This document provides advice for tech entrepreneurs on surviving and thriving as a SaaS company. It discusses how getting from $0 to $1 million in revenue is nearly impossible, while getting from $1-10 million is very difficult due to limited resources. The key is to recruit continuously to find great hires that can double performance. Crossing $10 million allows the "cavalry" of brand, redundancy, and scale to arrive and fuel self-replication. Maintaining innovation and management excellence ensures success once $25-30 million is reached. The challenges don't end but the company and team will continue improving over time.
Tech Entrepreneur's Guide to Survival and Success in SaaS
1. Tech Entrepreneur’s Survival Guide –
The Best of SaaStr
Jason M. Lemkin
SaaStr; Managing Director, Storm Ventures
@jasonlk
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3. Jason M. Lemkin
SaaStr Founder Community – 1m Views/Mo
Managing Director, Storm Ventures
Founder/CEO – EchoSign/Adobe
MobileIron, Marketo, EchoSign, GuideSpark,
Metacloud, Sandforce, etc.
4. SaaStr
• Web’s Largest Community for SaaS Founders
and Execs
• Genesis: learnings (and mistakes) going from
$0 to $100m+ at EchoSign/Adobe Web
Services
• 1m views a month; 5m on Quora
• Cool, founder-specific events & 1,250 answers,
videos and posts
• Goal: Help you get from 0 to $100m Faster.
With Fewer Mistakes.
5. From the Impossible to the Inevitable
•Getting from $0 - $1m:
IMPOSSIBLE.
•Getting from $1 - $10m:
UNLIKELY.
•Getting from $10m - $100m:
INEVITABLE.
6. SaaS Compounds
Very Hard to Start. Much Easier to Maintain and Grow … Up to An Organic Point.
7. $0 - $1m: Impossible.
No One Needs Another Web Service. Not Really.
8. $0 - $1m: Impossible.
No One Needs Another Web Service. Not Really.
• Not That Fun
• Not That Fun
10. $1m - $10m: Toughest Slog
Too Much to Do. Too Few Resources.
11. $1m - $10m: Toughest Slog (Usually)
Too Much to Do. Too Few Resources.
12. If You Have Leads – A Great Hire Can Be Just Epic
Can almost instantly double sales, marketing, product, engineering, etc.
13. If You Have Leads – A Great Hire Can Be Just Epic
So Spend 20% of Your Time Recruiting. Period. You Just Gotta Find a Way.
– From Initial Traction on (say $1m ARR until $10m
ARR) — this is the single most important
improvement you can make to your SaaS
company:
• To recruit every single day.
• Or 20% of your time.
• The equivalent of one full day a week.
– You have to find a way to get out of the weeds. Stop
taking out the trash. Stop doing Medium and Low
ROI things. Hire great people to do them.
14. Flip Side – Get Rid of a Bad VPS Especially ASAP
– For a VPS -- You Should Know Subjectively In Just a Few
Months – Just 50% of The Way Through Your Average Sales
Cycle
– Numbers Should Increase in 1 Sales Cycle – with Keen
Focus on Revenue Per Lead
– First Few Hires Should be Clear Upgrades – and made
quickly + seemingly effortlessly
15. Ways to Go From $1m to $10m ARR Faster
– Tilt, at least a smidge, Upmarket
– Overinvest in Customer Success (not just Sales)
– Focus just on doing better. Improving churn (no
matter what absolute value). Improving Revenue Per
Lead. Improving MQLs. Don’t try to quintiple
overnight. Just try to improve everything that matters
at least 20%. Will be enough (SaaS compounds).
– To do #3, need measure everything. No more soft
goals. In any function.
– Recruiting, Recruiting, Recruiting
17. Time Can Become Your Enemy
5 Years is the Burn-Out Zone – Even if You’re Doing Well.
• Everyone – everyone – just gets burnt around
Year 5
• After $10m, if you are growing >80-100% …
time then becomes your friend
• Must … Fight … Through It
• Bring on a COO, a Great VP, a One Great
Exec Who Can Truly Help Shoulder the Load
18. The Cavalry Comes @ ~10m:
Brand. Redundancy. Robustness.
• Installed Base + Customer Success = Huge $
Driver
• Second Order Revenue Really Kicks In (Takes
2+ Years)
• Partners Can Begin to Move The Needle
19. The Cavalry Comes @ ~10m:
Second Order Revenue Begins to Really Scale***
*** So Invest in it – Heavily!!!!
20. $20-$30m or So: Self-Replication
With Brand, Second-Order Revenue + Scale = Feed the Machine
21. $25m-$30m or So: Can’t Be Killed
• Market Leadership.
+
• Winning CEO &
• Mgmt Team.
+
• Commitment to Innovation.
• = Guaranteed Success.
• Don’t Screw it Up!
22. Once You Have Something: Take Nothing for Granted
• Because It’s Year 3 When
You Lose Your
Customers!
• Invest. Invest. Invest.
• In What You Have … Not
Just Where You Want to
Be.
,
23. The Inevitable: From Mini-Brand to Brand
Brands are Highly Defensible. Proxy for Who to Trust.
24. It Doesn’t Get Easier Per Se. Just Better.
And You Really Will Get Better. Much Better.
• No Matter How Bad You Are at X, or
Inexperienced at Y … You Will Learn
in SaaS.
• Everyone Will.
• You Will Get Even Better.
Guaranteed.
• You Will Become a Great SaaS CEO.
25. When It’s Good – It’s Really Good
– Great SaaS Teams Have Low Turnover – They Want to
Stay Together
– Great SaaS Teams Feed on Themselves – Get Better
and Better. Serving Customers is Inherently
Collaborative.
– Great SaaS Teams Energize the Rest of the Company
So Your Job is To Drag the Company to Initial Scale – And
Then Feed the Engine so It Stays There!
Editor's Notes
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