Senja's journey to $6k MRR & a fast growing SaaS
This post covers an in-depth analysis of Senja, a SaaS for collecting and showcasing testimonials. Interestingly, there are 2 parts in Senja’s growth.
The first 6 months of introspection and dilemma that most Indiehackers experience ($0→ $250 MRR)
A growth phase with a clear product vision ($250 → $6,000 MRR)
In the end I’ll also talk about an interesting project in our “Fast growing SaaS“ section.
Before we move forward, I’ll introduce SunsetClub, a newsletter that spotlights failures of builders who have had to sunset a product, project or idea. Learn about the don'ts of company building, mistakes to avoid and how to discover your next move.
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Senja’s journey:
What’s the point of building another testimonial tool when Endorsal, Testimonial, Vocal Video, and Shoutout existed and were quite popular?
Especially since the product targets small businesses and solo founder niche with following market constraints:
Customers have a small budget for software tools
Success requires audience building as low pricing doesn’t allow for ad spend to work
Conventional sales tactics barely work in this market and word-of-mouth is often the core growth feature
Finding a niche
According to Senja’s founder, the popular tools to collect and manage testimonials back then were either slow, expensive, or ugly.
He wanted to do things in a more fun and exciting way than the competition.
As we have discussed in other posts, if the same solution is working monetarily for a different niche, it’s already proven that it’s a repeatable problem to solve. All you’re left to do is find a new niche and make sure there’s enough demand for this product in that niche.
Before getting into Senja’s niche let’s understand how niches work for SaaS as it’s a recurring theme of our discussions.
Niche is a combination of 4 things:
Businesses often use one or more of the following characteristics to carve out their niches.
Specialization- most niches are an occupation in case of B2C and a category in case of B2B. B2C specializations are: authors, coaches, doctors, architects etc. B2B specializations are industry specific like retail, manufacturing, agriculture, finance etc.
Stage of growth - usually depends on revenue/income and experience/years in business. Basically, products targeting seed stage, bootstrapped or small businesses are very different from ones targeting mid-size and those for large corporations.
Platform/channel/geography/sub-specialization - this is to going one level deeper to carve out a niche from an existing specialization because it has some unique needs. Like building for doctors in a specific country because of some unique health regulations or building for realtors who specialize in commercial real estate etc.
Preferences- even within a certain sub-specialization and growth stage customers may have different preferences. Some may prefer better designs, lower price, ease of use, community, real time support and so on. This is the niche for many bootstrappers who begin by solving a specific problem very well.
In case of Senja, it went for the customers with a preference for better design for testimonials within the small business niche.
Betting on one core customer preference
For many tools solving for the ‘user experience before purchase’, like website builders, testimonial tools, forms, chatbots etc. there is almost always a tradeoff between different competing functions like design, ease-of-use, speed etc.
Tools that offer great design choices are either too expensive or slow or have some other limitation.
So Senja’s strategy was to carve out a design-conscious+ ease-of-use segment from the existing small business audience as a niche. As there were hardly any competitors focusing on these functions, Senja had a clear differentiation.
Execution is the key
6 months of dilemma
Once the differentiator was clear, Senja’s solo founder built the MVP.
But building a faster or more beautiful product usually isn’t enough to get people to pick you over the competition. You need to have:
Product-market fit in a niche (multiple purchases where users share a common reason for purchase)
A vision to build the product beyond initial product-market fit
The initial 6 months were rough for Senja.
Its journey started with “scratching your own itch” for its founder as he solved his own problem with embedding a fast wall of love on his website, and he didn’t know what else the market wanted and the direction the product should take.
This is a typical issue with founders who come up with an idea to solve their own problem and then struggle to grow the product when that specific problem is solved for.
It didn’t have any clear roadmap and was replicating features from its competitors which was a mistake because of 2 reasons:
You can’t differentiate yourself with features offered by existing players- building a niche requires features that are exclusive for the niche
Absence of a roadmap often confuses the builders as they start picking up any feature request that comes their way but this makes the product like a boat without a sail
Senja got 100 sign ups during this initial 6 months period but a very few repeated users or paying customers - the 2 key criteria of vision and a product-market fit were not satisfied by Senja.
During the first 6 months Senja made only 2 LTD sales for $350 in total and $0 MRR.
What Senja lacked was a clear value proposition, product roadmap and business model to attain its desired level of adoption.
Need for a team
After the initial period of confusion Senja brought in a co-founder and things started turning the corner.
The following review summarizes what Senja stands for today:
The things that stand out in most of Senja’s reviews are
Design and
Ease of use
So let’s backtrack Senja’s journey and see how they reached this point after the initial turmoil.
Senja’s phase of fast growth- 24x growth in 8 months
After the new co-founder joined two important things happened
Senja started focusing on onboarding that was missing from its initial roadmap
A handful of features were prioritized as the new co-founder had first hand experience with this problem
We talked about 2 USPs (design and ease of use) that helped Senja standout and here’s the onboarding and product roadmap that got them to this point.
Onboarding
Earlier Senja’s onboarding plan was to drop users into an app, and expect them to figure out the rest.
Senja was getting 1.5K- 3K visitors to the site every single month but activation rate was close to 0. Activation is when the user starts using a product and get the value after signing up.
So they knew that onboarding was something they needed to fix to deal with this situation.
The essence of onboarding is to give users direction (and nudges) and keep them engaged from the point they visit a landing page until they reach that aha moment when they have attained a desired a goal using your tool.
Here’s what Senja did to fix their onboarding
They made sure that the users completed one primary action (creating a form) when they signed up, making those users to invest on the product from the get-go.
They artificially reduced the time to magical moments with dummy data and automation.
They cut out the dead ends in the app to engage users with some action on each screen. For example, when they first visit the testimonials page, instead of having an empty state, they’re prompted to import their existing testimonials.
They improved the playfulness of their onboarding process.
Feature prioritization
In order to achieve its goal of better design an ease of use, Senja needed a clear feature roadmap. And this couldn’t happen by copying features from competitors but by understanding the needs of its users.
In the second phase of its Journey Senja achieved ease of use by features like
Richer review management
Multiple forms for collecting different kinds of testimonials.
More ways to embed and customize testimonials.
It’s design goals were attained by features like automatic image generation from testimonials.
New acquisition channels
With all the above Senja was already on its path to better conversion and retention. Now it had to bring in more users on its platform by expanding its acquisition sources.
Its initial users came from Twitter (about 70%) but for building a sustainable business it’s important to focus on SEO and expand the acquisition sources.
Senja focused on repackaging its Twitter content for other channels like Linkedin and reddit and started focusing on Cold Email as a channel to spread the word.
It started paying dividends as within 6 months its search traffic increased 4x and stable search traffic growth is an indicator of a stellar word of mouth (coming via backlink and social mentions)
Risks in Senja’s business:
Finally, let’s look into the risks faced by a product like Senja. The biggest risk that I’ve seen for SaaS in a competitive niche is to stay relevant and reinvent constantly. Senja was able to take away business from its competitors by focusing on certain offerings.
But with buildinginpublic there is always a chance that a copycat will emerge with similar features and a better marketing strategy.
Currently, it’s signup to purchase rate is 6% (based on April data of 526 signups and 32 customers ).
It has practically $0 acquisition cost with customer acquisition via social platforms, cold emails and SEO.
But as time passes, if social traction or SEO gets disrupted due to platform policies, the acquisition costs may go up and then the 2.5% monthly attrition will become a real threat to the business.
Sources:
https://senja.io/blog
Finally, the fastest growing SaaS
This week’s fastest growing SaaS is: Chatbase
Chatbase started as a "ChatGPT for your PDFs" tool. You just upload a PDF, then you could chat with its content.
The founder then tweeted it to 16 twitter followers on Feb 2, 2023 and it went viral:
here's the viral tweet:
https://twitter.com/yasser_elsaid_/status/1621954428105379846
The tool is doing $64,000/mo in 6 months of launch by extending its functionality as chatbot for your website where it can use the web content to respond to users.
If you’d like me to cover more about this tool (or any other tool) please reply back.
Great piece!