92% of SaaS Startups Will Fail Within 3 Years.
One of the biggest reasons they fail is because so many Founders follow the flawed MVP (minimum viable product) process.
Every CEO should have a 1-page growth strategy written down on paper. You should answer:
0) Who is our core customer?
1) What are the macro trends affecting our customer?
2) What is our core strength?
3) What are the major threats?
4) How do we strengthen
#2
and innovate for
#3
?
So much of marketing, business, life equates to this simple mantra:
1/ Write down a thesis
2/ Establish a set of metrics
3/ Execute
4/ Figure out what's working, iterate, and execute again
5/ Success
Most fail at
#2
, blindly does
#3
, and gives up before
#4
.
First time entrepreneur:
- let me raise a seed
- dilute 20%
- figure out / flesh out the idea
Second time-ish entrepreneurs:
- let me build a business
- let me make it print cash
- let me raise a growth round
Stages when you're starting something...
1/ This might be a thing
2/ This is TOTALLY going to be a thing
3/ This is not a thing
4/ OK no this might be a thing
5/ Who T F am I to make this a thing
6/ I'm so awesome
7/ I'm an idiot
8/ HOly shit
9/ OMG
Go back to 1; repeat
I really don’t know why people hate on waving goodbye at the end of a zoom call. I like waving goodbye. I like it when the other person does too. It’s the only human thing in an otherwise very contrived interaction.
I’ve never fanboyed over anything in my life before. Until… I got to come to Miami for the All In Summit and be in the same room with the besties:
@jason
,
@DavidSacks
,
@chamath
,
@friedberg
.
A must listen for founders,
@bhorowitz
and
@pmarca
reflect on 10 years of being in the VC business.
Most notable takeaway (amongst many):
"People don't think these things are obvious in the beginning. They're only obvious after the fact."
Instead, what's worked for me, and for the Founders that broke through to initial revenues and product market fit was the M.G.P. framework:
1/ Market
2/ Go-To-Market
3/ and then Product
(in that order)
Crazy idea I had recently that won’t leave me alone.
IF you have a B2B SaaS startup. I’ll invest $25k.
BUT. You have to deploy that $25k to the exact playbook we have for generating 💰.
IF it generates a predictable growth machine for you, you give me 1% equity.
Would you?
The ONE secret weapon in startups that not enough VCs nor Founders talk about: Stamina.
But.... here's the BIG question. How do you build stamina as a startup founder?
(a thread) 👇
Building startups are particularly hard for founders because you have to hold two very opposing ideas at the same time:
1/ Do unscalable things to serve your initial customers in a specific niche
2/ Build a scalable machine to serve your customers in a very large market
On a Zoom call today...
F: You know. The stuff you talk about is really basic.
Me: Have you implemented all of these basic things? How’s growth?
Silence ensues...
You don’t need a PhD to scale a SaaS business. But you do need discipline.
@jowyang
No one in Silicon Valley is “from Silicon Valley.” It’s all people who took risk, left their home towns and moved there to make something of themselves.
Other cities can’t compete with that. Their people are inherently just built different.
On today’s Unstoppable Sunday episode… I’m going to dig into this 3-step MGP framework (and when you apply these steps, you’ll be able completely transform how you approach starting software companies). Watch here 👇
1/ First, there really are only three types of SaaS businesses: System of Record (CRM), System of Engagement (eg Outreach), and System of Decision (eg any BI tool). Most spreadsheets in not yet digitized industries still need a system of record. In others, system of engagement.
So I get on this Zoom call because an entrepreneur wanted to chat
We start the call and I'm like COOL.
What do you want to talk about?
"I had these 10 questions listed
but I discovered your Youtube channel 30 minutes ago
and I've been binge watching
and you answered them"
Request for startup: I’ll pay you $99/month. You give me an all access pass to any paywall article on the internet.
You then take the proceeds and distribute it to the publishers. I never have to deal with giving WSJ, BizJournals, NYT, Economist or anyone else my credit card.
Age at founding for B2B SaaS
Marc Benioff, Salesforce, 35
Fred Luddy, ServiceNow, 50
Eric Yuan, Zoom, 41
Abele Bhusri, Workday, 39
Peter Gassner, Veeva, 42
Jeff Lawson, Twilio, 31
Stewart Butterfield, Slack, 36
Age at founding
Facebook
Mark Zuckerberg: 19
Stripe
Patrick Collison: 21
Apple
Steve Jobs: 21
Microsoft
Bill Gates: 23
Google
Larry Page, 25
Tencent
Pony Ma, 27
Amazon
Jeff Bezos: 30
Alibaba
Jack Ma: 35
Here are 7 terrible mistakes I made as a SaaS Founder on my way to $3M+ ARR. Hopefully my mistakes are your reward... you can learn from them and avoid them 👇
1. Too wide of an Ideal Customer Profile (ICP): Trying to be everything to everyone can lead to diluted efforts and
Over the past 18 months, I've talked to 50+ founders of MarTech/SalesTech startups. Before I do intros to VCs in my network, here's the checklist I use to validate if they're meaningful enough...
This allows me to validate my conviction, and the VCs to quickly get up to speed.
How to start:
1. Pick your ideal customer
2. Develop a new religion for them
3. Get on the road and raise awareness
4. Tether back to a blog/podcast/manifesto to mobilize them
5. Build an engaged audience
6. Build and sell the product that helps them adopt the new religion
Being a 2nd time Founder has a lot of advantages. But there’s one BIG disadvantage. We often forget how big things start very small. Scalable things start very unscalable. I’ve seen Founders get paralyzed because of this the 2nd time around. Beware!
A slightly contrarian view. In order to succeed as a Startup Founder, you can’t outsource Sales and Marketing. You have to get good at it yourself first because so much of that initial journey to Product Marker fit requires it.
One of the downsides of being a Founder is that you just can't use your laptop for fun stuff. I'll open it up on a Saturday and before I know it I'm inside editing website copy or answering emails instead of watching viral videos. Anyone find a good fix for this?
There's two arts that SaaS Founders need to master.
First is the art of Fundraising.
The second.... is the art of Product Demos.
So much has been written on Fundraising. A thread on SaaS Product Demos 👇
Here's how a shitty Marketer can keep a job for 18 months until the CEO finally catches on and fires him (only for him to get another job and do it again for another 18 months *without* ever having to generate a $1 of quality pipeline). Ready? Here we go...
My Mom always wanted me to get an MBA. Until the day I called her and told her that I have a Harvard MBA, a Stanford MBA, and a Wharton MBA working for me.
Founders, you’re here to create something from NOTHING.
Then you can hire MBAs to scale it.
You don’t need an MBA.
Just spoke to day 0 founder who told me he was considering an MBA instead
It was hard for me to unhear that + still see him as likely to grind for a decade trying to build an huge company w/o selling or stopping along the way
(different from getting MBA + *then* startup...)
Heeeere we go! 65+ SaaS Leaders joining for our 2021 Strategic Planning Workshop. This is nerve wrecking (which means you care) & equally exciting.
Thank you to those who kindly helped us promote this event. And for those of you that didn’t, well, you’re on my naughty list 😂.
9/ That’s it. That’s what it takes to take a plain old boring critical to the business spreadsheet and turn it into a big SaaS business. Here’s a visual of how this all comes together.
The
@ToutApp
sale had a holdback amount for investors. Super proud that the Marketo sale closing just released the final payout to investors from our sale. Crazy 19 months! Just hit send on the final-final Investor update email.
#overandout
5 years ago, if I was starting a MarTech/SalesTech offering, I'd have started with integrating with Salesforce.
Today? I'd hands down start with Hubspot.
Salesforce still important, but for early traction, for winning in the mid-market, Hubspot wins. Hands down.
A blossoming martech platform:
@IDC
sizes the
@HubSpot
ecosystem at $6.4 billion this year, $12.5 billion in 2024
#martech
For every $1 of HubSpot revenue this year, companies in our ecosystem will collectively earn $5.60.
In 2024, they'll earn $6.16.
I signed up for a
@Hubspot
CRM account today. AND sure enough, got the MOST AMAZING personalized email from a rep over there. What a great way to start the experience!
cc
@dharmesh
Being a Startup Founder in the super early stage and really at every stage is tough and grueling because you're the 0.001% of the planet that is trying to go from 0 → 1. From nothing to *something*. For all of you doing that shawshank crawl, I have one mantra for you: Keep on 👆
The year was 2016. My high flying SaaS company was declared a “zombie” almost overnight because 3 things happened all at once:
1/ A board member retired
2/ My VP Sales quit after 3 weeks
3/ SaaS multiples crashed
But we survived and exited. Here’s the 3 things we did: 👇🧵
You build a product, a "minimum" one and then you try to find the market and go-to-market motions that have a "fit." Simple right?
Well it doesn't work. Because it's backwards.
@josephflaherty
Two things I’d add, especially because I’ve seen these in startups outside the valley a LOT:
1/ Are they full time? Or part time contingent if the round closes?
2/ Why do you need a CIO and COO for a 3 person startup?
3/ Who is the key person shipping code? closing deals?
It is still mind boggling to be that the % of job applicants who send a Thank You note after an interview is anything *but* 100%. Send that thank you note! It pays dividends.
The best founders I know just have this one trait. They’re going to grind it out until they get to that promise land. I’m pleased and surprised every time I see it.
If you’ve been going at it for a while... and you’re kind of wondering... just know. You might be one pivot away.
Having coached 100+ SaaS Pre-Founders over the past couple of years, and having seen what works and doesn't work in my own journey in starting winning products (and failing ones), I've found that the MVP approach while well intentioned is all wrong.
So I was getting a haircut here in Dallas, TX.
And then it happened.
My barber stops the buzzer.
Leans over.
And asks....
Hay man... You're in tech right?
Do you think I should invest in some Dogecoin?
I spoke to a Founder today joining the GTM program. They got to $1M ARR in 12 months tracking deals on a spreadsheet.
Goes to show. Strategy is what matters. Not the tools.
@dcancel
Sundays are HUGE for me.
I practice this thing called Unstoppable Sundays to plan out my week.
I spend 30 minutes to:
1/ identify what's bothering me
2/ acknowledge what I'm excited about
3/ create a hit list for my week
4/ make sure my calendar reflects my priorities
I signed up for a trial for a SaaS product recently.
But I never really activated.
Now I'm getting an email every other day from them asking to enter my credit card because my trial is over.
This is an important lesson for SaaS Founders. Focus on activation first. Then $.
Funny thing that happens EVERY time I’m on a zoom call with an early stage founder.
Me: So... I’m looking at your website right now and.....
<and before I can even finish the sentence>
Founder: Yeah we’re re-doing the website right now....
If you're an early stage Founder -- (while tempting) it is a terrible idea to outsource your Marketing & Sales.
At the early stages, it is super hard to land great marketers so a lot of the work lands on Founders. A thread 👇
If you’ve built a SaaS product.
But you don’t have predictable revenues yet...
Then it’s time to get serious about a Go-To-Market plan.
If you're a Technical Founder, this may sound like a waste of time. It's not.
Here's six steps on how to create your SaaS GTM plan 👇
Dating outside of SF has been interesting. The other night while on a date, she asked me...
“Wait... you only have an undergrad degree?” (She had two masters.)
On the same 10 minute period she asked...
“Wait... are you a workaholic?”
Texas is a weird place to be right now re: masks.
Walk into an elevator with a group of people with NO masks and I’m wearing my mask, and I’ll get a dirty look.
Walk into an elevator with a group of people WITH masks and I’m not wearing one, and I’ll get a dirty look.
Nothing makes me happier than to see seriously genuinely good people I’ve met over the years win BIG eventually. On a long enough timeline, the good souls always win.
@ErinBlaskie
I book a meeting with Charlie multiple times through the week.
Have done it for 8+ years.
Zoom link and all. We get together and crank through emails and my most pressing tasks together.
No one seems to bother me or want a “quick question answered.”
Charlie doesn’t exist.
It's seriously the Golden Age of SaaS. And times like this... I'm eternally grateful my Mom convinced me to get a degree in Computer Science.
Thanks Mom 👋 🙏
Having hired 3+ VPs of Sales and 20+ AEs in my career, here are 3 things to look for when you're hiring your VP of Sales or AE that are counterintuitive and I had to learn the hard way 👇
This is an incredible time to build business applications.
💥No Code platforms gives you Enterprise grid and CRUD overnight
🛢 AWS (Lambda, ML, Data tools) then can give you deeper intelligence
💰Stripe Atlas making it easy to incorporate and charge
What’re you waiting for?
I wonder how many Founders are royally screwing themselves over without even knowing it because they've been misled to think "We're product led, we don't need Marketing."
Before AI replaces jobs. There will be an era where using AI will help you be 10x better at your job. Kind of like using a computer made you 10x better at your job. Embrace it!
There’s a new breed of marketers. They’re marketers that think like Founders, they think in terms of revenue not leads, and they’re willing to own the whole stack to go make it rain for the company$.
Not just T-shaped. Not just DemandGen. Not buzzy PLG. It’s the whole stack.
I’m not gonna lie. Being three months in, I’m friggin’ exhausted of text messages, Twitter, and Zoom calls.
As great as technology may be, human interaction, warmth, and sharing a great laugh over a drink or an amazing meal is unmatched. And my subconscious is clamoring for it.
Certain phrases in cold emails are literally triggers for me. "I know you're crazy busy... but.."
No man... I'm not crazy busy. I ruthlessly prioritize my time, and I keep lots of open spaces in my calendar so I can work on my most impactful things. I'm not crazy busy.