Lessons From SaaS Founders

I'm 43. After 12 years bootstrapping, growing Groove to $5M ARR, and leading a team of passionate builders, I've made just about every entrepreneurial mistake in the book. Here are 10 pieces of brutally honest founder advice (I wish someone had told me day one): 1. Create one true believer. To get traction, you don't need 1000 customers or investors. You need one customer who believes in you. Find them, deliver exceptional value, and they'll become your biggest evangelist. 2. Data beats intuition. Intuition means scaling only with gut feelings. Data means gathering real customer feedback and using it to become customer-obsessed. Let the data do the heavy lifting. 3. Take calculated risks. Bootstrapping a SaaS company was terrifying. But I didn't jump blindly. I tested, learned, and built a path. Run experiments first. Focus on small wins to reduce uncertainty. Big dreams are scary, but calculated risks are where growth happens. 4. Systematic execution is the requirement. When I launched Groove, I planned, tested, and refined that business. I was methodical, sometimes to a fault. If you're not systematic, someone else who is will out execute you. Success isn't genius... it's process. 5. Handle feedback thoughtfully. In tough situations, write the response or email, then wait 24 hours before sending. You'll almost always revise it with a clearer head—and build better relationships in the process. 6. Being a student is the fastest way to grow. I worked with every customer I could, I learned everything they could teach me about their needs. Find successful companies in your space, and study what works for them. Shortcuts don't exist—but learning accelerates the journey. 7. Never waste a good crisis. In the late 2010's our growth dropped from 100% to 30% monthly growth. It felt devastating, but I used it as an opportunity to rethink the approach. We created efficiency throughout the company and became incredibly focused. Six months later we rebounded with our strongest quarter ever. 8. The most important decision you'll make is choosing what to focus on. The best investment wasn't in features, it was in understanding customers. Your priorities will shape your business more than anything else. Choose wisely. 9. The top performers live in the details. The difference between good and great is in the small things. At Groove, our retention grew because we paid attention to the details others overlooked (like response times, onboarding flow, customer feedback loops). 10. No milestone makes you successful. There's no void to fill. When I hit my first million in ARR, I thought the achievement would fix everything (my doubts, my stress, my uncertainty). Reality check: it didn't. No number can make you feel fulfilled. True satisfaction comes when you realize you're building something valuable all along. What principle had the biggest impact on your business journey? 🤔

In my 3 years as a founder, I’ve found that most traditional startup advice is trash. Not because it's untrue or because it doesn’t work, but because it's all made for a certain type of company → one going for the VC-level outcome. Don't believe me? Check these out: 1. “You must be building in a billion-dollar market” False. There are two problems with this: 1. You can’t predict what the market will look like in 5-10 years (shoutout to Rob Snyder for pointing this out), and 2. There’s nothing that says you can’t start in a smaller market and expand if/when the opportunity presents itself. Don’t discredit or shut down your idea because you think the market is too small. 2. “You need a technical co-founder” False. We reached $100k ARR with a product built on no-code before expanding our team to full-stack. Having a technical co-founder helps address investor concerns about your ability to build your product. It’s never been easier to build software than it is right now. If you don’t have a technical co-founder, don’t think you need to pause your company until you find one. Caveat: this is specifically for a technical co-founder whose sole job is to code. It IS helpful to have someone tech/product-minded who can think about the technical architecture of your product, even if that person doesn’t start coding until you have a more solidified picture. It's not a requirement, but it's worth considering. 3. “Focus on repeatable revenue and avoid services” Investors want companies that can grow to $100M in revenue and do it with great margins, so saas has become the primary focus area for so many VCs. Founders hear this and avoid consulting or services work because they don’t think it’s repeatable, but that’s not true. First, with AI, services can be more repeatable than you’d think, and second, selling companies a service can help you figure out what needs to go into what eventually becomes your company’s product. Working with customers means having regular conversations with them and getting a deep understanding of their problems, something that you might not get if you focus solely on building a product. Again, it’s not that this is all bad advice; it’s just that you rarely see the advice preceded by something like, “If you’re aiming to build a huge, VC-backed company, then…” That’s the problem. Build the company and product you want, not what the VC-focused world tells you to build.

Venture is a game of long feedback loops. You place a bet. You squint through the fog. And if you’re lucky, years later, the loop closes and the lesson comes into focus. Melio was one of those bets for me. In the chaos of summer 2020, while at Coatue, we led our first round into what was then a scrappy upstart in the sleepy world of B2B payments. Then we backed them again. Today, Melio is being acquired by Xero for $2.5B. Cue the eyerolls because it’s time for a good old “3 things this taught me about B2B SaaS” post. Hopefully with fewer clichés and a bit more candor. 1. FOMO is a great GTM strategy. When your product drives real business results- faster payments, lower costs, better cash flow - adoption doesn’t just spread, it snowballs. Melio's vertical-focused GTM turned payments into a competitive advantage: if your peer was saving time and shaving cost, you had to respond. That sense of urgency did the selling. As adoption grew, CAC actually dropped in some verticals as the remaining dominos fell faster- a rare and powerful dynamic. That’s when we leaned in. TLDR: You can't growth-hack your way out of a weak value prop. But if the product delivers, the right GTM can become a force multiplier. 2. Radical transparency beats radical optimism. Melio had many moving parts - product lines, segments, regions - but they always had one source of truth. Investors had access. Founders led with bad news. There were no “friendly” numbers, no narrative gymnastics. That mindset - transparency over theater - built trust. When things didn’t go to plan, the reaction wasn’t defensiveness, it was curiosity: What’s the root cause? What are we missing? The team treated metrics like clues, not verdicts. 3. Mercenary vs. Missionary is a false binary. Melio’s leadership proved you can move fast and still make people want to follow you. They were sharp, disciplined, and execution-focused - but never at the expense of humility or humor. They ran a tight ship without losing their humanity. You wanted to work with them. You wanted to see them win. Congratulations to Matan Bar and the entire team for building a product that mattered, a culture that endured, and a journey that taught many of us along the way.

On this Whiteboard Wednesday, I had the good fortune of spending time with the founder of a large e-com SaaS company who completely transformed my thinking about building successful software businesses. The critical insight? We're witnessing the end of the standalone tool era in SaaS. While you could previously build a substantial SaaS company with just a great tool, today's successful companies must evolve into platforms with data advantages. AI is democratizing app development at unprecedented rates. This doesn't mean companies will suddenly build their own internal tools (maintenance burden remains prohibitively high), but it does mean exponentially more competition from specialized third-party developers. More competition → price pressure → cap on growth potential for pure tools. The formula I now see with perfect clarity: → Build a platform with unique data advantages → Those advantages must accrue from your applications → Market specific apps, not the underlying platform This framework was transformative for us at FERMÀT. I was confusing everyone—customers and investors alike—by trying to merge platform and applications into a single conceptual entity. Now we position ourselves differently: we have multiple applications (landing page building, behavior insights, offer testing, virtual PDPs, custom carts) all powered by our core shopper behavior data platform. Your platform isn't what customers will talk about. They will talk about the individual applications that solve their problems. What frameworks have completely reshaped your strategic thinking recently? Sometimes the most valuable insights come from separating what you've been desperately trying to force together.

The $2M Revenue Plateau Nobody Talks About Every founder talks about the grind to get to $1M. But what happens at $2M? Silence. At $2M, you often build a job, not a business. You become the engine, the glue, and the bottleneck. The company works because you are in every meeting, every deal, every fire. only 0.4% make it to $10 million but the rest? THE PATTERN: The hardest phase of SaaS is the phase from Initial Traction ($1-$2m in ARR) to Initial Scale ( $2 - 5m+) So what's the problem? It's not a product problem. It's not a market problem. It's a founder problem. You ( Founder) become the ceiling. It's called founder bottleneck syndrome 😅 𝗚𝗿𝗼𝘄𝘁𝗵 𝗰𝗼𝗺𝗲𝘀 𝗳𝗿𝗼𝗺 𝘀𝘆𝘀𝘁𝗲𝗺𝘀, 𝗻𝗼𝘁 𝗵𝘂𝘀𝘁𝗹𝗲 [𝗣𝗲𝗿𝗶𝗼𝗱] 𝗪𝗵𝘆 𝗠𝗼𝘀𝘁 𝗙𝗼𝘂𝗻𝗱𝗲𝗿𝘀 𝗚𝗲𝘁 𝗦𝘁𝘂𝗰𝗸 𝗛𝗲𝗿𝗲 1. 𝗧𝗵𝗲 "𝗛𝗲𝗿𝗼 𝗖𝗼𝗺𝗽𝗹𝗲𝘅" "Only I understand our customers" "Only I can close the big deals" "Only I know the product vision" 2. 𝗧𝗵𝗲 "𝗡𝗼𝘁 𝗥𝗲𝗮𝗱𝘆" 𝗧𝗿𝗮𝗽 "I'll hire when we hit $3M" "I'll delegate when I find the perfect person" "I'll build systems when I have more time" 3. 𝗧𝗵𝗲 "𝗖𝗼𝗻𝘁𝗿𝗼𝗹" 𝗧𝗿𝗮𝗽 At $500K: "I need to control everything to survive" At $2M: "I need to control everything to maintain quality" Reality: Your control becomes the ceiling 𝗪𝗛𝗔𝗧 𝗧𝗢 𝗗𝗢 𝗥𝗜𝗚𝗛𝗧 𝗡𝗢𝗪: 1. Audit your calendar - If you're in more than 3 recurring meetings per week, you're the bottleneck 2. List your "only I can do this" tasks - 90% of them can be delegated or eliminated 3. Fire yourself from one role this month - Pick the one that's most operational 4. Hire your replacement before you're ready - You'll never feel ready, that's the point 5. Create decision frameworks - So your team doesn't need you for every choice The companies that break through $2M don't have better products. They have founders who learned to get out of their own way. Again! Only 0.4% make it to $10 million. Not because of the market. Because of the mirror. #founders #saas

In 2015 I joined a startup doing $500k in ARR. 7 years later that same startup was doing $250M+ in ARR. Here are the 7 valuable lessons I learned that are worth your time: 𝟭// 𝗬𝗼𝘂𝗿 𝘀𝗼𝗳𝘁𝘄𝗮𝗿𝗲 𝗶𝘀 𝗯𝗮𝘀𝗶𝗰𝗮𝗹𝗹𝘆 𝗮 𝘀𝗽𝗿𝗲𝗮𝗱𝘀𝗵𝗲𝗲𝘁 𝘄𝗶𝘁𝗵 𝗮𝗻 𝗼𝗽𝗶𝗻𝗶𝗼𝗻. So have a conviction about the problem that your product solves. The internet (and potential customers) reward conviction. So put your stake in the ground: • The problem • How your product solves the problem • Why your business is the best at solving the problem And get crazy about honing in on this every day. 𝟮 // 𝗬𝗼𝘂𝗿 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗻𝗲𝗲𝗱𝘀 𝘁𝗼 𝗵𝗮𝘃𝗲 𝗮 𝗰𝗹𝗲𝗮𝗿 𝗥𝗢𝗜. This will help you get through tough climates like today. When businesses cut spending the first products they cut are "nice-to-haves". Don't wait until your customer is wanting to churn to prove ROI. Do it early. Do it often. Don't be the "nice-to-have". 𝟯// 𝗧𝗿𝗲𝗮𝘁 𝗲𝘃𝗲𝗿𝘆𝘁𝗵𝗶𝗻𝗴 𝗹𝗶𝗸𝗲 𝗮𝗻 𝗲𝘅𝗽𝗲𝗿𝗶𝗺𝗲𝗻𝘁. Be okay with that. Treat every day like an experiment. Try things out. See what works and what doesn't. Make course corrections along the way. 𝟰 // 𝗦𝘁𝗮𝗿𝘁𝘂𝗽𝘀 𝗮𝗿𝗲 𝗻𝗼𝘁 𝗮𝗯𝗼𝘂𝘁 𝗮 𝗴𝗿𝗲𝗮𝘁 𝗶𝗱𝗲𝗮, 𝘁𝗵𝗲𝘆 𝗮𝗿𝗲 𝗮𝗯𝗼𝘂𝘁 𝗴𝗿𝗲𝗮𝘁 𝗿𝗲𝗰𝗿𝘂𝗶𝘁𝗶𝗻𝗴. You need to build a great team. The best startups are not about a great idea, they are about great recruiting. Find and hire the best people you can. They will be your secret weapon. 𝟱// 𝗡𝗼 𝗼𝗻𝗲 𝗰𝗮𝗿𝗲𝘀 𝘄𝗵𝗲𝗿𝗲 𝘆𝗼𝘂 𝘄𝗲𝗻𝘁 𝘁𝗼 𝗰𝗼𝗹𝗹𝗲𝗴𝗲. They only care if you can get sh*t done. I sat through 100s of interviews. Not once did I care about if someone went to Harvard or not. 𝟲// 𝗬𝗼𝘂𝗿 #𝟭 𝗺𝗲𝘁𝗿𝗶𝗰 𝗶𝘀 𝗿𝗲𝘃𝗲𝗻𝘂𝗲. Don't get it twisted y'all. So many SaaS buzzword metrics out there. There's 1 thing that should always go up and to the right... REVENUE. Companies don't run on email opens and clicks. 𝟳// 𝗔𝘃𝗼𝗶𝗱 "𝗕𝘂𝗧 𝗪𝗲'𝗩𝗲 𝗔𝗹𝗪𝗮𝗬𝘀 𝗗𝗼𝗡𝗲 𝗜𝘁 𝗧𝗵𝗜𝘀 𝗪𝗮𝗬" This is the company killer. You need to have the conviction to do things differently. The only way a small company can win is by being scrappy and nimble. By doing things differently. Don't get caught in the trap of doing things "just because". Do them because they make sense and will help you grow. So there you have it. If you're working on a startup, keep these 7 lessons in mind: 1. Your business is a piece of software with an opinion. 2. Your business needs to have a clear ROI. 3. Treat everything like an experiment. 4. Startups are not about a great idea, they are about great recruiting. 5. No one cares where you went to college. 6. Your #1 metric is revenue. 7. Avoid "BuT We'Ve AlWaYs DoNe It ThIs WaY" What am I missing?

The Cheesecake Factory isn’t known for great food. They’re known for a menu that never ends. Pasta? Got it.  Tacos? Sure.  Thai food? Why not. But let’s be honest: when’s the last time you had a great meal there? That’s the problem.  When you try to be everything to everyone, you end up being average at best. And that’s exactly the mistake Matt Lhoumeau, CEO of Concord, made when scaling his company. Contract management? Every business needs it. Which meant every company was a potential customer. So they said yes to everyone. SMBs. Mid-market. Enterprise. “It’s a dollar? I’ll take it,” Matt told me. At first, it felt like growth. More customers.  More revenue.  More traction. But soon, the cracks started to show. Customer needs? All over the place. Go-to-market org design? A mess. Their ability to serve anyone exceptionally well? Gone. That’s when Matt had the realization: They WERE The Cheesecake Factory. So they made the hardest decision of all: downsize the menu. No more trying to serve everyone.  No more stretching themselves thin.  They focused. Zeroing in on the right customer segment and serving them better than anyone else. And that decision?  It saved the company. Here’s the SaaS lesson: More isn’t always better. When you try to be everything to everyone, you become forgettable. So, leaders, time to check your menu. Are you running a Cheesecake Factory?

You'll never "feel" ready to scale your company. That's where most founders get stuck. They wait for readiness to happen: - The product to be "perfect" - The team to be "fully staffed" - The systems to feel "strong enough" But here's the hard reality I've learned working with 50+ scaling companies: scaling isn't something you ease into. It's something you decide to do. Founders who wait to "feel ready" never do. They wait. They stall. And they get outpaced by companies who made the call to scale before they felt comfortable. I see this pattern every week: 🚨 Stuck founders... - Binge "growth hacks" - Throw $50K/month at ads - Panic-hire 3-4 salespeople And yes, it works... For about a quarter. Then reality hits: → Tech debt balloons 300% → Customer satisfaction drops 40% → Server crashes during peak traffic → Manual processes collapse under load → Growth transforms into expensive churn The real move isn't waiting until you feel ready... or trying to duct tape growth with marketing spend. The only way to scale without breaking your company is getting your tech infrastructure ahead of your ambition. Here's what actually works: 1. Decide to scale 2. Build to handle it 3. Then hit the gas As a fractional CIO, I just helped a SaaS client go from 500 to 2,000 users in six months. The difference between their success and others I've seen struggle? They built the foundation first. Before the growth surge, we: → Automated their customer onboarding (reduced manual work by 80%) → Implemented proper database architecture (eliminated those 3am "server down" calls) → Set up monitoring and alerts (caught issues before customers did) That means professionalizing your: → Systems (before they break under load) → Processes (before bottlenecks cripple momentum) → Tech stack (before technical debt suffocates growth) I've seen companies go from $1M to $10M in 18 months using this approach. And I've watched others stall at $2M for years waiting to "feel ready." It's not about feelings. It's about decisions and strategic preparation. Standing at that line between founder-led startup and scalable business? Don't wait for a feeling. Decide. What's your biggest tech bottleneck right now? Let me know below 👇

Gong just announced last week they blew past $300M in ARR. WOW. In 2016, I started at Gong as the 2nd US employee at $200k ARR. 20 SaaS sales tips I learned during my time in that storybook growth journey: 1. Money follows pain. Stop selling benefits. Start selling pain relief. You'll close more. 2. WHO matters more than WHAT. If you're talking to the right person: But you have bad sales technique? You can still win. If you're talking to the wrong person: And have great sales technique? You lose. 3. Don't multi-thread. Single-thread with multiple people. Break people out into 1:1 meetings. Stole this from Krysten Conner. 4. Don't multi-thread too much. Looping in the wrong people can kill your deal. Get the blend of people just right. No, IT doesn't always need to be involved. 5. Great cold emails don't talk about your product. They talk about pain. They look like a page from your buyer's diary. 6. Follow up. Fast. Some sellers take days to follow up. They don't want to seem desperate. Stop it. This isn't dating. Speed sells. 7. The secret to enterprise deals: Pick the deals you can win; then win the deals you pick. 8. Build your business acumen. It makes your sales techniques 2x as effective. Without acumen, you're hollow. 9. Don't seek approval. Seek to solve problems. Big difference. Don't grovel. 10. Buyers don't buy because of ROI. ROI doesn't drive purchases. Emotion does. They simply need ROI to justify the purchase. 11. There are two winners in each deal: The seller who won. The seller who ejected from the deal early and didn't waste time. 12. "Continuity of power" is the ultimate metric. Getting access to power is one thing. Getting a 2nd or 3rd meeting with power is entirely different. Only sellers with sharp acumen get the latter. 13. Great sales calls start with planning. Don't wing it. 14. Voice tone matters. Stop inflecting up. Inflect down. It sets an equal tone. 15. Become a master wordsmith. Words trigger mental pictures. Mental pictures trigger emotions. Emotions trigger actions. Actions close deals. 16. Don't negotiate price too early. It should be the last thing you do before the deal closes. Anything else is too early. 17. Talk about money like it's nothing. Quote a $600,000 proposal with a straight face. That's a super power. The best salespeople have a casual attitude about money. The worst salespeople freak out when they talk numbers. 18. Selling is a set of skills. Not a personality trait. 19. Use the same words your buyer uses. Stop paraphrasing. Stop putting your own twist on things. Use their words. 20. Always know the next step. Bad news: If you don't know what next step you'll suggest? You're wasting that sales call. Selling is an act of leadership. So lead. P.S. Master every aspect of SaaS sales with a FREE trial of pclub.io here: https://lnkd.in/gzF2YwKt

So "SaaStr Inc" will cross $100,000,000 in cumulative revenue a little later this year. It wasn't originally intended to make any money, and didn't have any revenue for years, but it's been 10 years, and we'll soon cross that milestone. A few learnings: #1. Non-recurring revenue doesn't really scale.  It can look like it repeats, and it sort of repeats, but it's not remotely the same as 100% NRR.  #2. The people side of sales never gets easier. The rest does. #3. CMOs have a really tough job. If you say No to too much, you lose your job. Not enough pipeline. If you say Yes to the wrong things, you lose your job. Wrong pipeline. You can't stay in place too long. #4. The world outside of tech is full of corruption. The vendors we've worked with that take back-channel payments, that charge for work never done, etc. might shock you. #5. What worked 4 years ago only sort of works today. What worked 8 years ago does not work at all today. We all know this, I’m just relearning it 🙂 #6. 10x Folks Matter Now Even More Than Ever. You can’t let them go. And you have to seek them out like a heat-seeking missile.  #7. Bootstrapping isn’t Better or Worse. But it is more flexible. The pressure is real but it isn’t the same without as many external forcing functions.  #8. Most folks just want to work at a classic SaaS company selling the same way as the rest. If you do something a bit different from that, you will have to expand the talent pool you bring in. #9. Paying poorly backfires, but paying top of market isn’t a magic happiness vehicle. I’ve had a chance to run experiments on big profit sharing, big bonuses, and lots more. They are fun, but ultimately, don’t move to needle either way on happiness or retention. Not in the end. #10. Do Free Stuff for Free, but Don’t Do Paid Stuff for Free. A lesson re-learned. 100% of SaaStr content is free, and 99% of SaaStr stuff overall is free. But we do charge for sponsorships, and charge tickets to offset some (not all) of the costs to put on our IRL events.  We’ve tried doing a lot of free stuff for our sponsors and partners over the years. In the end, they don’t care or remember. They have their one goal. I guess we all do.