Scaling a B2B SaaS Business and the Different Stages of Growth

I’ve just re-read Ben Horowitz’s excellent book, Hard Thing About Hard Things.

One of the things that Ben was talking about is diving the stages that a start up goes through.

For example, for a well established company, having more than 3 initiatives per quarter will probably be too much.

On the other hand, if you’re a small start up, nothing will happen unless you make it happen. You need to have at least 8+ initiatives per day just to stay still. Without massive input from you, the company will not move.

Jeff Bezos talks about essentially the same thing here where he says an executive is paid to make a small number of high quality decisions, not thousands of decisions daily. On the other hand, it’s very different when you’re a start up company.


Principle 1: Be Aware of What Stage You’re At And Act Accordingly

I think that this is a very useful idea to keep in mind when you’re working with start ups generally — keeping in mind what stage of growth you’re in.

It’s very easy to make the mistake of applying general lessons from large companies for your start up. For example, hiring an executive with a ton of experience in a $100m+ company and expecting them to successfully guide your start up from zero to hero.

The things to get your SaaS start up moving from $0 to $1 million ARR and $10 million to $20 is very different.

Initially, you’ll be doing a lot of things that are very unscalable. You’ll be closer to what Horowitz calls being a Wartime CEO than a Peacetime CEO. Making a ton of decisions, trying a ton of things, figuring out product-market fit, knocking on doors, messaging people on LinkedIn, pre-selling your product, trying to stay alive.

Principle 2: Focus On One Channel

Once you’ve got the product market fit, then it’s about figuring out what acquisition model works best for you. Ideally by this stage, you would have experimented with enough channels to know roughly which one works better for you and which one doesn’t.

My specialization has generally been in paid ads (Facebook/Google Ads/LinkedIn Ads) for B2B SaaS businesses but it can be blogging/content, sales reps, partnership/affiliate/referrals, building integrations, webinars, and so on. What you really don’t want to be doing is continuing to do a million different acquisition related activities but really being focused on just one at a time. I see time and time again, “Oh this SaaS is doing X, so let’s do that!” Then a week later, “I read that using LinkedIn outreach is successful for a ton of start ups!”

Ignore all the noise and just focus on the channel that works for you before expanding.

If you haven’t figured out what channels work best for you yet, then you can make a list of the things that you think will work best and then systematically go through them and see what the ROI for those look like.

Make sure that you’re measuring and tracking your activities.

Only once you’ve doubled down and mastered your chosen channel should you expand your marketing activities to include other modes of acquisition. By this stage, you should already have gained significant traction. You’ll need to hire on overdrive now as you need even more talent to help you scale. This is where the pace will really change.

A Changing Beast

This brings up a challenge which is that someone that was right for your business may no longer be right for where the business is today. Since your business will be continually changing as it grows, it means continually assessing the positions that people are occupying and assessing whether it still makes sense.

Further Reading

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