*note: if you haven’t listened to Searching for Saas episode 10 and episode 11, you probably want to stop right here and listen to those first.
If you’re anything like me, you’ve probably read a lot of “how-to” startup material. “How to scale your business from 1k to 100k”, “How to hire your first employees”, “How to raise your series A”. All that stuff is great, BUT I DON’T EVEN HAVE AN IDEA!
That’s been the refrain of my life for the last while, and it’s been really depressing. All this scaling knowledge and excitement, but nowhere to funnel it. Sure, for a while I tried just latching on to any idea I could sink my teeth into – but that got old pretty quick when I spent ~3yrs of evenings and weekends on ~5 startups that didn’t go anywhere. A good friend of mine compared finding an idea to dating. You just have to keep putting yourself out there and eventually you’ll come across “the one”.
I like the idea of coming across “the one”, but I’d like to tilt the odds in my favour if that’s possible. So of course I asked my trusty friend Josh Ho (@jlogic) about this on the podcast. Where can we find ideas and how can we validate them.
How to find a Saas Idea
So it seems to me there’s a few tools you need in order to find a Saas idea.
- Learn how to identify why existing companies are successful
- e.g. 7 Powers framework
- Listen to other founders talk about things that worked and didn’t work
- e.g. Saastr podcast
- Learn as much as you can about positioning, marketing, product development and engineering
- Consume a tonne of data on topics such as
- What other companies exist and what do they offer? (maybe you can remix some ideas into a new, better idea)
- What new technology is coming out? (maybe you can use this tech to get ahead of some existing players)
- What market shifts are happening? (maybe you can give a new offering to consumers are looking for a new type of product)
There’s probably more, but that’s what I can think of right now.
How to validate a Saas Niche
Before I lay it out, let me share some of my biases. I’m trying to evaluate a business idea that I can self-fund (I’m not interested in riding a unicorn to $1Bn with investors breathing down my neck). I’m happy to grow a company to whatever size the market will bear – if it’s 2 people or 200 people I’m happy either way.
I’m also a big believer in using SEO marketing as an acquisition strategy. Of course there are other ways to be successful too (e.g. market places, PPC), but I think the most attractive one as a self-funded business is SEO.
Ok, so what is our (Josh and my) formula for this?