Launching A Startup SaaS Product With No Hosting Cost (For Free) For Up To 12 Months
When building a startup, especially your first startup, you will need to stay focused on keeping your costs down and being as lean as possible throughout your startup journey — essentially keeping your burn rate as low as possible.
If you are a technology startup building a SaaS product, it is possible to launch your product with no hosting cost for 12 months using Amazon Web Services. There are some constraints to this approach, such as the dependencies and services that your product requires (databases, storage, etc) and the amount of resources needed on each of those services, which will be dependent on the traffic levels and usage of your product at any given time. We will discuss that further — but in my first startup, this approach worked and was a huge win given that the SaaS product was the core of our business.
Let’s dive in to how this would work, and if this is the right approach for your SaaS startup.
This article is focused on the launch of your product, but it’s worth mentioning that while you are in the development phase, all work should be done offline and on local development environments. There is really no need to incur hosting costs while in the development phase of your product, especially since you can use many of the same technologies locally as you can on AWS i.e MySQL Databases and Redis Servers. There are even many ways to ensure that your development team can collaborate effectively while all working on their individual local environments — this all comes down to your development workflow.
Now, let’s focus on the launch. In this section of the article is where you’ll be able to determine if this strategy is right for the launch of your product.
Once you have completed the development of your product and you are ready to launch and invite users in for the first time, you now know the ins-and-out of your product and the required technology stack for it to run.
Go ahead and make a simple list of the various components within your technology stack, and here’s a template for doing so — in my first startup, I built our product on the Laravel Framework which ran using an Apache Web Server on a Linux machine, a MySQL database, and a Redis server, and that was my list of components that I would need to run my platform.
Amazon Web Services offer a Free Tier, which includes specific services either free for 12 months, or free forever — it is likely that all of the services you’ll require will fall within the “free for 12 months” category.
Using my simple list of services, I was able to turn to the AWS Free Tier listing and looked for the services that I needed. In my case, I was able to get my hands on a ‘t2.micro’ EC2 instance to run Linux, and on that machine I was able to run my Apache Web Server, as well as install a Redis Server. I could’ve also ran a MySQL Server on that machine, but since the free tier offered a ‘db.t2.micro’ RDS instance, I chose to use that for my database which saved me time in the future as I was simply able to increase the size of that instance to a paid instance once my users grew, as I would’ve eventually wanted my database to live on RDS as opposed to on the Linux machine that is running my code. I essentially wanted to run my Redis Server on an ElastiCache instance, but since it was not available within the Free Tier, I ran it directly on the Linux machine and eventually moved it to ElastiCache.
Most of the services that you’ll need, will likely be able to run directly on your Linux machine, but it’s best to put those components into managed AWS services ifthey are included in the free tier as it makes it easier in the future to just increase the resources on those services as opposed to moving the component(s) from your Linux machine to an AWS service, considering the service in question is included in the free tier.
If you’ve made a list of the components in your technology stack and you find that you can run them across AWS services that are offered in the Free Tier, then this strategy will serve you well, specifically if you haven’t yet done any fundraising and have limited capital — this is an approach for a truly lean SaaS startup.
The registration of your AWS account marks the start of your 12 month period, so be sure to create your AWS account only just before you need to get your product hosted to be opened up to the world. Once you do that, the launch of your product will essentially mark the start of your 12 month period, and you will be able to get users onto your platform, which means you will be able to build revenue.
Depending on your growth, you will likely not be able to operate your product for the full 12 months on the limited resources that the Free Tier offers i.e your Linux machine might simply not have enough CPU or Memory to support your traffic, but if you get enough users to warrant additional resources on AWS, then at that point it is likely that you have some revenue to invest into your AWS footprint. The idea here is that once you need to go beyond the Free Tier, this will likely mean that you have some revenue being generated from your SaaS product, some of which can be invested into your hosting cost.
I hope this helps you on your journey to launching your SaaS product, and I know that it will be especially useful to the folks who haven’t yet done any fundraising, and want to get their product off the ground with no spend on hosting.
My final note is that Amazon Web Services is only One (1) cloud provider that offers a Free Tier, and there are other such as Google Cloud and Microsoft Azure — so there are options to choose from should you have a preference.