Dear SaaStr: What are the top 20 pieces of advice for building a successful SaaS startup?
Top advantages to being a first mover:
– No roadmap
– Tiny market
– Customers aren’t sure
– Limited legitimacy
– Never budgeted
– VCs don’t get it
– Many VPs don’t get it
– Tiny TAM at first
– Seems minor to many
– Why wasn’t it already done if it’s so important
— Jason ✨Be Kind✨ Lemkin (@jasonlk) April 26, 2022
Ok my top list of advice to get a SaaS startup going and off the ground:
- Take your time to find a great co-founder. It may seem like you are in a hurry, but in the end, anything less than a great co-founder will set you back. A bit more here
- Find a co-founder complementary to your skills, ideally. Someone great at something core you aren’t: Sales, Engineering, Marketing. Great at sales. Great at engineering. Great at marketing. More here.
- Do at least 20–30 customer interviews before you start writing too much code. Otherwise, you often are building for an imaginary customer. A bit more here.
- Somehow, find enough cash to make it 24 months to first real revenue. It just takes that long in SaaS and B2B, nine times out of ten. More here.
- Have confidence that if you get to 10 customers, you can get to 100. Those first 10 show you the way. Even if on their own, they aren’t enough revenue to really pay for all that much. More here.
- After you have 10 customers, build what they most value. Not what you want to build. You have to love the customers that get the most value from your product. More here.
- Make sure you have a key 10x feature when you launch — and always. A 10x feature that customers will pay for, that the key competition doesn’t have. More on that here.
- Sell the first 10–50 customers yourself. If you hire someone to do the first sales, you’ll never understand it yourself. Or be able to reproduce it. More here.
- When you go to hire your first sales rep, hire 2. Otherwise, you’ll never really understand why they are good. You need to hire 2 to really see what works, and what doesn’t. More here.
- Hire a great marketer early. Even $20k a month isn’t too early. They’ll move the needle enough to more than pay for themselves, even at $20k a month in revenue. More here.
- Raise 25% more money than you planned. You’ll always end up wishing you’d raised more. At least as a buffer. Just don’t spend the extra 25%. More here.
- Worry a bit less about the competition. They matter. But as long as you are growing at a decent rate, they can’t really kill you. More here.
- Don’t hire any VPs you don’t truly, 100% believe in. They won’t work out, no matter how good they look on paper. More here.
- Don’t hire any VPs that haven’t hired at least 2–3 great folks before. 50% of the job for a VP is recruiting. More here. And go talk to those 2-3 and make sure she or he really hired them.
- It’s OK if your VP of Sales isn’t great at every part of sales. They just need to be great at the parts that move the needle for you. They can figure out the rest. More here.
- Don’t hire a VP of Marketing that isn’t great at demand gen. At least, not until you have a brand. What you need until $20m ARR at least is more qualified leads, not brand strategy. More here.
- Know 100% for sure what your “Zero Cash Date” is — when you run out of money. Too many founders don’t keep up with the burn rate and get this wrong. At their peril. More here.
- Drive NPS up, and churn down. Make NPS a top company metric. Once you have even $1m ARR, it’s just as important to keep your existing customers happy as it is to acquire new ones. More here.
- Do almost whatever it takes to make your first big customers happy. Unless you really don’t want big customers. Doing so will teach you how to get more of them. That doesn’t mean a ton of custom software. But it often means reprioritizing your roadmap, and bringing things forward that are important to them. More here.
- You need more folks in customer success. Most SaaS companies invest early in sales, but wait on customer success. That’s backwards. You want customers for life. More here.
(note: an updated SaaStr Classic answer)