Why though? If you want to start a business that makes, say $300k ARR, you probably need to target a market w/ total revenues of >$100million But I don't see it's important whether that's 5 customers or 50'000 --> *unless* the founder isn't good at aligning solution w/ pain...
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Certainly, founders can do whatever they'd like.
But:
"Bootstrapping is already hard, don't make it harder!" – Jason Cohen
5 customers is inherently more risky (and generally not a good fit for bootstrappers).
A company with 5 customers is probably an enterprise play.1 odpowiedź 0 podanych dalej 0 polubionych -
You may think that's harder. In my experience it's easier. 5 customers *may* be a bit extreme, but 50, 100, 500... that's an awesome market size (assuming they have $ and are similar enough to be able to reach them w/ same language). Why do you think it's not a good fit?
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W odpowiedzi do to @louisnicholls_@mijustin i jeszcze
I agree. It can really be all over the board but low customer counts can work well. I’ve been a part of or currently running 3 bootstrapped SaaS businesses. Here’s the spread: ~$5mm ARR: 225 customers >$100k ARR: 25 customers <$100k ARR: 40 customers
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W odpowiedzi do to @LandonB32@louisnicholls_ i jeszcze
Again, just reiterating my original points: - Generally, the "total market" you target needs to be pretty big. Example:
@Userfeedio targets Intercom users (100,000 monthly active users and 30,000 paying customers). - In SaaS, having < 100 customers is usually riskier than 500+.2 odpowiedzi 0 podanych dalej 1 polubiony -
W odpowiedzi do to @mijustin@LandonB32 i jeszcze
Justin, I'm sorry but those points just aren't true (except the userfeed thing, no idea there). It isn't per se harder to build a profitable business in a small market (talking low # customers, not low $). <100 customers isn't riskier than >500 ...
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W odpowiedzi do to @louisnicholls_@LandonB32 i jeszcze
If you're assuming all customers pay roughly the same amount, it's way riskier to have 100 customers vs 500. Losing 10 customers when you have 100 is a big deal. Less so at 500. When you have lower numbers, every customer that churns results in a bigger % of revenue lost.pic.twitter.com/bfrdqjDIUv
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W odpowiedzi do to @mijustin@LandonB32 i jeszcze
Of course. That's why it's so dangerous for eg agencies to depend on 2-3 customers. But in the real world, you're just as safe losing 10 customers at 100 as you are at 500. Will it hurt? Yes. Is it materially more likely to kill your business (risk)? No.
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W odpowiedzi do to @louisnicholls_@mijustin i jeszcze
Bear in mind, these customers are paying you *way* more, you're solving a *real* pain for them, and you're in touch with them so have a much better chance of predicting and mitigating churn weeks/months/years in advance.
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W odpowiedzi do to @louisnicholls_@mijustin i jeszcze
It sounds like you haven't spent much time in business serving niche markets like this. And that makes sense - they don't do 'marketing' and aren't normally very vocal online. But you should seriously give it a try - it's a *lot* more fun than you (seem to) think
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I've served some pretty small markets!
You could be right about being able to mitigate churn (with a smaller customer base). And you might be right; maybe it is more fun!
It'd be nice if we had more open data on how "# of active customers" effects different parts of a biz.pic.twitter.com/4N9eMXj0jv
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W odpowiedzi do to @mijustin@LandonB32 i jeszcze
Didn’t mean that in a patronizing/condescending way btw - I know you’re a v good marketer/experienced founder, just thought more in the 500+ customers category

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