SaaS: Passion over Exit

Successfully Bootstrapped

2014 has been a great year for us at Yanomo!

• We now have customers in 5 continents
• Where we set out to double our figures, we tripled!
• The average size (# of users) of our customers has doubled
• LTV has doubled
• CHURN has dropped

Some results we are very pleased with and all of that while still fully Bootstrapped. Yes!, you heard it right; SaaS with a very healthy growth on the basis of revenue without external investment. Not that we are against receiving an investment nor are we saying we won't, it's just that we have a healthy dislike of the SaaS investment frenzy.

The SaaS Investment frenzy

Anyone that has spent more than 5 minutes in an Tech Incubator or has read more than 3 articles on TechCruch will know all about Seed, Growth, Series-A, Series-B etc. I've always been a bit surprised at how little we question this “Investment freeway”. It's as if all these hugely talented developers and entrepreneurs are so caught up in their products and ideas, that the basics of running a business are no longer addressed. You often hear: “We need capital to get started”. To which I'd like to reply: “Well, you have already started and, No! You don't need it.” You just robbed yourself of a world of options to grow.

I do know first hand how hard and challenging it can be to get up and running with limited means. It involves lots of patience from you and your loved ones. Creative time management, a rice diet once in a while and a huge amount of night work. Place that next to a scenario where you are invested, and it will feel like an unnecessary price to pay, right? But I've seen ample examples of startups with an investment in the pocket with only one primary change. The addition of a tight deadline for when they need to get back and plead for a next round. And as a result, a very poor negotiation position.

What got you started?

My primary reason for being hesitant to attracting investment is not so much stress or targets. These will be around no matter what, as that's just part of running a business. It's rather an idealistic stance. We started Yanomo on the idea that we can change the way organisations work. A grassroots approach to selectively sharing management information across the whole organisation, so to increase and support responsibility and ownership to all layers of the organisation. The how and why is a whole different discussion, but the big takeaway is that we are motivated by passion and ideals. And I see this in pretty much every Startup around me.

It's not so much that the Startups that have received investment lose their passion and ideals. But if you'll go belly-up in 3 months if you don't grow, you won't have much space left to contemplate your decisions. You can't ask yourself the question if that next client/feature/pivot fits with your personal ideals the business was founded upon.

Get creative

So I would like to invite startups to get creative and be very selective with your time. Is raising money really what you started your business for? Do you really need it or are you just going though the set SaaS motions? It's not a failure to run your side job a little longer if it means you keep control. Be as critical toward protecting the passion behind your product or service as you are toward your product or service itself.

So when you are sitting across the table of an Investor, the first question you should ask is: “Kick-ass product over exit?” If the answer is “Kick-ass product”, discuss the details including an exit. You might need to Bootstrap it a bit longer, but at least you'll be sure you all run on the same fuel: Passion!