As a bootstrapper of a German-based SaaS company myself, I've gotta say that I quite enjoyed the article. I would like to weigh in on specific parts of the article with some quick, if not exhaustive, comments:
> Bootstrapping is tough, especially in the beginning.
This couldn't be more true. Once the operation begins, that's when things start to get real. Cash starts to burn once the product moves from your laptop to its first production environment, and that usually happens well before the commercial go-live. Unless you have significant savings parachute should things go really badly, you are faced with the very real possibility of having to fully bail out once personal finances get to a critical point (e.g. not being able to cover rent, bills, food). Much bravery and faith is required to get through this very stressful phase. Expect to spend the early days and months praying for break-even.
> One of the benefits of running a SaaS business is the low operational costs. For Stagetimer, I spent barely €20 per month on tech infrastructure.
This really depends on what it is you're doing. If your service is computationally intensive and works on larger chunks of data as part of its offering, then it gets way more expensive. Bandwidth costs, compute costs (# of VMs/Cores/Threads, RAM, storage) all become pretty expensive. Costs will get more difficult to estimate as time progresses - for a few reasons:
1. Growth is hard to estimate, always, but especially when nCustomers == 0.
2. With increased load comes increased utilization of the infrastructure, which necessitates the need to know how much extra capacity should be available and what usage peaks look like. During the phase of winning your first customers and then some, you don't want to be in a position of getting frequent complaints about degraded performance, or worse, outages. Those things can kill you right at the start. Additionally, you probably shouldn't spend too much time solving scaling issues from the get-go before you have any reasonable traction. Finding a reasonable balance is tricky.
3. With scaling and spare capacity taken care of, you'll then start to see what your gross revenue really looks like and will likely start exploring ways to reduce your operational costs and squeeze out more margin by reducing the TCO, and ideally calculating the COGS for your product to get insights into how to reduce your fixed costs.
> Pricing is a huge challenge in the SaaS space
Oh God, yes. Good luck with this, especially if there's no precedent for the business type. If you're competing in a pre-existing product category then you can just spreadsheet the other offerings out there. If not, then you're basically guessing. In my opinion, you should always start with prices higher than what you think people will pay for. It's easy to go from higher to lower, but not vice-versa, especially at the very early stages. If there is an interest in the product and the pricing is on the high side, you'll likely get a lot of feedback. Be prepared to adjust your pricing and find a harmonious price point, but never rush this process. Don't forget, you can also negotiate prices directly with people who reach out to you.
> Legal, taxes bureaucracy, company founding
All of it is a pain. I'm quite sure that it's much easier in 2023 to explain what a SaaS is, to notars and tax accountants, than it was in 2013. Most tax accountancy firms will want to know stuff about your business before they agree to enrol you. In 2013 it was way more difficult to explain "customers send signals to our computers over the Internet and we send back signals containing the information their signals were asking for, and yes people will pay for this and mostly by credit card". Fun stuff.
(There's a lot more I want to type but I have to step away for now)
> Bootstrapping is tough, especially in the beginning. This couldn't be more true. Once the operation begins, that's when things start to get real. Cash starts to burn once the product moves from your laptop to its first production environment, and that usually happens well before the commercial go-live. Unless you have significant savings parachute should things go really badly, you are faced with the very real possibility of having to fully bail out once personal finances get to a critical point (e.g. not being able to cover rent, bills, food). Much bravery and faith is required to get through this very stressful phase. Expect to spend the early days and months praying for break-even.
> One of the benefits of running a SaaS business is the low operational costs. For Stagetimer, I spent barely €20 per month on tech infrastructure.
This really depends on what it is you're doing. If your service is computationally intensive and works on larger chunks of data as part of its offering, then it gets way more expensive. Bandwidth costs, compute costs (# of VMs/Cores/Threads, RAM, storage) all become pretty expensive. Costs will get more difficult to estimate as time progresses - for a few reasons:
1. Growth is hard to estimate, always, but especially when nCustomers == 0.
2. With increased load comes increased utilization of the infrastructure, which necessitates the need to know how much extra capacity should be available and what usage peaks look like. During the phase of winning your first customers and then some, you don't want to be in a position of getting frequent complaints about degraded performance, or worse, outages. Those things can kill you right at the start. Additionally, you probably shouldn't spend too much time solving scaling issues from the get-go before you have any reasonable traction. Finding a reasonable balance is tricky.
3. With scaling and spare capacity taken care of, you'll then start to see what your gross revenue really looks like and will likely start exploring ways to reduce your operational costs and squeeze out more margin by reducing the TCO, and ideally calculating the COGS for your product to get insights into how to reduce your fixed costs.
> Pricing is a huge challenge in the SaaS space
Oh God, yes. Good luck with this, especially if there's no precedent for the business type. If you're competing in a pre-existing product category then you can just spreadsheet the other offerings out there. If not, then you're basically guessing. In my opinion, you should always start with prices higher than what you think people will pay for. It's easy to go from higher to lower, but not vice-versa, especially at the very early stages. If there is an interest in the product and the pricing is on the high side, you'll likely get a lot of feedback. Be prepared to adjust your pricing and find a harmonious price point, but never rush this process. Don't forget, you can also negotiate prices directly with people who reach out to you.
> Legal, taxes bureaucracy, company founding
All of it is a pain. I'm quite sure that it's much easier in 2023 to explain what a SaaS is, to notars and tax accountants, than it was in 2013. Most tax accountancy firms will want to know stuff about your business before they agree to enrol you. In 2013 it was way more difficult to explain "customers send signals to our computers over the Internet and we send back signals containing the information their signals were asking for, and yes people will pay for this and mostly by credit card". Fun stuff.
(There's a lot more I want to type but I have to step away for now)
EDIT: Formatting