Startup Idea: Shopify for SaaS companies

There are over 20,000 SaaS companies in the world and growing (source). They are the new “software ISV” of the 1990′s. Growing like weeds. Getting users, building niche applications and growing revenue.

Every SaaS company builds a “specific application” for a “specific user”. They are the domain experts on that application.

Every SaaS company development team though, needs to pay a 15-25% tax upfront. Sometimes more.

Every one of them has to develop a sign up process, a user cancellation process, a payment process, a refund process, a login process, a password retrieval process, etc.

Trust me, we are going through this and its an absolute PAIN. It gets in the way of building useful benefits and capabilities for the user.

Its plumbing and it should be standard and out of the box for 90% of startups.

What if you provided a “Shopify” like sandbox for SaaS companies? Provide all these capabilities out of the box. Let SaaS developers focus on building their app. Not do plumbing.

Please dont tell me AWS is one, they are an infrastructure provider. You will still have to code a bunch of processes on top of AWS.

Requirements:

1. This platform has to be “developer friendly” – but not like Magento. That’s too steep a learning curve. Think like Mixpanel or Stripe “developer friendly”.

2. It has to provide simple API (hooks) to the developer’s own application.

3. It has to (obviously) be hosted.

Is it a billion dollar opportunity?

I dont know.But I will put my money where my mouth is. Show me a good team, and show me how you will do this and I will put angel money into this.

This is Heroku 2.0 (they got bought for $212 million). Go beyond platform and infrastructure and actually build application plumbing.

No one is doing it.

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16 thoughts on “Startup Idea: Shopify for SaaS companies

  1. sridh ar

    Great point. You have stated the unstated obvious here and in time. Shopify for SaaS is something I agree with entirely. In fact, we are trying to do something like this – check http://www.1lineserver.com/. If there is traction, we may seriously offer this…will be great to hear your views.

    Reply
  2. Vikram Bahl

    I am glad you talked about this opportunity. There are a few who are trying to do this albiet at a very parochial level.

    We at Yavvy.com do have this opportunity at the back of our mind. We did not go after the user signup / password retrieval process. We thought its very little effort to build that (on a platform). You get numerous plugins, beans etc to do just that.

    SaaS companies do however need help with the plans, with the invoicing, with the recurrent billing, etc. with the payment collections. They want to get the signups directly into their sales cycles (CRM leads), they want to be able to sell plans and track when is the next due date. They want to be able to take in support tickets and assign that work to a developer.

    We have doled out the apis (www.apis.yavvy.com), we have built up the web based backend and we continue to work on it. Its still taking shape (beta) but do check out yavvy.com and I’d love to hear your feedback.

    Reply
    1. Mukund Mohan Post author

      There are a lot of companies doing payments, billing, etc. It is a big need, so I can understand starting from that point. I think you can easily expand to an entire SaaS app dev stack.

      Reply
    1. Mukund Mohan Post author

      Ravi, sounds like a good company. I tried hosting an app based on my github profile. Did not work. Needs more time on my side to invest I think.

      Reply
      1. Saurabh Nanda

        Wouldn’t an SDK be better? Using Devise on RoR I got my user registration & auth processes up & running in a day AND I had complete control over customization.

  3. avlesh

    Mukund, I am sure you have seen enough SaaS companies. If you would have been involved in the development of anyone, you’d know that this is next to impossible to build. For multiple reasons -

    1. As you said, every SaaS product is different in terms of the problem it solves, the implementation it adopts and of-course its subscription management. The platform, you suggest, can only be popular, if *every* SaaS company (that they acquire as customers) chooses to adopt an overarching API to build their respective products. That’s next to impossible. Because, all API’s have their own limitations. E.g. you can only build games on top of the Facebook API and NOT another Facebook itself. SaaS products are similar to platforms themselves. While they look simple and easy to use on the face of it, most of them are way more sophisticated in design behind the scenes.

    2. The problems you talk about are common and apply to any web product – authorization, authentication, subscription, user management .. these are not new problems. And there’s nothing new that SaaS companies do to solve these expect for adding a layer of business logic to these processes. I’d any day pick an existing open source framework for the corresponding problem than ask my team to adopt a new API for same. I contribute to a bunch of open source frameworks and from a developer’s standpoint, I can definitely tell you that they solve those specific pain points – irrespective of your language and stack.

    3. Talking about subscriptions, that’s the most difficult ones to crack. Here’s why – any typical well-designed SaaS app would have the concepts of upgrades, downgrades, discounts, affiliates etc. While all of these might sound very logical to abstract them as a service, the problem is that there are corresponding actions attached with each of these individual tasks. E.g. An upgrade would mean access to more features, enhancing the limit on some features etc. All these actions are business logic tied up strongly with subscription management. API’s can help in building add-ons; they can’t be *accurately* designed to serve business logic which is tightly built into the product.

    I have played a devil’s advocate by writing all of the above. However, I would also like to place a bet on someone who understands these pain points and wants to solve the problem bearing a product developer’s hat.

    Reply
    1. Mukund Mohan Post author

      Good points Avlesh. I think it can be built and a few folks (see comments above) are trying to build it. I agree that it wont be easy. The problems I stated above are the tip-of-the-iceberg when it comes to SaaS as you know. There are more like service feedback management, etc. which every SaaS app needs, which every company is building.

      As an example every mobile game and app needs social features and there’s a company that offers just that. Also take a look at http://www.kiip.me/

      Reply
  4. Vik Chaudhary

    Mukund, you mentioned this when we met. Sometimes the best ideas are just obvious. As one of the larger SaaS companies around today, I see us consistently go through this pain as we’re launching new products. In fact, the problem is really full-scale user management, which should handle everything above, plus upgrade, segmentation, and integrate with other systems that provide billing, analytics, etc. I agree with the assessment that you made about my involvement in such a venture, and I’ll be in touch.

    Reply
  5. Sahil Parikh (@sahilparikh)

    Hi Mukund,
    Here are my thoughts:

    1. Signup Process – this is too easy to do and there are plugins etc. available
    2. Payment/ Billing/Cancellation – there are companies like Chargebee who are solving the billing gab
    3. Upgrades/Downgrades – KissMetrics, Intercom.io helps assess how your business is doing.
    4. Password Retrieval – it takes a few hours to code this up.

    Sometimes designing parts of the app and UI in a different and unique way (the way you want to position your brand) is much more fun than using an out of the box solution.

    Reply

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