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The SaaS Playbook - Practice

The SaaS Playbook - Practice

Building a Reading SaaS Step by Step

1. Market: Define Your Niche & Strengthen Product-Market Fit

Identify the Underserved Segment

Problem Discovery: Start with customer interviews (prospects, competitors’ users, churned customers). For a reading SaaS, target academic libraries struggling with fragmented e-book platforms, or independent authors needing tools to manage digital rights and reader engagement.

  • Academic librarians: “We waste 10 hours/week troubleshooting incompatible e-book formats.”
  • Indie authors: “I can’t track reader behavior or monetize premium content effectively.”

Niche Selection: Focus on mid-sized academic libraries (2,000–10,000 users) or self-published authors with 500+ book sales/month. These groups have budget constraints but high need for streamlined digital management tools.

Build a Moat with Unique Value

Feature Prioritization: Use the “Crackpots, No-Brainers, In-Betweens” framework:

  • No-Brainer: Build a universal e-book converter (supports PDF, EPUB, MOBI) – a pain point for 80% of librarians.
  • In-Between: Add AI-driven reading recommendations (validated via surveys showing 60% of readers want personalized lists).
  • Crackpot: Ignore “build a social network for readers” (too broad, not core to library workflows).

Moat Building:

  • Integrations: Partner with library management systems (e.g., Alma, Koha) for seamless data sync (network effect).
  • Brand Positioning: Position as “The All-in-One Academic Reading Platform” (vs. generic tools like Libby/OverDrive).

2. Pricing: Align with Value Metrics & Expansion Opportunities

Tiered Pricing with Value Metrics

B2B (Libraries):

  • Starter ($500/month): 1,000 user licenses, basic analytics.
  • Pro ($1,500/month): 5,000 licenses, advanced usage reports, API access.
  • Enterprise (Custom): Unlimited licenses, white-labeling, dedicated support.
    Value metric: Price per user license, scaling with institution size (aligns with library budget models).

B2C (Readers):

  • Freemium: Free access to 5 e-books/month; $10/month for unlimited access + recommendations.
  • Premium ($20/month): Ad-free, offline reading, author Q&A access.

Freemium & Trials for Low-Touch Conversion

  • B2C Trial: No credit card required for 14-day premium trial (low friction for individual readers).
  • B2B Demo: Require a credit card for enterprise trials (filters serious library buyers; aligns with book’s advice: “qualifying event” reduces tire-kickers).

3. Marketing: Dual Funnels for B2B & B2C Growth

B2B High-Touch Funnel (Academic Libraries)

Tactics:

  1. Industry Events: Sponsor booths at ALA Annual Conference (high intent, direct access to decision-makers).
  2. Case Studies: Partner with a local university library to showcase 30% reduced admin time – use as a sales demo centerpiece.
  3. Cold Outreach: Target librarians 6 months before budget renewal cycles (e.g., “We helped X University cut e-book management costs by 40% – can we show you how?”).

Sales Demo Structure:

  • Start with pain points: “Are you struggling with interlibrary loan delays for e-books?”
  • Demonstrate solution: Walk through the universal converter and usage analytics dashboard.
  • Close with ROI: “Our tool pays for itself in 3 months via admin time savings.”

B2C Low-Touch Funnel (Readers)

Tactics:

  1. SEO & Content Marketing:
    • Blog posts: “10 Best Classic Books for Academic Reading” (target long-tail keywords like “free classic e-books for students”).
    • YouTube tutorials: “How to Organize Your Digital Library with [Tool Name]” (showcase features in 5-minute videos).
  2. Social Media Virality:
    • User-generated content: Encourage readers to share their “Reading Journey” using the app’s highlight feature – offer a month of premium for submissions.
    • Influencer partnerships: Collaborate with book bloggers (10k+ followers) for unboxing-style reviews of the premium features.
  3. Referral Program:
    • “Refer 3 friends, get 3 months free” (leverages the book’s “SaaS Cheat Code: Virality” – each referral brings a fractional new user).

ICE Framework for Channel Prioritization

Tactic Impact Confidence Ease Score (1-10)
SEO for B2C 9 8 7 24 (High)
Library conference 8 9 6 23 (High)
Social media ads 7 7 8 22 (Medium)

4. Team: Structure for Scalable Growth

Role Prioritization

  1. First Hires:
    • Customer Support (B2B): Hire a librarian with tech experience to handle onboarding (understands library workflows).
    • Content Writer: Create SEO-optimized blog posts and case studies (critical for B2C organic growth).
  2. Scaling Teams:
    • Product Manager: Own feature prioritization (use the “Crackpots” framework to filter requests).
    • Sales Development Rep (B2B): Qualify leads from conferences and cold outreach.

Avoid Common Pitfalls

  • No “family” mindset: Set clear KPIs (e.g., support team response time < 2 hours) and conduct quarterly reviews.
  • Cofounder Fit: If technical founder + librarian cofounder, ensure equity vests over 4 years (mitigates risk of early departure).

5. Metrics: Track the 80/20 Indicators

3 High/3 Low Framework

  • High Metrics:
    1. ACV (B2B): Aim for $12,000/year (average academic library spend on e-tools).
    2. Expansion Revenue: 15% annual upsell rate (e.g., libraries upgrading for API access).
    3. Referrals: 20% of B2C sign-ups from referrals (track via unique referral links).
  • Low Metrics:
    1. CAC (B2C): Keep < $50 (SEO/social costs are low; ads cap at $30 CPA).
    2. Sales Effort (B2B): Aim for 2-call closes (pre-qualify via budget/needs surveys).
    3. Churn (B2B): < 5% monthly (high switching cost due to data migration; offer free migration support).

Churn Prevention

  • B2B: Segment churn by library size – small libraries may churn due to price; offer annual discounts for 2-year commitments.
  • B2C: Track “time to first book completion” – if users drop off before 3 days, improve onboarding tutorials.

6. Mindset: Bootstrap with Resilience

Overcome Speed Bumps

  • Pricing Objections: If a library says “$500 is too much,” reframe: “Our tool saves 150 hours/year – that’s $3/hour for admin savings.”
  • Technical Delays: Use no-code tools (Airtable for early analytics) to ship MVP faster – iterate later.

Community & Mentorship

  • Mastermind: Join MicroConf or Indie Hackers to learn from other SaaS founders (e.g., how Castos scaled podcast tools similarly).
  • Mentor: Partner with a former library director as an advisor – leverages domain expertise for product tweaks.

Example Growth Timeline

Year 1: Validate & Launch

  • Month 1-3: Interview 50 librarians/authors; build MVP with universal converter and basic analytics.
  • Month 4: Launch freemium B2C ($10/month) and pilot B2B pricing with 3 small libraries.
  • Month 6: Hit $10k MRR (600 B2C users, 4 B2B clients); hire first support rep.

Year 2: Scale & Optimize

  • Month 12: Launch referral program; B2C referrals jump to 25% of sign-ups.
  • Month 18: Add AI recommendations (提升user retention to 90%); ACV increases to $15k for B2B.
  • Month 24: MRR hits $100k (800 B2C, 20 B2B); hire dedicated sales team for enterprise deals.

Year 3: Dominate & Expand

  • Month 30: Integrate with 5 library systems; achieve net negative churn (12% expansion, 8% churn).
  • Month 36: MRR $500k; acquire a smaller e-book tool for $2M (leverage moat of integrations and brand).

Key Takeaway

By focusing on niche pain points (e.g., academic library inefficiencies), using dual funnels (high-touch for B2B, low-touch for B2C), and prioritizing metrics that matter (ACV, referrals, churn), a book & reading SaaS can scale profitably without venture capital. As Walling emphasizes, “you don’t need permission” – just relentless customer focus and strategic execution.

Adapted from Rob Walling’s The SaaS Playbook: Build something users love, price for value, and scale the channels that work.

The SaaS PlaybookThinking, Fast and Slow