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Bootstrapping a profitable SaaS business: Jason Cohen's experience and prospective

SaaS business models are most entrepreneur’s (and investors) dreams : a successful software as a service business will generate recurring revenues and high margins. The best, for entrepreneurs, is to be able to bootstrap such ventures, with the ultimate goal of being self funded.

Starting a SaaS (Software as a Service) company can be a daunting task, but with the right approach and mindset, it is possible to bootstrap the business and generate recurring revenues. In this article, we will explore the key steps and strategies to bootstrap a SaaS startup, with insights and advice from Jason Cohen, a successful entrepreneur and founder of WP Engine.

Bootstrapping Step 1: Identify a problem and validate your idea

The first step in bootstrapping a SaaS startup is to identify a problem that needs solving and validate your idea. This involves conducting market research, identifying your target audience, and understanding their pain points. Once you have a clear understanding of the problem, you can develop a minimum viable product (MVP) and test it with potential customers to gather feedback and validate your idea.

Jason Cohen advises entrepreneurs to focus on solving a problem that they are passionate about, rather than chasing the latest trend or fad. "You need to be solving a real problem that people are willing to pay for, and you need to be passionate about it," he says.

Having detailed conversations with your target audience is crucial at this stage of your venture.


Very often finding niches in large markets, or add-ons to successful products can be very attractive. Word Press templates and themes is a good example of such a successful positioning.

Bootstrapping Step 2: Build a scalable product

Once you have validated your idea, it's time to build a scalable product. This involves designing a product architecture that can grow with your business, developing a user-friendly interface, and creating a reliable infrastructure to support your product.

According to Jason Cohen, it's important to build a product that is "simple, yet powerful." This means focusing on the core features that solve the problem and avoiding feature creep that can bloat your product and make it difficult to maintain.

A scalable product must not be very complex. Very often, it is much better to minimize product development and get customer and user feed-back before any heavy investment. This is the basic philosophy behind the Lean Startup and Minimum Viable Products (MVP).

Bootstrapping Step 3: Acquire customers

The next (and often most difficult) step is to acquire customers and generate recurring revenues. This involves creating a marketing strategy, identifying your ideal customer, and leveraging different channels to reach your target audience.

Jason Cohen advises entrepreneurs to focus on building a strong brand and creating content that demonstrates your expertise and builds trust with your audience. "You want to create a brand that people can trust and rely on," he says.

Keyword marketing and Search Engine marketing campaings (SEM) are a good way to start acquiring customers and test which keywords are in demand.

Once the keywords with the highest potential are identified, it is possible to start a content marketing strategy to foster qualified free traffic generation with SEO.

Bootstrapping Step 4: Optimize pricing and revenue model

The final step is to optimize your pricing and revenue model. This involves experimenting with different pricing strategies, such as monthly subscriptions, annual subscriptions, or usage-based pricing, and analyzing customer behavior and feedback to find the optimal price point.

According to Jason Cohen, it's important to focus on generating recurring revenues and building a predictable revenue stream. "You want to build a business that has a steady stream of recurring revenues, rather than relying on one-off sales," he says. Cohen also shares some tricks and practices, which were quite successful for his ventures :

-Increase prices : very often, increasing prices will not lead to a decrease in customer numbers. Testing the demand curve and a business’s price elasticity may be very beneficial.

-Offer discounts for yearly subscriptions : most SaaS businesses offer monthly subscriptions. Because the margin on SaaS are often high, it is possible to offer substantial discounts to drive traffic conversion.

-Price your keywords to get a marketing ROI of 12 to 24 months.

In conclusion, bootstrapping a SaaS startup and generating recurring revenues requires a combination of problem-solving skills, product design, marketing expertise, and pricing optimization. By following these steps and leveraging the advice of successful entrepreneurs like Jason Cohen, you can build a successful SaaS business that provides value to your customers and generates sustainable revenues for your company.

This video by Jason Cohen at a Microconf event in 2013 is worth watching for further information:



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