Hello everyone,
In this article, I’m going to share (and ask others to contribute) to my experience of growing a SaaS company. To make it even more useful, I’d like to split bits of advice based on a certain stage of the company growth. My opinion, the tips are usually differ depending on it.
If you read this article and have something to share, please, leave a comment in a similar manner below. Let me start with myself, as an example.
Author: Mike KulakovRole: Co-founder, product ownerProduct: Everhour (Time and expenses tracking software)Stage: $1.5M+ ARRTeam: 15 peopleFunding: Bootstrapped
Pre-launch phase
Find early adopters to your project-to-be so
It’s very important that the day you launch, you get some traction, some real feedback. Among other things, it will be very demotivating for you and your team when you have 1–2 sign-ups.
Create a very simple “coming soon” page, submit it to Beta List and a couple more directories. When we started, this gave us roughly 1,500–2000 early adopters right after launch.
Launch early and don’t add every feature possible
Don’t try to add every feature you think is important. It’s better to simplify your offerings, release quickly, show it to real customers, collect their feedback, and improve. Always look for criticism for all your new features, and try to find it from a diversity of sources.
For past years we have experimented with adding and deprecating features. One thing for sure is that 80% of customers use only 20% of the functionality. You can spend a lot of time, postpone releases due to “one more feature”, but no one will use it.
Take smaller steps. Always offer something basic and see if there is a demand for it. If not — remove and repeat.
Start charging money early
It may sounds as a good idea to start without paid plans, test the waters and introduce them later. But I think this is not very good.
In our experience, free users more often contact support, they react more sharply to your failures, and can even ask absolutely different features rather than those who are paying. At the same time, the conversion from free to paid is very low.
It is better to immediately understand whether your offering is worth paying and what’s your unit economics.
$0–20k MRR phase
Talk to early adopters and don’t be afraid to do “pivots”
Your goal is to find your competitive advantage as soon as possible. Something that will help you to stand out and win customers. This is hardly a 10% lower price.
In our case, it was how nicely we integrate with the most popular project management tools (like Asana, Trello or Basecamp). And while we did not have a free plan, had fewer features compared to our competitors, didn’t have a mobile app etc. many users still preferred us. Why? Because we did one important feature very-very well.
Of course, we do our best to react to requests from our customers, add new functionality, but in the beginning, we did not have much of it and could not do everything overnight.
We did not immediately realize that integrations are our advantage. It took us almost a year and several pivots.
In addition, because you do not have a large number of paid customers you can experiment. Later it will be more difficult, you will have to maintain a lot of legacy things.
Like us, thus we had to maintain two separate versions of our app since we could not migrate old customers and someone didn’t want to.
Look for a dedicated support person ASAP
There will be a lot of questions and requests from users, especially if you add a live chat. It will eat a lot of your time. You, as a founder, better focus on something else. We understood it a little bit late.
Eat your own dog food
Use your product. This way you will understand better where it needs to be improved and how. Give users what they actually want, not what they say they want. Besides, by using your product daily you will be sure that everything works. Synthetic testing can sometimes fail to detect a serious problem.
Don’t run by traffic at any means
Do not chase traffic by any means. Make sure that your profiles are relevant in different directories, aren’t made in lock-step and your blog content is actionable and unique. Less is the new more.
Integrate with popular tools
As you do so, get listed in their marketplaces. Somewhere the listing process is fully automated, others require to be contacted personally.
Do not hesitate to contact these companies. If your integration makes something useful to their users, you thereby make their product better and make their users stay with them longer. But it is better to contact them in advance, because the process may take a week or more. Also, prepare all the necessary assets and texts. A dedicated landing page is also a must.
$20–100k MRR phase
Offer a yearly plan
In the beginning, we did not want to offer annual subscriptions. Probably there was some kind of self-doubt. But then we tried and it turned out to be a very good idea.
It will significantly increase your cash flow, in our case approximately +15% to the MRR. In addition, this reduces the number of monthly failures and delinquent churn. There are customers who want to limit themselves to only one invoice a year. It’s probably some kind of savings on bookkeeping.
Measuring your Net Promoter Score
This way you can easily identify your most loyal customers and ask them about something. For example, to leave feedback or to fill out a survey.
Gather feedback
As early as possible, start collecting positive feedback on popular sites such as Capterra, G2Crowd or TrustRadius. When preparing an article, some bloggers determine what products to include based on reviews and/or popularity on these sites, so having a positive presence can have a downstream effect on potential free advertising and traffic.
In addition, these sites themselves periodically make “Top-X” selections and ratings.
Look for stable traffic channels
Listing in integration directories works very well for us. And this is high-quality traffic! Lead conversion from a partner directory is about 30%.
Try Ads early (Google, Facebook etc.). Check for yourself whether you are able to use these channels, can you further rely on them for scaling. Haven’t worked well for us yet, but I think the root problem was our clumsy approach. We will definitely keep trying.
Another great, but a long-term investment is organic. Spend some time creating content and setting SEO. Just to give you an idea, we once wrote an article comparing Everhour with two other popular time tracking tools. People searched for articles comparing these two companies and learned about us. During the first year, this article brought us up to 1,000 new visitors a month!
$100-500k MRR phase
We are only at the beginning of this journey, so here I’ll share more of our plans rather than proved advice.
Time to hire staff and delegate
We reached $100k MRR with a team of 7 people. But for further growth, you’ll need more. We realized that we could not keep up desired development pace, could not provide adequate code coverage, quickly respond to all customer requests, prototype new ideas. We organically grew to the moment when we should more and more delegate tasks in order to concentrate more on growth.
I must say that it is not easy and quick. What worked for 7 people is no longer quite effective for 15. There are nuances in the development methodology, stand-up meetings, documentation, design system development etc.
Scaling improvements on the back-end
A year ago, we paid Amazon $235 a month for renting a server. Now we pay almost $2,000. This is the moment when you should also start thinking about architecture, scaling and availability.
Going deeper with landing pages optimization
Now we are actively developing our new promo website and new very optimized landing pages for better SERP presence. In addition, standalone keyphrase oriented pages are well suited for running Google Ads campaigns.
We also think it is a good time to develop your brand. You shouldn’t be just another app, people should remember you and trust you. Because very often decisions to use one or another tool are made not rationally but emotionally. Your product should cause emotions.
More focus on content marketing
We will spend even more time producing well-thought and useful content.
Today on the market there is a huge number of business apps. On the one hand, this is good, because it encourages lower prices and better products. On the other hand, this creates the complexity of making a choice for the buyer.
There are so many blogs and review sites which are affiliates and simply promote themselves. Those who are in the top results aren’t necessarily the best ones and better than you. But what’s the difference if they can’t find you. If you do not make sure that you are searchable in Google, you won’t be even shortlisted.
We are looking for advice
As I mentioned earlier, we are at the beginning of our journey to $500K a month. So it would be priceless for us to learn from someone who had already passed it.
Please, share some helpful advice based on your current growth stage, tell us and other entrepreneurs what worked best for you and what we should try.