Episode 828 | Am I Building a SaaS?, Serving Both B2C and B2B, Pricing, and More Listener Questions (Rob Solo)

What It Covers

Rob Walling answers four listener questions covering how to define SaaS (disagreeing with ChatGPT's definition), serving both solo and enterprise customers simultaneously via dual funnels, pricing mission-driven B2C tools alongside B2B offerings, and how US healthcare costs create measurable runway and hiring constraints for bootstrapped startups.

Key Questions Answered

• •SaaS Definition Framework: SaaS requires two conditions: subscription billing (monthly, annual, or quarterly) plus software delivering the bulk of the value. Netflix and Spotify fail this test because content, not software, creates their value. APIs, mobile-only apps, and even on-premise deployments qualify as SaaS under this framework, contradicting ChatGPT's requirement for a UI and central hosting.
• •Dual Funnel Strategy: Serving both solo users and enterprise clients (50–200 seats) smooths MRR growth curves that otherwise flatline for months between large deals. The self-serve low end generates steady incremental gains while enterprise closings deliver $5,000–$10,000 MRR spikes. This combination sustains founder motivation, which Rob identifies as the primary failure point for bootstrapped startups.
• •B2B Layering on B2C Products: When financial planners or other professionals organically request B2B features without any marketing targeting them, that constitutes market pull — a signal worth acting on. The technical decision to split or merge codebases is secondary; pricing page structure matters more, with separate individual and professional tiers plus a "contact us" enterprise option priced above $35,000 annually.
• •Mission-Driven Pricing Structure: Rather than defaulting to free or donation models, charge standard rates ($5–$10/month for B2C) with an honor-system need-based exemption below the pricing tiers. This captures revenue from users who can pay while preserving access for those who cannot, and avoids the opt-in problem where most users default to free regardless of ability to pay.
• •Healthcare Cost Impact on Hiring: US group health insurance runs $15,000–$20,000 per employee annually, directly compressing bootstrapped startup runway. A common workaround is providing a $500–$1,000 monthly stipend for employees to purchase coverage on public exchanges. This approach limits access to senior talent but avoids full group plan costs, and Rob notes healthcare costs alone push a $60,000–$70,000 salary role to $80,000–$90,000 effective cost.