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To improve our own startup, Beep's, overall strategy, we posted a question on Hacker News asking current or ex-SaaS Startup Founders what advice they would give their younger selves.
Just a few hours later we returned to find over forty answers. 🤯
Though most gave only one or two points instead of 3, we were pleasantly surprised to have received some great advice to keep in mind as we move forward.
We thought it would be a waste not to share what they said, so we created this blog post to present the most insightful answers given.
🤔 "With the experience I've gained, if we went back in time and I was building an SaaS startup all over again, I would...
Genuinely create value for society - not just look to make a buck. It's more sustainable and rewarding in the long run. Find/create a solution that solves/alleviates a problem for a big enough market, but don't forget to tell them about it. Most forget to tell.
Keep in mind that I do not have to go "nuclear big" to be successful. One's goals should be self-determined, not decided or influenced by another.
Read and apply "The Mom Test" (a book by Robert Fitzpatrick) - otherwise I will not be executing on the business optimally. Plenty of great tips on how to scale a business following a customer-based approach. Remember, you are not your customer - so you must look at everything your business is and does through the lens of the market. Interviews, surveys, focus groups, ethnographic studies - whatever it takes.
Learn how to sell & pitch an idea. No one can sell the product better than its founder. The faster sales skills can be developed, the faster the idea takes off.
Start by providing professional services before having a product. This will help generate some early revenue, it will validate that someone is willing to pay for the business' services, it'll help develop a better understanding of what the product is required to do, and most importantly, it'll help build early relationships with crucial clients. These professional services can then be streamlined by automating them with the early product. Then over time, these professional services would be switched out entirely for the product.
Hone my writing skills - or at least know what looks like good writing (to edit outsourced content or chatGPT-written texts). The ability to influence using copy is an invaluable marketing tool.
Sell before I build. Generating hype with the promise of something to come is an artform to master. We see examples of this all the time with successful projects on Product Hunt, Kickstarter or Itch (for game developers). Ideally there should already be a sizeable group of people ready and willing to buy as soon as the product launches. Studying the countless material on "customer development" will prove very helpful during the early stages when sales is done on nothing but words.
Allocate time and effort towards expanding my professional network. Some ways to do so would be through networking within the company or co-working spaces, attending college alumni events, playing sports that other professionals play (e.g., golf, tennis, pickleball), attending networking events or clubs, going through an in-person MBA, sending the kids off to private school and befriending their friends' parents, or even marrying/dating someone with a wide network.
Build the MVP to have a useable core product - not to be perfect. The goal is to get into users' hands ASAP, get feedback ASAP and either improve ASAP or see no traction and move on ASAP.
Focus on distribution & discovery and rely less on the tech - unless what is being developed is really revolutionary (e.g., chatGPT) or leagues ahead of competitors (e.g., Figma).
Distinguish whether my goal is to be "rich" or to be a "king". As spoken of in the Noam Wasserman's book, "The Founder's Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup", founders need to determine whether they are optimizing for financial returns (be "rich") by raising outside capital to accelerate growth at the risk of reduced equity and control, or control of their company (to be a "king") by bootstrapping though growth may not be as fast. Very rarely are founders able to achieve both "rich" and "king" outcomes.
Be extra careful of accepting investments from venture capitalists. One can lose control and focus on the business. It's alright to decline an offer - not everyone will be a good fit. We win some and lose some.
Not raise too much money for the seed. That much money isn't needed to build and validate the business plan. Would the business be really worse off if half the amount received was raised? Probably not.
Set an aggressive (but achievable) revenue goal for my first year. 500k ARR is a suggested standard if there is trouble figuring this out as this will put one on the path toward raising a Series A funding. This goal is doable with fewer than 5 people in the first year.
Not hire a single non-founder until I have achieved PMF (product-market fit). This prevents premature scaling and having the pressure of being responsible for a team while the prospect of success is yet to be determined.
Pick partners/ co-founders with intelligence, energy and integrity. Intelligence allows them to help build solutions, work more autonomously, and present strength where the CEO falls short. Energy enables them to virtually multiply their power of contribution and acts as a morale booster for the rest of the team. Integrity is an important safeguard that offers peace of mind that they will do what they say and not purposefully act against the best wishes of all stakeholders.
Keep in touch with good old friendships & relationships - especially if they are doing well in life or look to be going places. As there's already built in trust, they can be approached to become your co-founders, partners, or investors.
Find a co-founder with a B2B sales background - especially in a mid-tier company (those that are small enough to work with small businesses but also big enough to land F500 clients). They can help you close deals you wouldn't even know how to approach.
Hand over marketing to someone who is a specialist. Ideally someone who can diagnose and then prescribe the best solution unique to the business - instead of someone who presents a bunch of marketing strategies. A CEO or founder's main role is to focus on the long term vision of the company; they know they need marketing but are oftentimes unsure as to what specifically needs to be done.
To manage the financials, only hire a part-time bookkeeper if absolutely necessary within US$ 0 - 1 million ARR. Then look to hire a Director of Finance/ Controller once ARR is within the US$1 - 5 million threshold to manage AR/AP, audits, ASC 606, basic financial modelling, and key revenue benchmarks. Only once ARR is above US$5 million can one consider hiring a CFO (Chief Financial Officer) - depending on the company's growth rate. It is possible to get to US$10+ million with a good Director of Finance and a good FP&A person.
Keep in mind that it takes roughly 7 months to fully recruit someone. 1 month for the interview, roughly 3 months to wait for them to leave their old job or to be fully able to work with the business, and 3 months to fully integrate them and get them up to speed.
Create a strategy for recruiting people with more expertise in an area than I have, as well as develop effective ways (built around metrics) to evaluate performance. Selecting the best hires for legal, financial or human resource (to a lesser degree) positions will be easier due to accreditations and industry guardrails. However, determining who can definitely do the work for roles in sales and marketing is a greater challenge, since they tend to interview well.
Acknowledge that the skills to get a product off the ground are very different from those required to scale a business. It's often said there are "three CEOs". Similarly in the case of co-founders, most are only needed for a certain phase of time; very few manage to stick it out until the end.
Look for what's working - keep on doing that and eliminate what doesn't. Nothing is going to be perfect, a large majority of companies only breakeven in their second year - it was all trial and error prior to that.
My time and money is usually better spent on ads. Sure, launching on Product Hunt, Indie Hackers, or Hacker News may draw organic attention and traffic - especially if one achieves being featured at the top spot or on the first page. However, hitting it big on these platforms doesn't necessarily equate to conversions for B2B products because most of their communities just want freebies. Furthermore, soliciting feedback is difficult with their quickly shifting attention spans. Ads are quicker to send out, highly targeted and have potentially more reach - all of which translate into a better chance of increasing the conversion rate.
Keep on trying. Don't quit too hastily. The problem often lies in a skill gap which can be filled or a tweak in strategy that has to be made - not that your startup idea is bad. As a startup founder you may take that occasionally glance at those employed with some envy. But sure, getting a job may allow one to earn a few hundred thousand year, but it won't get them any closer to freedom.
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Any more advice from other SaaS startup founders?
If you are or have been a startup founder and have lessons of your own, let us know in the comments section below!