Now that we know what Micro SaaS is, let’s take a look at the key benefits of the Micro SaaS business model!
At its core, Micro SaaS is about solving problems for an audience within a specific niche. Much like SaaS (Software as a Service), it allows customers to subscribe monthly/annually to software applications that add value.
So, as a software developer, what are the Micro SaaS benefits that we can expect from this business pursuit?
In this article, I’ll be breaking down the top 10 Micro SaaS benefits, exploring the main advantages to producing Micro SaaS apps.
From minimal startup costs to financial freedom, you can expect to see a whole host of advantages. I’ll be focusing on these 10 Micro SaaS benefits:
1. Compounding results from your efforts
2. Financial security from a predictable recurring income
3. Minimal startup costs
4. Direct connection with your users
5. Ability to build it once but sell it to many
6. Time freedom
7. Location freedom
8. Technical freedom
9. Financial freedom
10. Self-employed status
1 - Compounding results from your efforts
Firstly, as you add more features to your Micro SaaS app, you’re building upon its existing foundations. Instead of starting from scratch each month, you’re always building on top of the work you’ve done in the previous month. The more features you add, the more enticing your offering will be for your prospective users.
Secondly, your customer base will grow over time as early adopters of your app are joined by new customers. Again, the work you put in on promoting your app doesn’t start from scratch each month, it compounds and builds upon what you’ve done previously. I cover the various methods of scaling up your customer base in a later chapter but for the time being, I just want to communicate this compounding of the subscribers too.
This compounding of both the growing features of the app and the expanding customer base cannot be underestimated.
In my case, when I first launched the MVP of my Merch Wizard chrome extension, I did so with a barebones app that was functional but didn’t have any bells and whistles to it. However, the functionality in that first version laid the foundations for the app as it is today and many of the original MVP features haven’t needed to be updated since their launch.
They say that you should cringe when you think about the first version of the app you release. I am cringing right now thinking about that MVP version, but you’ve got to start somewhere and gaining that early feedback is vital!
I offered a low monthly subscription for early adopters that many of them are still paying today! This group of early adopters formed a stable base of monthly subscription income which I was able to build upon as the app evolved and became more well known within the community.
2 - Financial Security From A Predictable Recurring Income
Your customers will subscribe to your product on a monthly or annual basis. Whilst there’s always going to be a certain degree of customer churn, the vast majority of your customers will continue to pay you on autopilot every single month.
It’s this automatically recurring income that makes this business model so attractive to gaining a stable passive income.
Having a baseline of subscribers paying you each month, whether or not you’re working flat out adding new features or taking some time off, is very reassuring.
If you compare this to freelancing, you effectively start at zero each month with no hours billed and if you don’t put in the hours, you don’t get paid …. Sick? Injured? Family emergency? You don’t get paid.
In my case, it was the group of enthusiastic early adopters paying monthly that gave me the confidence to focus on the app. This built up a runway to de-risk my eventual exit from my day job to go full time on the app. I wouldn’t have had anything like the same level of confidence to quit my job if I was leaving to go freelancing.
I have also been through the unfortunate experience of working at a company that suddenly went bust overnight. Everyone lost their jobs with no notice and no pay.
So, let me ask you which is safer ... relying wholly on one company to pay your salary each month, or having hundreds/thousands of customers pay you a small subscription each month … I know which I’d pick!
3 - Minimal Startup Costs
The Micro SaaS app business model doesn’t require any upfront costs. The only thing you’re putting “at risk” is your time.
As it’s software you’re creating, you don’t need to buy any inventory upfront or rent office space. All you need is your computer and an internet connection to get started.
You don’t even need an advertising budget to successfully launch your Micro SaaS app. My launches have all been via organic methods. I recommend this over ploughing money into paid ads which can be very costly if executed poorly.
4 - Direct Connection With Your Users
There’s nothing quite like having an open and direct connection with your app’s users. They will let you know what features they love, what they’d like to see next, and will also spread the word about your app to other potential customers.
In my old day job as Technical Director, I was so far removed from the end users it was difficult to get any meaningful feedback from them.
In the Micro SaaS app world, it’s likely you’ll be interacting directly with your users every day. You’ll have access to a continuous stream of useful insights into your users’ thoughts and desires which will help mold your product roadmap.
In my case, I took this a step further and organised an entire conference for my niche’s user base! As I was active in the Merch Facebook groups I saw that there was only one conference for this niche, held annually in Seattle, USA.
I figured it could be a good idea to arrange a conference for the European based Merch creators and once I had the blessing from the USA contingent, the Merch UK Conference was born!
Despite the stress of organising a conference for 80+ people, which in the end had several attendees from USA & Europe as well as the UK., the benefits far outweighed the stress. I was able to:
- Increase my profile in the community.
- Earn further trust that my app was run by a credible person.
- Create relationships with multiple influencers within the niche community and network with other app owners.
- Meet many Merch Wizard users and pick their brains in person (these relationships have lasted years and are vital for feedback).
5 - Build It Once, Sell To Many
There are only so many hours in a day and in a job/freelance role, your income is constrained by the amount of hours you’re able to work.
This is known as active income, where you’re actively working and getting paid the corresponding amount for each hour you work. Your earning potential is always going to be constrained by the number of hours in the day/month.
Contrast that with building your Micro SaaS app. You are no longer being paid per hour, but rather for the result of your efforts in building a top notch product.
This is the secret to how you can achieve a disproportionate income from the time you invest. For example, this relatively modest looking chrome extension(There are only so many hours in a day and in a job/freelance role, your income is constrained by the amount of hours you’re able to work.
This is known as active income, where you’re actively working and getting paid the corresponding amount for each hour you work. Your earning potential is always going to be constrained by the number of hours in the day/month.
Contrast that with building your Micro SaaS app. You are no longer being paid per hour, but rather for the result of your efforts in building a top notch product.
This is the secret to how you can achieve a disproportionate income from the time you invest. For example, this relatively modest looking chrome extension is run by one developer and it nets him a disproportionate $32,000 in monthly passive income recurring revenue!) is run by one developer and it nets him a disproportionate $32,000 in monthly passive income recurring revenue!
Micro SaaS apps are the best time leveraged model for us software developers to follow to achieve passive income. *This leveraging of your time is the true power of the Micro SaaS business model. *
6 - Time Freedom
You develop new features and release them at your own pace. If you prefer to work in the afternoons/evenings that’s up to you. Working on your Micro SaaS app is asynchronous work.
You no longer need to clock in and out as you do for a traditional 9-5 job. This refreshing lifestyle change opens up all sorts of flexibilities and a freedom that you don’t get when you’re part of the herd adhering to the corporate 9-5 agenda.
For example, I like to get out and ride my mountain bike for a few hours each week. When I was working in my full time job, the only chance I’d have would be at the weekend. The trails were always super busy and if it was raining then I’d have to get wet, as that’s the only slot I’d have to go out and ride.
Now, if the weather is good on a weekday morning, I can head for the hills and ride the quiet trails with a smile on my face - it makes such a difference!
7 - Location Freedom
As long as you have an internet connection, you can work on your app from anywhere in the world. This opens up all sorts of nomadic possibilities for those wanting to travel and work at the same time.
In my case, this came in handy when I flew over to Australia for a few weeks for my brother’s wedding. I was still able to work just as effectively as I would have done at home.
In fact, whilst I was there I did several Facebook/YouTube Lives with influencers and affiliates promoting Merch Wizard from our holiday rental in Sydney. This is one of the best Micro SaaS benefits as it’s incredibly freeing!
8 - Technical Freedom
It’s your choice as to whether you want to build your app in a programming language/platform new to your experience as part of your self-development or just use one that you know well to get your app to market quicker.
As you’re building a new app there won’t be any old creaky legacy systems riddled with technical debt to deal with. It’s very likely you’ll be starting with a blank canvas.
For my chrome extensions, I was able to choose between learning a new framework such as Vue/React or sticking with Angular which is what I knew at the time. Ultimately, I decided to stick with Angular for speed of delivery.
That said, for future projects, I could choose to implement them in new frameworks or programming languages as part of my own self-development goals. Technical flexibility is a huge part of the micro SaaS benefits. At the end of the day, it’s up to you!
9 - Financial Freedom
If you’re an employee and you want to increase your income, your only option is to work really hard in the hope that your exceptional performance is noticed by management to give yourself a chance of getting a “decent” pay rise.
However, we’ve all had that sinking feeling in the stomach when your pay review is disappointing to say the least. All those hours of hard work at evenings and weekends for that tiny increase? WTAF?!?
Contrast that with running your own Micro SaaS app with it’s recurring passive income business model that puts you in charge of your own income.
If you want to increase your income, then you need to work on new features, keep customers happy, do more promotion, and then you’ll be able to harvest the results of your additional efforts. You’ll see your income grow as a byproduct of the increased level of work you put in.
10 - Entirely Self-Owned Business
Your Micro SaaS app is likely to be bootstrapped (self-funded), with no outside investors. Worst case, you may have borrowed some money from family/friends to get the first version out the door.
As it’s an entirely self-owned startup, you won’t have investors breathing down your neck with ambitious growth targets. That means you’ll never be working in a stressful boom or bust scenario. You can go at the pace that is right for you.
It’s completely up to you whether you want to do it all on your own, or form a small micro-team. It’s up to you how you promote the app; whether you offer seasonal discounted sales; how you work with affiliates in your niche; how you use social media; how you handle support etc…
You’re the boss now.
In case you landed on this page directly from a search engine, then you’re reading chapter 2 of my 12 part guide to Micro SaaS.
Download the entire 12 chapter guide as a PDF eBook for free so you can read it where you want, when you want.
Final Thoughts
From time and location freedom to a fresh sense of independence, there is a lot to gain by developing Micro SaaS applications. For me personally, I’ve been able to:
- Earn multiple 6 figures in subscription income.
- Quit my life-sapping 9-5 job.
- Banish pointless meetings, office politics, chaos & firefighting.
- Work when I want.
- Work wherever and in whatever technologies I want.
- Spend more time with family.
- Have a better connection with the users of the apps I develop.
- Have way more financial stability
- Earn multiple 6 figures when I finally exited and sold my Micro SaaS apps.
Sadly, Micro SaaS is not all rainbows and unicorns. There are some Challenges of Micro SaaS you need to be aware of before you get stuck into it. Let's take a look at them in the next chapter so you’re prepared to overcome them!
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