Thread by @jspeiser

17 Steps to Source & Flip a SAAS business in <18 months

#1 Go to any App Store (Shopify, Chrome, Salesforce, etc).

#2 Find a category you are interested in, for me it was email (mail merge, tracking, analytics, etc)

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#3 Sort the apps by the worst reviews first. Yes, that’s right.

You want to find the ones really struggling.

Then filter out any with <100 reviews, you want enough scale here.

Now throw out the apps that are broken, scams, or don’t charge.

Focus on the ones that are generating negative reviews due to poor/non-existent customer service.

#4 Now cold DM & email the owners of these struggling apps offering to buy it.

Your outreach should include something that legitimizes your ability to pay. (Your linkedin, experience, access to capital, network, etc)

Be clear, to the point, and respectful. Offer compliments on what they built, don’t mention the negative reviews.

#5 I was amazed by how high a reply rate I got, struggling apps mean desperate founders.

If you do these steps right you will have a bunch of saas apps to choose from.

#6 study the competitors, the market and all the features available.

Make sure you aren’t competing against cash-rich VC funded beasts.

#7 Eat your own dog food, search out the bugs of these apps, get a feel for what’s good/bad about each, what missing features/UX upgrades would be needed.

Think about what would be a huge lift, vs an easy one.

#8 Pick your winner, and start negotiating, aim for no more than 1x revenue - and financing via the seller, and/or @pipe

Remember these apps are struggling, founders typically moved on and are just as anxious as you to do the deal.

Don't get emotional.

#9 Once closed (30 days usually), it’s time to line up an inexpensive overseas dev shop like, @cosmicdevelop ($50/h) or purelogics.net ($15/h).

Each has their pros/cons, and it really depends on your budget and the app’s complexity.

#10 As soon as you have access to the customer file, send out a survey (@typeform has a free plan)

ask your customers what you can do to make the app critical to them, ie what features are missing?

This will help prioritize your dev roadmap.

#11 Use @trello or @Jira, to organize your wish list, feature requests and bugs

#12 Immediately offer amazing customer service (Do this yourself for the first few months before outsourcing).

Understand the reason for every single customer churn.

Prioritize plugging those leaky holes.

Give refunds without headaches!

Answers emails within a few hours, nights/weekends included. Makes a massive difference.

Build macros to reply faster/easier, @intercom and @Zendesk offer easy ones.

#13 When customer service gets too much for you, outsource to an overseas shop. supportshepherd.com is a great resource.

#14 Invest in SEO.

That means clean up your meta tags, go deep into google search console, do real keyword research and turn out at least 1-2 smart pieces (4k words) in your niche weekly.

Find budget friendly SEO experts on @Upwork if needed

#15 Review your pricing tiers, and your competitors'

Find areas to offer more and raise prices, even a few dollars extra per month can have an outsized valuation impact

#16 Now that the churn is fixed, customer service is exceptional, and features are starting to get deployed, you should be seeing revenue growing month over month.

After 6-12 months of growth, it’s time to test the market with a private listing on @microacquire

Always share a pro-forma P&L - not actual

You will get immediate feedback on the price, and appetite with no obligation to take the offers.

#17 Lastly, and easily the most important step, do all of this with a partner.

It's no fun to experience the emotional rollercoaster of entrepreneurship alone.

Some days are going to be incredibly amazing and others insanely draining.

You want someone to not just lean on to split the work, but to be there to share the ups/downs on a daily basis.

But pick wisely, if you can't see yourself stuck at the airport with them for hours on end, then they probably aren't the right fit…divorce isn’t an option here.

Never build companies alone, it's too depressing.

If you liked this breakdown, and want more, please follow me here @jspeiser