add to their product.
It’s easier to align simple use case to bigger products.
Whilst Micro-SaaS might make your go-to-market easier.
‘Easier’ doesn’t mean ‘guaranteed’ success.
Micro-SaaS will still faces the same challenge as any standard SaaS - just at a smaller scale.
So all the points mentioned above are still relevant to any type of startup seeking go-to-market traction and PMF.
I.e. focus on 1 use case, 1 persona, 1 message - and make it simple and compelling enough to drive action.
It takes the same effort to be amazing at 1 thing, as it does to be average at 10.
Except people won’t pay you for average.