3 tips for SaaS founders hoping to join the $1 million ARR club
Building a SaaS company from the ground up is never easy. In fact, it’s generally a grueling, all-consuming process that strains every fiber in your being.
But it is much, much more difficult if you approach it without a tried and true process. After starting and scaling five successful companies, I can tell you that there absolutely is a repeatable process to building a successful SaaS business, one that can reliably guide you to product-market fit and then help you quickly scale.
That doesn’t mean it’s easy, but it does mean that you won’t waste years of your life pursuing a solution that nobody wants.
Begin with finding the right problem
In the earliest stages, the process begins by finding the right problem to solve. At this point, you likely already have a few hypotheses about that problem. But no matter your conviction, you must test those hypotheses against a consistent set of criteria. For example, these are the questions that my co-founder and I used to evaluate the earliest concept of our current company, Drift:
- Is the problem big enough?
- Is the market big enough?
- Does the problem have a recurring use case?
- Can we build the solution for the problem?
If this sounds like a simple, straightforward exercise, it’s because it is. But not enough entrepreneurs ask themselves these questions at the beginning of their journey. We successfully avoided wasting months or even years of precious time building products that didn’t fit these criteria. This simple step will save you an incredible amount of pain and aggravation.
The only way to find product-market fit
Once you settle on a problem to solve, it’s time to build a barebones product that solves it and to then test that product against the market.
My co-founder Elias and I approached it this way: First, we personally spent hours each day in communities like LinkedIn, Twitter and Product Hunt, giving folks early access to our product and asking them for as much feedback as they could offer.
We were happy if they responded in the comments or to our direct messages, but we always went deeper by asking them to speak over the phone or on a video chat. We also hit the pavement by going to in-person Meetups and events around our hometown of Boston. We even took flights out to small events around the country so that we could interact with potential customers in-person.
If this sounds inordinate, it isn’t. This is the kind of attention that you need to devote to gathering intelligence from potential customers, so that you can relentlessly laser in on a product that they will actually use, value and pay for.