- In this video, I'm gonna give you the three steps
to build an exit strategy.
You're gonna get two things out of this.
One, when you do this
it'll actually help you accelerate your revenue growth.
I know it sounds crazy, but I'll explain why
and also it will increase your chances
of likely acquisition.
And you can decide whether you take it or not
but we'll at least give you optionality.
Intro.
(upbeat music)
What's up everybody?
Welcome to Unstoppable, I'm TK and on this channel.
I help SAS founders like you accelerate your path
to the next stage of growth with an unstoppable strategy.
If you are new to this channel, welcome
be sure to hit the subscribe button and then bell icon.
That way you'll get notified
every single time I drop an episode with the TK energy.
If you're already part of the community
if you're a part of my SAS, go to market coaching program.
Welcome, it's really great to see you here.
So I've been part of a number of SAS businesses
and it's kind of a crazy story
when you put it together this way.
So my first SAS business HipCal
I start with four of my fraternity brothers.
We built it out
and then we got acquired by a company called Plaxo.
At Plaxo I joined there, I was a product manager.
I work on this partnership with Comcast
and Comcast ended up buying Plaxo.
And so that was the end of that story.
Then I started ToutApp my last SAS business.
I grew that out to about 7 million ARR
and we had a partnership with Marketo
and Marketo happened to actually buy us.
I joined Marketo and I led strategy and I led alliances.
We were working on some key partnerships
with some key companies
and that led to the acquisition of Marketo to Adobe
for $4.75 billion.
Three out of the four companies that I just mentioned
happened to get acquired because of a partnership in place.
That's the power of partnerships, right?
So here's a little secret that they don't tell you.
Exit strategies actually help you drive revenue growth
and also increases the likelihood of an acquisition.
And you can choose whether you take the acquisition or not.
Guess what?
If you have an acquisition offer
and you are also fundraising
you can actually use that as leverage during your fundraise
to say, look, we have an acquisition
and we can just take that
or you can actually give us a better valuation
'cause otherwise we're gonna take that.
It gives you actual leverage
in a process where you might not have that much leverage.
So in this episode, based on everything that I've learned
and these crazy twists and turns of HipCal, Plaxo
ToutApp, Marketo, Adobe,
I'm gonna walk you through
how to actually build an exit strategy
and mobilize it to drive revenue growth.
And in the long run, it may actually lead to an acquisition
that you can take or not.
If you're excited, dig in, go and smash out like button,
let's go into principle number one.
So principle number one is to actually find and list
larger companies that are complimentary to your product
and selling into your ICP.
That's quite a bit so let me explain.
What you wanna do
is actually make a list of larger companies
that are in your space
and that are also selling to the same customers
that you wanna go after.
Hopefully you have an ideal customer profile
if you don't, you should like,
I don't even know what to say.
You need to have an ideal customer profile
and then I'll teach you how to do that
inside of my SAS go to market program
but you should have an ideal customer profile.
This is a list of customers that should buy from you.
A very tight list.
So you should use that to understand
who are the larger companies
that are already selling to these people?
And are these companies actually selling products
that are complimentary to my product?
When you do this
you're not only gonna get a list of potential acquirers,
you're also gonna get a list of companies
that can help you actually grow faster.
Does that make sense?
Once you do that, the second step in this
is to engage with their partner ecosystem.
Chances are in each of these larger companies,
if they're large enough
and you should only be targeting the really large ones
don't do any smaller ones.
These larger companies are gonna have people
that are paid to find ways
to partner with smaller companies.
Because here's the thing,
if you're operating a large SAS business
if you're operating a platform, I did this at Marketo
this was one of my roles, one of my many roles.
And we knew that our core Marketo
people would actually stay longer
if they hooked up their Marketo to smaller companies
and other SAS businesses.
That way it created this like locking
and this competitive mode for us.
So is in our interest
actually build a robust partner ecosystem.
And so in each of these large companies
that you made a list of,
you are gonna have a group of people
who are paid to actually engage with you.
So what you wanna do is actually engage with these people,
get listed on their marketplaces,
figure out ways if they'll actually do co-marketing with you
and figure out ways that you can actually co-sell together
or sell to their customers your SAS product.
And while you're doing this you wanna find ways
to actually integrate into their products,
create a seamless experience
and make it super easy for your mutual customers
to actually get benefit from both platforms.
Now what these two will do
is not only will it establish sort of an exit strategy
of companies that are complimentary,
selling complimentary products, much larger,
would wanna buy you at some point, if they're smart,
it also helps you drive revenue growth.
So let me pause here for a second.
If you do this, just these two things
can you start to see like forget exit strategy,
can you start to see how much more powerful
your go-to-market machine is gonna be,
how you can actually use these companies
that are already selling to your target customers
to actually sell your product.
Start to get this hit me with a yes below,
gonna smash that like button for the YouTube algorithm.
Also, if you're building out your go-to-market machine
if you think about driving growth for your SAS business
I invite you to download
my five point startup growth strategy guide.
Inside of that, I give you my actual playbook
on how to build a go-to-market machine
and how about a lot of strategy to grow your SAS business.
I'll tell you more about it at the end of this episode
but let's go to principle number three.
Principle number three is once you have actually
engaged with a partner ecosystem
this is where the acquisition part comes in.
Hopefully start to see growth
when you've done these two things.
The third thing that comes in
is you wanna actually build relationships
with three key people.
There's three key players
that actually helps drive acquisitions, alright,?
The first one is the CEO.
As much as you can, any way that you can,
maybe it's at their user conference,
maybe it's some other way
you wanna find a way
to actually forge a relationship with the CEO.
The second one is the chief product officer.
Chief product officer eventually will have to say,
you know what?
If they wanna acquire they're like,
we can't build this or it's not fast enough
and there's is better we should acquire them.
The CPO has to sign off on it.
So these are two people that are super important.
The third group of people they kinda go together
sometimes they're separate
is alliances in the corp dev person.
So for me, I ran corp dev and alliances at Marketo.
So it was one person but in other larger companies,
they might be split in two roles,
but you wanna hook into the alliances leader
and the corporate development person.
The corporate development person does the deals,
they figure out the acquisitions.
The alliances person forges partnerships.
And you wanna have a relationship with all of them.
When you do these three things
not only are you gonna be able
to grow your SAS business faster
you'll also be able to create exit opportunities
down the line because you'll constantly be working
in building relationships with these larger companies
that are likely acquirers.
So to recap, number one
make a list of companies that have a complimentary product
and selling to the same customers as you.
Number two, engage with their partner ecosystem
and use them as a channel to sell.
Number three,
build relationships with these key stakeholders.
So down the line
when an acquisition conversation needs to happen
they already know you and know how to engage with you
and it's a much quicker deal to be heard.
When you do these three things
a, you'll have an exit strategy
b, you'll actually be able to drive growth
for your SAS business
and c, you'll actually be able to start warming up
exit opportunities down the line
when the time is right if the time is right,
depending on if you choose that path or not
but it's always good to have optionality
which is why I always believe in having exit strategy,
helping drive growth through those
and that way always having an option of exiting
or raising the next round
or appearing or whatever you wanna do
with your SAS business.
Drive it to profitability if you like.
Now, if you are building a SAS business
you're thinking about how to grow it.
This is just one of the ways.
I invited download
my five point startup growth strategy guide.
Inside of it,
I'll walk you through the exact strategies I use
to help grow SAS businesses step by step.
All you need to do is go to getunstoppable.com/strategy
it's completely free I'll also link to it below.
You can just follow the link there as well.
If you got value from this video,
please smash that like button for the YouTube algorithm
also it just means a lot to my team, we look at the stats.
We wanna spread our knowledge to as many people as possible
as many SAS founders as possible.
Speaking of which. if you have a sass founder friend
that would get value from this video,
please share it with them.
If you have a team member, co-founder, share with them
it would mean the world to us.
Follow the link down below
we have a click to tweet link,
use that if you wanna spread on Twitter,
I'm active on Twitter as well.
And also if you're new and haven't subscribed
be sure to hit that subscribe button, that bell icon
I drop an episode like this
that's with actionable strategies
on how to grow your SAS business
every Sunday, Wednesday and Friday.
Lastly, remember everyone needs a strategy
for their life and their business
but when you are with us, yours is gonna be unstoppable.
I'm TK, I'll see you in the next episode.
(upbeat music)