Latest / The Indie Hacker Podcast with Fexingo: Solo Developers, SaaS Side Projects, and Independent Tech / Using Free APIs to Build a SaaS That Makes 5K MRR
Transcript
- Lucas: You know, one of the most common questions I get from indie hackers is, 'I have an idea, but I don't have the money to pay for expensive infrastructure or data sources.' And the answer more and more is: you don't need to. Free tiers of major APIs are getting generous enough that you can build a real, revenue-generating SaaS with almost no upfront cost. Luna: I've seen examples where the only cost is a domain name and maybe a few dollars for hosting. But how do you actually make money when your inputs are free? Lucas: Let me give you a concrete case. There's a solo developer I've been following — he built a social media scheduling tool specifically for small nonprofits. It lets them schedule tweets, track engagement, and manage multiple accounts. The whole backend runs on the Twitter API's free tier — which gives you up to 500,000 tweets per month at no cost — plus a headless CMS called Strapi, which has a generous free tier, and a cloud function service like Cloudflare Workers, which has a free plan that covers millions of requests. Luna: Five hundred thousand tweets a month is huge for a small nonprofit. Most of them are posting maybe ten times a day. Lucas: Exactly. His target users are organizations with maybe one or two staff members handling social media. So he's well within the free limits. His only recurring cost is the domain — about ten bucks a year. And he charges twenty dollars per month per nonprofit. He's at about 250 customers now, so that's five thousand dollars in monthly recurring revenue. Profit margin is basically ninety-nine percent. Luna: That's incredible. But what happens if Twitter changes its API pricing or rate limits? You're completely dependent on their goodwill. Lucas: That's the elephant in the room. Vendor lock-in is the biggest risk with this model. But there are ways to mitigate it. First, he built a thin abstraction layer — so if Twitter's API changes, he can swap it out for another provider or host his own Mastodon instance. Second, he chose APIs with long track records of stability. Twitter's free tier has been around for years, and Strapi is open source, so he can self-host if needed. Luna: So it's about picking APIs that aren't likely to suddenly vanish or become prohibitively expensive. Cloudflare Workers, for example, has been very consistent with its free tier. Lucas: Right. And there's another angle: many APIs have free tiers that are actually quite generous because the companies want to hook developers early. Stripe's API, for instance, has no monthly fee for small volumes. SendGrid's free tier gives you a hundred emails a day. That's enough for a small SaaS sending transactional emails. Luna: It sounds like the key is to design your product around the constraints of the free tier. You don't build a service that needs a million API calls a day if the free tier only allows ten thousand. Lucas: Exactly. You tailor your pricing and features to match what the free tier can handle. If you need more, you can always upgrade to a paid plan later, but by then you have revenue to cover it. Luna: What about building trust with users? If your product is essentially a wrapper around other services, how do you convince people it's reliable? Lucas: Transparency helps. The developer I mentioned has a public status page that shows uptime and any api related incidents. He also explains in his documentation that the service relies on third-party APIs and outlines his contingency plans. Users appreciate honesty. Luna: That's smart. And it's a nice segue into something I wanted to mention. A couple of dollars a month is genuinely what keeps projects like this going — buy me a coffee dot com slash fexingo, if you've gotten something out of these conversations. Lucas: Yeah, listener support makes a real difference. It lets us keep the show ad-free and focused on actionable content. Luna: So back to the API model — another approach is to combine multiple free tiers to create something no single API offers. For example, you could use the Google Maps API with a weather API and a calendar API to build a travel planning tool for road trips. Lucas: That's exactly the kind of mashup that can work. The trick is to identify a niche where the free tier is enough to deliver real value. The developer I mentioned found nonprofits that tweet less than 500 times a month. That's a perfect fit. Luna: Are there any free tiers that are particularly underutilized? I feel like a lot of indie hackers overlook certain APIs. Lucas: One I like is the Open Exchange Rates API. Their free tier gives you a thousand requests per month, which is plenty for a currency conversion widget on an e-commerce site. Another is the Spotify API — you can build playlist generators or music discovery tools without paying a cent, as long as you're not streaming audio. Luna: And of course, there's the whole world of open data APIs — government data, scientific data. You could build a SaaS around real estate data from public records, for example. Lucas: Absolutely. The key is to read the terms of service carefully. Some free tiers prohibit commercial use, or they require you to display attribution. Others have data storage limits. You have to make sure your business model aligns with the API's restrictions. Luna: So what's your advice for someone listening who wants to start today? What's the first step? Lucas: Pick a problem you understand deeply. Then look at what APIs exist that could solve it. Don't start with the API — start with the user's pain point. Then check if there's a free tier that fits. If yes, prototype in a weekend. If not, maybe look at a different angle. Luna: I'd add: build in public. Show your progress. It builds an audience and accountability. And you might attract early users who give feedback. Lucas: Great point. And don't forget to set up a simple payment system from day one — even if you're not charging yet. Stripe's API is free to start, and it'll save you headaches later. Luna: So to sum up: free APIs are a viable foundation for a micro-SaaS, as long as you understand the limits, mitigate vendor lock-in, and stay transparent with users. Lucas: Exactly. And remember, the goal isn't to build the next unicorn on free tiers — it's to build a sustainable, profitable side project that serves a real need. Five thousand MRR might not be a billion dollars, but it's life-changing for a solo developer in many parts of the world. Luna: And that's the indie hacker spirit. Thanks for listening, everyone.