How to Build a Software Company From Scratch Solo

- In today's video, Speaker A talks about how to start a software company from scratch by yourself. The video covers the pros, the cons, and drawbacks. - Speaker A explains the benefits of starting a SaaS and then talks about the drawbacks. The benefits are it's very high margin, it's easier to make a good bit of profit, and you have more control and more security in the business. - SaaS provides more security because it has recurring revenue. It requires more work up front and it's more consistent over time. But it's becoming less and less costly as time goes on. - Speaker A asks the founders to find a user base and pick something that users want or need. The best way is to look at existing software companies and do it slightly different, slightly better, and at a cheaper price point. - The best way to start a SaaS is to find existing companies that are already launching, already going, and see if you could do something similar. - Speaker A recommends JavaScript with HTML CsS because it's the go to to build most sasses. He also tells people not to get hung up on the tech stack and the pricing.

Hello and welcome. In today's video, we're going to be talking about how to start a software company from scratch by yourself. So you probably have heard about, you know, starting a software company or starting a SaaS, and you know, how profitable it can be, which it is. And you may not know where to start, where to begin. You know, is it too much? Is it too much to do? Is it too expensive? So I want to jump into all of that kind of stuff, the pros, the cons, drawbacks, you know, how to actually do it, how to get customers, how to come up with ideas. We're going to be covering all of that in today's video. So strap in and let's get started. So first off, a very brief definition of what exactly is a software startup or a software company or SaaS. These are all kind of the same thing. SaaS stands for software as a service. And there's a lot of, a lot of them out there. Basically, most SaaS operates in the web browser online and most of them are paid monthly. Now there is probably lots of free SaaS that you've probably used. There's a ton. I mean, basically any piece of software that you use on the Internet is probably a SaaS or software company in some way, shape or form. So you've probably use them, you've probably seen them. Odds are they're making a lot of money. And the thing is you could too. So let's talk about the benefits of starting a SaaS and then we'll talk about the drawbacks. Because there are some drawbacks. The benefits are it's very high margin. So in a traditional business, you know, maybe you have a physical product business, e commerce, Shopify, FBA, whatever, your margins are usually maybe like 30%. So you know, you have to buy inventory, you have to pay selling fees, shipping. There's a lot of costs associated with running a traditional business. With a software, there's usually not as much of a cost. You can honestly get margins as high as 99%. And the great thing about that is, you know, if I say I'm making 100k in revenue on my Amazon business or my Shopify business, I'm probably only making $30,000 in profit. But if I say I'm making $100,000 for my software company, I'm probably making $100,000 in profit. And that's the great thing about it, is the very, very high margins. So you can make the same amount of profit with three times less revenue with software companies. So it's actually a lot easier to make a good bit of profit. The next benefit is you have more control and ultimately more security in your business. When you build a business on another platform like Shopify or Amazon or anything like that, you kind of are at the mercy of a large faceless corporation being able to kind of just shut you down at any point in time. And so that was something that I dealt with and something I didn't really like. And so I see this as a really big benefit of starting your own software company, is that you don't have to worry about being suspended randomly. You are in more control. You have direct access to your customers, you can talk to your customers, you can see what they need, you can sell them more products, you can sell them upgraded packages, etcetera. So it makes it so that you are more in control of your business and you have more security because you also have that recurring revenue. Your customers are sticking with you month after month, they are paying you every month. Its not just you have a customer come in and then they disappear. You have that recurring revenue. I would say thats probably a third benefit is the recurring revenue kind of ties into the security. You know, it's more consistent over time. You know, it doesn't go like wild ups and downs. You have a very consistent growth over time as you get more and more customers. So let's get into some drawbacks, because there are some drawbacks, and one big one is that it requires probably a bit more work up front. You know, it's pretty easy nowadays to just throw up a Shopify store or some website and sell some random product out of China. When you're starting a SaaS, there's a little more work to be done. Obviously, building the product is more work usually, but there's more work in terms of getting customers and doing marketing and things like that. So I would say that's potentially a drawback though. What I've seen is even with these more easier business models, they're becoming harder and harder anyway. And the way I see it is starting a software company is actually becoming easier and easier. There's a lot of tools and other pieces of software that make it a lot easier to get your software company up and running. Now, another drawback that you probably have already heard of is that it's more costly to start and that actually depends. I would say it's becoming less and less costly as time goes on because of all these different no code tools and the fact that learning how to code is becoming a lot easier. So even if you don't know anything about how to create a software product, you can actually learn pretty quickly and really inexpensively. You don't need a computer science degree to build a SaaS. I don't have a computer science degree and I built a SaaS. I learned how to code over the span of a few months and I learned what I needed to learn to build a SaaS. So you don't have to learn everything about everything. You don't have to learn about binary or machine code or all this stuff. You just need to learn what you need to learn in order to build an actual working product. So it's actually, I would say, less costly than it's been in the past. And that cost is continuing to come down. And if you're doing all this solo by yourself, you can pretty much do it for free. You may have to buy a domain name or pay a few bucks a month for hosting or something like that, but ultimately you can do it nearly for free. But that is if you do all the work yourself. So that's kind of tied with the other drawback is it's a lot of work, but you can do it for free if you actually go out of the way and learn the stuff that you need to learn. So those are the kind of some pros and cons, but let's actually talk about how to start a software company. The first thing that you need is a topic, an idea, a market, a user base, and the best way that I think to find one, especially if this is your first software company, I'm going to plead with you. Don't make something amazing, okay? Don't make something that's never done before. Because if you're making something that's never done before, you know starting a SaaS is hard enough. Don't make it more difficult on yourself. What you need to do is not pick something that you personally like or that you enjoy. You need to pick something that users want or need. The best way to do that is to look at existing software companies that already have a bunch of customers and look at their core product offerings and just do one slightly different, slightly better, slightly cheaper, whatever, and go with that because that's going to be a lot easier. Because the thing is, early on, if you try something really hard and you fail, you're going to be demotivated. You're probably just going to quit altogether. Whereas if you can start small and you can get little wins as time goes on, those wins put you into a positive feedback loop and you get rolling. And when you do run into a roadblock. You can just crash right through it and keep going. Honestly, most SaaS fail because the founder picked something that was too hard or something that people just genuinely didn't want. So I plead with you again, if this is the first time you're building a software startup, pick something that's already been done and just do it slightly better, do it differently, do it at a cheaper price point, something like that. A lot of really successful SaaS, and I've reviewed them. If you look at some of my older videos, I review a lot of SaaS and a lot of them are not making anything new. They're just taking something that's already been done by a larger company and doing it slightly better. A great place to find existing companies that are already launching, already going, is on Appsumo. Appsumo is a place where you can list your startup and you can list like a really great deal. And I would just look for software on there that, you know, has a decent amount of reviews so that, you know, it has a decent amount of sales. Look at what they're offering and see if you could do something similar. And that's honestly, I think the best way to start your first SaaS, because odds are your first sas is going to suck and you should just kind of accept that. Like, it's not going to be the best thing that's ever graced the world, but maybe after you've done a few of them, you might actually be able to make something really cool, really amazing and groundbreaking. But, you know, for your first sas, you really just want to get your feet wet and understand how the whole process works. And it's great to not have to worry a ton about, you know, is this product actually something people want? I don't know. You already know because you find a product that is already selling, and if they can sell it, so can you. If you're liking the video thus far, be sure to, like, subscribe if you haven't already. That's all I have to ask from you. So back to the video now, if you don't want to heed my warning and you want to start something grandier or new, validate your idea. And what I've seen is as a great way to validate your idea, is to not actually build any of the software. Just put together a landing page. And there's plenty of landing page builders out there. They're like $10 or less. Some are free and allow the software to take credit card information, but don't actually charge the card. So you can basically charge your customers and not actually charge them, but they'll put out their credit card information. What that means is that you have found someone that's willing to pay for whatever it is you're describing on your landing page. So you describe the software, you know, put in some details about it, what it does. If you could get someone to pay for it, that's pretty good validation that you found a product that people actually want to spend money on. And then, you know, again, you don't process the car because you don't actually have the software built because you could throw all this together in a weekend. You know, you throw together a landing page with a payment processor very quickly and all you have to do is send them notifications. Hey, you know, we're not quite ready, but we'll email you when things are up and running. Obviously tell them you didn't charge their card, and that's a great way to verify that your idea is going to work. If you're able to get paying customers when you don't even have a SaaS product built, once you have it built, it should be pretty easy to get customers. Now, I want to switch gears for a sec from the business side and talk about the tech side, because this is something, you know, as a solo founder, you have to do both. You have to worry about the business side, we also have to worry about the technical side. So from a technical perspective, I think personally it's a little easier than the business side. I think they both have their ups and downs, but a lot of people are worried about the tech stack. You know, what language you know, and what frameworks and what libraries. The answer is, if you already know how to code, whatever you already know how to do is going to be the best thing to start with, do not worry about can this scale to a million users worry about can this work at all? Once you get to, you know, 10,000 users, then you can worry about building something that scales. What you need to do at this point is be able to build something that actually works for a user. So build something that doesn't necessarily scale. And if you get to a point where you need to scale later, you can rebuild the platform. It's not a big deal. Lots of, I mean, basically every software company rebuilds their platform at some point. That's just what happens, because early on, you shouldn't spend a ton of time building out this crazy advanced platform. So as far as tech stack goes, whatever language you know you can probably use. If you don't know how to code, I would recommend JavaScript, HTML and CSS, because those three are the languages of the web and you're building an application for the web. And so those are the languages that you're going to want to know in order to build a Sass. And most sasses are built using JavaScript and that's what I use for all of the software that I build pretty much nowadays, unless I'm using Python, I might use that for AI. So if you want to do like artificial intelligence, do something there, maybe use Python, maybe not. Now if you don't know how to code, you can either learn and honestly, it's gotten a lot easier to learn how to code. I'm actually putting together a course right now to teach how to code and also how to build a SAS from a business perspective, because again, there's two sides, but there's plenty of courses out there, there's plenty of free information out there to learn how to code. And I would recommend JavaScript with HTML CsS. Those are going to be kind of the go to to build most sasses. That's going to get you 80% of anything you might want to build on the web can be built with that combination. If you don't want to learn how to code, you could still make it SaaS. I mean, you can use things like bubble or webflow, you can actually build a good bit of stuff using those tools and you can't build everything. You can't build really complex stuff, but you might be able to build something that you can use to kind of get the ball rolling, get some customers and then make some money. And then maybe from there you could talk about, you know, a co founder or hiring somebody. But at the very least you can get an MVP up and running, even if you don't know how to code. So all in all, just don't get hung up on the tech stack. Just use what you already know. And if you don't know, then you can learn or you can use a no code tool. Another big thing that people get hung up on is the pricing. And I don't understand why. You know, pricing, especially early on, is really easy. You just look at your competitor and how much they're charging and then maybe charge a little less or charge the same. You know, don't get hung up on these things really early on. The thing that you need to be focusing on is what does the customer want and how can I get that for them. You don't need to worry about your pricing model, you don't need to be working out your tech stack, you need to be worried about how to get customers, where those customers are and what those customers need. And that's really it. You can split test pricing as you go along. You can try different pricing models, you know, the dollar trial or freemium version or a free trial. There's a lot of different ways, but really for your first SaaS is look at what the competitors are doing in your space, look at a similar software company and what they're doing and what their pricing is, and then that's it. Again, you don't need to spend a ton of time thinking about this. It's a waste of brainpower when you can honestly just look at what your competitors are doing, go from there, and then just focus on your customer. Okay. The last thing I want to hit on is actually how to get your early customers, how to get your first customers. Now, I've done a few different videos about how to get your first customers, and usually when I review a SaaS, I talk about how that particular SaaS got its first customer. So I have plenty of videos that you can look at to kind of get inspired on how to get customers. But I think the best way to do it is to just figure out where similar softwares are getting their customers and go to the same place or go to the place where the users hang out. Right. So if you're building a SaaS and, you know, there's a Facebook group that uses a similar software, and you've made your software that's got kind of a unique edge or, you know, it's slightly different or it's a little bit better, you know, post something useful and helpful in that group and then mention your software. Because most groups, especially in Facebook Reddit forums, they don't allow you to just go in and, you know, sell your product or like, hey, guys, come buy my stuff, you can't do it like that. And you have to actually provide something useful and valuable. And then you usually you can mention that you have a product that, you know, does exactly what you're looking for. But if you can, you know, what's bonus points is if you can use your tool that you built, use your software to generate something that's really useful for, you know, a group or a forum or whatever, and then post about it and then just mention that, hey, I got this from this software that I started. That's usually the best way to go about getting customers early on is just show them how your software works and make it genuinely helpful, and you usually can get, you know, a good bit of customers just doing that. So I know this video was kind of long, but if you have any other questions, just drop them in the comments section. I'll be happy to answer them. And that's all for this video, so I'll see you in the next one. Bye.