Helping to build digital products I work on and with many SaaS products. Interestingly, as a small business owner, I struggle with bringing SaaS products into my operations.
Now, I am 1 person with a few freelancers, but I have heard the same from someone who is a sole freelancer, a small team of up to 6, or a couple of co-founders, but we have something in common - no external investment, i.e. we are bootstrapped.
After many questions and conversations with people like me, here is the problem as I understand it today.
The Problem
As a small business owner, I want to run my business in an effective, efficient, optimised manner, as being a small business requires wearing many hats, as there is no one else to do the work. Using digital products to deliver that work is a common and often successful solution to having too many multi-disciplined tasks.
But whilst I have to pay for direct operational tools, after all, I need email, document storage, bookkeeping, etc., the indirect operational tools, Canva, Figma, Notion, etc., end up having many £X’s per-user-per-month subscriptions. This gets expensive quickly, as each tool only does one thing specifically.
I find myself in an odd situation, where in every other service being delivered, the costs will go down per unit, e.g. a wholesaler will sell you a product cheaper if you buy in a greater quantity. Whereas SaaS does the opposite, a SaaS product will charge you more for the success of your business by locking collaborative features behind tiered and/or metered billing.
This is because all SaaS companies essentially sell repackaged server costs. A business will build an app and host it on AWS, which bills in a tiered and metered way, so it ends up that the business has to bill in a similar fashion to be profitable.
Therefore, I end up with a commitment that will grow disproportionately with my business, e.g. if I pay £150 a month for their operational tool stack, then bringing on another person takes that to £300. Still, it might be a lengthy period of time before that new person helps to bring in double the revenue, and in that interim period, I don’t have the money to pay for it.
This leads to me working less effectively, for example, doing lead management in a spreadsheet.
Also, it is frustrating because the tools I pay for are not being built for me, a small business owner, but for enterprise and industry-specific teams and individuals. So, I might only use 10% of the functionality of the products they pay a lot of money for.
Where now?
I have been utilising a lot of Open Source technology and paying the server costs myself. OpenProjects is my latest installation because I wasn’t financially sensible enough to use Asana for myself and a team of freelancers working a few hours a week.
But here is a hypothesis, small businesses with operational needs are not being served appropriately because a few large customers pay more than many small customers. Therefore, delivering a solution outside of the typical operation model of a SaaS product means that a better value proposition can be put in front of small business owners.