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don't fall foul to the "SaaS is pure profit!" syndrome.

I wrote a little bit about this here: http://yongfook.com/saas-is-not-pure-profit

In a nutshell, to get to 200 members you are not going to be operating on 100% profit margins unless you happen to be extremely fortunate.

The reality is more likely that a decent chunk of that $2k per month is being spent on customer acquisition costs. You won't get 200 customers just by existing. You need to advertise.



Initially, the major cost for customer acquisition should be founders' own time. Writing articles, pitching to blogs and news, promoting on social media, SEO and all other organic means should be the methods to get initial customers until you hit significant revenue (or get funding) to start using paid acquisition methods.

The cost of customer acquisition can be very high for a bootstrapped startup to afford. For example, Constant Contact (for $20/mo subscription) spends $375 as cost to acquire one customer. Spending a major chunk of $2k to acquire just a few paying customers may or may not be a viable strategy (depends on numerous variables, of course).

Source of data: http://investor.constantcontact.com/annuals.cfm


In this case it was mostly profit. $85 for web hosting. And I spent about $300 on Adwords last month, but this was optional (didn't even convert very well, most of the traffic is from SEO).

Those costs will be largely fixed as the site grows. I may experiment with other advertising to see what if anything converts, but I think the site would do fine without it.


Try Reddit self-serve advertising. There are lots of college students that read Reddit!


Good idea, will look into it.


You need to advertise.

This is simply not true. You need to be found but that doesn't mean spending money on advertising. I hit this mark without spending a dime on advertising. A large amount of my traffic comes from owning the most important keywords for my niche. The rest from WOM and blog posts from others about my product (reviews, interviews, CSS galleries, etc.)




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