The Advice SaaS Startup Founders Would Give Their Younger Selves(justbeepit.com)
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The Advice SaaS Startup Founders Would Give Their Younger Selves
https://www.justbeepit.com/post/saas-startup-founders-what-advice-would-you-give-your-younger-selves-here-s-what-they-said
54 comments
In fact, I would reverse SaaS entirely: make it Service as a Software instead. That is to say, provide the service you want manually for the customer (as much as is possible, as it is not always possible), then build software to automate that process.
When DoorDash first started, they manually took orders and delivered them to people, over the phone. They'd get an order from their customer, then they'd order it from the restaurant, then drive over to pick up and deliver them. Then, they built the driver network software, mobile app, and all that.
When DoorDash first started, they manually took orders and delivered them to people, over the phone. They'd get an order from their customer, then they'd order it from the restaurant, then drive over to pick up and deliver them. Then, they built the driver network software, mobile app, and all that.
Very insightful comment. Most customers just want the problem solving. If you can’t find anyone to discuss and possibly pay for it being solved in a clunky way then software isn’t suddenly going to change that.
This is very similar to how the EatThisMuch (? I'm not sure it was this app) app launched. I think I heard the founders talking to someone on a podcast. The three guys had one customer at the start and they started by talking to this woman, figuring out her eating goals, and then doing grocery shopping, and delivering the food for her. Then they added a second customer and started to scale.
So should I become a consultant then to learn more about being on the service side of things?
No, just start a service business first. For example, I'm running Google ads for some local lawyers, I'm working on some software to automate that process.
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.
> 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.
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?
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.
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.
yes. Silly I did not spot that. The first three rules of a startup are:
1. get customers
2. get customers
3. get customers
But, as per my reply earlier in this topic, the "how" is left as an exercise to the reader.
1. get customers
2. get customers
3. get customers
But, as per my reply earlier in this topic, the "how" is left as an exercise to the reader.
> 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.
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.
> 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.
YEP. It's funny how it's always the multi-millionaires that talk about the importance of God, giving back, being honest. And "the rest will come naturally". It's absolutely sinister gate-keeping.
YEP. It's funny how it's always the multi-millionaires that talk about the importance of God, giving back, being honest. And "the rest will come naturally". It's absolutely sinister gate-keeping.
It also reeks of survivorship bias and a privileged/sheltered upbringing. I know plenty of people who live this way and aren’t rich or even middle class. In fact it implies that if you aren’t rich you didn’t live your life a good way.
This is a (bad-faith?) misreading. What I took away was: a business that attempts to maximise profits without returning a corresponding value to society is likely to fail.
Is that even remotely in the real world?
Edit: I missed the society part from the original argument. The value doesn’t need to be to society but to some people somewhere in order to succeed.
Of course it is! Show me a successful business that doesn’t give genuine value to their target audience.
The target audience may not be who you think it is, but you had best believe that someone is getting value or else the business would fail.
Of course it is! Show me a successful business that doesn’t give genuine value to their target audience.
The target audience may not be who you think it is, but you had best believe that someone is getting value or else the business would fail.
You will most likely fail but there are examples of companies, like Groupon, that created negative value for their customers.
Tobacco companies. Net value is higher risk of serious illness.
Fraud seem to be a pretty successful business model.
I suppose you have to at least temporarily appear to be providing value, before your casino leaves your customer bankrupt.
I suppose you have to at least temporarily appear to be providing value, before your casino leaves your customer bankrupt.
For me the point is, if you care more about the money than about the product, then the product will inevitably become worse and worse. We already have far too many such products. I don’t see how anyone can truly feel fulfilled by operating a business that’s more about the profit than about the product. Is that what they want their life to be about? It just seems soulless and devoid of meaning and purpose. Profitability should be the means to a purpose, but it should not be a purpose in itself.
I think that the vast majority of people who are creating SaaS companies are not looking to improve society if it costs them money in the long run. Fortunately, it seems to be possible to both satisfy human greed and improve the world—if imperfectly—as a side effect. SaaS founders aren't the best people we've got, in the moral sense, but sometimes they're the best we've got, in the sense that we'll take what we get.
Is there anything wrong with that?
When you’ve ticked off the money requirement then you can move onto higher level things and trying to change the world.
Maslow hierarchy of needs, and it’s probably better for everyone that it exists.
When you’ve ticked off the money requirement then you can move onto higher level things and trying to change the world.
Maslow hierarchy of needs, and it’s probably better for everyone that it exists.
I don't see how you could possibly object to the idea that a business should create genuine value.
In theory, that's the entire point of why we as a society allow businesses to exist
In theory, that's the entire point of why we as a society allow businesses to exist
Thinking about money is what leads to enshittification though, so it's useful to think about it initially but if you continue along that path, your company and product will irreparably suffer.
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.
> 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.
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.
> 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
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
The fact that they mentioned it means they haven’t otherwise they wouldn’t have said it. All the VCs I know want to make money but ALSO want to leave a positive impact on society and the world. The “Do Good” is on the forefront of their minds.
Sustainability. Renewals. Finding more novel and safer ways to do something risky. There’s a lot more that goes into decisions than money. Faith in leadership is another.
Sustainability. Renewals. Finding more novel and safer ways to do something risky. There’s a lot more that goes into decisions than money. Faith in leadership is another.
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.
No?
There is an area between being unemployed and making huge money with scams and shady tactics where you can make less but non-zero money and create real value for the world.
Not everything needs to be a VC pitch. People go into teaching (for example) knowing that it doesn't make much money because they want to make a difference, and plenty of them don't regret it.
There is an area between being unemployed and making huge money with scams and shady tactics where you can make less but non-zero money and create real value for the world.
Not everything needs to be a VC pitch. People go into teaching (for example) knowing that it doesn't make much money because they want to make a difference, and plenty of them don't regret it.
If they actually cared about making society better over making a buck, then they wouldn't use an SaaS business model.
Maybe he just knew he had more throws at the dart board.
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:
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.
#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.
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.
I think the intended thought process is: don't prematurely scale. Wait until you need to.
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.
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!
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!
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.
* 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.
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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.
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.
Your last sentence is not wrong, but is subject to an awful lot of inherent selection bias.
Depends. $100k arr low hassle would be preferable to me to $1M but hiring lots of people.
100k arr works out to
- 8334 per month
- 1923 per week
- 385 per business day
Lat's assume SaaS or similar subscription service. If I sell a subscription product with a few price tiers, say free, 10$/mo, 50$/mo, and 500$/mo (and maybe a hidden tier for corporate customers that amounts to 1000$/mo on average). Let's assume most of my customers are in the free tier, 95%. The remaining 5% are stratified across 10, 50, 500, and 1000 (maybe following an inverse logarithmic curve because people are allergic to spending money -- -ln(x/1000) + 1). The following scale factors apply to each price tier:
- 1 x 1000/mo - 2 x 500/mo - 4 x 50/mo - 6 x 10/mo
13 customers gets me to 2260/mo, so I'd need about 4 times that many customers to hit ~8000/mo. This comes to about 50 paying customers to hit 100k arr.
And now I need to sort out what I have that 50 people would be willing to pay those various amounts for protracted periods of time.
But what do I have that people want to buy? I can sell my time as a developer working on someone else's product and make about 100k arr. I can build a product -- and I assume most folks on this board are here in this camp, that they want to build something and own it. I could sell information products (ugh) or other kinds of information. What else can I do?
I'm curious how people with multiple launched products that make money managed to discover their original product. Was it an accident? Copious amounts of market research? Cross-industry experience that allowed them to build for non-engineers?
- 8334 per month
- 1923 per week
- 385 per business day
Lat's assume SaaS or similar subscription service. If I sell a subscription product with a few price tiers, say free, 10$/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?
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.
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.
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.
This is the HN thread, which doesn't seem to be linked: https://news.ycombinator.com/item?id=37834908
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.
agreed. i want to see all of the answers.
Also some questions
- how much is the role of product vs distribution? - should be go aggressive on distribution with a relatively new product?
- how much is the role of product vs distribution? - should be go aggressive on distribution with a relatively new product?
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.
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.
Good advice here!
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.