SaaS & Micro-SaaS Subscriptions Hard

What it is

Software as a service is the subscription business model applied to a tool: users pay monthly or yearly for continued access, and you keep improving it. Micro-SaaS is the one-person version: a narrow tool solving one problem for one audience, often born from a free utility or a spreadsheet you built for yourself. Pricing is per seat, per usage or by tier, and a free plan or trial feeds the paid one.

How the money flows

Customers subscribe by card through a billing provider: Stripe (cheapest, tax is on you), Paddle or Lemon Squeezy (merchant of record, they handle VAT and sales tax for a higher fee), or app-store billing for mobile. Annual plans paid up front fund development; usage-based add-ons grow revenue with the customer. Failed payments are recovered by dunning; churn is measured monthly. Payouts arrive daily to weekly from Stripe, monthly from merchant-of-record providers.

What it pays

Freemium tools convert 1-4% of free users to paid; trials convert 10-25% when the trial requires a card. At $10-100 a month per customer and a landing page converting 2% of visitors to trials, a tool earns $40-400 per 1,000 visitors, and every customer who stays raises the figure: at 3% monthly churn the average customer lasts nearly three years. A micro-SaaS at $3,000-10,000 MRR is a common one-person outcome; the same revenue sells for $100,000-400,000.

Requirements and who pays

A problem people already pay to solve or lose time on, software skills or a no-code stack, hosting, billing, a landing page, support. The property that produces the customers is usually a blog, a free tool or an audience in the same niche. Buyers are individuals for consumer tools and, for anything work-related, companies with cards and expense accounts.

Pitfalls

Build the smallest thing someone will pay for, charge from day one, and talk to every customer who cancels. Free plans should be generous enough to spread and limited enough to convert. Do not compete on price; compete on the one thing you do better. And keep an eye on the platform you depend on (an API, an app store, a marketplace): its terms are your risk.