Successful vs. Very Successful SaaS Companies

Successful vs. Very Successful SaaS Companies

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Should you join that?Successful SaaS start-up?

The one that just raised a nice seed round, that has $20k in MRR, and a cool product?

Maybe.

The key is understanding if it’s merely a pre-success you are meeting with … or one that potentially can be?very?successful.?And it turns out, at least in my experience,?the characteristics of Successful and Very Successful SaaS companies are actually quite different.

But especially in the early days, it can be hard to tell, especially from the outside.

To be a Successful SaaS Company — which is very hard today, because there are 10,000+ SaaS start-ups everywhere in every category — you need:

  • A very, very committed CEO and co-founders.?It’s too hard to make customers happy if you aren’t truly 100% committed.
  • Product-market fit.?Which can be arrived at, or hacked, in many different ways.?But roughly, if you aren’t growing at least 10% a month in MRR on the way to $1m ARR, and at least 6% a month thereafter, you don’t quite have product-market fit yet.
  • Passion and belief in your market, customers and journey.?Total commitment to understanding every nuance of your market and niche, and shipping software to serve it.
  • The patience to keep at it, for always, forever.?Because it takes 7-10 years, minimum, to really get anywhere in SaaS.?And sometimes two decades to really build a decacorn.?More on that?here.

Because once you have $1m, $2m in ARR … if you are growing at a decent clip … you can probably almost always keep growing.

.

But.

.

That alone doesn’t breed a Unicorn.

.

To be a Very Successful SaaS Company.?An Outlier.?A Pre-nicorn.?To achieve Hyper-growth.?You?also?need:

  • A?great?CEO.?Not just very good.?Incredibly, or at least very, smart.?Insanely driven.?Not just very driven.?Really, a little bit insane.?Because there’s no magical network effect in SaaS.?The CEO has to push the rock up the hill.
  • The ability to see the future.?In SaaS, anyone with a brain can see the white space that exists today.?Oh, it’s so stupid we still use Excel and clipboards in Industry XYZ.?Of course, it’s stupid.?But what’s hard is to?truly?see where it will evolve in 2, 3, 7 years — and?how?to get there.?The best SaaS CEOs I know, the ones building Decacorns … can see the future.?And how to get there.
  • The ability to?get?to that future, no matter what.?Period.?To recruit amazing teams.?To break things and fix them.?To pick themselves off the ground, 5, 10, 50 times.?To never, ever quit.
  • A market or at least, market segment, that if small now will be huge.?Related to seeing the future.?For example, you can’t take Salesforce head-on today, not really.?But CRM is a big market.?Start small, but see something that can be $10b+ in CRM.?And make it so.?Small markets that stay small-ish are common in SaaS companies that don’t expand, that don’t grow.?These ones all stall out at some point.

So maybe, use this as a checklist if you are deciding whether to join a given SaaS start-up or not.?If you have options.?You’ll know if they have success, or at least, pre-success.?You can see the logos, check out the vibe, read up online.?But if the company also has some of the second group of attributes … they probably really have something.

Try to join one in the second category if you can.


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Nima Shokouhfar

Full-Stack Developer ?? | Digital Marketing Specialist ??

1 年

Thanks. Great content...!!!

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Carl Wilhelm Hagander

Founder - Win fast revenue without outsourcing - 19 years of selling - Father

1 年

Does ReSocialize have what it takes to be good? A very, very committed CEO and co-founders. ? Product-market fit.?? <- building to fix this every day! Passion and belief in your market, customers and journey.?? The patience to keep at it, for always, forever.?? To be great? A?great?CEO.?Not just very good.? ?? (Ping Emelie) The ability to see the future. ? The ability to?get?to that future, no matter what.?Period.?? A market or at least, market segment, that if small now will be huge. ? Looks good. We have a way to go, but we're on the right track. Thanks for the motivation, Jason M. Lemkin! I can't remember which time in the order we're picking ourselves up tonight. But one thing is for sure: The more times you pick yourself (or your founding colleague) up from the ground, the easier it gets. Bring it, world!

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Keith Campagna

I help people make money by leveraging my MBE (Master of Business Experience) & and Accounted4's software.

1 年

I love the emphasis on growing the team. The story of scaling a saas company often overlooks the soft skills required to keep your colleagues motivated in a personal and professional sense.

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Ton Dobbe ??

The Anti-Consultant for Sales-led SaaS Scaleups → Clarity, No BS, Results | I’ll reveal your latent potential, remove your growth barriers, and commit to impact | Author of The Remarkable Effect | Client stories in About

1 年

Love this line on the checklist Jason: "The ability to?get?to that future, no matter what.?Period." As you say, it's about creating an organization that break things and fix them.?That pick themselves off the ground, 5, 10, 50 times.?To never, ever quit let me add to this - Succesful vs Very Succesful SaaS businesses: - They measure their success by the impact they help their customers create (rather than their big exit) - They aim to be different, not just better - They create something valuable - and desirable - They surprise, and hit the right nerve - again and again In short: SaaS businesses that are worth making a remark about - again and again and again.

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Tim Beck

CEO @ SAASTEPS | Seven Siloed Systems Turned Into One | Taking Unstructured Data, Making it Structured | and Delivering Predictable Repeatable Revenue Outcomes.

1 年

But what if there is no lead investor and the company is positive CashFlow and was bootstrap from the beginning. Sometimes you just need to believe in the CEO mission. I push boulders all the time up hills. In doing this I can prove to my team what is possiable. Leaders lead in every way possiable we do whatever it takes to succeed.

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