Brian Casel is a solo founder and product designer of 13 SaaS businesses in his career. He has sold 10 of them, quit 2, and is still actively running 1 SaaS business. He is remarkably known for being able to sell 5 of his SaaS businesses within a period of 6 months, including an online community platform for entrepreneurs called Productize.
Currently, he is running a video messaging SaaS tool called ZipMessage. It's a tool designed to replace meetings with async conversations. You can share a ZipMessage link with anyone and they can respond to you on video right in the browser.
ZipMessage was launched in 2020 and it’s currently in its 2nd year of operation with great traction. Brian raised a bit of funding from Calm Fund after 13 years of bootstrapping his previous businesses. ZipMessage uses a freemium model, which is working well so far, according to Brian.
Brain Casel has extensive knowledge in launching SaaS businesses, marketing them, acquiring users, scaling them, and exiting SaaS businesses. In this article, Brain Casel answers all the popular questions related to his experience in different areas and stages of growing SaaS businesses, including:
Brian was asked a couple of questions in the areas above and he had the following insights to share.
Q: How do you generate saas ideas?
Most ideas were born from a previous business and a pain I experienced while running it. For example, ZipMessage was born when I was doing customer support for my previous SaaS product, and I wanted an easy way to send video messages to customers and offer a no-friction way for them to respond on video without asking them to sign up or install any software. My preference for async communication (instead of live meetings) also pointed me toward the solution that became ZipMessage.
Q: How do you determine an idea is worth pursuing?
To determine if an idea is worth pursuing, I look for these factors:
Q: Do you have a process now to manage the 'shiny object syndrome"?
I believe shiny objects appear when you're hitting some kind of wall in whatever you're currently working on. So when they do show up, I think it's important to ask why? Why now? Where am I at with my current thing?
Shiny object syndrome is really more about deciding whether or not to let go (or pause) of your focus on what you're currently doing, to devote your resources to the new idea. It's a perfectly valid thing to step back and re-assess rather than blindly stick to one thing longer than you (maybe) should.
That being said, when my shiny object ideas arrive (which happens often), I just write them down in my journal to get them out of my head. 99% of them end there. But 1% keep coming back to me until I do something more with them. Then it's decision time.
SaaS MVPs and Development
Q: Did you pay for an outside team to develop your first SaaS? Tips for that process?
Earlier in my career, my skill set was only in front-end and design. So I had no choice but to outsource all back-end development.
In 2018, after spending lots of money on outsourcing back-end-dev and being frustrated with my inability to give input on the overall architecture, I decided to invest all of 2018 to upgrade my skillset to full-stack. I spent the year learning Ruby on Rails and I'm so glad I did!
That enabled me to move much faster on shipping SaaS products and features, and it has greatly improved my collaboration with other developers and the quality of products we're able to build together.
Today on ZipMessage, I work with a development firm plus I work on the product most of my days. We're able to move very fast on shipping features and responding to customer requests, while maintaining best practices like thorough test coverage, etc.
Q: Do you go the MVP route? If so, how long on average does it take you to build one?
For ZipMessage, I went from idea to a v1 ready for 1st users in about 3 months (1st paying customers in month 4). My approach now is to ship as fast as possible the core product first and then add on periphery features as you go along. But don't delay getting the first version in the user's hands!
I don't believe an MVP should be rough, and generally am not a fan of no-code temporary solutions. SaaS development has come a long way, especially in how fast things can be built
Q: What's your tech stack?
Ruby on Rails, TailwindCSS, and StimulusJS.
SaaS Marketing and User Acquisition
Q: How would you go about getting the first user if you have a product idea with a unique feature?
My first step would be to get into conversations with people who are currently using (ideally, paying for) that widely used product. Ask them what they like/dislike about it, and what gaps it's not filling for them.
I'd also start building an early interest list with a basic landing page that explains your USP and an email signup form. Then email those people updates while you build the first version.
Do whatever you can to ship that first version as quickly as possible. Don't build the whole thing. Just build the most important feature or 2, and keep communicating with those early interested people every step of the way. Based on their feedback, you'll know when you've built enough to be usable yet or not.
I'm personally not a fan of pre-selling. I've tried this on one of my previous (failed) SaaS attempts and I found it gives a false positive signal. i.e. most of those who pre-pay didn't end up being customers later, in my experience.
That being said, I do think conversations with customers where you specifically ask about money ("how much are you currently paying for your current solution?", "when did you upgrade from free to paid in the past?", etc.). You're looking for evidence that this person has and does pay for solutions like the one you're building.
Q: Favourite marketing methods that don't call for a large online following?
I don't think a large following is necessary. But networking and outreach do help in the early days when it comes to finding your very first users and customers and bouncing your idea off them.
Luckily, even if you have zero following, there are places like r/SaaS on Reddit, Twitter, and lots of other communities to grow your own small early network that you can build on. I also recommend attending in-person conferences.
Beyond that, I believe marketing is still all about the product—offering something that lots of people already want and offering a reason to try and recommend your solution (i.e. a differentiator that matters to them).
Q: What was your research and marketing process like?
For Research: Most of my businesses, including ZipMessage, were born out of a personal pain I experienced and a desire to create a better solution. But scratching my own itch isn't enough to pursue it.
My next steps are to assess the market, how active/growing it is, what the competitive landscape looks like, and what my unique differentiator(s) will be (a.k.a why should people care about my solution in this space)?
For Marketing: Over my career, most of my marketing success has come from the slow, organic network effects. By podcasting and being public about my work, this has helped spur word-of-mouth customer acquisition. Over time, that helps drive other organic channels like SEO and referrals.
Today with ZipMessage, it's a combo of that (organic word-of-mouth), with the help of a viral component (send a ZipMessage with someone --> they start using ZipMessage, etc.). We're also starting to invest in content/ SEO, integration partnerships, and other channel experiments.
Saas Products and Tools
Q: What is the biggest hurdle to getting people to sign up for the paid version vs the free version and how did you maximize the number of people who become paid users?
On ZipMessage, we see a healthy number of people convert from free to paid. The main drivers for upgrades are:
But plenty of people also get value on our free plan, especially since we offer unlimited messages with unlimited respondents.
One tip I recommend: Show all of your features to all users. If a user clicks on a feature that's paid-only, it should take them to the upgrade screen instead of taking them to that feature.
Q: Will you tell us where you host your SaaS? Do you have any recommendations on what to look for when choosing a hosting company?
All my SaaS apps have been hosted on Heroku. I chose that because managing a server is not a strength of mine, so I'd rather go with a service that's as "hands-off" on that front as possible. We also leverage several AWS services.
I'd say it's good to value how easy a hosting service is for you/ your team to work with, along with its reliability, over things like price.
Q: How do you handle authentication & authorization (user management/security)?
We're built on Rails and we use the most popular Ruby gem for this, Devise, with several customizations built on top of that for our use cases.
Q: How do you monetize and how do you do the billing?
My current business, ZipMessage, is a SaaS with a freemium model. Users start on our free plan and then upgrade to a paid monthly or annual subscription. We have 2 paid tiers and the upper-tier can expand (increase in cost) as they add additional team members.
Most of my previous businesses also used a recurring revenue/subscription model. My previous business (sold in 2021) was a productized service where clients paid monthly for blog content writing services.
I also had a course business, which was a one-time purchasable product. I sold this business in 2022.
Selling SaaS Businesses
Q: If my goal is an acquisition in 1-2 years, what things should I do to make sure the business is ready and acquisition worthy for a bigger competitor or company?
It's always a good idea to build systems and processes to remove yourself from the day-to-day operations. Think about what would fall apart if you were out of the picture? Potential buyers will ask this question and the answer will impact their valuation of your business. This is especially true in service-based businesses.
2 of the businesses that I sold were productized services. The reason these were sellable was that I spent almost zero time day-to-day on them. It was all about my awesome team, and our processes, and the new owner was able to take over smoothly.
Q: How do you approach selling your businesses?
In 2015 I worked with a broker for my SaaS. There are many out there, and I worked with FE International and had a great experience. These days, I think a broker is better suited for higher-end, 7-figure deals.
In 2021 I listed some of my businesses on MicroAcquire, a marketplace for buying/selling businesses like these. I recommend this marketplace for 6-figure deals and below. I sold a few in the 6 and 5 figures through MicroAcquire.
And some of my businesses were sold to personal friends and acquaintances. In some cases, they approached me, and in others, I approached them.
Q: Is selling itself easy?
It varies! Very different, varying from deal to deal.
I've been in deals that took several (stressful!) months to complete the negotiations, due diligence, and transfer. In others, we went from offer to closing in as fast as 1 week. Totally on a case-by-case basis.
Q: What sales points are you focusing on and how do you determine the price?
In general, it's what the market/buyers find valuable. When talking about SaaS specifically, the valuations tend to be based on your current recurring revenue OR your current recurring net profit and some multiple on that. That multiple can vary based on lots of factors such as current growth trajectory and whether this is a strategic acquisition (higher multiples) or purely a financial-based transaction.
Q: What keeps you going when things aren't going too well in a Startup? Any insights on perseverance?
Great question! A few things, for me:
That’s it and we hope that you have picked a bunch of ideas from the insights Brian Casel has shared. If you are looking at starting a SaaS business or if you already have one running, you can check out more articles on our site on how to start, grow, scale and exit your SaaS business.