- When I quit my last corporate job
to start my SaaS business
I actually didn't start my SaaS business outright.
I actually started with a services business
and I built the SaaS business on the side.
Once the SaaS business started to hit product market fit
I then raised money, scaled the company, and then exited it.
Since then, I've applied this same playbook
at least twice more
probably more times because it works so well.
In this episode
I'm gonna walk you through the three steps
that I follow every single time
I'm starting a new SaaS company
even if I'm starting with absolutely nothing.
And when you follow these three steps,
regardless of whether you're raising money,
whether you're investing in it,
or you're starting from absolutely nothing
you're gonna know the exact three steps that you can follow
that I follow to actually start
and build a SaaS business.
Intro.
(upbeat music)
What's up everybody?
Welcome to Unstoppable.
I'm TK, and on this channel I help SaaS founders
like you, grow your SaaS businesses
with an unstoppable strategy.
Now, if you're new to this channel, welcome.
I drop an episode every single Sunday
with actionable strategies and tactics from the trenches.
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be sure to hit that subscribe button and that bell icon.
That way you'll get notified
every single time I drop an episode with the TK energy.
Now, if you're already part of this community
if you're a part of my SaaS go-to market coaching programs
my people, welcome back.
It's really awesome to see you over here.
At the time of this recording right now
i started and exited two SaaS companies.
My last SaaS company, ToutApp
was a pioneer in the sales engagement space.
I built it, I scaled it, I exited it.
Since then, I've also started two additional SaaS companies
both of which have hit product market fit
and are generating revenues.
And I have a third company
that's at the pre-revenue stage
that we're incubating right now.
For each of these companies.
Even the company that I first started
when I had absolutely nothing,
I followed these three principles.
These three principles have served me well
to start SaaS businesses from absolutely nothing.
So if you're excited to dig into the first principle
and exact way that I start SaaS companies
go and smash that like button for the YouTube algorithm.
Let's dig right into this playbook.
So principle number one
and this was something that was super important
for me when I was first starting out
was to understand if there's a difference
between SaaS companies and consulting companies.
This is super important to me
because I see so many gurus out there
that are talking to newbies
to pre founders probably like you that tell them,
look you can just start a SaaS business.
It's so easy.
You don't even need to know how to code.
You can just use a no code tool and build this little thing
and you'll have an incredible SaaS business.
And it pisses me off
because I actually think they're lying to you.
I think that the quality bar
for a proper SaaS product that actually generates revenues
and generates MRR is so high and so competitive
just building a random little SaaS tool
using a no no-code option
isn't really gonna help you compete.
In fact you might actually be wasting the money
that you have, the time that you have,
on building the wrong thing in the wrong way.
This is why it's super important to understand
principle number one because there's a huge difference
between a SaaS business and a services business
even though one is software as a service
and the other is just your services.
If you're just starting out from nothing
like I did when I was doing ToutApp
I first started with a services business
and then I built out a SaaS business.
If you really think about it
a sass kind of like a giant apartment building.
You're building out an apartment building,
you gotta set the foundation,
you gotta build up the framework
you gotta make sure it's 30 stories
and you want to make sure that you can actually rent it out
to as many people as possible.
You'll need a management company
you'll need a construction company.
You'll need all those things
to properly build up that infrastructure.
That's what truly a SaaS business is
and in this channel with all the founders I work with
and even the pre founders who've gone
from an idea to revenues, that's exactly what I teach.
If you're just starting out and you're like, look, TK
I don't have any money to invest
in a brand new SaaS product,
I don't have any money to invest
in building this apartment building
then you might be doing yourself a disservice
by starting with a SaaS company.
And that's an important lesson that I learned
when I first started out as a founder.
On the other side,
take a consulting company that you just started
if you're already an engineer,
a consulting company might be doing freelance coding work.
If you're not an engineer,
a consulting company might be doing
some sort of services that you're offering
where you're trading money for time.
Consulting business when you're starting off
is more like a lemonade stand.
A lemonade stand is something
where you can just put up a stand anywhere.
You can buy some raw materials at the supermarket
and you can start selling it right away
and get the cash flow going.
And the more lemonade that you sell,
the more profits you start to generate.
And then using those profits,
you can actually start to invest in other assets
for example a SaaS business.
So often I see founders starting off
and actually trying to start a SaaS business
saying I can just cobble together this no-code tool,
or even worse, I'll spend the little money that I have
to hire an external engineering team
and they quoted me a hundred thousand dollars
to build this product only to realize
either they built the wrong product
or to actually get to the quality bar that is needed
so that they can hit product market fit,
they're going to have to invest a lot more
into that product.
They start building apartment buildings
before they've actually validated the idea,
whereas instead if they actually start to invest
in a lemonade stand and generated profits
they would actually have more cash flow
and more profits to properly invest
in building a SaaS business.
This is one of the things that I was fortunate enough
to get advice, on when I quit my job
and actually set out to become a true entrepreneur.
When I started to do this,
I first started with consulting work.
I was an engineer,
so I started with freelance consulting services
where I would code other people's products.
That got the profits starting to come in
it accumulated more cash even more than I had in my day job.
And while that was building,
on the side using everything that I was learning
and the spare time
that I had outside of the consulting work,
because I was no longer tied to a nine to five schedule,
I was able to start building out a SaaS product.
And that became ToutApp.
Pretty quickly as I launched ToutApp
it started to generate more and more revenues.
At the same time
my consulting services was generating more and more profits
and at one point I was able to say, okay, cool.
This is gonna be my last consulting project.
I'm gonna close out the lemonade stand
and I'm gonna take all the money
that I have and I'm gonna bet it
on actually building out this full apartment building.
Now, this is super important
because if you are just starting out
and you're thinking about, okay,
do I go build apartment building?
Do I start with services?
A huge differentiator
is going to be how much capital you have.
Do you have enough capital to invest
in an apartment building or should you start
to build up more capital first using a lemonade stand?
And I don't mean any of this in a derogatory way.
Services are incredible businesses
because I started with one.
I think they're incredible businesses.
And services businesses can become massive businesses
in their own right
but they require very little upfront capital
because you're actually trading time for money
and you can actually sell that in a really great way
and start to get the profits rolling in.
One of the biggest reasons
why I wanted to start with this principle
is because I think there's a lot of bad advice out there.
People are saying you can so easily start a SaaS business
but in reality, you're kind of going on a fool's errand.
You're starting to build this giant apartment building
and not being properly capitalized to build it
and then wasting months building the wrong product
only to realize that you built the wrong thing
and you maybe are wasting time.
Instead, you should start with the lemonade stand
get the cash flowing
and then invest in a proper apartment building.
Now as you're doing this,
there's still so many companies
that never ever get to product market fit.
This three-step strategy that I'm talking about
actually allowed me
to get to product market fit that much more faster
with all the products that I went after.
Here's why this is principle number two.
Principle number two is to build domain knowledge.
Ultimately, successful SaaS products
solve an urgent and important problem
for a very specific market, for a very specific domain.
One of the magical things about starting
with the lemonade stand is that if you can start
to operate in the market, you can start to serve people
and solve problems for them through services.
Undoubtedly, you're gonna come across a list of urgent
and important problems that you can actually
solve using a SaaS product.
And this becomes a two-pronged approach
where not only are you solving problems with services
and you're generating profits,
you then identify which of these urgent
and important problems that you're solving
with all the domain knowledge that you're building
that you can actually invest those profits
into to build a proper SASS business.
So these two principles
when I did it in this way, actually worked 10 times better.
There's a little story
that a lot of people don't know about.
When I was putting my job,
I was actually working on a different SaaS product.
It was called Braintrust, and no one ever heard of it
because it never hit product market fit.
As I got into it, I started doing more consulting
and as I was doing more consulting
I was actually exploring more problems
and that's when I actually built ToutApp.
ToutApp originally, the first version of it,
was built over the course of a weekend
and the reason I was able to build it so quickly was
because I took all the sales pages and the billing workflow
and a lot of these things you had
to build from scratch back in those days.
And I just converted it to the ToutApp idea
and I launched it over a weekend
and it started generating revenues right away.
And the reason it happened so quickly
is not because I'm such a genius,
it's because I was building a product
that actually solved an urgent important problem
tethered to the domain knowledge that I was acquiring
from the lemonade stand that I started with.
And I was able to take the profits from the lemonade stand
and the time that I bought back for myself
and invested into this SaaS business, and then it took off.
Now I have a third principle
on how to really put all these pieces together,
but before I go into that,
lemme just pause here for a second.
I starting to see the power in this.
Now, believe it or not
I have nothing to sell you in this scenario.
If you are truly someone
that should be building a services business
instead of a SaaS business, then I can't profit from this.
There's nothing here for me to sell you.
I'm purely doing this
because I actually think there is bad advice out there
and I think people are being led astray
and they're wasting time.
And I want you to be honest about are you in that phase
or you want to be investing in the apartment building
or should you be starting
off with a lemonade stand like I did?
Because that gets profits going, that gets cash flowing.
And more importantly,
that starts to build up that domain knowledge
and it gives you conviction on exactly which urgent
and important problem you should be solving.
I am the biggest proponent of SaaS.
I think SaaS is an incredible industry.
If I could have it my way, every single person
that I come across should start a SaaS business
and have a thriving SaaS business.
And that's why I do this.
But at the same time, I want people to go into it
knowing that SaaS is a competitive sport.
It's a very valuable business
which is why it's so competitive.
And the bar is really high.
The world does not want more SaaS software.
They want quality SaaS software.
And that's why I want people to really, really be honest
with themselves on what should I spend my time on?
How do I capitalize myself
so that I can focus on the right important urgent problem,
so that I can build incredible SaaS companies?
And that's what I really want for you.
If you're starting to see the power in this
can I just get a yes in the comments below
and also smash out like button for the YouTube algorithm?
It just loves it when you do that.
Now, let's go to principle number three.
Principle number three is my MGP framework.
MGP stands for market, go-to-market, and product.
Now, let's just assume
that you are in that stage where you know what TK
I'm good on the lemonade stand.
I've got my profits
I'm ready to invest in a proper SaaS business.
And let's just pretend for a second, you know what?
I have enough domain knowledge,
I have a few ideas on the urgent
and important problem that I wanna solve.
Now what do I do?
I want to actually be successful in building a SaaS company.
Well pull up a chair.
Now we're talking and now I'm super excited for you.
This is where the third principle comes into play.
Now, here's where most founders go wrong.
And even me, when I was doing Braintrust, I went wrong.
I started with the product
I had so much conviction around the problem,
I was like I know exactly what this needs to be.
And I, so I just started coding
and I was an engineer so it was easy
for me to start coding even on nights and weekends.
And so I just built a product.
In fact, I built three products back then.
Two of them didn't succeed and one of them took off.
But the thing is, when you start with the product,
you're more likely to fail.
But if you, you flip the model
and you start with market and then go-to market
and then product, you're more likely to succeed.
When you are actually competing in a market
with a tremendous, urgent and important problem.
You can actually have a pretty shitty product
and pretty shitty go-to market,
but you'll still be successful because the market pull
is so incredible.
ToutApp and its first version
which I cobbled together over the course of a weekend
that helped you send emails was not very good.
In fact, you couldn't even use rich text.
It was text only emails.
You couldn't bold anything.
It was that crappy of a product, but it was so powerful.
People were paying $30 a month for it right off the bat
as soon as it launched.
It was so powerful
because the market dynamics were so strong.
A lot of times people start companies
without thinking about the market.
You can be in a shitty product, have okay go-to market
but if the market's really strong, you can still win.
So my MGP framework is all about figuring out
what market you're operating in first.
Figure out what urgent
and important problem you're really solving for
which specific customer you're really solving for.
Once you've done that, then don't build a product yet.
Do the go-to market, actually talk
to a hundred people in that market and validate
that this is an actual urgent, important problem.
Figure out if they're willing
to actually try a product that solves this problem.
Figure out if they're willing to pay for it.
Figure out if there's a way
to actually cut through the noise and sell this
in the marketplace before you build the product.
Once you've done those two things,
you will come away with a lot more insight
into exactly what you're solving for.
And then you get into product.
And at that point, you're actually fulfilling demand,
your market and go-to market thesis
helps you build up that demand.
And then you'll have a list
of people that are like, hey, I want this.
When can I sign up?
And you can actually build the product exactly
to what they want and start to generate revenues right away.
For the times where I've built products
where they started generating revenues right away,
I started with market, then went to go-to market
and then went to product,
which is why by the time I launched,
they started generating revenues.
It wasn't by accident,
it wasn't because the product was so incredible
although they were pretty good.
But it was because I had done the market first
then the go to market, and then the product in that order.
So to recap, if you wanna start a SaaS business
from nothing like I did
here are the three principles you absolutely need to know.
Number one, figure out if you're ready
to invest in a SaaS product, an apartment building,
if you will, or if you're better off starting
with a lemonade stand, generating profits,
acquiring the domain knowledge,
and then investing in an apartment building,
which is the proper SaaS product.
Number two, figure out
if you've got the right domain knowledge.
If you don't acquire it,
by doing the services business,
the lemonade stand you can actually learn
a ton about your target market,
solve problems for them, and figure out what is the urgent
and important problem that you should be solving.
On top of that, you're charging for it.
So you're getting paid to do this market development.
And once you do that, follow my MGP framework market
then go-to market and then product.
Talk to a hundred of these people
through your go-to market machine
start a mini one, start engaging with them.
Use those conversations to validate
that this is a real problem.
Develop your value proposition
and then start to build out the product product
based on what their inputs are.
And then by the time you launch,
you'll already have paying customers,
and that's the power of this.
So now you know the three steps that I follow
and this is not just once that I did it.
This is multiple times I've used this framework
and it's worked so well for me.
I wanted to share this video.
There's so much bad information out there for beginners.
They're just trying to sell you on like,
oh just start this no-code thing.
And I truly, honestly believe that doesn't make
for a great SaaS product for a true SaaS business
and a lot of people lose a lot more money on it.
So I want you to be honest about it
and make sure you're building truly great SaaS products
and SaaS businesses.
So now you do the three steps that I recommend
when you're starting a SaaS business
on how I started a SaaS business from nothing.
What you may not know is, okay, TK
if I'm ready to actually build out the SaaS product
how do I know if it's an urgent important problem?
How do I figure out the value prop?
How do I actually go to market?
How do I test the market?
This is why I created my 10 point SaaS business checklist.
It's completely free.
Just go to tkkader.com/saas-checklist,
tkkader.com/saas-checklist
or I'll also link to it below
so it's easy for you to access, it's completely free.
And inside of it I give you the 10 questions
you should ask yourself to actually stress test
whether what you're building is truly valuable
in the market.
And on top of that,
you can figure out if you should be investing
in an apartment building
or you should be starting with a lemonade stand.
If you got value from this video,
please smash that like button for the YouTube algorithm.
If you're new, I drop a video like this every single Sunday
with actionable strategies
from the trenches on how to grow your SaaS business
from actually being in the arena.
So be sure to hit that subscribe button
and that bell icon where you'll get notified
every single time I drop an episode.
If you've got value from this video,
please share this with a fellow founder,
a team member, a WhatsApp group,
a Slack group where other founders
and pre founders like you can get value
and hopefully not waste time building the wrong product
of building the wrong type of business
depending on where you are in your life.
My ultimate goal is to help founders like you
build incredible SaaS companies,
build incredible businesses, and that's why I do this.
And lastly, remember, everyone needs a strategy
for their life and their business.
When you are with us, yours is gonna be unstoppable.
I'm TK and I'll see you in the next episode.
Take care, everybody.
(bright music)