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Description by @mijustin

Is there a time where a SaaS hits a certain MRR and can stop growing?

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Also: will paid podcast feeds be a thing?

Published on Sep 10, 2019 in Entrepreneurship
US English

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One listener DM'd this question:

"You mentioned 'needs to accrue $10K MRR in a reasonable amount of time.' Do you care to elaborate on this time threshold? Is it different for ever company/market. If at 6 months you haven’t met '$X MRR,' you should just quit? At what year should you do that?"

4 years ago • Reply

I wrote a bit about this here: https://justinjackson.ca/giveup

A lot of this depends on the market, the type of product you’re selling, and the outcome you’re looking for.

However, all of us need to have some sort of "circuit breaker" for killing an idea. I think most folks stay with bad ideas too long.

Jason Cohen says: "If you're two years in and you still need a day job then by definition it doesn’t have good fundamentals."

4 years ago • Reply

Another listener wrote in to say:

I noticed a few instances of bias in your viewpoints and wanted to bring them up.

  1. You seemed to discount the idea of a market for Supercast, but then immediately brought up how successful Patreon (their biggest competitor) has been. There may be a market for one and not the other, but I would have liked to hear that discussion a little more. Is the difference that one is pay-for-access and the other is pay-for-value, etc.?
  2. You identify that Supercast likely doesn't pass The Mom Test. On the other hand, would Patreon have passed The Mom Test 5 years ago? Is altruism the thing that drives people to support shows like yours which are free either way? If so, how can we measure that opportunity or create a different "Mom Test" for those instances?
4 years ago • Reply

Patreon is a big player, but their success (and effect on the market) is difficult to quantify for a few reasons.

First, Patreon is venture-backed ($47 million). They're truly trying to create a new category. Most businesses shouldn't pursue that strategy (because they don't have the time or money to make it happen).

Second, Patreon has admitted their business model isn't sustainable: https://www.cnbc.com/2019/01/23/crowd-funding-platform-patreon-announces-it-will-pay-out-half-a-billion-dollars-to-content-creators-in-2019.html. Even with all that funding, they haven't figured out a way to make it work as a business!

Third, Patreon's focus isn't just on podcasters, but rather for "all creators." This gives them a huge potential audience of video creators, journalists, musicians, artists, etc...

From a VC's perspective, Patreon may have passed "The Mom Test" in that there were thousands of creators actively looking for a way to earn a living (and the momentum with Kickstarter, Gumroad, etc.. was good evidence of this). But from an entrepreneur's perspective (especially a bootstrapper), Patreon wouldn't haven passed the test, because most artists and creatives aren't making any money. There's not enough evidence that there's sufficient momentum.

(Only 2% of creators on Patreon make a living wage: https://theoutline.com/post/2571/no-one-makes-a-living-on-patreon?zd=1&zi=bbapfovl)

4 years ago • Reply


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