What is a Micro-SaaS and How to Create One
Denis Shatalin
Founder of SaaS Camp
SaaS founders often get caught up trying to create the next Hubspot or Salesforce — a large scale product that attracts a diverse user-base. There's nothing wrong with being ambitious, but it's important to remember that not every SaaS product needs to be all-encompassing.
In fact, some of the most successful SaaS products are those that focus on a very specific market or niche, such as micro-SaaS products, which are designed to cater to those specialized needs.
In this micro-SaaS guide, we'll be doing a deep dive into the world of micro-SaaS. By the end, you'll have a good understanding of what micro-SaaS products are, how you can create profitable micro-SaaS products, and how to validate them.
So, without further ado, let's get started!
In fact, some of the most successful SaaS products are those that focus on a very specific market or niche, such as micro-SaaS products, which are designed to cater to those specialized needs.
In this micro-SaaS guide, we'll be doing a deep dive into the world of micro-SaaS. By the end, you'll have a good understanding of what micro-SaaS products are, how you can create profitable micro-SaaS products, and how to validate them.
So, without further ado, let's get started!
What Is Micro-SaaS?
Micro-SaaS is a software as a service product that is targeted at a very specific market or niche and normally does one specific set of functions. It is usually much smaller and simpler than traditional SaaS products, and can be created and launched in a very short amount of time. For instance, Cleanvoice is a micro-SaaS that uses AI to automatically edit your podcast audios.
Why You Should Create a Micro-SaaS Product
Now that you know what micro-SaaS is and how to create one, you might be wondering why you should bother creating a micro-SaaS product in the first place. Here are some of the biggest benefits of creating a micro-SaaS product:
i. Micro-SaaS products solve very specific problems
One of the biggest benefits of micro-SaaS products is that they solve specific problems. This is in contrast to traditional SaaS products, which often try to be everything to everyone and as a result, don't do anything particularly well.
As you’re solving a very specific set of problems, you can also focus on targeting your primary customers with a very clear message and position. There is no room for ambiguities, when you can only do one set of things! If there is, then it's time to see how you can make your branding clearer.
As you’re solving a very specific set of problems, you can also focus on targeting your primary customers with a very clear message and position. There is no room for ambiguities, when you can only do one set of things! If there is, then it's time to see how you can make your branding clearer.
ii. Micro-SaaS products are easier to create
Another benefit of micro-SaaS products is that they are much easier to create than traditional SaaS products. This is because they are usually smaller and simpler, and don't require as much development time and resources.
With micro-SaaS products, you can test out your ideas without having to commit a lot of time or resources. This means that you can ship fast, fail rapidly, and iterate in an agile way, all of which can benefit early-stage startups.
With micro-SaaS products, you can test out your ideas without having to commit a lot of time or resources. This means that you can ship fast, fail rapidly, and iterate in an agile way, all of which can benefit early-stage startups.
iii. Micro-SaaS products have a lower barrier to entry
Another benefit of micro-SaaS products is that they have a lower barrier to entry. This means that it's easier to get started with a micro-SaaS product than it is with a traditional SaaS product.
While developing SaaS products usually requires a long development time, you can actually create a micro-SaaS product with a small team of developers—even on your own in some cases!
While developing SaaS products usually requires a long development time, you can actually create a micro-SaaS product with a small team of developers—even on your own in some cases!
iv. Micro-SaaS products can be created quickly
Another benefit of micro-SaaS products is that they can be created very quickly. This is because they are usually much smaller and simpler than traditional SaaS products.
Because micro-SaaS products are small and focused, they can be created relatively quickly and with very little upfront investment. This makes them ideal for entrepreneurs who want to get their business up and running quickly and efficiently.
Because micro-SaaS products are small and focused, they can be created relatively quickly and with very little upfront investment. This makes them ideal for entrepreneurs who want to get their business up and running quickly and efficiently.
v. Micro-SaaS products have less enterprise competition
Another benefit of micro-SaaS products is that they have a high potential for success. Because micro-SaaS products are designed to solve very specific problems, there's often less competition over users from large incumbents, as it would not be profitable enough for them to tackle your niche.
vi. Micro-SaaS products are less risky
One final reason why you should consider creating a micro-SaaS product is that they are less risky than traditional SaaS products. By launching an MVP (Minimal Viable Product), you can test your hypotheses about the problem you're solving and the market you're targeting without putting too much time or money into development.
If your MVP is successful, you can then invest more heavily in the product and scale it up. However, if it's not successful, you can move on to another idea without having wasted a lot of time and money.
If your MVP is successful, you can then invest more heavily in the product and scale it up. However, if it's not successful, you can move on to another idea without having wasted a lot of time and money.
How to Create a Micro-SaaS Product
Creating a micro-SaaS product is actually a lot simpler than you might think. Here's a quick overview of the steps you'll need to take:
- Identify a problem or need in your target market.
- Develop a solution that meets that need.
- Start with basic planning.
- Create a minimal viable product (MVP) and launch it.
- Test and iterate on your MVP based on feedback.
- Market and sell your micro-SaaS product.
- Scale your micro-SaaS business.
1. Identify a very specific problem or need in your target market.
The first step to creating a micro-SaaS product is to identify a problem or need in your target market. You can do this by:
You can also check out my article on How to find SaaS ideas for a rundown of the idea generation process.
- Researching your target market and talking to potential customers to find out what their biggest pain points are.
- Going through reviews and checking out what’s lacking from the products in the niche you’re competing in.
- Using Ahrefs to see queries in your target niche that people search for.
- Assessing a problem that you’re facing yourself in your workflow.
You can also check out my article on How to find SaaS ideas for a rundown of the idea generation process.
2. Develop a solution that meets that need
Once you've identified a problem or need, it's time to develop a product that solves the problem. This will involve coming up with an idea for your micro-SaaS product and then developing it into a working prototype.
Generally, there are two ways this can play out:
Generally, there are two ways this can play out:
- If there is a passable solution on the market, much of the hard work has already been done. Your primary goal is finding ways to improve it in meaningful ways—unless you can think of an entirely new way of approaching the problem.
- If there isn’t a passable solution already on the market, you’ll probably need to put more effort into coming up with a solution that can solve the problems people are having. However, the lack of competition might mean you’ve stumbled upon an untapped market!
3. Start with basic planning
Once you've brainstormed a solution, it's time to start planning your micro-SaaS product. This is where you'll decide on the features you want to include, the target market you're going to focus on, and the overall direction of the product.
It's best to paint with a broad brush to start with—that means:
It's best to paint with a broad brush to start with—that means:
- Wireframes
- UI Sketches
- Feature Lists
- App Maps
4. Create a minimal viable product (MVP) and launch it
Once you have a prototype of your micro-SaaS product, it's time to launch it as an MVP. An MVP is a version of your product that is good enough to start selling, but which may not be fully polished or feature-complete.
Focus on core features that address the main pain points of your audience without getting bogged down by perfectionism. If you find yourself saying, “it would be nice if I added…”, the thing that follows should probably get pushed to a later stage of development.
Once you have the MVP, you can start selling access. However, you'll probably want to limit your marketing expenditure until you have a more polished product.
Focus on core features that address the main pain points of your audience without getting bogged down by perfectionism. If you find yourself saying, “it would be nice if I added…”, the thing that follows should probably get pushed to a later stage of development.
Once you have the MVP, you can start selling access. However, you'll probably want to limit your marketing expenditure until you have a more polished product.
5. Test and iterate your MVP based on feedback
Once you've launched your MVP, it's time to start gathering feedback from your users. This feedback will be essential for shaping the future development of your product.
There are a number of ways to gather feedback from users:
There are a number of ways to gather feedback from users:
- Direct Emails
- Widgets like Feedback Lane
- User Surveys
- Customer Interviews
- Product Reviews
6. Market and sell your micro-SaaS product
Now that you have a polished micro-SaaS product, it's time to start marketing and selling it!
There are a number of channels you can use to reach your target audience:
There are a number of channels you can use to reach your target audience:
- Social media
- Content marketing
- Paid advertising
- PR/media outreach
- Community building
- Word of mouth
7. Scale your micro-SaaS business
Once you've found a formula that works for marketing and selling your micro-SaaS product, it's time to start scaling your business. This will involve hiring new team members, investing in growth hacking initiatives, and expanding your marketing efforts to reach new audiences.
How to Validate Your Micro-SaaS Idea or Product
Let’s say you’ve decided to jump into a micro-SaaS project and think you have a great idea. But, how can you know for sure? What if it’s a flop? You don’t want to spend too much time building the micro-SaaS business only to find out nobody wants what you have to offer.
This is where micro-SaaS idea validation comes in. This can help you understand if your idea is going to be profitable. Fortunately, there are several ways to make sure an idea has legs beforehand.
This is where micro-SaaS idea validation comes in. This can help you understand if your idea is going to be profitable. Fortunately, there are several ways to make sure an idea has legs beforehand.
1. Stop Getting Emotional
The first step to validating a micro-SaaS idea is getting into the right mindset. Business is largely a mental game, so you need to have the right mentality.
When it comes to validating ideas, you need to prevent yourself from getting emotional. What this means is you need to separate the excitement from the numbers. Simply ‘feeling’ you have a winning idea isn’t enough - it’ll need testing.
A good way to begin your validation is by actually assuming you have a bad idea or an idea that is doomed to fail. Then, work to prove yourself wrong. What this does is it stops you from seeing everything through rose-tinted glasses and helps detach any emotions. You can then focus on the data and work out whether it will really work.
When it comes to validating ideas, you need to prevent yourself from getting emotional. What this means is you need to separate the excitement from the numbers. Simply ‘feeling’ you have a winning idea isn’t enough - it’ll need testing.
A good way to begin your validation is by actually assuming you have a bad idea or an idea that is doomed to fail. Then, work to prove yourself wrong. What this does is it stops you from seeing everything through rose-tinted glasses and helps detach any emotions. You can then focus on the data and work out whether it will really work.
2. Market Research (Especially for Competitors)
Now you’re in the right mindset, it’s important to investigate your market to see what’s being sold, what companies are seeing success, and to identify whether anybody is looking for the solution you’re offering.
You can simply start your search on a platform like Google and type in your proposed product or market, but you should also search social media (Instagram, Tik Tok, etc.). Check whether there are:
The reason you want to look for influencers, events, and courses is that you’re hunting for demand. If people are looking for products and services to buy in that industry, you could be on to a winner. When you find competitors, you can search them on sites like Crunchbase and learn about them in more depth.
With platforms like Google, you can also check search volume to give yourself a rough idea of how many people are searching queries related to your offering. Tools like Ahrefs or Google Keyword Planner can tell you the monthly demand for specific searches.
Identifying your market is one of the most crucial steps to creating a successful micro-SaaS. There are in-depth aspects you need to understand if you want to get this step right. If you’re looking to shortcut the learning process and reduce mistakes, sign up to SaaS Camp now.
You can simply start your search on a platform like Google and type in your proposed product or market, but you should also search social media (Instagram, Tik Tok, etc.). Check whether there are:
- Direct competitors
- Indirect competitors
- Influencers
- Events around your industry
- Books or courses
The reason you want to look for influencers, events, and courses is that you’re hunting for demand. If people are looking for products and services to buy in that industry, you could be on to a winner. When you find competitors, you can search them on sites like Crunchbase and learn about them in more depth.
With platforms like Google, you can also check search volume to give yourself a rough idea of how many people are searching queries related to your offering. Tools like Ahrefs or Google Keyword Planner can tell you the monthly demand for specific searches.
Identifying your market is one of the most crucial steps to creating a successful micro-SaaS. There are in-depth aspects you need to understand if you want to get this step right. If you’re looking to shortcut the learning process and reduce mistakes, sign up to SaaS Camp now.
3. Check Reviews and Customer Feedback
You want your micro-SaaS idea to have a unique purpose in the market you’re entering. There’s no point in producing another cookie-cutter product that mimics other products and competitors.
To make sure your product is unique and will solve a problem, you should start researching what customers are saying about current products and competitors.
Take a look at sites like TrustPilot to identify reviews and feedback. You want to keep an eye out for negative or bad comments, as these could be areas you can improve on. If your competition isn’t making the mark, this presents a gap for you to fill with your new idea.
To make sure your product is unique and will solve a problem, you should start researching what customers are saying about current products and competitors.
Take a look at sites like TrustPilot to identify reviews and feedback. You want to keep an eye out for negative or bad comments, as these could be areas you can improve on. If your competition isn’t making the mark, this presents a gap for you to fill with your new idea.
4. Check the Trend
If your micro-SaaS idea is based on a recent trend, you’ll want to make sure it’s going upwards, not down. The last thing you want to do is invest money jumping on a fad that’ll fizzle out in the next few months.
There are a number of tools you can use to check if your idea is in an upward trend. Google Trends is the best free option, but if you want to pay for a premium tool, you can use something like Exploding Topics.
If you notice a positive SaaS trend or at least consistent interest in the industry, it could be a good idea to explore further.
There are a number of tools you can use to check if your idea is in an upward trend. Google Trends is the best free option, but if you want to pay for a premium tool, you can use something like Exploding Topics.
If you notice a positive SaaS trend or at least consistent interest in the industry, it could be a good idea to explore further.
5. Calculate Profitability
You might have discovered the best micro-SaaS idea available. One that has low competition, has high demand, and is easy to start. However, you still have the issue of profitability to handle. After all, you’re not a charity, so you need to make sure the numbers and pricing work.
Here’s the basic process of calculating how much money you’ll make:
Once you’ve finished, you’ll have an estimate for how much you could earn from your micro-SaaS. Ask yourself whether it’s a number you’re happy with. If not, you might have to look for a better idea.
Bear in mind the average SaaS churn is around 5%. So, you might want to factor that into your equation if you want to understand your potential profits at a deeper level. For more detailed insights, check out my SaaS pricing guide.
Here’s the basic process of calculating how much money you’ll make:
- Take a look at what the competition are charging for their services and try and create an average ticket price. That is, the average you can charge for your SaaS.
- You then want to estimate the number of customers you’ll get each month. You can use search volume data (described above) to get a rough figure.
- Then, multiply the two figures together and take off 20% to account for a basic margin of error. This will leave you with your potential revenue each month.
- To calculate profit, you’ll need to work out your profit margin. In SaaS, the average gross margin is 80%. So, take 80% of the total revenue.
Once you’ve finished, you’ll have an estimate for how much you could earn from your micro-SaaS. Ask yourself whether it’s a number you’re happy with. If not, you might have to look for a better idea.
Bear in mind the average SaaS churn is around 5%. So, you might want to factor that into your equation if you want to understand your potential profits at a deeper level. For more detailed insights, check out my SaaS pricing guide.
6. Run an MVO
Lastly, once you’ve checked demand, reviewed the market and your competition, and checked if the numbers work, you can start running experiments. The first one you should do is an MVO, also known as a minimal viable offer.
This differs from an MVP, as you won’t be creating any product just yet. Instead, you’ll be sending out marketing and sales material that will request pre-payment for your micro-SaaS. This will allow people to learn about what you’re doing, get excited, and express their interest with actual credit card details.
What this does is it enables you to test whether there are highly-motivated buyers in the market who will pay for your SaaS already. It can qualify people more precisely by identifying warm leads ready to pay for a solution.
You can use a simple landing page software like Clickfunnels combined with online ads to action this test. The quicker you can start this experiment, the quicker you can see if your micro-SaaS idea has legs.
This differs from an MVP, as you won’t be creating any product just yet. Instead, you’ll be sending out marketing and sales material that will request pre-payment for your micro-SaaS. This will allow people to learn about what you’re doing, get excited, and express their interest with actual credit card details.
What this does is it enables you to test whether there are highly-motivated buyers in the market who will pay for your SaaS already. It can qualify people more precisely by identifying warm leads ready to pay for a solution.
You can use a simple landing page software like Clickfunnels combined with online ads to action this test. The quicker you can start this experiment, the quicker you can see if your micro-SaaS idea has legs.
Final Thoughts
Creating a micro-SaaS product is a great way to get started in the world of SaaS development. It's less risky than developing a traditional SaaS product, and it can be launched in a relatively short amount of time. So if you're looking for an idea for your next software project, consider creating a micro-SaaS product.
I've helped tons of SaaS founders navigate the various stages of product creation, and I'd love to do the same for you! If you're ready to build a SaaS product that gets you to freedom, apply for SaaS Camp accelerator today.
I've helped tons of SaaS founders navigate the various stages of product creation, and I'd love to do the same for you! If you're ready to build a SaaS product that gets you to freedom, apply for SaaS Camp accelerator today.
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