SaaS feedback loops

Early draft

Just a brain dump, likely not coherent yet.

One of the things a lot of people (myself included) find difficult in transitioning from a service-based business (like freelancing) to a product-based business (like SaaS) is that the latter has a much looser feedback loop.

If the work you do today is perfect, it still might not make you any money today.

Or even this month.

So it becomes that much harder to know that you’re working on the right thing.

(This is true of services too, by the way, except you’ll probably get paid regardless, totally masking the fact that what you’re working on might be wrong—and is why things like charging time & materials can become so toxic.)

Something that’s only occurred to me recently is that this is much more true of later-stage SaaS than early stage.

I have a 5-year-old SaaS and a 6-month-old SaaS.

With a more established SaaS like RightMessage it’s often hard to know whether fluctuations in any key metric you care to track are caused by some specific new feature, marketing effort, etc. You need to wait longer to see the trends, if they ever become clear at all. There are so many more variables at play.

But when something’s new, like Smart Subscriber, there likely isn’t any noise at all, because not much is happening yet. Everything you see is signal.

This graph tracks new customers vs tweets about the product, which for better or worse have been the main form of marketing.

(It hasn’t been filtered to just relevant tweets, which would make the correlation much clearer. I plan to redo this in future.)

Give or take, I get new customers straight away when I talk about the product. And I don’t when I don’t.

I don’t know what my conclusion here is, yet. There’s a positive conclusion: you just need to put some of the right work in and you’ll quickly see results to tell you you’re on the right track. And there’s a negative conclusion—starting a product business definitely doesn’t mean you’ve decoupled your income from your time, in itself.

In any case, the reality is: to keep it growing, I just need to keep stacking bricks.