Bootstrapping a SaaS ecommerce startupPresentation by Charles Brun for the CCE

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Personalized paper an online catalogs.

@mtl_ecommerce

facebook.com/mtlecommerce

meetup.com/mtlecommerce

mtlecommerce.com

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Social Media Email Offline

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Now In Store enables ecommerce by driving traffic to online stores

SaaS = Software as a Service@_charlesbrun

Traditional software model

Perpetual license upfront

Annual maintenance fee

Upgrades

C

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Traditional SaaS required deep pockets to stay alive

• Almost all costs are incurred at the beginning.

• High cost because custom-built solutions and large clients

• Profits are far into the future

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The consumerization of IT changed everything

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The propensity for users’ experiences with technology as consumers to impact their expectations regarding their

technology experiences at work.

• Business Apps that are built like consumer apps

• Single purpose apps (unbundling)

• No customization (one size fits all)

• SMB oriented

A new wave of SaaS

• Lower setup cost

• Lower maintenance cost (single version)

• Easier to bootstrap!

5 rules to bootstrap a SaaS

ecommerce Startup

• Keep costs as low as possible

• Team should be able to do everything

• Don’t overbuild: eliminate waste by talking to your customers

• 80-20 rule: 80% of your customers use 20% of a product’s features

Rule #1: Stay LeanYOU MEAN TO TELL ME

THAT I NEED TO TALK TO MY CUSTOMERS?

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Rule #2: Iterate Fast

• Build MVP

• Ship frequently and learn fast (time = $$$)

• Measure your results to get to product-market fit

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Rule #3: Assess value propYou need 2 million

customers to build $100 Million business

charging $5/month

• Put a price on it as early as possible!

• SaaS SMB is hard because you have a lower ARPU

• Make sure ARPU is above $20 / month

• Be weary if your revenue ceiling is $100 / month

• You need tremendous volume to become a rockstar

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Rule #4: Focus on churn

• Churn Rate = The percentage of subscribers to a service that discontinue their subscription to that service in a given time period

• In SaaS, churn rate needs to be at 5% or lower (in SMB world)

• Churn is the single biggest determinant of a business' capital efficiency and how quickly it can grow

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5% churn rate

2.5% churn rate

$76,505 MRR

$139,045 MRR

Comparing churn rates

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Rule #5: CAC < 1/3 LTV

• You can only be profitable with scale

• Once you control churn and the unit economics make sense expand sales

• Make sure CAC < 1/3 LTV

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A startup is not a rocket-ship, it’s a hot-air balloon

Bootstrapping a SaaS ecommerce startup

Thanks!

@_charlesbrun

Presentation by Charles Brun for the CCE