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The "hit by a bus" quandry for one person SaaS companies


#1

Have you ever had prospective clients question what would happen if you were hit by a bus, or some other disaster, which meant you were no longer able to run or support your SaaS?

For traditional software firms, a mitigation would be to put source code in ESCROW. But for a SaaS model, where the “service” is all important, I don’t think this applies.

(As an aside, sounds almost like a business idea, to be a contingency fallback “administrator” for SaaS apps with drop-in technical, admin and customer support staff. Does this already exist?)


How do you guarantee Business Continuity for enterprise customers?
#2

Downloadable software has its advantages. ;0)


#3

I only knowingly use one one-man SaaS product and it’s not mission critical. In fact, if it went down right now, I wouldn’t even have to touch anything.

I would be hesitant to knowingly putting such a thing in my critical path.

So I dunno how to solve the problem, but I can confirm at least one more person that thinks that way.


#4

Documentation is the key. Assuming you are at a position where you don’t need to be hands on tweaking things and fixing bugs all the time (which you shouldn’t be), you should document as much of the business processes you do as you can. From there you can outsource things which not only frees up your time, but it also means you company will be able to run if the “hit by a bus” situation happens.

You can talk to a solicitor to put in place a kind of ‘will’ for the company (I think there is a legal term) to dictate what should happen in such a situation, such as putting someone else in charge or closing down the company (and giving clients notice instead of the servers just going off one day when your credit card is rejected).

Bootstrapped with Kids had an interview with Brian Casel about documenting business processes the other week. Basically every repeatable thing he does, he documents. Even if it takes an hour instead of 15 minutes to write every step down, now it means he can outsource that and will save 15 minutes tomorrow.


#5

+1 to documenting everything.

My prospects have this concern, and this is partly why I host my service on Heroku.

What happens if I get hit by a bus? Nothing. The service keeps running. Security updates get applied. Let me give you example. Have you heard of heartbleed? Well, while a lot of online services were scrambling to apply the patch, I was sleeping the deep sleep of the innocent. I woke up, checked my email: ‘Hi, we’ve patched your servers for heartbleed. Have a great day. - The team at Heroku’

This isn’t a full response to the concern, but it’s pretty good. I don’t think there’s any other way to get that kind of robustness in your service. It’s not enough to document what you do. It’s not enough to have one guy in the Philippines who can run through your documentation. You need an organization who can execute for you.

That’s my 2 cents :smile: Doesn’t necessarily apply to everyone.


#6

Documentation obviously helps, but that’s just part of the process.

The real point is how do you prove to customers or prospects that you have everything in place? With an Escrow agreement, that’s legally binding. Is there a legal contract of some form that covers services and the transfer of services to “failover” parties in the result of the demise of the original maintainer?


#7

I’m sure you could create a contract with someone but who? Maybe someone you know or something?

In reality I think it’s probably not worth it. You’re going to have to let those customers pass you by.

Also, hate the SaaS :slight_smile:


#8

This is less relevant to bootstrappers unless they get fairly large, but I think that Apache does this to some degree (OpenOffice, Wave, more?). They might have stipulations (Off the top of my head, it might have to become open source once it switches control – but if you’re dead, you might not care), and they probably wouldn’t even talk to anyone who isn’t large, but it is one example I can think of.


#9

As the “one man” for 3 SaaS products that a few small businesses depend on every day, it always irks me a bit when I hear this brought up. To me, the issue isn’t what happens if I get hit by a bus, it’s what happens if I want to go on vacation and be legitimately offline for a few days.

If you’re a one man SaaS and randomly die, you’re not going to care who fixes that next bug or updates the server. And from the other end, if you’re making the choice to use a one man SaaS for your business, you already know that you’re taking some risk, but presumably the reward outweighs it.

My users know that if I fall off my roof and die, their lives are probably going to suck for a couple months. But for the service, product, and price they have now, they’re ok with it.


#10

I’ve heard from several bootstrappers that they have standing agreements with a peer they trust, who could step in and take the helm for a while in an emergency (e.g., disability or death). Typically it’s with someone who is in a similar line of work, and who can access all documentation on the full business (process, security, financial, all of it). And typically, it’s an agreement where both parties are agreeing to step in for each other.

I don’t have this in place for Jiffy yet, but I’m documenting like crazy and plan to formalize a similar arrangement next year.


#11

Another approach to mitigate this would be to offer a data export feature. Then if something happens and the service has to cease, at least users can grab their data and hopefully do something useful with it.


#12

Thanks for the mention and great points here (interesting thread too).

Although just about everything in my biz is documented in detailed procedures for my team, it would certainly help to have one document in place, which should HOPEFULLY never have to be used.

But when if/when this scenario happens, this doc could contain the high level stuff for someone to pick up the pieces and get things in order if the solo founder were to disappear.

This doc can be shared wth one or two close advisors and/or family members.


#13

There are three parts to this question: how you answer this as a sales objection, how you answer this as a technical challenge, and how you answer this as a life challenge.

Sales objection: I’ll try my level best not to get hit by any busses! No, seriously speaking, we have a written business continuity plan, which I’m willing to share under mutual NDA. In the event of my death or incapacitation, contracts fire and a well-regarded technical firm takes over the day-to-day operations of the business. You’ll be able to export your data prior to the orderly shutdown or sale of the business, if that turns out to be necessary.

n.b. This assumes enterprise sales. If you’re a $29 a month account, either you’re OK buying SaaS or you’re not. If you’re not, I will not waste my time attempting to change your mind.

Technical challenge: Have up-to-date process documents in place for the major things and/or your major products. Get a buddy you trust and prepare an envelope with the In Case Shit Happens information in it. In my case, this includes passwords, SSH keys, and the like. (Pro-tip: your password to a password manager is far and away the easiest way to accomplish this.) You probably want paperwork between you to establish that they have legal authority to operate your stuff, and you’ll want to have talked about what your priorities are. e.g. Should they just do an orderly wind-down? Should they keep the service in maintenance mode for as long as possible, given that you may recover? Should they try to sell the service for as much as they can, and give the proceeds to your heirs? etc, etc.

Your lawyer can help you think through these questions, draft the documents, and is a good choice for someone to hold your In Case Shit Happens envelopes.

Personal challenges: Estate planning is something you don’t want to have to think about, particularly while young and healthy, but if you have loved ones or causes which would survive you, do it. It is highly likely that your business will, if it is day-job capable, represent >>> 90% of your net worth and take an immediate 90%+ hit to its fair market value in the event of your incapacitation.

I have a wife and daughter, and I want to see them taken care of, so I just have a term-life policy, covering ages 30 to 40 (I’m 32 now). The plan is, by 40, that I’ll have socked away enough such that any proceeds from sale of the business would be “nice to have, but not critical” in the event that I encounter an untimely bus. If not, oh well, new term life policy.

This costs about $50 a month for a youngish man in good health, for $500k of coverage. You can get it cheaper outside of Japan, to my understanding. Get it, for the piece of mind if nothing else, if you have dependents.


#14

Excellent reply.

Even in pure enterprise sales I’ve only rarely come across the need to discuss contingency plans. They’re good to have, but I tend to think it’s something we solo founders like to overanalyze in general from a sales necessity perspective.

+1 to term life insurance (in case shit). I got $750K in coverage up until age 50 when I was around 32/33 at $700/year. Don’t smoke, relatively good health, etc. Definitely something everyone should look into.


#15

The main reason I raised this question was because this might become a sales objection.

It sounds to me like part of the answer, other than the excellent operational stuff suggested above, may be to raise my prices. 'Cos the price tier involved isn’t really “enterprise”.