Recently I was fortunate enough to moderate the founders panel at BoxDev ’15. We had 5 great founder-CEOs on the panel, all post-Initial Traction (all 50+ employees), but with very diverse backgrounds and stories.
Everyone got to $1m in ARR a different way. Some were first timers, several were second timers. I don’t think second timers do much better than first timers statistically. Because being a second-timer doesn’t make inventing something novel, new and amazing from scratch any easier. But second-timers do execute better and more quickly in the post-Initial Traction phase. ‘Cause they know exactly what not to do and what, in many cases, to do to go from $1m to $10m ARR more quickly.
So I asked them how they got their first 10, 20, 50 customers. Because here’s where you see the most divergence, because we all hack this phase based on our own backgrounds. If you know how to get on a plane and open doors — you do that. If you are great at PR and getting your product known early — you do that. What doesn’t tend to work is building an amazing product and just sitting in front of your monitor.
Here’s how each of them did it. 5 different stories to $1m ARR from 5 different SaaS companies that are on the path to success and post-Initial Traction:
Rick Morrison, CEO of Comprehend System, Faked-it-Until-He-Made-It. Selling into Big Pharma — slow, traditional, very Enterprise — they tried to look as Big as Possible. Until their First Big Customers showed up at the garage in Palo Alto they were launched out of.
Ann Johnson, CEO of Interana, had an all-star and all-engineer founding team from Cal Tech. With zero sales experience. They found their investors and VCs were most helpful in getting the first customers. Who knew? This can work. Just make sure you arm them well. Give them a perfect 1 sentence and 1 paragraph intro that you know works and you are comfortable with. Warm intros need to be an A+ to work.
Nader Mikhail, CEO & Founder of Elementum, had strong domain expertise for his product (SaaS for supply chain automation) so he Hustled. He reached out to his former employer, customers, colleagues. Took every cold and warm intro and sold ahead of where the product was. Because he “knew” how to solve a big problem, provide a true enterprise solution — even if the product wasn’t all there yet. And he bridged that software gap with services.
Sarah Nahm, CEO & Co-Founder of Lever had just hired her first 10 sales reps. All in-bound. Lever generated buzz from Ycombinator and PR, and built on that … and then hired 10 reps to just attack those leads. Sort of what I did, with a bit of semi-successful Hustilng mixed in to get our first true enterprise / bigger deals
Shan Sinha, CEO & Co-Founder of Highfive was a second-timer. He did targeted outbound to get The First 100 Customers. In fact — way before they had a sellable product. Coming off a solid exit in his prior company, he was able to raise 24+ months of capital, and hired a head of marketing very early (an A+in my book) and a director of sales before he even had a sellable product. And he hit LinkedIn with a simple, one-line pitch: “Want videoconferencing that’s 10x better at 1/10th the price?” This doesn’t always work. But if your connect rates are reasonably high (e.g., Guidespark from The SaaStr Annual) … it can really work well.
So 5 SaaS companies. That are all basically going to scale the same way, now, post-Initial Traction the way all the others do at similar ACVs. But they got to those first 10, 20, 50 customers … and that first $1m … in a way that matched their strengths.
(Cross-posted @ SaaStr)