Dan Martell - March 09, 2020


How to Start a SaaS Business (Find the Pain)


Episode Stats

Length

12 minutes

Words per Minute

187.8469

Word Count

2,403

Sentence Count

110

Misogynist Sentences

1


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

Transcript

Transcript generated with Whisper (turbo).
Misogyny classifications generated with MilaNLProc/bert-base-uncased-ear-misogyny .
00:00:00.000 Hey there, I'm Dan Martell,
00:00:01.140 serial entrepreneur, investor, and creator of SaaS Academy.
00:00:03.500 In this video, I'm super pumped to share with you
00:00:06.300 how to find pains that you can easily solve
00:00:09.180 using a SaaS solution.
00:00:11.600 If you've ever had the inspiration,
00:00:14.240 if you're SaaS curious,
00:00:15.540 maybe you have a product you're working on now,
00:00:17.000 but you don't feel like it's working,
00:00:18.500 I'm gonna share with you guys the strategies
00:00:20.120 that I've used to find and identify
00:00:22.100 the perfect solutions to build,
00:00:24.600 to scale a software company.
00:00:25.780 I've done it five times.
00:00:26.940 And be sure to stay at the end
00:00:27.900 where I'm gonna tell you how to get access
00:00:29.180 to my exclusive free mini course called the idea to exit mini course pretty straightforward
00:00:34.060 and it literally is going to teach you the whole process to get through that let's get started
00:00:51.340 so the other day i was in the scaling sas founders facebook group it's a free facebook
00:00:56.220 group that i run and manage to help other software entrepreneurs to scale their business
00:01:00.300 and somebody asked me the question how do i find a problem or a solution that would be perfect to
00:01:07.660 solve with a software product now here's the deal if you don't know what sas stands for stands for
00:01:12.460 software as a service it's the software it's the tool it's easier said than done so i'm going to
00:01:18.860 teach you today how i've been able to identify key problems in the market and solve them to generate
00:01:25.260 revenue and scale those businesses the last three i've actually exited i feel super lucky to have
00:01:29.740 done that um and it wasn't easy i'm not gonna say it's easy but i think there's definitely a process
00:01:35.420 that i wasn't really conscious about that i was using that i'm gonna share with you guys today
00:01:40.060 to look at markets identify opportunities and figure out what could potentially be a great
00:01:45.980 sas solution it's the same conversation i've had with so many of my friends that run agency business
00:01:51.420 so if you have an agency business and you want to make the migration to SaaS, this is the video for
00:01:56.140 you. Strategy number one, spreadsheets. It might sound weird, but if you have the ability to go
00:02:03.720 look at people's work life and ask them to show you spreadsheets that they use to manage their
00:02:10.460 workflow, you will see incredible opportunities for potentially building a software solution
00:02:16.540 to increase that workflow throughput.
00:02:19.620 But here's the deal.
00:02:21.000 Some people use worksheets because they're cheap.
00:02:23.100 They actually don't wanna pay for the software
00:02:25.340 that already exists.
00:02:26.200 So don't be disillusioned that there's potentially
00:02:28.680 already a solution out there for that workflow
00:02:31.960 just because somebody created a worksheet, all right?
00:02:34.740 One of my favorite tools is Airtable.
00:02:36.900 Airtable feel has more workflow-y type solutions.
00:02:40.700 And I've seen so many people use Airtable
00:02:44.120 to solve their workflow problems
00:02:45.580 that are either existing SaaS businesses
00:02:48.240 and maybe there's something unique about their workflow,
00:02:51.000 a specific niche or vertical or industry
00:02:53.220 that you can decide to kind of dive into.
00:02:56.240 One of my favorite example is my friend, Laura.
00:02:58.560 She built a software called Edgar, so meetedgar.com.
00:03:03.140 And she built it because she was teaching people
00:03:05.260 how to manage their social media posting schedule
00:03:07.780 and in documenting all their content
00:03:09.920 and their historical content
00:03:10.880 and creating a very simple way to get that published
00:03:13.920 and realized that this was absolutely a software product
00:03:17.720 that needed to exist.
00:03:18.740 Now, Edgar is a multi-million dollar business
00:03:21.320 because it started with a spreadsheet template
00:03:24.380 that she was teaching her clients.
00:03:26.020 So go find those spreadsheets for ideas.
00:03:29.080 Number two, your own pain or pains really.
00:03:33.120 I mean, at the end of the day,
00:03:34.020 I think that it's the entrepreneurial muscle
00:03:36.660 to feel friction in the world
00:03:39.100 and want to solve it using software.
00:03:41.960 My companies are great examples of that.
00:03:44.560 My company, Spheric, that I started back in the day
00:03:46.480 when I was 24, I literally started it
00:03:48.680 because I wanted to work with world-class people,
00:03:51.400 which sounds crazy, but I built a whole company
00:03:53.740 just so I could work with smart, technical talent, okay?
00:03:57.400 I was an engineer, a software developer.
00:03:59.120 I just wanted to be around other people.
00:04:00.980 The customers just financed literally the people
00:04:04.060 I spent my time with every day, okay?
00:04:06.020 So that was the first company.
00:04:06.840 Second one was Flowtown.
00:04:08.320 It was a social marketing application,
00:04:09.740 and I built it because my brother who was in the home building, he's a home builder,
00:04:15.040 he didn't believe that his customers were on social media and that was the first thing that
00:04:20.100 I built to show him and I realized it's like there's a lot of small businesses that aren't
00:04:24.560 using social, this is 2009 for those that you know are a little young. Back then Twitter was
00:04:29.940 really a new thing and a lot of these new platforms were coming online so people were arguing with me
00:04:34.200 like, oh, I don't, you know, I don't think that my customers are there. So that was Flowtown.
00:04:38.780 And then more recently, even though I exited about five years ago now, Clarity.fm, Clarity
00:04:45.340 was a marketplace so that entrepreneurs get advice from other entrepreneurs. If you know
00:04:49.160 me, you've ever met me, I absolutely love talking about business. I love supporting
00:04:52.880 the entrepreneurial journey. And I wanted to create a tool for myself that allowed me
00:04:57.060 to be more available to those that needed me most, especially if people have been following
00:05:00.960 me on Twitter, on Facebook, on different social platforms. And doing that, solving that problem,
00:05:06.600 I realized there was a huge opportunity to unlock all of this knowledge in the world to make it
00:05:11.400 available for you. And that was clarity.fm. And the work I do now as a coach, same thing. There's
00:05:16.440 no software behind it. It's me, but I love doing it. But to me, solving your own pain means that
00:05:22.040 typically you have domain expertise, meaning you know the industry, you know the market,
00:05:26.000 which gives you an unfair advantage.
00:05:28.320 You understand the customer pain point,
00:05:30.340 the voice of the customer,
00:05:31.540 so you can really work backwards from the value
00:05:33.360 that they need to wanna pay for the solution.
00:05:36.920 So having a high what's called willingness to pay.
00:05:39.260 So I just think your own pains
00:05:41.320 and building that muscle for frustrations
00:05:43.380 and frictions in the world.
00:05:44.640 If you look at the origin story of all your favorite tools
00:05:47.480 that you use, consumer or business,
00:05:50.060 they usually start by the entrepreneur
00:05:52.000 solving their own pain.
00:05:53.980 Number three, custom solutions.
00:05:56.380 So again, you're gonna have to do some research,
00:05:58.440 but here's how this one works.
00:05:59.580 There are companies out there called
00:06:01.760 custom development shops, system integrators,
00:06:04.900 dev shops, consultants, if you want it,
00:06:07.760 technical consultants, and all they do
00:06:11.000 is write code to solve business problems
00:06:14.660 for existing companies, okay?
00:06:16.260 So all these companies have logistic issues,
00:06:20.740 reporting needs, whatever it is,
00:06:22.680 and they hire development companies
00:06:24.800 in the enterprise level you got like IBM Global Services,
00:06:28.100 Tata Consulting, Infosys, you have all these.
00:06:31.900 I mean, these are billion dollar companies
00:06:33.480 and all they do is for the most part is not all they do,
00:06:36.940 but they provide development resources
00:06:38.960 for companies to build custom solutions.
00:06:41.100 So if you can talk to somebody in the IT department
00:06:45.700 of a bigger company and ask them the question,
00:06:48.760 hey, have you guys ever hired a contractor
00:06:50.400 or development firm, et cetera,
00:06:51.500 to build you a custom solution.
00:06:53.300 And they say, yes, say, hey, I'm just curious,
00:06:55.400 what problem did it solve for you?
00:06:58.120 Here's what you're looking for,
00:06:59.360 because I'm going to tell you,
00:07:00.260 all of these, you know, development shops
00:07:04.220 would love to build a SaaS product
00:07:07.200 to become the next Salesforce or Box.net or, you know, Slack.
00:07:11.020 But they, it's literally two different business models.
00:07:13.460 It's really tough to have one foot in custom development
00:07:16.300 and another foot in pure software, okay?
00:07:19.000 But where the opportunity is for you
00:07:20.500 is to find another company
00:07:22.140 that's already building the code base.
00:07:24.020 They have the code base.
00:07:24.940 They have maybe five or six reference customers
00:07:26.940 because they've been reusing the code base
00:07:28.220 and you can like extract it from that company
00:07:32.140 and actually bring it to market.
00:07:34.400 So all of a sudden now you're partnered with them
00:07:37.060 to bring it to market.
00:07:38.140 I did this recently with a friend of mine.
00:07:40.560 I had a coaching client who had a dev,
00:07:43.140 they have a healthcare development agency,
00:07:45.980 but they built this other technology for their team.
00:07:48.880 we pulled it out, I partnered with another friend
00:07:52.220 who became the CEO of it, I put some money into it,
00:07:55.060 and now it's a separate business
00:07:56.660 that we're all partners in, okay?
00:07:58.380 So this happens all the time.
00:08:00.940 If you're an entrepreneur, you're driven
00:08:02.440 and you're willing to put some time in,
00:08:03.920 trust me, there are so many dev shops
00:08:06.600 that have software type solutions
00:08:08.840 that they just need the leader,
00:08:10.960 the sometimes, you know, the product manager,
00:08:13.980 the general manager to run with that.
00:08:16.940 Uber's a great example.
00:08:17.940 If you don't know the quick story of Uber,
00:08:20.100 Travis Kalanick, who is the founder and CEO
00:08:22.060 with Garrett Camp,
00:08:23.220 Travis was an investor in my company Flowtown.
00:08:25.680 And he had just sold his company Red Swoosh.
00:08:27.860 He had came up with the idea with Garrett around Uber
00:08:30.680 and it was like MVP first version was like super simple.
00:08:35.580 And he just needed somebody to run it.
00:08:37.220 And he tweeted out,
00:08:38.320 does anybody wanna potentially be the GM
00:08:40.580 to my next side hustle?
00:08:42.460 And Ryan, one of my good friends,
00:08:44.560 replied to him on Twitter and said,
00:08:46.220 You found your guy, flew to San Francisco.
00:08:49.080 Short story long, but no, fast forwarding to today.
00:08:52.340 Ryan is a billionaire.
00:08:53.380 He's an amazing dude.
00:08:54.300 He got 10% of the company.
00:08:55.700 He ran Uber as COO for all the last, you know,
00:08:59.840 almost decade.
00:09:01.060 And that's an example of people always looking
00:09:04.400 to have technology that wanna find the person to lead it.
00:09:07.960 And that could be you, which could be huge.
00:09:09.860 So, you know, custom solutions is an incredible area
00:09:13.400 for you to extract a pain and have the solution
00:09:16.520 already coded up 70, 80% done for you to run with.
00:09:19.620 Number four, trends.
00:09:21.580 So this is one of my favorite things.
00:09:23.440 One of my mentors, a guy named Ken Nickerson said to me,
00:09:26.380 he said, you know, Dan,
00:09:28.240 if you just find a trend in the market that's growing,
00:09:31.700 even if you're mediocre, you'll do good
00:09:34.720 because high tide rise all boats.
00:09:37.000 And he said, if you're good,
00:09:38.180 which he said, you're good, you'll do great.
00:09:42.000 And that's why when I look at the history
00:09:44.000 of everything I've done from Flowtown with social media
00:09:46.600 in 2009 to Clarity with marketplaces and mobile,
00:09:50.640 I've always tried to figure out what's the trend
00:09:53.200 in regards to the solution I wanna solve
00:09:55.340 that I can kind of be part of.
00:09:56.960 But if I was starting from scratch,
00:09:58.520 if you're looking for a pain in the market,
00:10:01.040 here's what I've discovered.
00:10:02.360 History, some people say it doesn't repeat itself,
00:10:05.040 it just rhymes.
00:10:05.880 I think it definitely repeats itself.
00:10:07.440 And what I've discovered is every existing business tool
00:10:10.760 today from logistic management, shipping management,
00:10:13.980 CRM, Salesforce automation, et cetera,
00:10:17.020 email marketing automation, text,
00:10:18.920 like whatever the existing solution in the market is today,
00:10:23.280 as there is a trend, if you wanna talk about Bitcoin,
00:10:26.020 you wanna talk about drones,
00:10:27.140 you wanna talk about 3D printing,
00:10:28.440 you go Google top technology trends for the year
00:10:32.600 and you will find all of them.
00:10:35.380 There is going to be a point specific solution for that.
00:10:40.380 So there's going to be a CRM for drones.
00:10:42.380 There's going to be an inventory management system for drones.
00:10:45.540 There's going to be a sales partner management solution for drones.
00:10:50.220 And the cool part about doing this is you got to be careful to not be too early,
00:10:53.300 but a lot of those will be already vetted.
00:10:55.220 And as I said, they're the biggest trends of the world right now
00:10:58.540 is by building a solution specific for that industry.
00:11:02.420 You do two things.
00:11:03.140 One, you draft with their growth as the industry grows.
00:11:06.780 Some of them are growing 25% per year.
00:11:08.820 If you grow 25% per year, just so you know, you double every three years, okay, because it's
00:11:12.860 compounding. So you get the drafting effect of that growth and you become an incredibly well
00:11:19.800 positioned company to potentially be acquired by the existing incumbents. Or you can keep building
00:11:25.860 the company, bringing it public and be incredibly wealthy. Regardless, finding existing industry
00:11:30.620 trends, looking at the existing tool set that exists in that market for laggards or old school
00:11:37.140 versions of that and building the modern version is a powerful way for you to build a solution in
00:11:44.400 the software space on an existing trend so there's and there's pain there because it's so new a lot
00:11:49.560 of these people are trying to put together spreadsheets see where I'm going with this
00:11:52.660 it is all connected all four of these let's do a quick recap number one spreadsheets you got to
00:11:58.360 find people solving the problem themselves number two your own pain so you have domain experience
00:12:03.240 Number three, custom solutions, because people have already paid to solve those problems.
00:12:07.500 And four, find an industry trend you can draft against.
00:12:11.460 So as I mentioned at the beginning of this episode, I want to share with you a free resource called the Idea to Exit mini course.
00:12:17.120 You can click the link below to get access to that.
00:12:19.220 But if you want to learn how to do no cost product development, build a marketing growth engine,
00:12:24.780 and figure out how to fund your team using customer financing, I cover all of that.
00:12:30.040 It's a free course.
00:12:31.080 It's three parts.
00:12:31.820 You don't have to wait to watch the second and third part.
00:12:34.200 It's all in there.
00:12:35.220 And that is my gift to you.
00:12:37.040 As per usual, if you found this video useful,
00:12:39.300 please smash that like button.
00:12:41.100 Subscribe to my channel if you're new here.
00:12:43.320 And as per usual, I want to challenge you
00:12:44.900 to live a bigger life and a bigger business.
00:12:46.780 And I'll see you next Monday.