From Taxjar: Three Things SaaS Founders Learn the Hard Way

*This guest blog post was contributed by Mark Faggiano, CEO of Taxjar

I’m a lifelong learner — and I like to surround myself with lifelong learners. It’s a mindset. People who see themselves as always learning are naturally curious. They find unexpected connections. They try new things. They test and experiment, and when they fail, they try again. Lifelong learners are always trying to get better. Learning is energizing. And it can be humbling. It helps us not take ourselves too seriously.

I’ve learned plenty from books and classes, but as a startup founder, there are a few lessons I’ve had to work out on the job. We’re all bound to make mistakes, but in the hope that you might make different ones than I have, here are three of the things I’ve picked up:

1. Our people are everything.

The old saying is that customers come first — and that’s true in the sense that without our customers we’d have no business. But it’s vital that in the service of our customers (especially the way we strive to serve our customers), we don’t ever overlook the experience of employees.

In our first few years, when we were just taking off, we were scaling at supersonic speeds. It was a great problem to have, but still a problem. To keep up with the ever-increasing demand, our AutoFile team (which is in charge of state sales tax filing and remittance on behalf of customers) was working long into the nights and through the weekends, and despite their belief in what we were doing, morale was taking a hit. It became clear that if we didn’t do something meaningful,  we were going to start losing people.

That’s when we did what would be out of the question to most young, high-growth companies. We hit the pause button.

We made the decision to stop accepting new AutoFile requests from customers for over a month. You can bet that some of our customers were less than enthused by this decision, but we were completely transparent with them, and let them know we needed time to bring in additional employees to meet demand. And it was a clear sign to us that we needed to double down on our investment in automation that would protect our team — as well as help our customers.

Was it a tough call? Honestly, it wasn’t.  Growth had created an unsustainable environment, and it was hurting the quality of life of our team. And from a business perspective, losing my members of that team, with all of their specialized expertise, would have been a hole I’m not sure we would have been able to dig out of. We just had to do it and live with the consequences.

The result? We got the opportunity to take a step back and think about how to build the team (and our tech) for scale. And, more importantly, the team received the message that their happiness and sustained ability to do their best work at TaxJar was more important than growth.

2. Be honest. Even when it hurts in the short term.

Although we have customers of all sizes today, including many enterprise businesses, that wasn’t always the case. When we launched TaxJar, we did it with the goal of helping small e-commerce businesses solve their sales tax compliance. We served that market well, and we grew like crazy. As we did, we set our sights on larger customers.

And then, out of the blue, one came knocking.

We were approached by an e-commerce business that was orders of magnitude larger than any of our other customers. We knew that we theoretically had the capability to handle the volume, but there were major risks, risks that could not only prove problematic for this prospect, but for all of our other customers as well. As much as we wanted to do business with this customer, there were simply too many unknowns. We said no.

The prospect appreciated our transparency and rigor — and the fact that we were putting our customers over the possibility of a big deal — and told us to come back when we were ready. We didn’t figure they would wait around for us, but it was a sign that we needed to get our product ready for the big fish. And we did. We tweaked and tested until we knew without a doubt that our product could handle the order volume of big customers.

And wouldn’t you know, when we went back to the prospect six months later, they had waited for us. And they’re still customers today.

3. Everything is urgent. Slow down.

In business, especially in early-stage companies, everything is urgent. There are emergencies everywhere, all the time. It’s easy to get seduced by the frenzy. Although it’s stressful, it can be pretty exciting, too. And don’t get me wrong, it’s often important to act quickly and decisively. But it’s equally important to know when to take a breath. When to be patient.

Hiring is one of these times. When you have more business than you can handle, it seems like getting folks on your team as quickly as possible is the answer. But, as I mentioned above, your people are everything, and hiring quickly can often lead to hiring wrong. It might feel great to get people in the door, but in the long term, you won’t have the right group to take the company where it needs to go.

At TaxJar, we take hiring extremely seriously. We’ve learned that the short-term pain of not having enough people on staff is easily outweighed by getting the right people on the team for the long haul. It makes for happier employees and a stronger company.

Remembering what’s important

I’m a competitive guy. I grew up playing sports, and I like to win. But I don’t believe in winning at all costs. If there’s a theme here, I think that might be it. Sometimes, I think it’s important to take a step back and do what you believe is the right thing. Even when doing so smarts a bit. We need to have faith that making those hard choices will help shape the kind of business, and life, we want. I want us to create a place where we all love to work — surrounded by diverse folks with similar values that get up in the morning excited to build something together, and for the challenges to come.  As I’m fond of telling my employees, we are in control of our own destiny.

Sponsored blog post brought to you by TaxJar.

Published on January 21, 2021

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