Issue #10: Building $1K-$10K MRR micro saas products with existing open source products
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No fluffy content. If your goal is to build a $100m ARR business, this is not the right post. Here I am are NOT going to talk about building the next Facebook or Twitter. If your goal is to make a $1K to $10K MRR, continue reading.
This post will cover one SAAS area and talk about multiple niches in this space. This post also explains more on how to do tech implementation, do market analysis, how the current players are doing, and also ends with a cost analysis to understand the overall cost for 100 users.
Let’s see a very unique SaaS model that is helping solo founders make $100K ARR. There is a lot of money lying around this most neglected niche.
Bundling an existing “open source” product into a commercial offering for companies/enterprises/B2B. For starters, “Open source” by definition - is a term that originally referred to open source software (OSS). Open-source software is code that is designed to be publicly accessible—anyone can see, modify, and distribute the code as they see fit. [This doesn’t mean all open source projects can be used in commercial offerings. Each project has its license].
In short, people write code to build something and make it available for others to use and that's called “Open source software”.
Friendly.is a company that is making close to $100K ARR just by using open source projects.
We will dive deep into Friendly.is a commercial model and see how this model can be leveraged for various niches.
Friendly.is: Friendly is making close to $100K ARR without writing any code but just by using existing open-source projects. Friendly used two open-source projects related to analytics and automation to build this revenue.
Negative Nancy says: Non-technical founders can’t build this model.
Me: The founder of Friendly.is making 7K USD MRR isn’t technical. As the code is already available, it will be easier to outsource and build a revenue model on top of open source. Most open-source projects come with detailed documentation.
Negative Nancy says: Open source products cannot be commercialized.
Me: There are various types of open source licenses. Some licenses allow you to use the open-source product in commercial offerings too.
Negative Nancy says: Open source products may not be in the same programming language that I am proficient in.
Me: Agreed, not everyone knows every programming language. But there are enough open-source products in various languages and pick the best one you are comfortable with. For example, picking a docker based solution will help it easy to run it anywhere and investing some time in learning basics. Alternatively, this piece can be outsourced too. As the customer base grows, bring in technical co-founder.
Deep-dive
Why wouldn’t some customers use readily available cloud offering solutions by paying a monthly fee?
For example, if a customer needs an automation solution like Zapier, Integromat - it comes with multiple inherent issues even though it’s much easier to set up a cloud solution.
Less control of the cloud solution with no visibility. No visibility means - companies don’t know how their data is being used.
Pricing can shoot up as you use more add-ons.
Compliance and privacy issues.
No possibility to extend the solution by writing your code.
So, it's a safe bet for some companies to install the software on their local (country-specific) infrastructure. This also makes it easier to maintain compliance with any of the local privacy laws, GDPR laws, etc.
Why wouldn't companies just download and install the open-source projects by themselves?
While companies with tech talent can setup these easily, there are hundreds of non-tech companies that don’t have enough tech staff. So, these companies would prefer a solution that is packaged and ready to use on their infrastructure.
Some niches
Friendly.is used a simple model to create a company out of it. Take an existing open-source software and package that as a commercial offering and sell - as simple as that. Nothing more, nothing less. Let’s see how well this model can be replicated for other niches.
Analytics solutions: There are a ton of both free and paid analytics solutions. Some new analytics solutions are implementing privacy-friendly analytics. But still, a lot of companies are apprehensive to use these and are looking for hosted solutions for their analytics. Building analytics solutions using open source modules like Matomo would be a great fit for companies looking for their analytics solution.
Matomo supports importing existing Google analytics data
Matomo is the leading open alternative to Google Analytics that gives you full control over your data.
Matomo lets you easily collect data from websites, apps & the IoT and visualize this data and extract insights. Privacy is built-in.
Matomo is a highly robust product used by more than 1 million websites.
Building a commercial offering around Matomo and then advertising to agencies and B2B businesses will lead to paid customers.
Automation solutions: Automation is very important for any company. Automation helps save time on repetitive tasks. There are hundreds of solutions that can automate day to day tasks but comes with a cost of lack of privacy as these tools can read all your data. Implementing an open-source solution like Mautic.org - World's Largest Open-Source Marketing Automation. Mautic enables brands to integrate and personalize all their digital properties and channels into a seamless customer experience. With its modern approach to marketing automation, Mautic’s suite of tools enables marketers to deliver higher performing campaigns and content, and achieve superior results.
Marketing Automation is a platform for saving time, eliminating errors, and improving efficiency for a wide range of marketing tasks across multiple channels.
Using Mautic, you can enable your customers to do a lot of things like automating their marketing campaigns, creating complex automation, etc. Mautic is one of the most promising products for marketing folks.
This will be typically a good alternative to highly paid software like Hubspot, Marketo, etc.