Written by Dan Schwartz. CEO, InvestorFuse
Customers don’t care about your solution. They care about their problems. -Dave McClure, 500 Startups
The following case study is for all the non-techy, on-the-verge entrepreneurs who are intimidated by the technical execution of your ideas.
I will explain, in detail, how we built a $50,000+/month SaaS company using existing software that’s available to everyone.
More importantly, you’re going to see that building a successful SaaS (software as a service) isn’t about technology. It’s about the right marketing.
In fact, you can make some pretty slick, pain-solving solutions without being a coder. The cheat code is NO code.
Later in this post, I’ll drop in a video digging into the technical details, and creating a useful “invoicing app” for The Foundation in the process…
Ultimately, this post showcases a very natural progression of how you can create and scale a system that serves others…without your direct involvement.
I believe this is the essence of entrepreneurship. It’s the key to unlocking the time freedom necessary for you to enjoy life to its fullest, while helping others in the process…so enjoy, and execute!
The key is in selling solutions, not fancy functionality or design.
That is probably the biggest take-away I’ve learned from launching InvestorFuse, a self-funded real estate investing CRM we grew to 50K/month in our first year by building ON TOP of existing software…
We ‘SaaS-ified” someone else’s software and built our own brand around it. How? Read on.
Again, this is more a lesson in marketing than anything else.
I’ll be demonstrating how I used a tool called Podio to build our solution and “SaaSify” it for our market. Apply the same logic to whatever tools you find that will deliver the end result your customers seek. It doesn’t have to be Podio.
We’ll organize this case study into the following sections, emphasizing the very gradual progression of our growth and how you can apply it to your situation.
Finding your market>Prototyping your solution using existing software>
Getting your first customers>Productizing yourself out of the picture>
Leveraging your community and influencers>SaaSifying for recurring revenue>
How do you know where to look for your first profitable business idea? Usually, you shouldn’t have to look very hard…
Let’s discuss how to choose your market.
The Market: Going Niche
The Foundation community speaks to this often, but I can attest to the power of choosing a niche market versus a wide and broad market.
You can start by looking right under your nose. Often times, businesses like mine start by simply solving their own grievances.
What’s something in your market that you KNOW people need but it’s too difficult or time intensive to figure out? This is a great question to ask.
My professional background (aside from drumming in a funk band for the better half of my 20s), is in real estate investing, and back in 2012 we had some big issues.
We knew how to generate leads for houses to buy. The phone was ringing off the hook. But once the phone rang, it was up to our acquisitions team to stay on top of that lead and get the deal closed.
At scale, these inbound leads became a mess of spreadsheets, existing CRM solutions that missed the mark, and a general air of disorganization that permeated throughout our operation. I was determined to figure out a better way.
What To Charge
So how do you know how much money to ask for? There are whole academic studies on the topic of pricing, but let’s break it down with some simple logic:
In real estate investing, if I can help a company close ONE more deal per month, that’s an extra $5,000-$30,000 pay day for them (think about those house flippers on TV that make a boatload of money).
You bet they’ll pay $197/mo without much “selling” involved. The real value of a solution that can help a real estate investor make an extra $5,000 a month is clear.
The key is making your solution a no brainer from this value-based pricing approach. Dollars are merely a reflection of the implied value your solution will create. Example from early unprofessional sales convos (pre-SaaS):
Figure out how much money your solution will tangibly help a company make OR save. You can also replace money with “time.” How much time would it free the company up to do more important revenue-generating activities?
We’ll talk more about how to ask for these dollars later.
The next step is where the cheat code happens: Prototyping your solution.
Most non-technical entrepreneurs will stop at this point. The technical feasibility of delivering the end-result they know their market needs will seem like climbing Everest.
Here’s the big realization: Cloud based software services, APIs, and integrations that connect all these tools together have made it easier then ever for non-techy people to quickly prototype the building blocks of a SaaS.
Here’s how I figured it out for real estate:
We needed a better way to organize our inbound real estate leads, so I asked around to see how other people in the space were doing it and came across a platform called Podio.
Podio is a drag-and-drop, customizable project management tool/CRM where you have to “build” out elements of your business’s data to your liking. Think Trello (the project management app), but on steroids.
A ton of investors were using Podio at the time because of its flexibility…but with flexibility came some challenges, because it starts off on a blank canvas:
For my business’s “potential $5,000 deals falling through the cracks” problem, I knew this would be a step in the right direction, but would require a bit of brute force to create something that delivered the end result I was looking for…clean organization + automation of certain time-sucking activities like sending offers and follow up reminders:
What follows is a deep-dive video into the technical side of how I was able to create this…and more importantly how to AUTOMATE what happens inside of your Podio workspace using 3rd party tools like Zapier and Globiflow (Zapier for Podio).
I will show you how simple it is to create very practical systems by making a simple invoicing app from scratch. No coding necessary. Enjoy:
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Now that you’ve built a prototype, it’s time to show it off and determine if you have an opportunity worth scaling.
It’s vital not to waste time on opportunities that won’t make any money. This is the “Validation” phase.
Once I created a basic workspace for my own business, I made this super simple screen-share video to get some feedback:
The “Very nice, how much?” Test
The goal is to share your solution in the right channels until multiple people are approaching you, asking in some form, “Very nice! How much!?”
Essentially, they are expressing their need for your solution and that they’ll pay you for it. This is key.
By validation, I mean that people are physically or virtually sending you money. You don’t have an idea worth scaling until people are paying you for the basic hacked-together version, or your MVP (minimum viable product).
Shortly after I published that show-off video above, I threw it up in some real estate Facebook groups.
Nearly every vocation has public groups on Facebook or LinkedIn, so I’d start there.
Share it with as many relevant groups as possible, and be sure to enter yourself into conversations related to your solution. I did a lot of that, providing free value or recommendations wherever possible:
Since I put my email in the info section of the YouTube vids, I immediately started getting emails like these:
On and on and on….a handful of these every day passing the “Very nice! How much!?” test. Right off the bat I knew I had struck a chord, despite there being plenty of CRM type options out there.
Competition is irrelevant if people only want exactly what YOU have to offer, regardless of what else exists. Think about that for a second!
I was actually reluctant to charge anything because of the inherent responsibility that goes along with payment…hand-holding, support, questions, taxes etc.
That’s the very resistance you should embrace. It means you’ve found an opportunity!
Asking for money
This is the “selling” part, and a lot of new entrepreneurs struggle with asking for money. If you are confident that you can add value to someone’s life…”selling” is merely just proposing an exchange of value. This is nothing to fear.
Yes, that stuff I shared in the above prototyping video was a pain in the ass. No regular business owner should have to go as deep in the weeds as I did with this stuff, so I began offering to setup these automated workflows so it resembled my YouTube videos.
Since I had created some cool automated workflows for Podio-using investors (discussed in video), this allowed me to charge up to $997 for EACH setup!
This was mind-boggling income for a touring drummer.
I started at $497 and gradually raised it up after every few sales just to test the threshold.
All “selling” occurred from people emailing me and FB messaging me from shared YouTube videos and basically offering to pay me for a similar setup. You can tell I seemed to have hit some sort of nerve in the marketplace:
People were even just sending me money without even talking to me because they heard from a friend about my service…
Remember who I was selling to…real estate investors that don’t have time to be messing with technology. These workspaces were by no means revolutionary. They simply just organized leads and helped keep track of followups so investors could make more money and have peace of mind.
Is there a gold vein like this lurking in your market that others aren’t willing to tap into??
See how the Foundation can help you get started building your own profitable software business. Apply HERE
Right now, your service/solution is dependent on your time. “Productizing” is important because it will help you get out of your own way and scale up without your direct involvement.
Building systems around your solution
How can you fulfill a service like this without being involved at all??
This is the true test of your entrepreneurial chops, but it can often be pretty easy and just requires some documentation and outsourcing.
What I did was took my setup/solution and created a “Productized Service” out of it.
Productized Service: Marketing a service by positioning it as a one-time standardized “Product” vs. a traditional service where you charge hourly or on a project-by-project basis.
If you’re a consultant trading your time for dollars, productizing your service is the next step to take your time out of the equation.
So, rather selling my time as a consultant, I was selling a standardized and well thought out lead management system specifically designed for the real estate investing process. Solution vs. service…
Again, people didn’t care HOW this was happening, they just cared about getting the solution in the first place to solve their problems. The means of fulfillment are irrelevant.
The actual fulfillment of the workspace was complex, so I recorded a video of myself setting everything up for someone. Then, I sent that video to my real estate virtual assistant at that time and asked for her to create a step-by-step documentation of the video I shot:
Now, I had a standardized 10 page manual I could give to anyone and they could technically fulfill each of these workspaces for me…so I paid another VA I had worked with before a small flat fee for every setup he completed successfully.
I was tracking each of these customers and their setup status by creating a simple workspace on…you guessed it…Podio. With my automation skillz, I had a task sent to my VA every time I got a new customer.
To train these customers and minimize potential support issues, I had created a bunch of unlisted YouTube videos that I sent to all new customers in an email as soon as they signed up.
No website or fancy marketing automation necessary here!!
In order to take your solution to the masses, you’ll need to get the most out of what you’ve got: Your direct community (people who know you) and the people in your community who have clout (the connectors).
This is leverage, and it will help you amplify awareness of what you’re doing much quicker and wider than you could yourself.
At this point, I had been sharing these little efficiency hacks I was coming up with by manipulating Podio fields and Globiflow automations.
I was getting inbound messages on email, Facebook messages, groups, LinkedIn, and phone calls/texts…too many channels.
This agitated me. So I created a Facebook group to centralize these messages, “Real Estate Podio Automation HQ,” to field all Podio questions, talk to people, learn what people wanted, learned what other people were building, etc. NOT to sell…but to make helping people more centralized.
I hired someone on Fiverr to make the graphic.
There’s now close to 2400 members of that group, which became a big source of leverage for me to cultivate a community of folks interested in automating their business.
With the burgeoning new Facebook group and more exposure on YouTube and word of mouth, I was starting to get noticed in the space as the “Podio automation” guy…a sexy title, I know…
This “expert credibility” created more leverage to make the next step more realistic…working with influencers.
My life changed when I got a Facebook message from a real estate coach named Joe McCall. Successful investor, podcaster, guru, influencer in my target market, and now friend and advisor. I’d been following him for years…he said to me:
The kicker: Joe was literally the guy that exposed me and thousands of others to Podio in the first place! I couldn’t say no to the opportunity. It was a “hell yeah” decision through and through.
We used the Russel Brunson “Perfect Webinar” Model to pitch the offer. This gave me a great education into the webinar game, which is how we were going to sell this thing. I highly recommend it to sell anything more than $500.
One month later, we did a webinar to his list of thousands of investors and made close to $50,000 on day 1. Fuckin nuts.
My VA was fulfilling everything, I was managing everything, but Joe’s list was the ultimate leverage to get this thing in the hands of people that already knew, liked, and trusted Joe.
I created a website with training videos, hired a support guy to do installs and help customers out, and created a whole bunch of internal systems to track all elements of fulfillment. I go more into how we launched this in detail on this podcast with Brian Casel.
At this point, my productized service had struck a gold vein, and I was the one left holding the bag with hundreds of real estate investors breathing down my neck to make sure their systems were running smoothly.
Not ideal for my 4-hour-work-week aspirations…I had to figure out how to scale this concept even more without me as a bottleneck.
You’ll need to get creative in order to “SaaSify” your solution into recurring revenue, and you’ll need help.
Here’s how I did it: Team building and APIs.
Meeting your technical co-founder
Assuming you’re non-technical and totally brute forced your productized service into existence, you will need someone on your team that can take over the technical execution of this next step.
At this point, Joe and I had done a few more webinars well into the summer of 2015, and well into 6 figures of sales with me at the helm.
I was obligated to deliver cool new integration ideas and content throughout this growth period, so I had been working alongside some other Podio consultants (think InfusionSoft consultants) that were also helping real estate investors.
I referred a lot of custom work to these consultants, and it was through this process of working with other experts in this little niche where I met technical people I genuinely enjoyed working with.
This is also how I met John Whitfield, who is now the CTO of InvestorFuse and one of the smartest minds I know.
My recommendation is to go out and build small, but useful stuff with technical people. Don’t launch full scale businesses…just do little things, even for your current business or job. That way you can try people out before you strike a potential partnership.
See how the Foundation can help you get started building your own profitable software business. Apply HERE
Our productized service had a fatal flaw:
It was a one-time fee (expensive) setup that required multiple separate 3rd party platforms that our users had to pay for, learn, and maintain in addition to learning Podio.
If I had an idea to improve the overall system, we’d have to go into everyone’s accounts separately and manually make the tweaks.
It wasn’t true software, and I felt like I was doing a disservice to the real estate community by propagating these highly technical, hacked-together collections of cloud-based services.
The investors had to become technical experts just to understand what they paid for…and they were relying on too many separate tools:
I saw this flaw as an opportunity to figure out how to turn this solution into recurring revenue somehow.
Why should users have to pay for all these separate tools when they can just pay US a monthly fee to maintain and improve a more standalone system that we build with our own code hooked into the Podio API??
Everyone’s systems would gradually get better over time as we continued to innovate and push out improvements to everybody’s workspaces all at once (like real software!).
The continuing improvements and new features would be funded by more consistent recurring cash flow.
Yes, it would require some development/coding, but the risk to go all in on a new and improved SaaS model was a no brainer to me since I had already validated well into 6-figures in under 6 months.
However, since Joe was just helping me promote the productized service at the time, I had to make it clear that in order for this new and improved system to manifest…I needed to execute it on my own, with a separate team of technical people.
He understood, and we phased out our productized service offering and ended the partnership mutually.
I immediately went to the drawing board and assembled a team of people that I had worked with up until that point. I spelled out my vision to create InvestorFuse. Here’s how I announced that we were going to launch this new tool…real low budget:
Hint: Putting your intentions online helps light a fire for you to execute!
Once you vow to create this new and improved, monthly subscription form of your productized service, how do you get people to switch to the SaaS when you launch??
I announced on the Facebook group, on other groups, and to the customer base that had purchased stuff from me before.
In order to build goodwill and explain my intentions, I vowed to talk to as many people and potential customers as humanly possible between the announcement in November 2015 and our launch day in February 2016.
I opened up a window of time every day using a Calendly scheduler page, and I put it up all over social media so people could pick a time to talk to “Podio Automation man” himself.
Between this, email, and Facebook messages, I must have talked to 100+ people 1-on-1 just to see if I can help them improve their business in any way, as well as talk to them about what we were building with InvestorFuse.
I believe this built a lot of karma points in the community and curried a lot of favor for the InvestorFuse mission even before it was launched.
I released a total of three “teaser videos” demonstrating how it worked and how much easier it will be, how useful it will be to help automate follow up and execute deals…and just talked to everyone…all day…every day…until launch day:
Hustle, hype, and word-of-mouth was my secret weapon during these months.
On February 8th, we signed up around 75 companies right off the bat at 167/month (intro pricing), including a bunch of annual plans:
One year later, we’re at 1400+ users across all the companies and have an amazing full time team of 9 people working virtually all over the world.
I could write a whole series of posts on the lessons learned during this last year on the importance of customer success, customer support, building and leading a team, and the business development strategies we’ve been using to grow…
There’s still lots to learn and I’m excited for the journey ahead.
As a summation of this case study, I can attribute the initial success of InvestorFuse to the following five key takeaways that you can apply to your market:
I want these ideas to spark some new opportunities for you, but don’t want technology to burden you.
I don’t know how to write a single line of code, so if you’re non-technical like me, there’s really no excuse given the ease of all the cloud-based software products and APIs out there. Elbow grease, caffeine, and leverage is all it takes.
When you start experimenting with using existing software to prototype your solution, I’d love to hear from you. I’d be more than happy to advise you along your journey.
If you throw out the rule book and just focus on creating systems that serve other people, you’ll never go broke and you’ll enjoy the freedom of time that all of us deserve.
If this stuff has resonated with you or you have some ideas, I’d love to hear from you! Send an email to firstname.lastname@example.org or book a time to talk on the phone on my Clarity.fm page.
Now go and create something valuable!
Dan has a passion for helping the overwhelmed real estate entrepreneur work smarter and earn more by setting up effective systems. After launching InvestorFuse, a lead management workspace for real estate investing, he’s helped bring the power of Podio to hundreds of happy investors and has built a strong community around the technology. When not working or investing, you’ll find Dan traveling, drumming, or helping other entrepreneurs grow their businesses.