How I Created a Beer Money SaaS

My name is Rene, and I am from Mexico. I work as a data scientist from 9 AM to 7 PM. I want to share the story behind my Saas Startup, MatchKraft, and how I successfully developed a software solution that generates additional income, usually known as "beer money."

I wish to share my story, starting from the very inception of events. Also, I want to share the initiation of my journey with merely an idea and an unwavering determination to embark on something novel. Additionally, I aim to share the numerous iterations and refinements I undertook to reshape the idea and concept. Lastly, I want to divulge my plans for the future.

I am confident that this will be a good read for individuals aspiring to embark on a SaaS startup journey, yet lacking direction on where to begin, what steps to take, or what to anticipate. So, let's get started.

Before Initiating the Project

Before initiating my project, I encountered numerous failures in the realm of SaaS. Through this time, I learned valuable lessons. So, I intend to implement those meaningful insights in my future endeavors.

My next project should contain these features:

1. It has to be as simple as possible.
2. Automation is essential, with no requirement for human intervention.
3. I need WordPress to create my landing page
4. It has to be multi-tenant
5. I have to pay for ads

With those concepts in mind, I started crafting my web app.

The Birth of MatchKraft

Previously, I developed a simple price comparison software, which unfortunately resulted in a significant failure. However, I learned how to perform automatic fuzzy matching of product names.

Thus, I conceived the notion of concentrating solely on fuzzy matching due to my extensive expertise in the field. Additionally, my previous encounters with numerous matching tasks revealed that existing market tools were satisfactory but lacked precision. Therefore, I focus on building a fuzzy matching tool as a SaaS product.

Initially, I faced the dilemma of developing a general fuzzy matching tool or a focused one. The focused approach would involve creating a fuzzy matching tool specifically designed for tasks like person name matching, company name matching, or even product matching. However, after careful consideration, I built a general fuzzy matching tool.

Subsequently, I used WordPress to build a landing page and then devised a user-friendly interface to get users to test the product. To generate traction, I invested in Google ads targeting keywords such as "fuzzy matching" and "free fuzzy matching." My primary objective was to validate user engagement by observing their interaction with the tool and inputting data.

After a week of no sign-ups or tangible progress, I reevaluated my approach. I knew that there already existed a free fuzzy matching tool for Excel. I asked myself why individuals would choose my tool over the existing option. After careful consideration, I focused on developing a fuzzy matching tool tailored for matching company names. The motivation behind this shift stemmed from my experience with the time-consuming nature of company name-matching tasks. 

Consequently, I updated the landing page to emphasize the exceptional algorithmic superiority of my company name fuzzy matching tool, surpassing even the accuracy of Google Sheets' fuzzy match add-on. I diligently updated the keywords in my Google ads campaign, resulting in a remarkable outcome - the registration of my first user on the platform. Recalling the early stages, out of the five users I acquired, only one provided data for fuzzy matching. However, the software encountered bugs when handling the volume of company names. Nonetheless, this marked a significant milestone, with the initial users actively attempting to utilize the tool.

Subsequently, it became apparent that improvements to the algorithm were necessary, alongside the need to devise effective strategies for driving traffic to the website. At this point, MatchKraft had officially come into existence, firmly rooted in its purpose of delivering exceptional fuzzy matching services tailored for company names.

Project First Steps

I realized that I had to focus on two aspects:

1. How to drive traffic to the website
2. How to improve the fuzzy matching algorithm

When contemplating strategies to drive traffic to the website, I explored various options, such as SEO optimization and sharing on platforms like Reddit and other social networks. Eventually, I decided to leverage a Google Sheets add-on to direct traffic to my website. The rationale behind this choice stemmed from observing the success and popularity of other fuzzy matching software available on Google Sheets, which served as a motivating factor. Consequently, I saw Google Sheets as a potent tool for generating traffic.

I dedicated time to developing a Google Sheets add-on that connects with MatchKraft through an API. This integration allowed users to execute the MatchKraft algorithm within Google Sheets. Connecting MatchKraft with Google Sheets proved to be a challenging endeavor, but eventually, I succeeded. However, the traffic I received did not meet my initial expectations. Nonetheless, it was sufficient for testing the algorithm, with an average of 10 users per month. The positive aspect was that I did not require advertisements to generate this modest amount of traffic, saving me potential expenses. The funds I saved were crucial, as they contributed to covering the server costs.

When it came to enhancing the algorithm, I struggled a lot. The code was a mess, and I also uncovered issues with the database architecture. Consequently, I had to embark on a complete overhaul of the engineering process. This time, I opted to utilize an S3 bucket for data storage. Thankfully, this decision was fruitful as the system became more stable, no longer experiencing crashes, and exhibited satisfactory performance.

Another significant challenge revolved around improving the accuracy of the algorithm. To address this, I employed two metrics, accuracy and recall (also known as coverage). The accuracy metric measures precision in terms of matching similar company names. Coverage indicates the amount of data retrieved by the algorithm. Through numerous experiments, I discovered a combination that maximized both metrics. Remarkably, the final result surpassed the precision of Excel's fuzzy matching add-on.

My First Payment

At this point, my primary focus moved to monetization. Encouragingly, I received positive feedback regarding my tool. With this in mind, I recognized that the opportune moment to generate revenue had arrived, and I understood the significance of seizing this opportunity without delay.

After thoroughly studying a tutorial on integrating PayPal into my web app, I thought about different pricing strategies. Eventually, I charged $10 for each fuzzy matching job performed.

Despite all my efforts, I found myself without any financial returns. This realization left me disheartened and uncertain about the next course of action. Feeling lost and demotivated, I decided to take a break from working on the tool for approximately two months. Balancing my regular 9 to 7 job and the tool's updates had become overwhelming, and I needed time to attend to commitments during weekends.

During that period, while working at HP in Guadalajara, Mexico, I talked to a friend about the struggles I faced with MatchKraft and the lack of financial success despite my efforts. Expressing my concerns, I doubted if there was even a market for my tool. In response, my friend suggested that "I should lower the price to $3 per fuzzy matching job". His rationale was that this lower price point would increase my confidence in the tool as I witnessed money flowing in. Taking his advice, I adjusted the pricing accordingly. To my great delight, I received my first sale at the reduced price of $3. It may have seemed like a modest amount, but the transaction brought immense joy. Furthermore, it was gratifying to discover that my tool had found a client in China who utilized the algorithm.

Achieving Financial Break-Even Point

While I had managed to generate some revenue, the unfortunate reality was that it fell short of covering my expenses. Here is a breakdown of the costs I incurred:

• 25 USD Digital Ocean Server
• 5 USD S3 Amazon Bucket
• 2 USD Web Hosting for my site

With a mere $3 per fuzzy matching service, it became evident that the revenue generated was insufficient to cover the expenses incurred. Faced with this dilemma, I had to make a crucial decision: either enhance the existing fuzzy matching service by incorporating additional functionalities to justify higher pricing or diversify the product offerings to attract more users and potentially offer bundled packages for increased monetization.

In the end, I opted to expand the product lineup. As a result, I embarked on developing additional offerings, including text clustering, UK companies retrieval, company name-to-URL conversion, and a general fuzzy matching engine. Among these, the company name-to-URL feature emerged as a success, doubling the monthly users I received.

Another significant milestone in my journey towards achieving the financial break-even point was the introduction of weekly and monthly packages. These packages offered the opportunity to create unlimited jobs with unlimited downloads. This strategic move proved highly effective as users were willing to subscribe to the weekly or monthly packages.

Thanks to these modifications, I started generating a modest income from my software. It brought me immense joy to finally generate revenue on the internet through an app. Though the earnings may have been small, it was a gratifying achievement.

Next Steps for my Startup

In envisioning the future of MatchKraft, I will focus on three fundamental pillars:

1. Focus on SEO (blog posts and youtube videos)
2. Adding additional products to MatchKraft and improving existing ones
3. Collecting user's reviews and testimonials

Regarding SEO, I have already initiated generating valuable content on my website. Additionally, I have devised plans to create informative YouTube videos. Those videos will provide detailed instructions about my software and its benefits.

Also, I want to add the following products to Matchrkraft:

• A company name to LinkedIn company profile lookup tool
• An email validator tool

Gathering user testimonials has posed to be a challenging endeavor thus far. It has become apparent that I need to invest more time and effort into devising effective strategies for obtaining user feedback. My goal is to establish an automated system that collects feedback and prominently displays it on relevant platforms such as Capterra or Facebook. I am actively learning and exploring various approaches to communicate this initiative to my users.

Conclusion

Developing MatchKraft has been time-consuming due to the constraints of my full-time job, which requires my attention from 9 AM to 7 PM. Consequently, I find myself with limited time, relying solely on weekends to dedicate my efforts to marketing and programming tasks associated with MatchKraft.

Furthermore, I have realized that there is no secret formula for acquiring users. It requires a great deal of patience and perseverance. I have learned that the key lies in consistently delivering genuine value to users through my software, as it is this value proposition that ultimately drives sales and fosters long-term user engagement.

While there is still much to be accomplished and improved upon, I am content with the results I have achieved thus far. It brings me great satisfaction to be among the few individuals who proudly state that they have developed a profitable SaaS product.

In the future, I intend to explore freelancing opportunities to allocate more time toward programming and handling the marketing aspects of MatchKraft. One significant mistake was diverting my focus toward other projects, which consumed valuable time. My advice is to focus on a single project. Avoid taking on multiple endeavors simultaneously.

If you have any further inquiries or require additional guidance, contact me at [email protected], and I will gladly assist you.