Founderpath’s Post

Behind every successful SaaS company is a constantly evolving org structure. Did you know that there are common patterns? My last saas.wtf newsletter was about common SaaS company structures and how they evolve as ARR grows. Part of this was a comparison of two analyses on this topic by Tom Tunguz from 2020 (= boom times) and Kyle Poyar from 2023 (= ongoing transition to more efficiency). Interestingly, there are no significant differences, except perhaps in the headcount, which is now slightly lower. One important finding was that you should scale your sales team much faster than the marketing team. To be more precise, more than 2 times as fast. According to both analyses, a SaaS startup with $1-5 million in ARR has a marketing team of 3 people that triples in size as the company grows and reaches $20-50 million - compared to almost x7 increase in salespeople. Apart from the fact that commercialization is becoming more and more important compared to R&D / product development (as shown in my post on Monday), starting outbound activities is crucial as you cannot increase inbound traffic through marketing (SEO, PPC, ...) endlessly. #saas #startups #founders #vc #venturecapital #organization #revenuegrowth #sales #marketing

I was on a call with a SaaS Founder who got to $1M ARR but was frustrated about his growth rate on his march to $3M ARR. So I took a screenshot of his website, pasted it into a shared whiteboard, and started to work through questions. Here's what we found... · To get to $1M ARR, this Founder took on customers of all different segments, sizes, geos, and use cases. Totally normal as you're working to product market fit. · The majority of his customers came inbound through partners to get him to $1M ARR, so they were already coming to him with a burning problem, and he built out his platform to solve them. But now that he's doing outbound and marketing, the messaging he had on his website just isn't converting. · His most successful customers were using a very specific system of record. And his platform was one of the few ones that integrated deeply into it in the market. So while he did have a bunch of different customers, there's a specific type in the customer base that are his best. After working through all the questions, we started to come together with a plan. Here were our action items: 1) Re-build the Ideal Customer Profile to focus on one use case, one type of customer, on one specific segment, so we can hyper focus to get from $1M to $3M. 2) Revamp the Messaging to focus on the Benefits for this ICP, instead of the Features on his platform. When folks came inbound, features sold because they were already armed with the problem. When you're marketing and doing outbound, the messaging is different. 3) Based on the ICP and the Messaging (Manifesto), pick the ONE most valuable channel to deploy that messaging and reach the ideal customers. I see this very often with Founders. What got us to $1M isn't what's going to get us to $3M (quickly). To get to $1M you're doing anything and everything to win customers. To get to $3M, you want to be doing the same thing over and over for one customer, one use case, one key channel, one core message. That's how you scale. We left with a game plan that we're going to execute on over the next 3 weeks. I'm super pumped for this Founder. He's going to do great. If you're a SaaS Founder and you're looking to scale from $1M ARR to $3M the you need to define a scalable GTM Strategy. To learn how to do this, grab a complimentary copy of my 5-Point SaaS Growth Strategy Guide (so you can accelerate your path to the next stage of growth). Follow the link in the comments below to grab your copy 👇

From Simple to $5M: 50 SaaS Companies That Proved Small Ideas Win Big... Ever wondered how some of the most successful SaaS companies started with just a simple idea? The following document dives deep into the journeys of these companies, revealing the strategies and decisions that transformed them from small startups into industry leaders. What you`ll discover? Niche Focus: How honing in on a specific problem made these companies unstoppable. Minimal Resources, Maximum Impact: The power of simplicity in SaaS, and why "simple" is the most repeated word on their websites. Success Metrics: Real-world examples like a Gmail plugin earning $5M/year and a Shopify plugin pulling in $400K/year+50 companies Growth Strategies: How leveraging no-code and platform-specific channels gave these companies a competitive edge. Market Insights: Why the demand for micro SaaS businesses is skyrocketing. If you're an entrepreneur or just curious about what makes a SaaS company truly great, this document is a must-read. Type of product, market segment, price range, business model, and above all a very well detailed for all 55 companies... Listed companies include: Gumroad, GMass, Tweet Hunter, Prerender®, Carrd Inspiration, Plausible Analytics, Taplio (my favourite), Rootd Tally CASTANET Gorilla ROI Sniply by UpContent Mailman SuperLemon Upvoty ReferralHero Plasfy SiteGPT Buttondown Leave Me Alone GoFullPage Merch Wizard SaasRock Nureply Instatus Trendlyne.com Wheely Sales and others. Take a look at the stories here: https://lnkd.in/dPriu7gK Would like to download? Comment:   I want stories, I'll DM you a downloadable file.

Two-time SaaS founder Joe Lewin, CEO of Foundy, shared a valuable lesson worth reflecting upon. For context - Foundy is an end-to-end platform for buying and selling SaaS companies, e-commerce businesses, or digital agencies. When I asked him, 'What's been the hardest nut to crack on your journey so far?' - here's what he answered "Fundamentally, if you bring high-quality sellers to the platform, buyers will come. And that's what we're seeing." "We're seeking to increase our vetting process to make sure the businesses are really high quality. For illustration - we are only approving one out of three registrations at the moment." "We don't want to be selling failing, distressed businesses. I know there is a market for it, definitely. But we're opting for healthy businesses." Here's the thing It is the essence of building the foundation for a SaaS business that will last: Being crystal clear about who you are for - and, more importantly, who you're not for. That takes guts - because, as he says, there's a market for the ones that are not ideal, and by saying 'not for you,' you certainly miss out on revenue from that part. But by saying 'No,' you're also saying yes to becoming a magnet for customers prepared to pay a premium. And that means profitable growth. It's a trait remarkable saas companies master: - They acknowledge they cannot please everyone,  - Build something valuable and desirable.  - And with that, create fans, not just customers. It becomes their flywheel.     Be Remarkable The link to the interview with Joe is in the first comment.

When pivoting to SaaS generates $60k MRR. ( my lessons) Am listening to Chris Ronzio on Nathan Latka's channel as he shares his plan to help 25,000 small businesses simply streamline documentation. Initially, Chris's team worked in an agency and built Trainual as an internal tool. They later killed the agency and went all in into the SaaS startup. Here is how they scaled to their first 600 customers. 1/Affiliate with a 20% ongoing commission. 2/ Launched on Product Hunt for traction. 3/ Later started running Google ads. My one takeaway: The PH launch is great but the customers from their converted poorly ( considering they took the credit card gate off for free trials) P.S: Get proven product marketing weekly newsletter: productletter.beehiiv.com

Since exiting our last business I've been approached by dozens of startups wanting either or both money or advice. So many are caught up in the SaaS universe because for years the thought of exiting at a multiple of ARR anot EBITDA was deliriously exciting. Couple thoughts. Valuations across the board are not what they were AND SaaS may not be the end all answer. The notion that SaaS companies are inherently more likely to maintain ARR compared to other types of companies isn't necessarily accurate. A business that offers a great product people purchase regularly would be as or more attractive than most SaaS startups. While the SaaS business model inherently focuses on recurring revenue through subscriptions, there are several reasons why maintaining or increasing ARR can be challenging for SaaS companies, just as it is for others: 1.   Customer Churn: SaaS companies face the challenge of customer churn. If customers find that the software doesn't meet their needs, or if a competitor offers a better solution, they can easily switch providers, leading to a loss in ARR. 2.   Market Saturation: The SaaS industry is highly competitive with a slew of options available to consumers. This saturation can make it harder for SaaS companies to attract and retain customers, impacting ARR stability. 3.   Changing Market Needs: The rapid pace of technological change means that SaaS products can quickly become outdated. Continuous innovation is required to stay relevant, which can be resource-intensive. 4.   Dependence on Renewals: ARR in SaaS companies heavily relies on subscription renewals. Any failure in renewing customer subscriptions, whether due to price, satisfaction, or alternative solutions, directly impacts ARR. 5.   Economic Sensitivity: SaaS products, often being operational or discretionary spending for businesses, can be more susceptible to cuts during economic downturns, affecting ARR. 6.   High Customer Acquisition Costs: Acquiring new customers in the SaaS industry can be expensive due to high competition and marketing costs. High acquisition costs can eat into the profits from ARR. 7.   Pricing Pressures: With many SaaS products in the market, there's often pressure to reduce subscription prices to remain competitive, which can affect ARR. 8.   Service Quality and Reliability: Continuous uptime and high service quality are crucial in SaaS. Any lapse in service can lead to a loss of customers and a reduction in ARR. The moral of the post to me is in the end cash flow has to be king. If SaaS is the best path to that goal then great. But don't think you can simply call yourself SaaS and the world of capital will beat a path to your door. #SaaS #ARR #Cashflow #startups

The beauty of having a community of SaaS founders is that we learn from each other. Today, I spoke with the SaaS Scaling Launchpad founders, and one of them went from $10k MRR to $22k MRR in a few weeks WITHOUT ads. Listening to him speak was enlightening, not because of some little “growth hack” or thing that he learned from a YouTube video, but because of his attention to detail on the fundamentals of his business. It was a wake-up call to focus on the things that matter: A great product (a mechanism that takes your prospects from state A to B effortlessly and predictably) Building for the RIGHT market (people who are willing to pay thousands every month for high-quality services) Maintaining excellent client communication (happy clients refer other clients that may be worth $50k-200k in LTV) So without ads, he’s been adding on $10k+ in MRR from a few sales calls a week. So when you revisit your SaaS and see a very slow growth curve for your MRR, go back to the basics. You probably are missing something. This Friday at 11 am CET, I’m back on the Skool group to break down more SaaS companies and answer your questions live. Join 333 other SaaS founders, if you aren’t there already. Be the architect of your success, Dan

Here’s the story of how I launched my own SaaS tool 👇 During 2023, I spent probably 1,000 hours in the LI Ads platform. And I reached a tipping point of frustration… It was impossible to answer this question from my CMO: 'How much revenue did LI Ads influence?' Because most people don’t click on ads. Think about it. You’re not here to click on ads. You're here to consume content, learn, and share. I reached out to one of my close friends, Adam Hartsner 🤩, who also happens to be a great programmer, and asked if he could build this thing I had in my brain. Fibbler was born. And as a bonus, here’s our first MVP. We’ve come quite far since then! 😅 P.S. If you want to identify influenced deals from LinkedIn Ads and push LinkedIn Ads data to HubSpot or Salesforce automatically, sign up for free: https://www.fibbler.co/. #saas #mvp #startup

Need a roadmap for SaaS success? Our blog explores the three popular GtM strategies and how to fund them smartly. Join us in navigating the path to growth and ensure your startup thrives in the booming SaaS market. #StartupGrowth #SaaSGoToMarket

A primer and new benchmarks on the hot new SaaS metric: annual recurring revenue (ARR) per full-time employee (FTE). Kyle Poyar explains what “good” ARR per FTE looks like, how expectations are changing, ways to improve this metric, and common pitfalls to avoid. #saas #saassales #growth #gtm #saasbusiness #saasstartups #saasindustry #b2b #revops #salessuccess #revenuegrowth #saleseffectiveness #businessgrowth #gotomarket #scalingbusiness #scalingup #revenuegrowth #revenuestrategy #salesperformance #salesefficiency #gtmstrategy #revenueboost #monetization #revenuegeneration #productgrowth #customerengagement #customeracquisition #customerretention #gtmmotion #gtmplays #customersuccess #cs #productstrategy #productmanagement #gtmomentum #revenuestreams #revenueoperations #gotomarket #saasmetrics #benchmarks #arr #arrperfte #salesproductivity #revenueretention #bestpractices #salesleadership #revenueleadership #plg #annualrevenue #recurringrevenue #growthlevers #growthdrivers #expertadvice