What Is Micro SaaS? What Do You Need To Know About Them?

What is Micro-SaaS and how does this startup model work?

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The internet has facilitated and enabled more people to start a business.

In this movement, there are strategies for creating these businesses, among them the Micro-SaaS that we will talk about later below.

This model is focused on facilitating the creation of SaaS businesses that are competitive with the market, even with little investment and structure.

How can we define Micro-SaaS?

“A Micro SaaS is a business targeting a niche market, managed by a person or very small team, with low costs, narrow focus (niche), a small but dedicated user base, and no external funding (bootstrapping). Therefore, Micro-SaaS. “

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Looking at this definition, we can see that Micro-SaaS tends to become a business that does not follow the conventional model of other companies.

See below some points that make a Micro-SaaS project unique and what the benefits of using this model are.

1 Niche focus and small user base

The first item and probably the main feature when we talk about a company in the Micro-SaaS model.

The main idea of ​​the concept is that we must find a niche to act in and that does not necessarily have a large customer base.

So, instead of developing a product that is an all-in-one (all in one), that is, one that solves all the problems of all people, a specific area or problem must be chosen.

A practical example would be the construction of a system for financial planning in a specific niche such as artists.

Thus, a system would be developed that would solve the problems faced by artists in financial planning better than any other.

This is clearly a limiting factor in terms of user base size, but when it comes to Micro-SaaS, this is an expected result.

Using a niche is a way of differentiating yourself from the competition, showing that your product is more tailored to customer needs.

This, of course, also makes it easier for us to find the product-market fit of the product on the market.

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2 Five times more …

One thing that is not a rule, but a recommendation, is to try to be five times more in one aspect than your competitor.

So, there are two main items that can be chosen:

#1. Having a product that is five times better than the competitor.

That is more complete in features and better meets customer needs, is an advantage.

It is important to emphasize that a product in the Micro-SaaS model should not be inferior when we talk about products.

“Micro” is a reference only to the size of the public served.

#2. Having a product 5 times cheaper is a good idea.

This is possible for 2 main reasons in this model.

2.1. The first would be the issue of the product’s scope being smaller, since it is not necessary to develop several features, only those that help customers in the chosen niche.

2.2. The second is that if the business has only the founder or a small team, its costs are much lower, since in most cases, salaries are the biggest expense for the company.

These two points allow for a cheaper product or a higher profit margin.

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3. Accelerated time-to-market and less bureaucracy

Micro-SaaS goes beyond the concept of MVP in terms of launching and developing products.

It is not limited only to the scope of the product, but also to the performance of the business as a whole.

With a focus on a niche, it is not necessary to develop features that generically serve the largest number of people.

It should only have the features that meet the chosen niche.

Also using the issue of having a smaller structure, with possible less investment, it is not necessary to invest a lot of time in the financial planning of the business, structuring teams and other HR issues and so many other formalizations that a non-“micro” company needs.

All these points reduce the development time and the number of tasks, thus making it possible to bring the product to market sooner.

And to clarify, Micro-SaaS is not a replacement for MVP, it is still used in product development.

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4. Proximity to customers

When we talk about having a smaller customer base, it means that we can even get to know each of our customers in a unitary way and be closer to them.

Maybe have a 1-1 conversation, understand their area/model of activity and the problems they face.

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5. Product build models

A very common issue in product development in the Micro-SaaS model is taking advantage of an existing structure or audience on a platform/marketplace.

We can categorize the models as follows:

#1. Platform dependency model and
#2. Platform independence model.

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#1. Platform dependency or integrated model

These are products developed as plugins or extensions.

They are developed to add new features to platforms.

The positive point in this model is that you can count on the ecosystem that the platform already has.

The business model is already validated and already has a customer base to be explored.

Good examples of these platforms are:

1. E-commerce platform;
2. Marketing, sales, communication, and other software;
3. Social networks.

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Dependent or integrated, the relationship between the product and the platform can be described in two ways.

In the case of “dependent,” if it is integrated into only that platform and adapts to the platform format.

Below are examples:

1. Extension for a direct message chat;
2. Functionality for an e-commerce platform;
3. Metrics dashboard for a social network.

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If the product connects to more than one platform, it becomes “integrated.”

Below are examples:

1. Conversation aggregator from various direct messaging platforms.
2. Extension for e-commerce that works regardless of which platform is integrated.
3. Aggregator of metrics from various social networks.

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#2. Platform Independency model

In the platform-independent model, product functionality is not intended to add features to a platform.

But in this case, it is not possible to rely on the platform’s user base and business validation.

We emphasize that this is not necessarily a negative point.

On the other hand, by not counting on the benefits that platforms and marketplaces bring can make things difficult at first.

On the other hand, the business is not held hostage to platform rules, resource evolution, and also the growth of the platform to obtain new customers beyond the current base.

So, even if the standalone platform is the hardest model to start with, in the long run it can be a healthier strategy for the business.

But there’s also nothing stopping, turning a dependent product into an independent one, if that’s possible in the context of the product.

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Conclusion

Well, that’s it. We’ve got to the end of our article: What Is Micro SaaS? What Do You Need To Know About Them?

We hope that you enjoyed reading this article and got some helpful advice from it.

Feel free to comment and share this post.
Thanks!!

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Midsize Business Solution For $550

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Start Your Online Store For $950

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