- If you're in the stages
of building your first ever SaaS business,
then it can be really easy to get lost in the weeds.
Questions that I came across
when I was first doing this was,
well what kind of TAM do I take on,
Total Addressable Market?
How scalable does this product need to be?
How do I actually differentiate
in the market if there are competitors?
And if there are zero competitors
is that a good thing or a bad thing?
When should I double down on this business
and stop doing anything else that I'm doing
or any other ideas that I have?
If I have a services business, when do I stop doing that
and fund and actually double down on the SaaS business?
These are all questions that I personally came across
when I was going through this journey.
These are questions that I get asked all the time
from founders and pre-founders in this community.
And having navigated that whole journey,
having coached others and advised founders
on navigating these things
and seeing a lot of the patterns.
On this episode,
I'm gonna walk you through the three principles
that you absolutely need to know,
on how to be effective and successful
and cut through all the noise
on building your first SaaS business
and actually getting to initial revenues
and scaling from there.
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 faster
with an unstoppable strategy.
Now, if you are new to this channel, welcome.
I drop an episode every single Sunday
with actionable strategies
on how to grow your SaaS business.
So, 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.
If you're already part of this fast growing community
of SaaS founders, SaaS leaders, SaaS practitioners,
my people welcome back.
It's really awesome to see you over here.
So, I remember my last SaaS business that I was starting,
I had a full-time job in finance.
I was working at a company called Bridgewater,
the largest hedge fund in the world.
And this was like early days for Bridgewater.
And I was like, okay, I'm gonna quit my job,
I'm gonna get back into startups.
I'm gonna start a company.
I know it's gonna be a SaaS business.
And there were so many questions
that was buzzing through my head.
Like, when do I quit?
When do I double down?
What kind of idea?
Which idea do I double down on?
Which market do I go after?
Is it gonna be a small bootstrap company
or do I go for a venture capital?
All of this was just buzzing in my head.
And even though I had some experience
in startups for my prior company,
this was the first true, like, I'm just gonna go at it.
And I was a solo founder that time around.
And so having navigated that, having navigated
and helping navigate other founders through these questions,
I came across some key principles
that really helps you cut through this noise
and not get too overwhelmed,
on how do you actually get into that first SAS business?
How do you get to initial revenues?
And then how do you figure out the options from there
to grow and scale
and really go after your dreams of being the CEO
and founder of a SaaS business.
So, having navigated this journey,
having taken tout at my last company,
to first, we were cashflow break-even,
then we raised venture capital, decided to go VC backed,
having scaled the company, having sold the company,
having gone through ups and downs,
having sell the company that bought ToutApp
but that was Marketo, I was SVP of Strategy there,
Having gone through all of that
and having coached other founders in this exact stage,
I'm gonna walk you through the three principles
that you absolutely need to know
as you navigate this journey.
And when you follow these principles,
you'll able to cut through the noise
and really dig into what matters.
If you've started digging into principle, number one,
go ahead and smash that Like button
for the YouTube algorithm,
It really likes it when you do that
and let's get to principle number one.
So principle number one is,
if this is your first SaaS business,
having gone through my journey and seeing other founders,
the first thing I would recommend.
The principle number one
is to focus on a micro SaaS business first.
A micro SaaS business is like a SaaS business,
it's like a software business.
It is, but it is a much more focused product.
It's a much more niched product,
going after a very niched audience.
And it is a product
that's not trying to build out everything.
It's trying to be very focused
on delivering a very specific ROI
for a very specific group of people.
The best part about a micro SaaS product
is because it's so focused, it's so niched.
You can actually get it to initial traction
and revenues a heck of a lot faster,
assuming your thesis is right about the market.
And we'll talk about that in the next principle.
And the best part about this is,
if you start with a micro SaaS idea
which is like a very focused SaaS product,
you will always have the option and the right
and the conditionality to say, you know what?
Now we can expand beyond being a micro SaaS.
Meaning if you focus on the specific thing
and you really get it working
and you get those quick revenues, you get that traction,
and you're like, oh my God, there's a thing here.
But then you start to see a broader opportunity
which you almost always will,
you can decide on whether we keep operating that
as a micro SaaS or you say, no
let's actually expand our vision, expand our TAM,
expand our product, turn into full platform,
raise venture back money and really go for it.
And you'll have that optionality.
The opposite of this principle is trying to...
As your first asthma is trying to build this massive thing
and you get stuck in the one more feature trap,
and you're like, whoa, we gotta do this and this,
and this is gonna be huge,
and you end up neither here nor there.
And this is why I always tell founders,
and this is how I did it with my prior companies.
Especially ToutApp it started with like,
hey, let's just build a small tool,
it'll be self-service and let's see what happens.
And then from there we were backed by In re Horowitz
and they don't invest in small TAMs.
And so we went really big on the vision
but we earned that right along the way.
And so my principle number one is that,
this is your first SaaS business.
Your perfect SaaS business
should be a micro SaaS product at first
because it helps you really get in there,
get things going, get things moving.
And as you start to get that traction and that momentum
a bunch of decisions on, do I double down on this?
Do I expand on this, do I raise money?
Becomes a lot easier to answer
versus being stuck in this theoretical land
where we are building this theoretical product
and you'll never know when it's gonna be done
and if anyone's gonna want it.
So that's principle number one,
micro SaaS just works way better.
Principle number two is,
you wanna be very specific about your target market.
When you're doing a micro SaaS product,
or just flushing out the strategy
for your perfect SaaS business,
you wanna be very clear about
what target market you are going after.
The two big things that I always look for
when I'm talking to founders
and believe it or not early stage investors
if you're raising money, look for this as well.
And any savvy investor,
and you are essentially an investor here
is investing your own time into an idea,
should look for this.
The first thing you wanna look for is,
are you going after an urgent
and important problem that exists in the market?
Meaning are you going after a market that has a very urgent
and important problem, it's top of mind for them
and your product and your solution can actually solve that.
A lot of times people assume
that principle number two is product.
They want to build this amazing product
but truly the thing you learn the hard way,
the thing I learned the hard way,
and I also learned through getting lucky
in finding the right ideas at certain points,
is that markets matter more than product ideas.
Product ideas are great, they're cool,
your product is awesome,
but unless it's mapped to a market that has an urgent
and important problem, then nothing will work.
And so what you wanna do is think about,
okay, if I'm building this very focused business
that delivers quick ROI,
we wanna get traction going quickly,
solves a very specific problem, it's very niched,
what is the market that I'm gonna be solving this for?
And is it an urgent and important problem?
The other thing that I've found to be very important
is founders that go after markets
that have domain knowledge,
meaning they have experience in that market.
They know people in that market, they know how things work.
They know what the problems are, tend to do better.
I'm not saying you have to pick one like that.
It could be tangentially related and you can get good at it.
But if you are going after a market,
a target market that you know a lot about,
maybe you have a lot of domain knowledge
from running a consulting company or a services business
or in a profession, and you're like,
I wanna solve this problem
that I know exists for me and all of my peers.
So, I'm gonna build a software company around it.
It's gonna start as micro SaaS,
I'm gonna go after this market,
and then we'll expand from there.
That's the type of founder that tends to do better.
That's the type of founder I was,
and that's the type of founder that tends to do better
particularly in B2B, business-to-business software.
Rules where you see this being broken
is that 19-year-old Founder
that create the next great social app.
That's the B2C app.
And those, they tend to do better
because younger people try those new social apps
and do really well.
And so, they have domain knowledge in that market.
They're living that life, so they're gonna do better,
but in business it tends to be where it's B2B founders
with some experience in a target industry,
target profession, target role,
and they're like, I wanna solve this problem.
And that's why taking the target market very carefully
where you have an urgent, important problem
and domain knowledge
actually increases your likelihood of success
and eliminates a bunch of choices
that are just not good ideas.
Now, once you picked the type of model you're going after,
and I recommend micro SaaS
and you can always expand from there,
then you pick the market that you're going after,
you wanna vet those pieces out, there's a third principle.
Now before I go in the third principle,
let me just pause here for a second.
Are we starting to see the power in this
for your first SaaS business?
And I think that, like every great founder
and you will be a great founder,
you are gonna have multiple successful companies.
You may just have one amazingly successful company
but it always starts small.
This is one of the things that Jeff Bezos talks about
all the time, big things start small.
And that's what the principle here,
underlying principle here really is.
If you're starting to see the power in this,
if you're starting to see how following this approach
even these first two principles can help you
cut through a lot of noise
and really get to that initial product,
initial company, initial traction.
Can I just get a yes in the comments below?
And also smash that Like button for the YouTube algorithm,
it really likes it when you do that, and so do we.
Also, if you're in the stage
where you're flushing out your idea,
you maybe have already started to build a product
and you're trying to figure out,
well, how do we get it to initial traction,
initial revenues?
I run an in-depth webinar every single week,
and in that webinar, it's completely free.
We go in depth into exactly how to piece together
the key parts to make sure
that you can get to that initial traction, initial revenues
and vet that idea.
You don't have to go anywhere right now,
I'll tell you more about it at the end of this episode.
'Cause right now
we gotta get to principle number three, right?
Principle number three finally is product.
And this is intentional.
You'll notice like first I was like,
what's the business model?
What's the type of scope, right?
That's micro SaaS.
Then I'm like, well, what market is it urgent and important?
And then finally we get into product
and I've made this mistake as well.
I originally started as an engineer
and then I learned go to market
because you're required to as being a successful founder,
you have to get good at that.
And then you hire people around you
to be better than you than that,
but you're dangerous enough.
So, I went to this whole journey, but in my early days
baby TK was really obsessed with product.
And there are so many great SaaS products
that never saw the light of day,
that never hit product market fit,
that never got initial traction
because they didn't actually do the work around,
what's the right market
and how to actually take it to market?
And that's what some of these pieces are.
But it's also important to have a really great product,
just as important, it's all important.
And so principle number three is
you actually wanna flesh out your product.
And the key components you really want to hit is,
your product needs to be easy to use.
I see this very often, especially with first time founders,
first software companies, your perfect software company,
your perfect software business needs to be something
where that your ideal customer
can get into the product very easily.
If they have to go through a huge process of onboarding,
if they have to hook into all these 50 different systems
and you have to go through a security review,
I'm not saying that's impossible,
that's a really tough thing to do
as your first software company.
That goes against the rules of a micro SaaS product.
So micro SaaS product is easy to use,
it's easy to get into,
it actually hooks into their existing workflow.
You find a really unique way
to hook into their current workflow,
how your target customer
or target user goes through their job,
and they can actually easily use the product
in their workflow, they can quickly get into it.
And most importantly
the product delivers some value quickly.
This is again around the ethos
of solve a very specific problem, go for a specific market
and solve that problem really quickly, really easily.
So they're like, oh my God, this is amazing,
this completely changes my life.
And that's exactly what the bar is for your product.
You wanna make it easy to use, easy to get into,
hooks your workflow
and solves the problem really quickly for them.
And then if you solve that very specific problem
you earn the right to solve bigger problems around them
and that's the power of this strategy.
Those are the key things that I would do,
if I were starting another company.
This is what I've learned, this is what I coach founders on.
And if you are building your first software company,
your first SaaS business
you want that perfect business for you.
This is the key principles to really internalize
and follow cause it'll help you cut through that noise.
To recap, number one, you actually want to know
exactly what model you're following
and I recommend a micro SaaS model.
So you can really get in, get early traction and revenues
and then earn the right to expand from there.
Before you think about the product
or fall in love with the product,
you wanna make sure what your target market is.
Whether it's urgent and important
and whether you have domain knowledge in it.
And then you wanna craft the product
so that you solve that very specific problem.
It's easy to use and people can hook it into their workflow
and you can deliver value quickly.
And so now, you know
how to actually follow these principles
to get to that perfect SaaS business for you.
What you may not know is if you've got this idea
and you're starting to figure out,
well, how do I get to initial revenues?
Or how do I stress test this
and make sure the market is right?
What you may not know is
how to actually go through that process.
This is why I run a webinar every single week.
It's completely free
where I go in depth into exactly how to take that idea
and get it into initial revenues.
How do I go through that process?
How to flesh out the key pieces and think about them.
What are the core principles around them?
It's completely free.
All you need to do is just go to tkkader.com/webinar,
tkkader.com/webinar.
When you go over there, you just fill out your info
and then boom, it's completely free.
And then you like, we put you right into the webinar.
So, it's like super easy workflow.
And in that in-depth training,
I'll actually walk you through,
how to vet out these key pieces?
Like what's the market gonna be?
What's the product gonna be?
What's the goo market gonna be?
So, that you can go from that idea stage
or that product that you've built to initial revenues.
If you got value from this video,
please smash that Like button for the YouTube algorithm.
It really loves it when you do that, and so do we.
We put a lot of log into these videos.
I also drop an episode like this with actionable strategies
on how to grow your SaaS business,
how to become a successful SaaS founder, SaaS leader.
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 have a fellow founder, a fellow team member
if you're part of a Slack group or WhatsApp group
or whatever community for SaaS founders
and you feel like they would get value from this video,
please share with them.
These videos are completely free on this YouTube channel.
So we can serve the SaaS community.
We can help as many SaaS founders as possible
in building incredible SaaS companies.
And lastly remember,
everyone needs a strategy for their life and their business.
When you are with us, yours, it's gonna be unstoppable.
I'm TK, and I'll see you in the next episode.
(upbeat music)
If you've started digging into principle number one,
go ahead and smash that...
Whoa!