Dan Martell - How to Start a SaaS Business (Find the Pain)

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 0.87

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.

Dan Martell - March 09, 2020

How to Start a SaaS Business (Find the Pain)

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