Jason Cohen – Designing the perfect bootstrapped startup MicroConf 2013

The MicroConf Hub Page with links to all the notes for all the talks can be found here

Speaker: Jason Cohen (@asmartbear)

Title of the talk: Designing the perfect bootstrapped business

Goal: $10,000 / month per founder – reliable, recurring revenue business

Watch the video (sorry, but I’m not allowed to embed it here)

Revenue model

  • One-Offs never get easier – You need to make new revenue every month
  • Recurring Revenue is the only way
  • 1,000 Fans
    • has never been true.
    • Really hard to get 1,000 Fans / Customers
  • Instead: 150 Fans Customers
    • 50: Scratching and clawing – Get interviews, offer to pay for their time
    • 25: Guest-posts / Social Media
    • 75: Basic Marketing
    • $66 / month average –> $10,000 / month
    • Tier pricing: $49 / $99 / $249 –> $66 average
  • “Boutique” approach
    • expensive
    • special
    • works in every profession
  • Cash is King, Annual pre-pay is God
    • Gets you cash upfront, which you can spend on growing the business
    • Example: $300 Adwords gives you $50 / month revenue $60,000 Adwords would give you 10,000 / month revenue
    • Realistic: (WPEngine)
      • 25% of signups pre-pay
      • 75% give you 1x month, 25% give you 10x month –> 0.75 x 1 + 0.25 x 10 = 3.25 x
      • Cash in > Cost out —–> infinite budget
    • Annual Hacks (ARPU = Annual Revenue Per User)
      • ARPU most important metric to small SaaS businesses
      • Coupon for “3 months free” (just 1 month more than your normal 2 months free)
      • Raise monthly price + increase annual discount
      • Change “per year” to “per month”
      • just raise prices – double price until CR changes
    • 60-day money-back guarantee (not a free trial)
    • No picking up pennies (no revenue share, CHARGE YOUR CUSTOMERS)

Part Deux: Market Model

  • B2C is not worth it, customers complain about costs all the time
  • EVERY speaker at MicroConf is in B2B (that should tell you something)
  • Bad Market: Point-in-Time / Temporary Pain (Weddings, Events, Code Profilers)
  • Good Market: Naturally Recurring
    • On-going actual costs
    • financial cycles (HR, taxes, invoices)
    • pain natural changes over time ( SEO changes, Adwords, Competetive reports, A/B testing)
    • Support (e.g. premium support $100 / month)
  • Bad Market: Viralalityness
  • Good Market: Not Real-Time
    • value not provided instantaneously (e.g. hosting is instant, sending out invoices is NOT) – takes away pressure
    • Decision support (analytics, metrics, reports, monitoring)
    • Finance
    • Project Management
    • Content
  • Bad Market: Marketplace
    • you suddenly have two businesses -> acquire sellers & acquire buyers (chicken and egg problem)
  • Good Market: Something that can be “finished”
    • Examples: WinZIP, Freshbooks, Basecamp, Hosting, CRM, bug-tracking, PDF editor, image editor
  • Good Market: After-Markets (there is already a well-known market, you just provide add-ons)
    • Examples: Smart Bear, Balsamiq, WooThemes, AlienSkin, QODBC, WPEngine
  • Aim for BIG markets
    • Niches abound
    • Room for “me-too”
    • Validated space

 Part Three: Acquire Customers

  • Adverts > Social Media
    • Social Media is hard
    • SM is NOT repeatable, Adverts are
    • Jason got 2 customers out of 30,000 of his blog readers
  • Backing into CPC
  • To what end?
    • Sell before it’s too big
    • Sell to partners
    • Sell to your biggest customer
    • Raise prices (to reduce the number of new customers)
    • Raise money (go into funded-startup mode)
  • As opposed to what?
    • What is the hardest thing? To know thyself – some ancient greek guy
    • What is the easiest thing? To give advice – same ancient greek guy

Jason’s formula to success

Predictable acquisition of recurring revenue with annual prepay in a good market

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About Christoph

Christoph lives in Munich, Germany and is bootstrapping his own SaaS application as a part-time entrepreneur.

He likes to write on this blog about anything of relevance to single-founder bootstrapped software startups.


  1. Thanks for writing this up! Great notes.

    • itengelhardt says

      Thanks Justin. But TBH: Jason did the really hard work. I’m just a slightly better typist

  2. I didnt get – "Aim for big markets"

    Why not niches?

    • itengelhardt says

      The idea is that in big markets you will find many niches to focus on – with the eventual ability to transfer your product into other niches within the same big market

  3. Hey Christoph,
    thanks for writing this down in a comprehensive way!

    • Christoph says

      Hi Bernd,

      you’re very welcome. Drop me an email if you have further questions or if you make crazy dollars from the knowledge you got here 🙂


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