10 Steps to Buying A Profitable Micro-SaaS Startup as A Non-technical Founder

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Ilya Novohatskyi
August 4, 2022

Saying all founders of software companies must have technical or programming skills is like saying all birds must be able to fly – doesn’t work that way. Some of the most brilliant startups were built by non-technical founders: Jack Ma, Alibaba’s founder, had a degree in English Literature. Tim Westergren, the founder of Pandora, was an award-winning composer, and Brian Chesky, Airbnb’s CEO, was a designer. So you’re in good company. They’re proof that the lack of technical/programming skills is not a disqualification from building a successful software company or SaaS startup. But that isn’t to say having tech skills is unimportant – it is. It's just that there are other moving parts (like the financial aspect, sales, marketing, management, etc.) in the product development cycle. 

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At Microns, we’ve built a marketplace for buying and selling micro startups. And one of the most common questions we get asked is, “How can I buy a micro-SaaS startup without having technical skills?”

In this article, we’ll walk you through the steps to buy your first (or next) SaaS startup as a non-technical founder and set the company up for success.

Let’s dive in!

Steps Non-tech Founders Should Take Before Buying A Micro-SaaS Startup

Buying a profitable micro-SaaS product is not easy, so a lot of consideration goes into the process. First, how do you know the company is going to be profitable? How do you handle customer feedback and fix bugs? These and more we will answer in this article.

Step 1: Why are you buying a micro-SaaS company?

Running a micro-SaaS business can be a very profitable venture even for a non-technical founder. Aside from its profitability, one of the most important things to consider before buying a software company as a non-technical founder is your “WHY”.

What problem(s) you are looking to solve?

Could the software help you generate better results for your clients? Can it automate some of your tasks and streamline your process? Are you looking for a more intuitive and user-friendly solution with improved features?

When you begin with why you’re buying a micro-SaaS product, you’re making your path clearer and setting your startup up for success.

Step 2: Finding a micro-SaaS product and knowing how it works

After establishing your reason for buying a software startup despite your lack of tech skills, the next thing is to find suitable products that tie with the solutions you seek to create.

In doing so, your priority should be to know the product’s features and how it works before brainstorming ideas to improve them.

On Microns, you can find hundreds of micro startups for sale across a wide variety of niches. The listings which cost from as low as $400 to $300,000 have key information about the product’s features and functionality.

Also, there are many moving parts in a cloud-based software solution. On our startup marketplace, you’ll get help from the sellers on how to use the tech stack. Being a non-technical founder doesn’t mean you shouldn’t be interested in the programming language(s) and technology stack that the product runs on. As a beginner, we recommend you buy a no-code project as they're easier to understand and run.

Gather information about the third-party services, dependencies, or software licenses that the web or mobile application runs on. You also need to consider the cost implication of these products and services and how they’ll impact the financial health of your new online business.

Step 3: Knowing the value the software brings to the user

Not all products are market fit. This CBInsights survey shows that the number one reason for startup failure is lack of market need. Regardless of how exciting a startup idea seems, it may not be useful to your ideal customers: hence, no market for it. So validate the software before investing in a startup.

The first question to ask is what target group the product will serve. Is it targeting developers, marketers, fashion designers, etc.? Are there many similar products? If yes, there’s a market and a need for your prospective product.

The next consideration should be the benefits and value it brings the user in the form of the problem it solves. Users only pay for products that bring massive ROI. So be sure the product you’re interested in buying can deliver on its promises, keep up with demand, and is scalable. And a great way to do it is by speaking with existing customers.

Step 4: Speak with customers

A great way to validate the product you want to acquire is to talk with existing customers. And as a non-technical founder, this should be quite easy for you.

After checking the product’s features and looking within the company, you need to look outside to see how it’s performing. And the first place to look at is the userbase. Speaking with at least three (paying) customers to get their feedback is a nice place to start.

Discuss their experiences using the product and ask about the features they’d like improved or changed. When you ask these questions, try to know how much value they’ll get from these new features and if they’re worth paying for.

This stage is very important and should be done before the acquisition phase. With these insights, you’ll have sufficient data to know if your micro-SaaS product of interest is profitable and can be improved upon to solve your customers’ pain points.

Step 5: Research the competition

Researching the competition is a crucial aspect of validating the software.

Are you buying a more privacy-friendly analytics tool than Google Analytics or an email marketing tool with features focused on specific audience than MailChimp?

Secondly, what are the top desirable features of the competitors, and what are they doing to acquire customers? What’s their marketing strategy? Are they going hard on ads or creating content to educate and engage their audiences?

As a non-technical founder, you should arm yourself with these pieces of competitor information before making a purchasing decision and find unique angles to get a slice of the market share.

Step 6: Understand the micro-SaaS business model

If you’ve run an eCommerce store or agency business, you may be surprised to discover that SaaS business models differ from these other categories.

There are different types of SaaS business models – flat rate pricing, per-user pricing, usage-based pricing, tiered pricing, etc. You need to consider this before investing in a micro-SaaS startup as the pricing model could be what could make or break the business.

Step 7: Set a deadline

There’s something like analysis paralysis where you overanalyze a situation and become paralyzed to take action.

Sometimes, we tend to pussyfoot or procrastinate taking an action because we want to be sure everything is perfect. Most times, neither the situation nor the SaaS product will be perfect. This could result in us giving up on the process in general.

So one of the best ways to stay motivated all through the buying process is to set a deadline for buying the micro-SaaS startup. Even if you don’t meet the deadline, it’ll give you something to work toward.

Setting a deadline should come earlier on in the buying journey.

Step 8: Learn how to calculate a SaaS business’s value

Do not make the mistake of believing and relying on the financials provided by the developer as the valuation of some of the listings on the marketplace may not be accurate. Hence, you need to do your due diligence.

So after gathering information about the startup, and you’re convinced it’s a viable venture, you need to consider how much the business is worth. You can begin by reviewing its revenue, expenses, and financial projections. These will help you value the business and know more about its profitability.

Keep in mind that some of the micro-SaaS startups listed on our marketplace have no revenue as they’re either new or the developer/creator hasn’t done enough marketing.

Valuing and marketing an online business are some of the tasks you can undertake easily as a non-technical founder.

Step 9: Network and seek guidance

There are many technical and other non-technical founders like you that have built or bought SaaS or micro-SaaS startups. You can read their books, subscribe to their blogs or newsletters, and listen to their podcasts to learn how to start and grow a software company from them.

You could also join different communities and Facebook groups. For example, our Discord group where buyers share valuable information, or forums such as Hackernoon. There are also niche influencers that you can follow on Twitter, and network with them to get access to valuable resources. This way, you’ll become more acquainted with terms and key metrics to track your new startup’s growth.

Another important thing to consider when buying a micro startup is learning how to be safe online to avoid scams and downloading malware.

Step 10: Consider having a technical co-founder

Now you’ve done your due diligence and are about to buy the micro-SaaS startup. But you remember you have no technical skills to run a software company, and your first thought could be to get a technical co-founder.

Having a co-founder will help you understand and improve your product better and faster. However, your lack of technical and programming skills shouldn’t be a deterrent to building a tech startup. Regardless, you may be able to take user feedback and make changes to the product by yourself.

You will save a ton of money by doing most of the work yourself and postponing hiring a technical co-founder.

Conclusion

Buying a software company as a non-technical founder doesn’t have to be so difficult. We have highlighted a roadmap of the things you can do as a non-technical founder to acquire a SaaS or micro-SaaS company.

While it’s important you learn a programming language, you may not have the time and patience for that. But some important skills you must have as a non-technical founder are project management, sales, marketing, and leadership skills.

That said, we have built a marketplace where you can find lots of profitable software businesses on sale. The sellers will also provide you with a month of free support and guide through every facet of the business.

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