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Pay4Bugs is the original pay per bug software testing marketplace. Our testers seek out and report problems with your software or website before they cause you to lose sales and customers.

Building a two sided SaaS business, finding people on both sides of the transaction.

Posted by C.S. Hsia on · Comments

Since the beginning of time, doing business involved dealing with people. Today's SaaS (Software as a Service) start-up companies are enjoy a historically unique position to reach large numbers of people quickly, with minimal advertising dollars. This however also puts start-up founders in a position to manage large numbers of people very early in their business careers. Their company payroll might be small, but the database of users are huge.

SaaS businesses can be broken down into two groups:

  1. Software doing the customer a service
  2. Software the connects customers to a group of facilitators doing a service

The first type is much more straight forward. Examples of this are Evernote, Dropbox, and 37Signals' Basecamp. Your focus is on one set of people - your customers. This singular focus applies to the marketing efforts, customer service, and even the design of your interface.

The second type of SaaS company is a much more delicate balancing act. Some examples of this are eBay and the handful of job search sites. Pay4Bugs is the second type of business. We are a marketplace that connects two distinct groups of users - the customer and the tester.

The complexity of courting two sets of people to your start-up website could seem intimidating early. Having one set of people but not the other will not create any value. Imagine eBay with no buyers, or a job site with seekers but not employers. If your company solves a pain point in our world, then within a few months you'll realize the natural balance of the two groups, and which direction you should focus your marketing promotional efforts.

In our case, it was much easier to find testers. As we were providing skilled computer and mobile users a way to monetize something they do already every day. Our challenge was to acquire clients, which is why our public site design is built to target software development teams, and our advertising dollars are all spent courting developers with a cost efficient and effetive way of testing their software.

In the beginning, you'll certainly feel the stress of the imbalance. For us, it was a group of eager testers with nothing to test, or clients with specific requests that our testers didn't qualify for. These are just temporary growing pains, just focus on scaling the business and they go away.

In the early days, "prime" the system by playing both sides. Just like how "Market Makers" make the stock market more efficient by buying and selling on the stock exchange, we've both tested in-house development projects on Pay4Bugs, and played the role of testers.