The Advice SaaS Startup Founders Would Give Their Younger Selves
justbeepit.com
justbeepit.com
Start with the customer. If you can get them excited & keep them that way, you solved most of the problem. If you are building something with hopes that "they will come" you are burning cash for fun and no one is going to care when it runs out.
The other piece of advice I would add is that, even though SaaS starts with "Software", you should NEVER start with the software. You should be starting with on-site meetings with your customers. Consulting about the processes the software might be able to help with. You should only start talking about things like clouds, containers and code once you have a schema that the customer can look at and go "aha! That's our business!".
Both pieces of my advice deeply involve the customer in some way. It's incredible to me how many "entrepreneurs" are blind to the fact that someone is eventually going to have to want their product, and for profitability to occur that prospect probably can't be their family member, SO or best friend.
When DoorDash first started, they manually took orders and delivered them to people, over the phone. They'd get an order from their customer, then they'd order it from the restaurant, then drive over to pick up and deliver them. Then, they built the driver network software, mobile app, and all that.
I'm curious who it was though if you find the podcast again.
> NEVER start with the software
As a long-time (old) engineer, historically my mindset was to rush into problem-solving mode by thinking about software-based solutions to everything. After learning from a failure or two, I recognize how that might work for me but doesn't necessarily contribute to solving a problem for a customer.
I understand how to solve problems with software, but my key to successes has been to really understand and define the problem to be solved. This generally takes so much more effort than surface-level assessments.
I think much of this is chicken-egg at the end of the day. Trust & networking is a hell of a challenge. There is no reality in which we could have walked into a client totally cold and proposed what we are selling today.
I think "hunting for problems" is part of the mission, but you also need people to be willing to work with you once you identify one. One element of successful professional networking should be a constant stream of "hmm maybe an opportunity?".
Building reputation in your target market seems to be the most difficult aspect of B2B SaaS.
1. get customers
2. get customers
3. get customers
But, as per my reply earlier in this topic, the "how" is left as an exercise to the reader.
I loathe reading stuff like this. Money is so important until you have it, and then it becomes fashionable to talk how there are more important things.
To any SAAS founders who feel strongly that there are more important things than money, feel free to give away your fortunes to feed the hungry if you’re in search of a higher calling. There are many who would appreciate it.
YEP. It's funny how it's always the multi-millionaires that talk about the importance of God, giving back, being honest. And "the rest will come naturally". It's absolutely sinister gate-keeping.
Of course it is! Show me a successful business that doesn’t give genuine value to their target audience.
The target audience may not be who you think it is, but you had best believe that someone is getting value or else the business would fail.
I suppose you have to at least temporarily appear to be providing value, before your casino leaves your customer bankrupt.
Things are remarkably binary in capitalism. Try pitching a VC on a startup concept that’s about more than money and see how far it gets you.
Or hit up just a few of hundreds of thousands laid off in the industry over the last year and ask them how important money is to them.
People who talk about wishing they hadn’t focused so much on the money are the ones who have it. Such tone-deaf takes are only possible once you’ve secured yourself against the system. The rest of us dream to one day be in a place to say such stupid things.
I'm curious, have you written a pitch to a VC? I've been involved in ours, and it's very much not about the money. It's about the idea, the people, and telling a story. Look at the top VC investments in the last few years. They're all AI. Before that was crypto, and before that was ML.
> People who talk about wishing they hadn’t focused so much on the money are the ones who have it.
You're missing OPs point, and I'm pretty sure you're doing it on purpose. Go back and read it again and reply to what he said, not what you're claiming he said
Sustainability. Renewals. Finding more novel and safer ways to do something risky. There’s a lot more that goes into decisions than money. Faith in leadership is another.
There is an area between being unemployed and making huge money with scams and shady tactics where you can make less but non-zero money and create real value for the world.
Not everything needs to be a VC pitch. People go into teaching (for example) knowing that it doesn't make much money because they want to make a difference, and plenty of them don't regret it.
When you’ve ticked off the money requirement then you can move onto higher level things and trying to change the world.
Maslow hierarchy of needs, and it’s probably better for everyone that it exists.
In theory, that's the entire point of why we as a society allow businesses to exist
The best across-the-board advice that I've heard from others:
- Own it. Be the best operator for everything in your business.
- Scale last. Very few companies have failed because they couldn't scale the business (but did everything else right).
- Keep at it. Blood, sweat and tears.
I think the intended thought process is: don't prematurely scale. Wait until you need to.
How do you find good people? How do sell before building? How do you find a good marketer? How do you reach $500k revenue in one year?
There are no easy answers, playbooks etc. here. It all depends on industry, customer profile, market circumstances etc.
Also, without trying to be overly sour, these tips should have a source with them noting the founder's company stage. Tips from folks doing $1M ARR+ tend to be more useful than those from $3000 ARR.
- 8334 per month
- 1923 per week
- 385 per business day
Lat's assume SaaS or similar subscription service. If I sell a subscription product with a few price tiers, say free, 10$/mo, 50$/mo, and 500$/mo (and maybe a hidden tier for corporate customers that amounts to 1000$/mo on average). Let's assume most of my customers are in the free tier, 95%. The remaining 5% are stratified across 10, 50, 500, and 1000 (maybe following an inverse logarithmic curve because people are allergic to spending money -- -ln(x/1000) + 1). The following scale factors apply to each price tier:
- 1 x 1000/mo - 2 x 500/mo - 4 x 50/mo - 6 x 10/mo
13 customers gets me to 2260/mo, so I'd need about 4 times that many customers to hit ~8000/mo. This comes to about 50 paying customers to hit 100k arr.
And now I need to sort out what I have that 50 people would be willing to pay those various amounts for protracted periods of time.
But what do I have that people want to buy? I can sell my time as a developer working on someone else's product and make about 100k arr. I can build a product -- and I assume most folks on this board are here in this camp, that they want to build something and own it. I could sell information products (ugh) or other kinds of information. What else can I do?
I'm curious how people with multiple launched products that make money managed to discover their original product. Was it an accident? Copious amounts of market research? Cross-industry experience that allowed them to build for non-engineers?
Definitely agree that a lot of advice appears "easier said than done" - execution is kind, after all. There was one response that said those at the top don't reveal their secrets/little details.
To boil it down: at the end of the day you need capital, clean execution, and aquire the correct customers. (the classic and infinitely repetitive trope of PrOdUcT MaRkEt FiT)
As many comments say, the magic is in how you do this (which no one seems to know! or explain!)
Maybe that's the real SaaS product we all need!
- how much is the role of product vs distribution? - should be go aggressive on distribution with a relatively new product?
* YOUR FIRST HIRES SHOULD BE CUSTOMERS *
You'll be building the right thing from the start. Selling will be easier too since confidence in the team is just as important as the product. Onboarding will be easier too. Support will be easier too. Heck, everything is easier.
Other advice:
*DO NOT HIRE A PROFESSIONAL PRODUCT MANAGER*
Instead, provide product management training to that customer you hired. You'll avoid playing the telphone game. Your devs will be closer to the customer this way.