Designing the Ideal Bootstrapped Business with Jason Cohen

I looked into that book, looks like it's really for venture backed companies trying to form a founding team. I'd recommend that you instead look up micro-SaaS, where you just target making $10k+ monthly recurring revenue and be set, rather than going on the VC treadmill and trying to raise capital, hire a team, etc which is often overkill for first time founders. Rob Walling coined that term initially through his conference on it called MicroConf, he has a new book called link which I'd recommend. His older book Start Small Stay Small is also quite good. But to start off with a free resource, Jason Cohen's video on designing a bootstrapped business can't be beat: ▶ this video

I think the better version of these ideas is in Jason Cohen's classic "Designing the Ideal Bootstrapped Business" talk.[0, 1] The difference is that Jason Cohen's advice is based on personal experience growing four businesses to over $1M/yr in revenue. I'm not seeing what qualifies this author to give such broad, sweeping advice about bootstrapping. [0] ▶ this video [1] link

Jason Cohen has an amazing talk on bootstrapping, with some very solid advice from his own experiences: ▶ this video Personally I think there is a lot of “kudos” for getting VC funding, so founders often get lured just for status reasons, joining the competition to become a unicorn. Unless you want to (or need to) “swing for the fences”, why give up ownership? Being a founder is already hella risky, and accepting VC money increases your leverage and your risk, which is just uneconomic for an average individual to do (unless they are already wealthy). Don’t double down on a risky bet. VCs get preferential shares, and they have a lot of different ways of taking control in the clauses of the contracts you sign which disempower you, and in return you get shitty common shares and often lose control for the worst reasons. I helped found a small business, and we retained full ownership which worked out great for us, although we will never get those mystical 7/8/9 figure payouts. The majority of founders only make wages[1]. We were in an incubator during our inception and I saw a lot of businesses get sidetracked by all the funding bullshit, control issues, stress, wasting time chasing investors, trying to follow conflicting or bad advice. If you do want to chase funding, consider applying for link which will help avoid you getting shafted. Other VC transactions are highly negotiation information asymmetric, because they have done many many transactions and you are doing your first, so

Jason Cohen is one of my favorite people speaking in this space. Here’s a great, actionable, talk he did at the equally informative Rob Walling’s conference. ▶ this video (I have followed this advice, and it has brought me a level of success and comfort I didn’t know I could have, as an admittedly run of the mill developer)

A good place to start with pricing is tiers at $49/$99/$249. (As recommended in Jason Cohen’s classic and awesome talk “Designing the Ideal Bootstrapped Business”: ▶ this video ) Customers at very low price points (such as $9/month) tend to churn quickly, and, counterintuitively, send more customer support interactions per customer than at higher points. You’ll never earn enough from them to cover your customer acquisition costs. Getting rid of the cheap plan also removes the, shall we say, more difficult customer.

A couple of things need to be balanced, I think, as I'm doing just that with PriceUnlock ( link ) PriceUnlock will help SaaS owners finds the perfect pricing for their product, with more upside and less downside when trying new prices. Besides, it helps you stop leaving money on the table. * THE THINGS* 1. You can "scratch and claw", as Jason Cohen (founder of WPEngine) puts it. He talks more about this in the YT link below and he also puts out this idea of 150 customers, not "1000 true fans". I highly highly recommend watching the video, regardless of going VC/bootstrapped. He also talks about 2 other ways besides scratching and clawing ▶ this video 2. Building in public is an upward trend these days. Basically you share as many milestones/ups/downs about your journey of building it. This can be a trap as well: it only works if your audience is A) interested in you sharing that, B) probably hackers/builders etc. I asked PG about this and he pretty much summed it up: link 3. As I'm building PriceUnlock, you'll also notice that I'm collecting emails (the ol' way) to get people's interest. I don't want to make a mailing list, I want to build my product, so I'll aim to be better doing the second rather than the first. But it doesn't hurt to, as Rob Walling did with Drip, launch with some MRR hopefully... or at least with some interest. link 4. The usual set of things hackers do when they launch their thing: ProductHunt, Betalist, etc. Don't forget to join my subreddit on link

This talk is the holy grail on this topic ▶ this video niche b2b, w/ natural recurring cycles, $99 price point at a minimum, and not needing to be on call is most ideal

In Australia our major commercial banks offer unsecured loans to businesses based upon the business' cash flow. Example eligibility requirements: turnover of at least $75K per year ; have been operating as current registered business for 1 year+ ; you can provide 12 months of business financial data from your accounting software. You'd need to convince the bank that your business is a relatively reliable and sustainable cash generating machine. Example terms: 9% p.a. interest rate, borrow up to $250k, no fees. Another trick you can do, orthogonal to finance, is the annual-prepay trick. Offer the "sign up for 12 months at a X% discount" plan to customers. If you can get some fraction of customers to pay you for a 1 year subscription in advance at e.g. a 30% discount that might really help the business' cash flow. Edit: if your SaaS business is the one linked in your profile then since you are not currently offering your customers an annual prepaid plan then you MUST watch Jason Cohen's talk about optimising SaaS cashflow from his 2013 microconf talk "Designing the Ideal Bootstrapped Business" ▶ this video

This is tough to give general advice for, because you'll want to tap your personal strengths. Here's a great talk by Jason Cohen, if you're trying to design a bootstrapped business. He even mentions the 1,000 true fans goal as being unrealistic compared to a handful of high-paying customers: ▶ this video Happy to brainstorm though. Here's a few questions to get the ball rolling: What're 2-3 things that people have come to you to learn? What are the 3 problems that are top-of-mind for the person who signs your paychecks? What are the top 3 sources of revenue for your current employer? How much is from expansion revenue (existing customers paying more over time) vs. new logos? Besides the all-in cost of personnel (salary, payroll taxes, health insurance, etc), what are the top expenses of your current employer? Follow the money! Once you start digging into how a company earns and spends money, you'll find ways to add revenue or reduce spend w/ software.

This might be tangential bc it's not about strictly OSS, but this talk is pretty centering: ▶ this video Patio11's talks at MicroConf too

There's a MicroConf talk from 2013 that discusses some of general traits of a desirable bootstrapped business: ▶ this video (Notes here: link ) Regarding exits, I'd say low technical complexity also helps[1]. If your whole business is built on top of Wordpress it's probably easy for an acquirer to find someone to maintain it. If the product is complex and needs regular updates then they might need to hire an experienced full-time dev, so you need more revenue to make up for that. Obviously there's a trade-off, and a lot of custom tech also allows you to differentiate. Update: you might also find this book/podcast helpful link [1] applies to the typical bootstrapped business, there are also high-tech businesses that exit pre-revenue

Please watch this video at this time stamp: ▶ this video Jason Cohen goes into why annual prepays are great for bootstrapped SaaS.