11 ms·

The Advice SaaS Startup Founders Would Give Their Younger Selves

111 points by rockyperezz 3y ago

tnolet 3y ago
Some truthful but slightly generic tips in here. The big missing thing always is not so much the "what" but the "how". How do you find good people? How do sell before building? How do you find a good marketer? How do you reach $500k revenue in one year? There are no easy answers, playbooks etc. here. It all depends on industry, customer profile, market circumstances etc. Also, without trying to be overly sour, these tips should have a source with them noting the founder's company stage. Tips from folks doing $1M ARR+ tend to be more useful than those from $3000 ARR.
- rockyperezz 3y ago
  totally agree, we got a lot of responses, but had to filter out the ones we found way too generic, deemed an untrustworthy source, or very few unhelpful or repeated advice. Definitely agree that a lot of advice appears "easier said than done" - execution is kind, after all. There was one response that said those at the top don't reveal their secrets/little details.
- sokoloff 3y ago
  Your last sentence is not wrong, but is subject to an awful lot of inherent selection bias.
  - quickthrower2 3y ago
    Depends. $100k arr low hassle would be preferable to me to $1M but hiring lots of people.
    - all2 3y ago
      100k arr works out to - 8334 per month - 1923 per week - 385 per business day Lat's assume SaaS or similar subscription service. If I sell a subscription product with a few price tiers, say free, 10$/mo, 50$/mo, and 500$/mo (and maybe a hidden tier for corporate customers that amounts to 1000$/mo on average). Let's assume most of my customers are in the free tier, 95%. The remaining 5% are stratified across 10, 50, 500, and 1000 (maybe following an inverse logarithmic curve because people are allergic to spending money -- -ln(x/1000) + 1). The following scale factors apply to each price tier: - 1 x 1000/mo - 2 x 500/mo - 4 x 50/mo - 6 x 10/mo 13 customers gets me to 2260/mo, so I'd need about 4 times that many customers to hit ~8000/mo. This comes to about 50 paying customers to hit 100k arr. And now I need to sort out what I have that 50 people would be willing to pay those various amounts for protracted periods of time. But what do I have that people want to buy? I can sell my time as a developer working on someone else's product and make about 100k arr. I can build a product -- and I assume most folks on this board are here in this camp, that they want to build something and own it. I could sell information products (ugh) or other kinds of information. What else can I do? I'm curious how people with multiple launched products that make money managed to discover their original product. Was it an accident? Copious amounts of market research? Cross-industry experience that allowed them to build for non-engineers?
      - quickthrower2 3y ago
        Looking at a lot of stories that people publish who “build in the open” I think yes people try different things until something sticks but they also often do some talking to prospective customers or some other way to understand the need.
dkyc 3y ago
This is the HN thread, which doesn't seem to be linked: https://news.ycombinator.com/item?id=37834908 https://news.ycombinator.com/item?id=37834908
- simonw 3y ago
  They should update the article to link to that thread. I'm going to assume this was an oversight - not linking to it is a bad look.
  - greenie_beans 3y ago
    agreed. i want to see all of the answers.
aiunboxed 3y ago
Also some questions - how much is the role of product vs distribution? - should be go aggressive on distribution with a relatively new product?
- tnolet 3y ago
  There is no clear answer to this. But if you are a builder / developer, you probably are doing to little on marketing & distribution. I know I did.
sickcodebruh 3y ago
This would be much more valuable and fair to the contributors if it linked to the original posts. Reading isolated HN comments is like eating the cheese from a pizza: it might be great on its own but you get the real good stuff when it’s all together.
LapsangGuzzler 3y ago
> Genuinely create value for society - not just look to make a buck. It's more sustainable and rewarding in the long run. I loathe reading stuff like this. Money is so important until you have it, and then it becomes fashionable to talk how there are more important things. To any SAAS founders who feel strongly that there are more important things than money, feel free to give away your fortunes to feed the hungry if you’re in search of a higher calling. There are many who would appreciate it.
- LastTrain 3y ago
  The point wasn’t that money is not important, it’s that it isn’t the only thing that is important. Things are rarely binary.
  - LapsangGuzzler 3y ago
    > Things are rarely binary. Things are remarkably binary in capitalism. Try pitching a VC on a startup concept that’s about more than money and see how far it gets you. Or hit up just a few of hundreds of thousands laid off in the industry over the last year and ask them how important money is to them. People who talk about wishing they hadn’t focused so much on the money are the ones who have it. Such tone-deaf takes are only possible once you’ve secured yourself against the system. The rest of us dream to one day be in a place to say such stupid things.
    - LastTrain 3y ago
      Again, you are missing the point. The advice being given, advice for success, is that you will do better in the long run if your focus is broader than just profit.
    - maccard 3y ago
      > Try pitching a VC on a startup concept that’s about more than money and see how far it gets you. I'm curious, have you written a pitch to a VC? I've been involved in ours, and it's very much not about the money. It's about the idea, the people, and telling a story. Look at the top VC investments in the last few years. They're all AI. Before that was crypto, and before that was ML. > People who talk about wishing they hadn’t focused so much on the money are the ones who have it. You're missing OPs point, and I'm pretty sure you're doing it on purpose. Go back and read it again and reply to what he said, not what you're claiming he said
bob1029 3y ago
My advice is pretty simple. Start with the customer. If you can get them excited & keep them that way, you solved most of the problem. If you are building something with hopes that "they will come" you are burning cash for fun and no one is going to care when it runs out. The other piece of advice I would add is that, even though SaaS starts with "Software", you should NEVER start with the software. You should be starting with on-site meetings with your customers. Consulting about the processes the software might be able to help with. You should only start talking about things like clouds, containers and code once you have a schema that the customer can look at and go "aha! That's our business!". Both pieces of my advice deeply involve the customer in some way. It's incredible to me how many "entrepreneurs" are blind to the fact that someone is eventually going to have to want their product, and for profitability to occur that prospect probably can't be their family member, SO or best friend.
- jroseattle 3y ago
  Preach. > NEVER start with the software As a long-time (old) engineer, historically my mindset was to rush into problem-solving mode by thinking about software-based solutions to everything. After learning from a failure or two, I recognize how that might work for me but doesn't necessarily contribute to solving a problem for a customer. I understand how to solve problems with software, but my key to successes has been to really understand and define the problem to be solved. This generally takes so much more effort than surface-level assessments.
- redgetan 3y ago
  Can you give a specific example of how you would start with a customer? Do you make a post in fb/twitter/linkedin like "I have some freetime as programmer, anyone have pain points or annoyances in your work that I might be able to help?" . Or do you come up with an idea (i.e i wanna build AI chatbots for real estate professionals) and start cold emailing agents that you dont know about and ask if they would find it useful?
  - bob1029 3y ago
    In my specific case, we were already doing business with a client for unrelated matters and they brought a new problem to us asking if we might be able to address it. Turned out the broader market had a similar problem so it took off. Once we had 1 client, we could convince the 2nd and so on. I think much of this is chicken-egg at the end of the day. Trust & networking is a hell of a challenge. There is no reality in which we could have walked into a client totally cold and proposed what we are selling today. I think "hunting for problems" is part of the mission, but you also need people to be willing to work with you once you identify one. One element of successful professional networking should be a constant stream of "hmm maybe an opportunity?". Building reputation in your target market seems to be the most difficult aspect of B2B SaaS.
zubairq 3y ago
Good advice here!
jroseattle 3y ago
Well intentioned list, and generally peppered with survivor (or failure) bias when trying to consume these bullet points without the context of the contributor. The best across-the-board advice that I've heard from others: - Own it. Be the best operator for everything in your business. - Scale last. Very few companies have failed because they couldn't scale the business (but did everything else right). - Keep at it. Blood, sweat and tears. Even at that, the mentors who I've had in the past said take these things with a grain of salt.
- dwallin 3y ago
  #2 seems very dependent on the competitive landscape in your market. If you have well-funded competitors growing quickly and taking market share you could absolutely fail due to not scaling rapidly enough.
  - jroseattle 3y ago
    Well, I'd say that these generic tips of advice aren't a strict playbook to go by. More so, I'd say they go to a mindset for a founder to help shape where you spend your time and resources. I think the intended thought process is: don't prematurely scale. Wait until you need to.
martin_drapeau 3y ago
My advice for founders building a B2B SaaS... * YOUR FIRST HIRES SHOULD BE CUSTOMERS * You'll be building the right thing from the start. Selling will be easier too since confidence in the team is just as important as the product. Onboarding will be easier too. Support will be easier too. Heck, everything is easier. Other advice: *DO NOT HIRE A PROFESSIONAL PRODUCT MANAGER* Instead, provide product management training to that customer you hired. You'll avoid playing the telphone game. Your devs will be closer to the customer this way.
- deleted 3y ago
  [deleted]
user3939382 3y ago
Prioritize relationships and sales over technical excellence of the product. “Never give up” is horrible advice, this isn’t a movie script- if your formula isn’t working change it.
fullstackchris 3y ago
Gonna sound like an asshat, but really, a mere 40 answers filled with what I could read in any Wired or similar publication... not too much value. To boil it down: at the end of the day you need capital, clean execution, and aquire the correct customers. (the classic and infinitely repetitive trope of PrOdUcT MaRkEt FiT) As many comments say, the magic is in how you do this (which no one seems to know! or explain!) Maybe that's the real SaaS product we all need!

111 points by rockyperezz 3y ago

Some truthful but slightly generic tips in here. The big missing thing always is not so much the "what" but the "how". How do you find good people? How do sell before building? How do you find a good marketer? How do you reach $500k revenue in one year? There are no easy answers, playbooks etc. here. It all depends on industry, customer profile, market circumstances etc. Also, without trying to be overly sour, these tips should have a source with them noting the founder's company stage. Tips from folks doing $1M ARR+ tend to be more useful than those from $3000 ARR.

rockyperezz 3y ago
totally agree, we got a lot of responses, but had to filter out the ones we found way too generic, deemed an untrustworthy source, or very few unhelpful or repeated advice. Definitely agree that a lot of advice appears "easier said than done" - execution is kind, after all. There was one response that said those at the top don't reveal their secrets/little details.
sokoloff 3y ago
Your last sentence is not wrong, but is subject to an awful lot of inherent selection bias.
- quickthrower2 3y ago
  Depends. $100k arr low hassle would be preferable to me to $1M but hiring lots of people.
  - all2 3y ago
    100k arr works out to - 8334 per month - 1923 per week - 385 per business day Lat's assume SaaS or similar subscription service. If I sell a subscription product with a few price tiers, say free, 10$/mo, 50$/mo, and 500$/mo (and maybe a hidden tier for corporate customers that amounts to 1000$/mo on average). Let's assume most of my customers are in the free tier, 95%. The remaining 5% are stratified across 10, 50, 500, and 1000 (maybe following an inverse logarithmic curve because people are allergic to spending money -- -ln(x/1000) + 1). The following scale factors apply to each price tier: - 1 x 1000/mo - 2 x 500/mo - 4 x 50/mo - 6 x 10/mo 13 customers gets me to 2260/mo, so I'd need about 4 times that many customers to hit ~8000/mo. This comes to about 50 paying customers to hit 100k arr. And now I need to sort out what I have that 50 people would be willing to pay those various amounts for protracted periods of time. But what do I have that people want to buy? I can sell my time as a developer working on someone else's product and make about 100k arr. I can build a product -- and I assume most folks on this board are here in this camp, that they want to build something and own it. I could sell information products (ugh) or other kinds of information. What else can I do? I'm curious how people with multiple launched products that make money managed to discover their original product. Was it an accident? Copious amounts of market research? Cross-industry experience that allowed them to build for non-engineers?
    - quickthrower2 3y ago
      Looking at a lot of stories that people publish who “build in the open” I think yes people try different things until something sticks but they also often do some talking to prospective customers or some other way to understand the need.

dkyc 3y ago

This is the HN thread, which doesn't seem to be linked: https://news.ycombinator.com/item?id=37834908 https://news.ycombinator.com/item?id=37834908

simonw 3y ago
They should update the article to link to that thread. I'm going to assume this was an oversight - not linking to it is a bad look.
- greenie_beans 3y ago
  agreed. i want to see all of the answers.

aiunboxed 3y ago

Also some questions - how much is the role of product vs distribution? - should be go aggressive on distribution with a relatively new product?

tnolet 3y ago
There is no clear answer to this. But if you are a builder / developer, you probably are doing to little on marketing & distribution. I know I did.

sickcodebruh 3y ago

This would be much more valuable and fair to the contributors if it linked to the original posts. Reading isolated HN comments is like eating the cheese from a pizza: it might be great on its own but you get the real good stuff when it’s all together.

LapsangGuzzler 3y ago

> Genuinely create value for society - not just look to make a buck. It's more sustainable and rewarding in the long run. I loathe reading stuff like this. Money is so important until you have it, and then it becomes fashionable to talk how there are more important things. To any SAAS founders who feel strongly that there are more important things than money, feel free to give away your fortunes to feed the hungry if you’re in search of a higher calling. There are many who would appreciate it.

LastTrain 3y ago
The point wasn’t that money is not important, it’s that it isn’t the only thing that is important. Things are rarely binary.
- LapsangGuzzler 3y ago
  > Things are rarely binary. Things are remarkably binary in capitalism. Try pitching a VC on a startup concept that’s about more than money and see how far it gets you. Or hit up just a few of hundreds of thousands laid off in the industry over the last year and ask them how important money is to them. People who talk about wishing they hadn’t focused so much on the money are the ones who have it. Such tone-deaf takes are only possible once you’ve secured yourself against the system. The rest of us dream to one day be in a place to say such stupid things.
  - LastTrain 3y ago
    Again, you are missing the point. The advice being given, advice for success, is that you will do better in the long run if your focus is broader than just profit.
  - maccard 3y ago
    > Try pitching a VC on a startup concept that’s about more than money and see how far it gets you. I'm curious, have you written a pitch to a VC? I've been involved in ours, and it's very much not about the money. It's about the idea, the people, and telling a story. Look at the top VC investments in the last few years. They're all AI. Before that was crypto, and before that was ML. > People who talk about wishing they hadn’t focused so much on the money are the ones who have it. You're missing OPs point, and I'm pretty sure you're doing it on purpose. Go back and read it again and reply to what he said, not what you're claiming he said

bob1029 3y ago

My advice is pretty simple. Start with the customer. If you can get them excited & keep them that way, you solved most of the problem. If you are building something with hopes that "they will come" you are burning cash for fun and no one is going to care when it runs out. The other piece of advice I would add is that, even though SaaS starts with "Software", you should NEVER start with the software. You should be starting with on-site meetings with your customers. Consulting about the processes the software might be able to help with. You should only start talking about things like clouds, containers and code once you have a schema that the customer can look at and go "aha! That's our business!". Both pieces of my advice deeply involve the customer in some way. It's incredible to me how many "entrepreneurs" are blind to the fact that someone is eventually going to have to want their product, and for profitability to occur that prospect probably can't be their family member, SO or best friend.

jroseattle 3y ago
Preach. > NEVER start with the software As a long-time (old) engineer, historically my mindset was to rush into problem-solving mode by thinking about software-based solutions to everything. After learning from a failure or two, I recognize how that might work for me but doesn't necessarily contribute to solving a problem for a customer. I understand how to solve problems with software, but my key to successes has been to really understand and define the problem to be solved. This generally takes so much more effort than surface-level assessments.
redgetan 3y ago
Can you give a specific example of how you would start with a customer? Do you make a post in fb/twitter/linkedin like "I have some freetime as programmer, anyone have pain points or annoyances in your work that I might be able to help?" . Or do you come up with an idea (i.e i wanna build AI chatbots for real estate professionals) and start cold emailing agents that you dont know about and ask if they would find it useful?
- bob1029 3y ago
  In my specific case, we were already doing business with a client for unrelated matters and they brought a new problem to us asking if we might be able to address it. Turned out the broader market had a similar problem so it took off. Once we had 1 client, we could convince the 2nd and so on. I think much of this is chicken-egg at the end of the day. Trust & networking is a hell of a challenge. There is no reality in which we could have walked into a client totally cold and proposed what we are selling today. I think "hunting for problems" is part of the mission, but you also need people to be willing to work with you once you identify one. One element of successful professional networking should be a constant stream of "hmm maybe an opportunity?". Building reputation in your target market seems to be the most difficult aspect of B2B SaaS.

zubairq 3y ago

Good advice here!

jroseattle 3y ago

Well intentioned list, and generally peppered with survivor (or failure) bias when trying to consume these bullet points without the context of the contributor. The best across-the-board advice that I've heard from others: - Own it. Be the best operator for everything in your business. - Scale last. Very few companies have failed because they couldn't scale the business (but did everything else right). - Keep at it. Blood, sweat and tears. Even at that, the mentors who I've had in the past said take these things with a grain of salt.

dwallin 3y ago
#2 seems very dependent on the competitive landscape in your market. If you have well-funded competitors growing quickly and taking market share you could absolutely fail due to not scaling rapidly enough.
- jroseattle 3y ago
  Well, I'd say that these generic tips of advice aren't a strict playbook to go by. More so, I'd say they go to a mindset for a founder to help shape where you spend your time and resources. I think the intended thought process is: don't prematurely scale. Wait until you need to.

martin_drapeau 3y ago

My advice for founders building a B2B SaaS... * YOUR FIRST HIRES SHOULD BE CUSTOMERS * You'll be building the right thing from the start. Selling will be easier too since confidence in the team is just as important as the product. Onboarding will be easier too. Support will be easier too. Heck, everything is easier. Other advice: *DO NOT HIRE A PROFESSIONAL PRODUCT MANAGER* Instead, provide product management training to that customer you hired. You'll avoid playing the telphone game. Your devs will be closer to the customer this way.

deleted 3y ago
[deleted]

user3939382 3y ago

Prioritize relationships and sales over technical excellence of the product. “Never give up” is horrible advice, this isn’t a movie script- if your formula isn’t working change it.

fullstackchris 3y ago

Gonna sound like an asshat, but really, a mere 40 answers filled with what I could read in any Wired or similar publication... not too much value. To boil it down: at the end of the day you need capital, clean execution, and aquire the correct customers. (the classic and infinitely repetitive trope of PrOdUcT MaRkEt FiT) As many comments say, the magic is in how you do this (which no one seems to know! or explain!) Maybe that's the real SaaS product we all need!