Q: What are the biggest mistakes first time founders make after $50K MRR in SaaS?
A partial list of the ones I see all the time (and mistakes I made myself):
- Not hiring a real VP/Head of Marketing early. $50k in MRR is plenty “late” to have someone spending 50+ hours a week just getting you more leads and managing the leads you do have better. What if at even just $50k MRR, you had a head of marketing that got you just 20% more leads? And/or just made sure 20% more of them closed? That alone would get you another $100k-$200k+ in revenue right there. I see way too many founders waiting to make this hire, or hiring someone too junior. More so now than ever. More here: I Hired My VP of Marketing at $20k MRR. It Wasn’t a Week Too Early. | SaaStr
- Not having 2+ quota-hitting sales reps in place. With only one AE, you won’t really know what’s working well and what isn’t in sales. More here: When You Hire Your First Sales Rep — Just Make Sure You Hire Two | SaaStr
- Not knowing your “Zero Cash Date”. As SaaS start-ups start to ramp, sometimes CEOs haven’t put in place the financial discipline to know exactly how long the cash they have in the bank will last. And they run out too soon. More here: Knowing — and Sharing — Your Zero Cash Date | SaaStr
- Not addressing downtime. You can get away with material downtime in the early days, sort of. Maybe. But by $50k in MRR, your customers will expect you to never go down. While that may not be possible, you need to start working on a zero downtime plan aggressively by this point. More here: Prisoners, And Why It Doesn’t Really Matter Your App Is So Hard to Rip Out | SaaStr
- Not driving your NPS up. $50k in MRR is plenty far enough along to know your NPS — and to start driving it up. The customers you have at $50k in MRR are your ambassadors going forward. Make sure they love you and will recommend you. If they won’t — fix it now. Not later. More here: I Was Wrong. NPS is A Great Core Metric. | SaaStr
- The CEO not being the VP of Sales. Until you have a true VP of Sales, the CEO has to play that role. A mistake I see time and time again is the CEO stepping out of sales once she/he has hired a few reps. If you do — sales and sales efficiency usually go down. More here: How to Hire A Great VP Sales: The Full Video (and Transcript) | SaaStr
- Chasing new customer segments. If you’ve gotten to $50k in MRR, then 95%+ of your efforts should be in replicating what you just did, only better, to get to $500k in MRR. Don’t start chasing new segments where you have zero customers. You already have a well-established pattern of customers at $50k in MRR (industries, use cases, segments, etc.). Double down there. You have so few resources. Don’t chase shiny pennies. More here: When Should You Add a Second Product? | SaaStr
- Not finding a strong mentor. At $50k in MRR, it all really does start being a playbook. Your product may be unique and different, but the way you scale revenue from this point isn’t. Find a great mentor or two, and seek out a peer CEO network, too. Get help from folks who have already done it. You’re ready. And pay them. More here: On “Paying” Your Mentors and Advisors: The 2.5x Rule | SaaStr
Congratulations on getting this far! The best times are ahead of you!
(note: an update of a SaaStr Classic post)
Published on April 13, 2022