- Some of the best software companies in the world
were started about 10 years ago,
the last time we had a really tough economic environment.
So in this video, I'm gonna be walking you through
exactly why they were able to thrive
in such a tough economic period.
And the three lessons that you can actually employ
as you're building your SaaS business and growing it,
in a tough environment like today.
Intro. (funky music)
(beeping) What's everybody,
welcome to Unstoppable, I'm TK, author of the book,
"How To Punch The Sunday Jitters In The Face,"
entrepreneur, startup founder, and I also run
the SaaS Startup School, where I help you go
from zero to three million ARR real fast.
On this channel, I bring a new episode every Sunday,
and every Wednesday now, to help startup founders like you
build and execute on an unstoppable strategy
for your SaaS business.
So be sure to hit the subscribe button and the bell icon,
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so you get notified every single time I drop an episode,
with the TK energy.
So the last time we had a really tough economic environment,
this was 2008, 2009, companies like Uber, Slack,
Twilio, WhatsApp, and even Stripe was started.
During that crazy, crazy time,
when the entire world was melting down,
these incredible companies, that are either pre-IPO
or have already IPOed, or have been acquired,
were actually being started.
So what was it about those companies
that made they wildly successful,
in a period of time when everyone was hurting?
On this episode I'm gonna be digging into exactly why
they were able to thrive, and the three lessons
that you can implement,
so that as you start a SaaS business today,
or if you're already operating a SaaS business,
how you can apply these three principles,
these three lessons, so that you can thrive
in this environment as well.
If you're excited to dig in, smash that like button,
and let's jump right in.
So let's talk about the why first.
Why was it that these companies,
and it's such a tough environment, were able to thrive?
Well the first reason was in order to survive,
at that period of time,
they had to focus on hard and essential problems.
If you look at any of these companies,
they weren't creating frothy time problems and solutions,
they were looking at, okay, companies were hard hurting,
consumers were hurting.
What are the most essential problems
that we needed to solve?
And they just focused on those.
And in fact, it was almost a survival of the fittest.
There was no way they would've survived
if they hadn't found a way to focus
on the most essential problems
they could actually solve for.
So almost automatically, their survival rate was more likely
because they were forced to actually focus
on essential problems.
The second was because so many other companies
were cutting down, there was a lot more talent available.
Meaning, in a frothy environment,
everyone's raising money, everyone's starting companies,
the distribution of talent is spread out
across different companies.
But on a tough time, like this,
with layoffs, with furloughs,
and when people just started to reevaluate
how they wanted to be spending their lives,
and what they wanna be working on,
talent started to get more focused, and more concentrated.
There's just more talent available.
And because of that, these companies
were able to bring on early talent,
that were able to help them thrive through tough times,
just like right now.
And the third reason
was that there's just less shiny distractions.
One of the Tweets I saw recently was Paul Graham
talking about the early 2000s, the mid-2000s,
when San Francisco, and Silicon Valley
were just a bunch of nerds just building things.
Over the last few years, it's gotten a lot shinier.
San Francisco is just a lot fancier,
and it's a lot more expensive to even live in.
And once of the things that's powerful
about downturns like this, economic environments like this,
is that it flushes out all that fancy stuff,
and just forces you to just focus on what's important.
It lets you actually put your head down, not have FOMO,
and just focus on what matters,
which is to create value, and to solve really hard problems.
If you look around now, you'll start to notice
that we're in a similar economic environment.
And we don't really know what's going to happen
post the actual pandemic being resolved,
or being addressed.
We don't really know what the timeline for that is.
However, a lot of these things are happening right now.
There is more talent available than ever before.
There's less shiny objects than ever, ever before,
and more than anything, companies are being forced
to focus on the most essential problems in order to survive.
So, the question becomes, well what are the three things
you need to actually apply to your SaaS business,
if you're starting one right now,
or if you're in the process
of building and growing your SaaS business,
what are the three things you actually need to apply.
So before we dig into it, if you're with me,
and you're actually thinking about starting a SaaS business,
can I just get a yes in the comments below,
that way I know who you are,
and we can connect through our other channels.
Also, I have a special 10 point SaaS business checklist,
and you can follow, I'll link to it below,
and also tell you more about it at the end of this video,
so you can learn more about it.
So let's talk about the three things
you actually need to apply, okay.
So the first thing,
if you're actually building a SaaS business,
starting a SaaS business,
you're actually one of these companies
where 10 years from now, hopefully you're IPOing or exiting,
and you create that truly long lasting company,
and you wanna take advantage of this environment,
the first thing you actually wanna be thinking about
is to focus on a critical workflow.
You need to be focused on a very, very critical workflow.
In order for your SaaS business to matter, to survive,
and to actually close deals right now,
which is what you're gonna need to be able to do
and prove, to move forward.
Critical workflows are usually close to revenue.
These are the workflows that usually ensure
that the sales team is closing deals,
the marketing team is generating leads,
and the HR team and the finance teams
are getting everyone paid on time.
So you wanna be staying as close as possible
to a critical workflow like that,
and that way you'll be focusing on,
remember, the hard and essential problems.
That's a core thing.
The second thing is companies today,
when they think about software,
when they think about evaluating software,
and buying software, they're gonna be limited
to only two drivers.
They're either gonna be looking to cost savings,
or actually to accelerate growth.
The cost savings is the most easiest one.
If you're gonna go out there,
and position your SaaS software,
you need to show how they're gonna save money
by actually buying your software.
Because every single business is going to be figuring out
how to actually reduce their costs.
Usually, their biggest cost line are people.
So if your software can actually do the work
of more people, then that's an easier way
to actually reduce cost.
Other ways to reduce cost is actually to reduce risk,
and reduce the amount of time required
to do certain activities.
You've gotta focus
on that specific, specific value proposition.
By the way, my next video, I'm gonna be talking about
specific SaaS value propositions.
And so be sure to hit the subscribe button,
and that bell icon (bell dinging)
if you're not subscribed already,
that way you'll get notified when I drop that episode.
The other driver that companies are gonna use is growth.
There are gonna be a set of companies
that are gonna be under control.
They have their cash straightened out,
they have their growth plans already casted,
and then they're gonna be saying okay,
what do we need to do to actually move ahead?
What strategic initiatives can we do
that will actually help us grow faster,
and come up stronger, after this downturn is over.
And this downturn will be over at some point.
So there will be some companies
that are gonna be like trying to look ahead of the curve,
and investing, to actually grow bigger
than their competitors.
So the other thing you can do, in addition to cost savings,
is focusing on growth.
How can you help them make more money?
How can you help them leverage
the current circumstances now, so they can get ahead.
And your value proposition has to be tied
to one of these two things, cost savings or growth,
and it has to be close to a critical, critical workflow.
And the last thing is companies,
their bullshit meters, and buyers bullshit meters
are higher than ever.
They are on the hook to watch every single dollar,
as closely as possible.
Which is why so many of these companies,
10 years ago, when they started, thrived,
because they were forced to build a muscle
to actually show ROI.
And that's my third thing, you actually have to have
a clear view on how to show and measure ROI
for your software.
You need to be able to demonstrate
how you're gonna measure it,
you need to be able to demonstrate
how you're gonna show the results quickly,
and you need to be able to show
how you did it for other customers.
And there's a very specific process around this,
you need to actually do it right,
and I'll probably do a separate video on this,
if you want me to do that, hit me in the comments below,
and say I want you to do a video on ROI,
and I'll be sure to bubble that up on the list.
So to summarize these, number one,
you need to make sure it's part of a critical workflow.
Number two, you need to make sure
that there's either cost savings, or growth,
and number three, you need to show
that there's a clear way to show or measure ROI.
Now I'll give you one more bonus.
This is a time of opportunity for every SaaS business.
Now if you're in a space,
and you're impacting a critical workflow,
that already has software,
and you have an older software vendor,
and there's a vendor that's a little bit older,
and they're not as innovative, they're not as nimble,
and there's some sort of shift
where you can actually do it better, faster, cheaper,
this is an opportunity for you.
If there's a piece of software,
and these companies literally cannot do their jobs,
but you can go in and do it cheaper, with cost savings,
and you can do it in a better way,
you have an opportunity right now
to displace the model. (serene music)
You have an opportunity to actually take over,
and disrupt an existing space.
SaaS businesses get disrupted faster than ever,
because it's easier than ever
to actually reinvent SaaS software,
and come up with a better way to do it, at a lower cost.
And so this is also an opportunity
for you to go in with existing categories,
and completely displace them,
if you can find a way to completely shift that model.
So now you know how to position your software business
to thrive during a recession, or a downturn,
or a tough economic environment,
however you wanna characterize this right now.
Now if you're really looking to start a SaaS business,
and you really wanna get the value proposition right,
and you get all the key pieces right,
and really apply some of these things I talked about,
I created a 10 point SaaS business checklist,
it's a checklist that you can follow
to actually flush out the beginnings of your SaaS business.
You can follow the link below to go download that,
it's completely free, and I'll walk you through it,
step by step, when you download it.
And lastly, if you're thinking about
starting a SaaS business,
you should also check out my SaaS School.
Over there we teach you end to end,
how to go from zero to three million ARR, real fast.
And we'll be sure to link to that in in the guide,
once you download it.
If you enjoyed this video, and got value from it,
please smash that like button.
If you have friends that are thinking about
starting SaaS businesses,
or SaaS founders, that are looking to grow,
in this tough economic environment,
please share the video with them as well.
And 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, and I will see you in the next episode.
(beeping)