What does Jason M. Lemkin want everyone to know when starting a SaaS company?
I’ve said each before individually, but let me throw ’em together:
- It may well take 24 months to get to true product-market fit and Initial Traction. If you budget any less, you probably will fail. This isn’t B2C and virality won’t accelerate the process.
- You will almost die somewhere between $2m-$10m ARR because there is too much to do and not enough people to do it. You will have a Year From Hell here. Finally you have great customers and traction — but you can’t afford to hire all the people you need to meet their needs. This is actually the most exhausting phase.
- It takes 7–10 Years in SaaS to Get Anywhere. Even outliers like Slack, really, started much earlier. And 99% of SaaS companies will need 7–10 years to get to $100m ARR and beyond. If you can’t do the time, don’t do the startup.
- You have to love, or at least commit to, recruiting constantly. You have to hire so many functions in SaaS – VPS, VPM, VPP, VPCS, VPE, etc. If you’re not willing to constantly recruit cross-functionality … you’ll never attract the talent. True in B2C too of course. But the founders and CEOs need to attract even more types of managers, earlier, in SaaS.
- It actually never gets easier. Every month, the Net New Revenue dial goes back to $0. But. You do get better. Much better. You may not be great at all that much at $500k in MRR. You’ll be great at so much at $20m ARR.
Published on May 27, 2016