Small Tech Business #11 - Pricing New SaaS, CTO Outage stories, Online traffic growth tips, Spotlight: Wavve.co
Week of 11/15/2020
|Justin Chu||Nov 12, 2020|
Small Tech Business is a curated newsletter for people looking for inspiration and learning around starting their own small internet or technology business.
by Arvid Kahl - Article 📰 (7 min) / Podcast 🎧 (23 min)
Arvid is someone whose journey I follow closely, as he is constantly sharing super helpful content, this piece is no exception. He talks through excellent general advice on pricing your product, then walks through how he applied it himself for his new business, permanent.link.
“In my experience, the most robust pricing systems are based on the value metric of the customer. Intercom charges for their helpdesk by the number of active users in your product, Mailchimp charges by the number of people on your email lists. They have found the one thing that allows them to make more money when you make more money.”
by Adam LaGreca - Article 📰 (5 min)
As small tech founders, many of us wear the CTO hat for our businesses. A lot of these stories are from established but not huge startups, so many of the learnings are still quite relevant to our smaller businesses and projects.
“The outage occurred on a Friday afternoon, just as we were about to head out to Halloween Happy Hour. The page came in that we were serving exclusively 500s — a bad, bad experience for customers. After some digging, we realized that our hosts had filled up their disks, and we started failing because we couldn’t write logs (also scary because we were flying blind).”
by Moemin Mamdouh - Blog Post 📰 (6 min)
Because small tech businesses are more lean than more traditional businesses, they don’t need a ton of customers and can thrive off organic growth. Regardless, the need for an initial boost or launch is common. Moemin’s post gives some really useful and concise advice around sharing your project or business online and also how to take advantage of the traffic you receive. He also has another really great write up around his experience launching two projects this year 📰 (5 min).
by Bart Boch - Indie Hackers Post 📰 (4 min)
This post follows pretty closely after the piece above this one; it has some useful insights around sharing your project or business online to get traction. Notably, this piece talks about utilizing Facebook Groups, which is an under the radar source of targeted online communities to share projects to. I’ve found it is super useful for my own side business, Mobo Games, which pertains to the board game and indie game dev communities.
“The most important - don't be afraid to put your business out there. You'll get some hate (it's normal when promoting business online), but mostly positive responses and many new happy customers.”
by Josh Pigford - Blog Post 📰 (7 min)
Selling an online business for a life-changing amount of money is a dream many STB founders have. Josh Pigford and his Stripe analytics company Baremetrics has been a beacon of transparency over the years with their Open Project, where they encourage businesses to share their revenue data with others. I really respect what Josh has down with Baremetrics and this is great to read about his journey with Baremetrics and his plans after.
Small Tech Spotlight: Wavve
🔗 Link: https://wavve.co/blog/
💰 Revenue: $123K MRR
📦 Product: “We built Wavve to provide audio creators with an easy & effective way to repurpose audio on social."
This week we take a look at Wavve, a really inspiring small tech business that I found out about through a recent Indie Bites podcast episode (🎧 15 min). Despite Wavve having so much success and being on pace to exceed $1m ARR, they have stayed extremely lean and only have a handful of employees. This epitomizes the dream of building a successful small tech business - something valuable, efficient, and scalable.
One key to Wavve’s success, is how well they have priced their product. Their pricing tiers are based off of total minutes of video generated by their tool. This very tightly ties their products value metric (generating video) directly with their pricing structure.
Alternative pricing models (mistakes):
Pricing tiers unlocking “premium” editing features - This makes your free tier become a poor demo of your actual product. Plus, a video editing tool’s value metric is not how easy it is to edit video, it’s how much they actually use it. This model will actually de-incentivize use of the tool.
Pricing tiers limiting the quality of video output - This is the model that VEED.io uses, which may be due to technical limitations/costs, but ends up falling into the same problem as the model above. It is charging based on how the tool provides value, rather than the actual value the tool produces.
Not offering a free tier - I think this is worth pointing out because some of Wavve’s competitors don’t offer a free tier. A free tier “with branding” is key to Wavve’s growth especially because they are aimed at the social media audience. By not having a branded free tier, they would miss out on a ton of potential viral posts that could drive organic growth.
In the News:
⌨️ Raspberry PI announced a $70 desktop PC, all which fits into a compact keyboard. Computing access has never been more accessible!
🍏 Apple announced their first Macs running on “Apple Silicon” - their new M1 chip. This hardware-related change, actually likely assists their software-related goals much more.
🩺 Just in case you just climbed out from under the world’s largest rock and the first thing you did was open the latest issue of Small Tech Business - Pfizer announced that its COVID-19 vaccine looks to be 90% effective, bringing a welcome burst of optimism to 2020.
💌 Hope you enjoyed the newsletter, please consider forwarding or sharing!
Written and curated by Justin Chu (@jstnchu)
P.S. - Apologies for missing last week’s issue, ran into some personal issues and wasn’t able to devote enough time to create a quality post for you all.