3 lessons learned selling 3 SaaS products
3 lessons learned selling 3 SaaS products
An exit can easily become a nightmare, learn how to avoid it
Selling a product is usually the exciting end of a product journey.
But it can easily become a nightmare if you don’t do a bunch of things right, from the beginning.
In this issue, I’ll share with you my experience of selling 3 SaaS products, in a completely different context.
Keep reading, and you’ll learn:
how to correctly manage all services
why networking is important
what affects the price of your valuable asset
1. The (multitude) of services
The first time I sold a product I was completely new to the SaaS game.
Without even realizing it, I had included a ton of services into the product, Amazon Web Services, WebFlow, MailChimp, Namecheap, and others.
As soon as I started thinking of passing all of that to the acquirer, I thought “AWS is a giant, it’s probably a breeze to move all the resources to a different account”.
Well, I was completely wrong.
Of course, I did use my personal AWS account to create everything. Who was thinking of the handover 2 years before?!
I spent a month supporting the migration of Lambda functions, Cognito, API Gateway, S3, Amplify, AppSync, DynamoDB, and all the roles, and permissions… to their AWS account.
Definitely, something I want to avoid in the future.
Lesson learned
This is what I do know, as soon as I buy the domain of a new product, I create new accounts using email & password for every single service I use (hosting, email, database, everything).
Avoid using Google, Facebook, Twitter, or create dedicated ones if you really need to (i.e. hey.productname@gmail.com).
Some services implement resource migrations between accounts, but if they don’t, send to the buyer the credentials, and the migration is done. In 10 seconds.
And the acquirer will also appreciate it — a lot.
2. Networking is important
This year I sold two Twitter products, in an unfortunate context.
Twitter applied $42k/month API pricing, and I couldn’t afford it.
I tried selling the products on acquire.com (great product by the way, I recommend it), but finding someone who could afford to buy the products and pay that amount, was not easy (let’s say almost impossible).
In the end, I didn’t sell them via any buy & sell platforms.
Instead, I was active on Twitter as an indie hacker, bootstrapping products and building in public. When this Twitter drama happened, the community organized itself, and I joined a Slack community where all the people affected were discussing how to manage the situation.
That’s WHERE I found the buyers.
It looks like a bigger Twitter product was looking for good opportunities to buy products, at a cheaper price.
It was a win-win situation, I wanted to sell instead of shut down the products, and they needed to increase their MRR to pay the new (huge) bill to Twitter.
Lesson learned
Your network counts. Where you show up daily counts. Be part of communities, talk to people, and be open and helpful with them. You’ll never know where the opportunities will come.
3. Exit value
The basic calculation for a SaaS price is
MRR x 12 x 5
But there are many factors affecting the final price.
First of all the context and external factors.
i.e. This year I was selling due to Twitter applying a huge bill, so I definitely couldn’t use that formula (unfortunately).
Other factors are:
how much did you invest in SEO?
are you able to generate traffic independently of your effort? (no personal branding for instance)
how much are the fixed costs? (servers, services, and so on)
what’s the market you’re in? (consumer, business, both)
what’s your growth? (a stagnating business is not a great selling point)
These are all factors to take into account even when starting a new product.
I hope this was useful, and will prevent you from making the same mistakes.
Personal updates
On the 4th of December, I launched a one-time purchase product, for the first time in my life.
I always thought I needed SaaS products, you know for the sake of recurrent revenues.
However there are many one-time purchase products in the market, and I wanted to experiment with them.
Therefore I launched Shipped.club — a Next.js Startup Kit that helps people ship a digital product in days, rather than weeks. Instead of wasting time figuring out how to do things, you just do it.
And the results had been mind-blowing 🤯
This is what people get: ready landing page, waitlist page, pre-order page, authentication, email, database ORM, UI Kit, payments — it’s all covered.
Plus, they get access to the private community with other shippers, and I support them in launching their product, as quickly as possible!
15 people already joined the community.
— if you’re a solopreneur like me, take a look at shipped.club
That’s all for today, have a nice Sunday ☀️
As always, feel free to tell me what you are interested in reading on these pages by replying to this email or on Twitter / X.
See you next week 🙌
Luca