How I sold my first SaaS app

Today, I sold Auto Page Rank. Auto Page Rank was a relatively simple SaaS application where I built the MVP in just 3 days and the finished product took 3 weeks.

Quick refresher on Auto Page rank

This is a glorified wrapper around Google's Index API. It enables website owners to automate indexing their web pages on Google Search. Demand for indexing tools is relatively high in the SEO space.

APR was designed to only index 200 web pages per day and this was intentional. The setup process was a bit involved and required about 5-10 minutes of the user's time and this investment led to more lockin, AFAIK since churn was extremely low.

Why Sell?

The opportunity to sell Auto Page Rank literally happened upon me via an unexpected Twitter DM:

Teo is an entrepreneur based in New Jersey and he was also a customer! Teo had found Auto Page Rank via Twitter and it was actually Fed's Social Proof Twitter post that led him to the product. He had been scouring Twitter for random SaaS tools and happened upon APR, he tried it and saw how well it worked, then he decided he wanted to own it!

The asking price

When Teo had initially followed and messaged me I actually blocked his account on Twitter because of his NFT avatar and us having 0 mutual followers. It wasn't until I checked my missed DMs that I saw he actually knew my name and he wanted to buy APR. I was upfront and honest with Teo on the Annual Recurring Revenue (ARR) of the product and that is what led me to ask for 3x ARR for the product. In the current SaaS environment most SaaS applications are going for 3-5x ARR and those are the ones with revenu of TTM which APR does not have, it only has 3 months of revenue. We ended up sealing the deal at 2.7x ARR due to the applications infrastructure costs which are about the same as current MRR ($140).

Relief!

Selling APR was an immeasurable relief! The project had accumulated over 120 users and most of them were Lifetime deals. Lifetime deal customers are usually the bottom of the barrel ones that you really don't want using your app. They complain the most, they demand new features, and they're usually incompetent. Almost every morning I'd wake up to several support emails and it was beyond exhausting. The application simply wasn't sustainable and I didn't have a real growth plan. Too many competitors were popping up and they all had a smoother set up since they provide their users with their own Google Cloud Service accounts.

No motivation

I had 0 motiviation to grow the project since growth simply wasn't there. Competitors were launching at 3k+ MRR with relative ease due to their large social media following. Also, the application uses Googles Index API is intended for Job Boards that frequently update and almost none of the websites that were registered were indeed job boards. There is a massive amount of platform risk. My guess is they'll start clamping down on the policy eventually and require some sort of a.i. based review for job board websites only.

No real distribution method

I didn't have a plan to get more customers. I was considering running Reddit ads since I knew I had at least one customer that came from Reddit. The majority of the users were through Twitter AFAIK. Either way I do not see a future for the application and I am sure glad Teo jumped in at the right time! I believe he can be very successful with it since he has a lot of cash and a 120+ employee company backing it.

What will I do Now?

I am planning to build at least one super simple tool and play the SEO field. I want to see some results by the end of 2024 for a few of my SEO oriented websites. Also, I am definitely going to be developing another SaaS app and I plan on focusing like crazy. Focusing on one problem at a time and gaining traction will be paramount. Most likely the application will be a.i. based since the wave is going strong and only increasing.

My plan:

Find a significant problem that companys with a lot of cash have
Solve said problem!

How I do it, I really don't know but I'll figure it out, it is part of being an entrepreneur!