MVP SaaS application: should I send out an email campaign to prospective users half way through development?


I have a SaaS application I have made a 6 months ago. A month ago, I decided to shut it off and upgrade it. I have shut the SaaS down so that I may do another launch as the first version was very was buggy (crappy website, product that stopped working).

From my previous MVP, I had gotten sign ups (users). Also, I built list from my old inbox contacts (old customers and other relevant contacts). Recently, I have started another mailing list (MailChimp email submit form). So that's 3 different mailing lists. In total I probably have about 1000+ emails to fire off to.

I'm about 60% finished with the new website and new product. I want to tell people about it but not sure what I should include in the email.

I also wonder if it's okay to ask for early paying customers. I might show them a few screenshots and a demo before I do this, but this time around, I don't want a large number of free users who don't end up paying or don't want to.

Which takes me to another discussion, my SaaS incurs a significant operating cost for each freemium user ($2~$20). If conversions are less than 5% for freemium users to upgrade to a paying plan, I feel it's unsustainable. (100 users costing on average $10 a month each) with 5 paying customers paying $50 a month each. Even if I raise the price by 50%, I'd still be underwater.

So my thinking is put off on the freemium plan for now and just focus on paying users and those that want to pay to use it. I'm going to include that I won't support freemium users which I fear won't be a popular decision but I simply cannot afford it.

Pricing Marketing Saas MVP

asked May 21 '14 at 16:50
Jo K
11 points
Top digital marketing agency for SEO, content marketing, and PR: Demand Roll

1 Answer


I think you have several questions here:

  1. Should you contact beta users before you launch?
  2. Should you ask them to pre-pay for the service that is still in development and hasn't launched?
  3. Should you have a free plan if your fix costs for each of those free users is high?

Here is what I would suggest for these questions:

1) You could email the beta users an update about your progress. Add something interesting or something of value that they will get out of your email.

2) Depends on the type of SaaS application, the rapport you've built with those users, and if you're going to do this manually by contacting each user. Kickstarter is an alternative if you want to raise some money by having customers pre-pay for something you're still building.

3) Those seem to be very high fixed costs for each account. What are you spending $2-$20 per free user on? If those really are your costs, I would suggesting launching with just paid plans -- and experimenting with a freemium plan later when you have a revenue stream.

answered May 21 '14 at 17:48
Patricia Wright
663 points
  • It's a video processing service. basically I am purchasing a VPS for each user to run the processing on. the software runs on each VPS and uses lot of CPU and bandwidth. now it might make sense to bundle bunch of users on a single or a few machines but this ends up with a long queue where people need to wait a long time for other user's jobs to complete. – Jo K 10 years ago
  • @JoK On a related note, you should check the TOS of the hosting company -- as most VPS providers specifically disallow video transcoding due to it being resource intensive. You should take a look at Amazon's Elastic Transcoder. You could probably even use their free layer for each freemium client (they allow 20 minutes of video transcoding for free each month). – Bruce Schwartz 10 years ago
  • Also, that seems to be the wrong way of looking at queue management. Instead of buying a VPS for each client, you could build a queue manager that distributes the load onto available servers based the server's load. That way you can scale up or down by adding and removing more virtual machines based on usage. Otherwise you're going to have a LOT of wasted resources (lots of VPS which aren't fully using their resources). – Bruce Schwartz 10 years ago

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