Acquiring a SaaS app with ZERO paying customers

The last week and a half have been pretty eventful here.  Not only has it been “business as normal”, but something I’ve been looking to do for a long time just happened as well…I acquired a small SaaS app.

If you’re a non-technical founder like me then the thought of building up a SaaS app from the ground up is just a daunting task.  And at this point in my entrepreneurial journey I don’t believe that learning to code is the best investment of my time, so it became clear in the past year or so that acquiring something that was a completed app (or almost at least) would be the way to go.

Of course these opportunities don’t just “grow on trees” as it were.  Not a lot of founders are looking to get rid of the SaaS app they’ve just spent the last few months working on.  And rightfully so in a lot of situations.  Building anything, even for a developer who can do all the coding, ‘for free’, takes tons of time and effort.

Finding that opportunity to acquire an app that doesn’t completely suck, at a reasonable price, is something that’s been a test of my patience.

But about 2 weeks ago I found it.

If you haven’t looked at sites like borderline.biz or transferslot.com then they’re definitely worth it (shoutout to the awesome community at IndieHackers for turning me on to TransferSlot).  These are areas where founders and developers can post businesses for sale that are very new, not quite finished, or making a very small amount of money.  There is usually no broker involved, like is the case on larger deals, and these can be a good place to look for smaller SaaS businesses for sale.

And that’s where I stumbled upon SalesCamp.  SalesCamp is a Referral Marketing SaaS app developed and launched a few months ago, but with only a few dozen trial customers, and ZERO paying customers.  Zero paying customers!?!  Yikes, right?  Maybe not.  Here is my thinking on the situation.

In the past year I’ve learned a LOT about software development in building, rebuilding, and growth of our Castos podcasting platform.  How to work with developers, how to manage a small team, how to balance revenue vs. costs, and how to get new users.  The last part is definitely the hardest, and honestly is a journey that will never end for most of us as business owners, but is arguably the thing that I’m best at: marketing.

With Castos we’ve been fortunate enough to have a very solid marketing channel relatively ‘built in’ with the WordPress.org directory.  Our Seriously Simple Podcasting plugin there continues to be our best source of new leads for our podcast hosting platform, and now we are exploring ways to get new sources of traffic, leads, and users.  This has been a really fun, and exciting process, especially now that it’s starting to work and pay dividends.

When I saw a SaaS app that was essentially ‘finished’ in SalesCamp  I thought that this would be a great way to fast forward about 6 months in creating my own SaaS app, and essentially JUST focus on marketing.

Sure there are a few technical things that we want to do with SalesCamp to build out feature sets and make some UI changes so that the app is a little more sleek and modern, but after I signed up for a free trial (14 day free trial and you can get started without credit card…just saying…salescamp.io if you’re interested) I quickly saw that this was an app with ‘good bones’ and that I could really run with.

On top of that a quick review of the Referral Marketing Software landscape showed a few things that are particularly exciting for me:

• Many competitors, each doing something slightly different – this is great. A somewhat segmented market where there are many different types of customers to serve is a great way for us to find out own niche
• Opportunity for expansion revenue – the way most Referral Marketing software is set up is you pay by the Subscriber (or new person to your email list that is a result of someone sharing their unique referral link).  This isn’t something that resets each month but is cumulative for the life of an account. So as someone is more successful with their referral marketing campaigns they will naturally move up in price tiers.  Similar to email marketing providers.
• High starting plan price – not the highest I’ve seen, but definitely a solid place to start for a SaaS.  Most of our competitors are starting in the $30-50/month range, and we’ve settled squarely in the middle of that at the time of this writing at $39/month for up to 500 new subscribers.  But the top pricing tier for most companies is >$200/month.  Doesn’t take a lot of $200/month users to start having some solid revenue.

After seeing these positive aspects to the market itself, and the fact that from what I could see as a user of SalesCamp that it was solidly built and bug free, I decided to make the purchase.

I can’t go into details about what the sale price as or what the terms were, but for a fully completed SaaS app, even without any paying customers, I feel that the deal was good for all involved.

Now the fun part starts

In the past few months I’ve come to the realization that my place in my businesses is not as a designer, developer, or even mainline customer support role (although I do a lot of that and LOVE talking to customers), but it’s to make strategic decisions about the direction of the business, and to lead Sales and Marketing.  And that’s ALL I’m going to do going forward.

Sure I’ll touch all the points of my business, but picking up SalesCamp which both just needs massive amounts of marketing, and is essentially a finished product, gives me the opportunity to devote myself even more to this as my main role in the business.

I’ll be writing a lot more here on my personal blog about marketing as we go forward.  Sure I will be learning a lot as we go from Zero to 1,000 paying customers, and along the way will share my successes (and the odd failure) here with you.