S5E3 – The Playbook of Growing 20+ B2B SaaS Companies: Tim Schumacher’s Guide to SaaS Success

What is the playbook of growing 20+ B2B SaaS companies?

In today’s world of technology, many entrepreneurs are interested in Software as a Service (SaaS) businesses. But running a successful SaaS company is not always easy. In this episode on the Grow Your B2B SaaS host Joran Hofman sits down with Tim Schumacher, co-founder of SaaS Group, who has built a proven playbook for growing 20+ B2B SaaS companies. His playbook gives useful advice on how to overcome challenges and build strong SaaS businesses. SaaS Group has acquired over 20 B2B SaaS companies, and this experience has taught Tim a lot about what it takes for these businesses to thrive.

The Bootstrapper Mindset: A Key to Growing 20+ B2B SaaS Companies

One of the most important things Tim talks about in the playbook of growing 20+ B2B SaaS companies is the “bootstrapper mindset.” This means being careful with money and keeping the customer at the center of your business. Many bootstrapped companies don’t rely on outside investment. Instead, they need to generate their own money quickly to stay alive. Tim says this mindset helps SaaS founders focus on offering real value to customers. If the product works well and meets customer needs, the business can grow. This approach leads to long-term success and helps SaaS companies avoid wasteful spending.

Avoiding Overspending

A common mistake Tim warns about in his playbook of growing 20+ B2B SaaS companies is overspending. Especially for companies with venture capital (VC) funding, spending too much can be a problem. In 2021, many companies got high valuations but had no real profits. Tim says it’s important for SaaS founders to watch their spending closely. Even small savings, like reducing processing fees, can make a big difference. By cutting costs and automating tasks, companies can run more smoothly and avoid financial trouble.

Efficient Processes

Tim also says that having efficient processes is key to growing SaaS businesses. Many companies start strong but lose their way as they grow. To stay efficient, Tim suggests automating tasks instead of hiring more people. This keeps the business lean and helps it adapt to changes. Before giving tasks to others, founders should understand how their processes work. Tim’s playbook for growing 20+ B2B SaaS companies emphasizes the importance of streamlining operations so the company can grow without slowing down.

Product-Led Growth

Tim suggests that the best way to grow a SaaS business is by focusing on the product first. When a product solves real problems for customers, it will naturally attract users. This is called product-led growth. Once the product is strong, Tim says marketing strategies like pay-per-click ads, SEO, and affiliate marketing can help spread the word and grow the business even more. In his playbook of growing 20+ B2B SaaS companies, Tim points out that every business is different. What works for one business might not work for another. So, founders must always be ready to analyze and adapt their approach as they grow.

When to Sell

At some point, SaaS founders may consider selling their business. Tim advises founders to think about their personal goals and business goals. Selling to a group like SaaS Group can give founders the freedom to start new projects. At the same time, it ensures the business will keep growing. The decision to sell shouldn’t just be about the money. Founders should think about their happiness and their desire for new challenges.

Conclusion: The Playbook of Growing 20+ B2B SaaS Companies Leads to Success

In the end, the SaaS world is full of possibilities, but it takes planning and smart choices to succeed. By following the playbook, SaaS founders can build businesses that grow in the long term. Tim Schumacher’s advice shows the way for anyone who wants to succeed in the SaaS industry. Whether you’re just starting or thinking about your next steps, the playbook of growing 20+ B2B SaaS companies is a valuable guide to follow.

Key Timestamps

• (00:00) – Introduction to SaaS Growth Strategies
• (00:54) – Meet Tim Schumacher: Co-Founder of SaaS Group
• (01:24) – What is a Bootstrapper Mindset?
• (03:16) – The Dangers of Overspending in SaaS
• (05:33) – Tim’s Tips: How to Avoid Financial Pitfalls
• (06:36) – How SaaS Group Optimizes Processes Post-Acquisition
• (08:43) – Growth Strategies: A Real Example from Typebutler
• (12:16) – Effective Go-to-Market Strategies for SaaS Success
• (18:54) – Overcoming Growth Plateaus in SaaS Companies
• (21:07) – Building the Right Team Beyond $10 Million ARR
• (27:39) – When and Why SaaS Founders Should Consider Selling
• (29:05) – Growing to $10K MRR: Tim’s Founder’s Advice
• (30:20) – Reaching $10 Million ARR: Building a Strong Team
• (32:50) – Episode Summary: Key Takeaways for SaaS Success

Transcription

[00:00:00.000] – Tim

I would advise every founder to just look at every expense, no matter how small, and see if you can negotiate it, you can cut it, you can automate it, and think because they all add up. You might say it doesn’t matter whether I pay 2.5 or 2% for your payment processor, but that’s huge. Half a % in your entire revenue, that’s huge. Spending money can be hard, or spending money wisely is equally hard as bootstrapping at most companies. I can’t do that. Every company is different. We have some, for the majority, which have product-led growth. And generally at SaaS Group, we’re a fan of product-led growth companies. You build a really good product, you build something people really love and where there’s organic word of mouth, then you add marketing to the mix. That marketing should be scalable.

[00:00:54.700] – Joran

Today, my guest is Tim Schumacher. Tim is the co founder at SaaS Group and general partner at World Fund. You can find it at worldfund. Vc. It’s a fund where he helps founders which are building in climate tech industry, so definitely check that out. Today, we’re mostly going to touch upon his role at SaaS Group as they buy SaaS companies with a bootstrapper mindset to grow them further. So far, they purchased over 20 B2B SaaS companies, which means he’s able to create a playbook to growing SaaS company further. Welcome to the show, Tim.

[00:01:24.260] – Tim

Hey, nice to have you. Cool.

[00:01:25.650] – Joran

You buy SaaS companies with a bootstrapper mindset. Let’s just start right there. What does it actually mean, a bootstrapper mindset, in your opinion?

[00:01:33.810] – Tim

Yeah, so with a bootstrapper mindset, SaaS companies, who bootstrap? They don’t get a lot of VC money, they don’t get outside funding, but revenue is their main source. That’s the way I would say the majority of SaaS companies start, because SaaS has one of the advantages that usually you can make money fairly quickly and grow organically, opposed to something in climate tech, for example, where you need to build super complicated processes of factories or develop a product for many years before you can actually make money. There, of course, you need venture capital. What I like about founders who have this bootstrapper mindset is that they’re very frugal, they’re very humble, They’re really just very customer-focused as well because someone needs to pay their bill. They’re not focused on telling the next great story to VC, which is also a good skill to have, though, but they’re focused on actually making money with their product. I’m saying bootstrap a mindset because you can have this mindset even if you get money. There’s always a great combination. If you keep that mindset to really be obsessively customer-focused, to ship very clearly, to be frugal in everything you do, have efficient processes over just hiring people And so you can have this process or you can regain this process.

[00:02:48.950] – Tim

We’ve bought a couple of companies that had VC funding. We put them back to bootstrap a mindset. Actually, sometimes founders can get back to this mindset even if they’ve lost it in between.

[00:02:59.180] – Joran

That’s what I mean to Yeah, I think it’s a good explanation because it doesn’t always mean you have to be bootstrap, but keeping that mindset or regaining it is going to be important. You have insight in a lot of kitchens, in a lot of SaaS companies. What is the most common mistake companies make while trying to grow their SaaS?

[00:03:16.120] – Tim

Yeah, with our SaaS group, as you said, we bought over 20 companies and we’ve analyzed thousands before we buy them, of course. We also look at many, we analyze them. We look at the good things and the bad things under the hood. We’re seeing a lot of interesting things. One common thing is overspend. That’s the flip side of the bootstrapper mindset is we’re seeing a lot of companies, especially now, about two or three years after the last VC bubble in 2021, money was cheap. I’ve seen some SaaS companies back then that only made a few million in revenue, single digit, and got 100, 200 million valuation. You know what? Most of them are toast. They’re either they went into overspending and they couldn’t reduce their spending fast enough, so they’re not in solvency or they’ve been sold very cheaply, or they have liquidation preferences stacked against them, even if they are not technically bankrupt, the founders will likely never see a cent, even if they would be sold. So definitely overspending is one of the most common thoughts I’ve seen.

[00:04:24.450] – Joran

Is that mostly typical with VC-funded companies? Because with the bootstrapper mindset, I guess that’s a thing you often don’t do.

[00:04:33.530] – Tim

Absolutely. It’s much more severe for VC-funded companies. You’re a healthy company, and suddenly you get 10 million. Spending money can be hard, or spending money wisely is equally hard as bootstrapping, and most companies can’t do that. But I also see that with bootstrap companies. I see some bootstrap companies that have good success. They make a few million in revenue, and they always spend this money. They’re in this mindset, I always I’m going to have my business just break even. With this mindset, they become somewhat inefficient, and they’re also overspending because they could run this at half the cost and actually make a hands-up profit and rethink some of their processes. It sometimes also happens with bootstrap companies.

[00:05:19.040] – Joran

But listen. We are going to dive deeper into our practices. But if we turn this around to overspending, what advice would you give founders here? If they might be overspending or they’re not sure, what What should they do? What should they look at? How should they change things?

[00:05:33.160] – Tim

I would advise every founder to just look at every expense, no matter how small, and see if you can negotiate it, you can cut it, you can automate it, and think because they all add up. You might say it doesn’t matter whether I pay 2.5 or 2% for your payment processor, but that’s huge. Half a % in your entire revenue, that’s huge. There are a lot of things where there’s waste in the system or founders immediately We hire someone, although it’s much better to automate the process first before you hire someone or do the process yourself to really understand it and how you can improve it before you got someone else on it. Even with that, there’s always potential to make things more efficient.

[00:06:16.220] – Joran

You purchase 20 plus SaaS companies, right? I can imagine they come in in all shapes and sizes. They haven’t been perfect, probably when they always came in. Are there any processes, strategies you on as soon as a company joins SaaS Group? What are you guys going to do? How does it work?

[00:06:36.130] – Tim

First of all, as you said, every story is unique. We look at thousands of SaaS companies every year. We buy a good handful of them every year. We bought 20 so far. First and foremost, for us, it’s really important to work with the founders on what the right strategy is. We wouldn’t do things against the will of the founders. For us, it’s really important that when we buy a company, it fits the wishes of the founder in terms of his or her lifestyle. We have some founders, for example, who say, Hey, I just want to have a partner to grow this to the next level. I’m going to be around for the next three years. Let’s do this together. We have other founders who are like, Oh, you know what? I’m totally burned out, or I really don’t want to run this company. I want to go back to building an MVP in a super early stage. Give me three months and I’ll transition this well to you, and then I’m out. Both of that is totally okay. We can work with both. We have a very founder-friendly approach. We’re all operators ourselves, so we know what they’re doing and we have functions for everything.

[00:07:35.810] – Tim

Then together with the founders, we go, Okay, what do you need? It really depends a lot if the founder wants to exit and we need to replace him or her, or if the founder wants to stay on, and we need to rather maybe change his role or complement his skills. Then it’s really all about preserving what is good about a company. Every company has some things where it’s great, and changing the things which are Every company has a few things where it’s bad. That could mean to just give some more specific examples. I’ll give you one example that we just bought a company called Typebutler. It’s a timekeeping software. Great company, super efficient founder. It was one guy with about 2 million in revenue, super efficient. I have utmost respect for people like him who really embraced the bootstrap mindset. He run and automated everything so he can run this one company completely alone. That’s great because here we can’t cut costs. It’s like the most efficient company I’ve ever seen. But of course, with one person, you can’t internationalize, you can’t do marketing. It’s a great product, but marketing, for example, would be one of the angles here.

[00:08:43.960] – Tim

We’re like, Okay, how do you market this product? And then it’s the usual marketing composition from pay-per-click or affiliate or social. And a tried and true playbook we’ve executed for many years, many times for many years, and the same goes for internationalization, taking a product, which in this case very German, to the broader European market. Again, something we’ve done multiple times. And so this is the growth vector. And it might be completely different to a company that has been over staffed, we see funding, and we’re like, Okay, how can we cut half of the costs? Very different skillset, again, but one in both cases where we have benchmarks what is the right thing to do.

[00:09:20.910] – Joran

Yeah, real practical because you analyze all the data, right? It probably starts with a big Google Sheet or an Excel Sheet where you’re basically going to check all the numbers. You’re going to find This efficiency is great. They’re overspending. Then you’re going to make conclusions of that. You’re probably going to have discussions with the founders. Is that a good assumption to make?

[00:09:40.000] – Tim

It’s a good assumption to make. An acquisition is always a multi-step process. You Start by establishing a relationship. At some point, the founder has to make his or her decision to actually want to sell because that’s usually a process that takes months or sometimes years to sell your baby. Then the negotiation start, and those can also take, in some cases, they’re quick. The founder has made the decision. In other cases, they can take months. If the founder isn’t fully sure, and that process can also serve to calibrate your own thoughts. Then once a deal has been done on a handshake basis, that’s what is called a LOI, a letter of intent, then the real work starts where actually the Google spreadsheets and all sorts of things come in. We would dig through lots and lots of materials. We would do interviews, we would We look at the technical source code, and that whole process is called diligence. But also during this process, we learn a lot about the company. The founder also learns a lot about us, and we craft the strategy. We’re already always looking at this information with a question in mind, what happens after we’ve inked the deal?

[00:10:49.500] – Tim

What should the setup be? How do we work best together? How do we preserve what made the company strong while making sure that we eliminate the weaknesses? That’s really what this process is about. It usually takes somewhere between one and four months, I would say, usually around two, but it’s also for both sides to get to know each other.

[00:11:08.530] – Joran

If we look at the Google Sheets or the benchmarks, do you guys have any templates? Do you recommend any resources out there which people can use to see how are they doing against other companies or how are they doing in general? Yeah.

[00:11:22.690] – Tim

When it comes to also valuation, my colleague Dirk Salmer, whom I think you also had in your podcast already, Usually, he has a lot of templates and things where comparing benchmarks and certain things against each other. I also know that some of the metric providers, for example, ChartMogul has benchmarking tools on different things. Padl are doing some great reports on comparing against each other. Then, of course, also on a product level, when it comes to different functions, let’s say, for example, customer service, like how productive are my people versus a general benchmark, you would turn to the resources of the respective providers. Benchmarking yourself is always a good idea.

[00:12:05.340] – Joran

Yeah. Okay, nice. If we look at your portfolio of companies in terms of go-to-market, what can other SaaS founders learn from them? What are they doing? Great at the moment? Yeah.

[00:12:16.560] – Tim

So again, I think every company is different. We have some, or the majority, which have product-led growth. And generally at SaaS Group, we’re a fan of product-led growth companies. You build a really good product, you build something people really love and where there’s organic word of mouth, then you add marketing to the mix. That marketing should be scalable. Yeah, always a program. Being one example, we happen to have our own rewardful. Com, which is a similar solution. So we have an in-house affiliate solution, which we’re building, is also opening to the market. We actually think affiliate is an important channel. But then also the classic stuff, pay-per-click. Seo, of course, is a big channel, publishing content, making sure to spread that content for Google and other search engines, but just as well as for discussion forums and Reddit and Quora and whatnot. So you usually have the same material and then just packages in different snippets. I think nothing revolutionary on that front. As always, it’s just about doing it well and executing it And that’s the hard part because you got to try a lot of things and a lot of things don’t work.

[00:13:19.730] – Tim

And then that’s time you spend as a founder. And that’s the benefit we have, of course, of having tried a lot of things is that we come in, we analyze a company, and we pretty much know what will be working and whatnot all the way down to enterprise sales, which sometimes is unavoidable depending on what product you have.

[00:13:40.050] – Joran

Let me see if I can dig deeper here because you said we’re analyzing things and we know what is going to work or not. I’m curious, how can we turn this into something where the listeners can actually maybe get some golden nuggets from? What do you look at? And then how would you know what is going to work and what isn’t so other people can learn from it right now?

[00:14:00.070] – Tim

That’s the hard thing is giving generalist advice there. I always hate those people who are on LinkedIn saying, You got to do this, because it’s just not the case. It’s like every case is different. There are some businesses where it’s best to funnel people through a demo and not have a self-serve solution. I think they are rare. I would say best practice is always build your product for people to sign up yourself to have an immediate wow effect of your product of some sort, and then let it organically grow and proliferate within an organization, and that ultimately hit people with an enterprise sales. To me, that is a best practice, but there are products where this doesn’t fly. Selling just doesn’t work that way. I find It’s very hard to always give generalist advice. In order to give a bit of generalist advice, I think I would always analyze every part of the funnel and see where do I stack against benchmarks and then improve that part, and that’s always loading fruit. Onboarding, for example, being one where it’s usually neglected and you have people sign up, but they’re often left in limbo and they just have the platform and they don’t get They support, they know.

[00:15:17.310] – Tim

There’s no handholding. Doing that, for example, in 90% of the cases is super low-hanging fruit. Going from sign up to usage of the product because usage defines payment and really focusing on this immediate wow and immediate value add to the customer. I would say that’s, for example, one piece of generalist advice I can safely give because it really applies in more than 90% of the cases.

[00:15:44.480] – Joran

Yeah, but this is good. Build a product which has an immediate wow effect, value add effect first, PLG with scalable marketing first, and then going after enterprise after. Because sometimes you see that company start with, I see them a lot, with book a demo or a contact If you are going to be a more complex solution, is there a minimum lifetime value a company needs to have before going that route and PLG doesn’t work, or is it not as simple as looking at the numbers?

[00:16:13.980] – Tim

Yeah, you have a rule of thumb. If you really have a solution which you need to sell enterprise-wise, the customer lifetime value should probably be more than 100,000 to make it worth a real enterprise sale.

[00:16:28.870] – Joran

I think it’s a good number for people to keep in mind.

[00:16:31.560] – Tim

That means if someone stays 10 years in enterprise, of course, churn is lower. That means 10,000 a year, so about a thousand MMR. Really rough rule of thumb, depending, again, on how hard the sale is, how much you customize. If you customize a lot and selling is hard, number needs to be higher. If selling is easy, customization is less, you can do some enterprise sales for maybe 200, 300, 400 a month. But I would say just roughly a thousand could be a good.

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[00:17:19.340] – Joran

We talked about the best practices. If we go to the other side, challenges. Can you speak of any challenges or obstacles you’ve seen or faced with companies where the growth didn’t happen or didn’t continue? And how did you overcome that?

[00:17:34.870] – Tim

Yeah, that’s a great question. And that’s very often the case when we step in as a SaaS group is that a founder always has the time when things really flourish. Of course, there are a couple startups who never take off, but then people do something else at some point. But most successful startup, they have a period when they really flourish. Okay, good momentum every month, every week, literally, they have more customers. And Then most companies at some point hit some glass ceiling. That can be coming earlier, it can be coming later, but eventually it comes. Very often it’s actually the skill composition of the founding team is the issue here. If, for example, you have a founder who’s really great with initial product market fit, but doesn’t want to do marketing, doesn’t want to do sales, and also at some point has captured the niche of the company, then it’s It’s really hard to grow it from this point on, and then it’ll ultimately plateau. That’s when also a lot of people are questioning themselves, and they’re like, I’m not the right person. They’re also losing some of their positive spirit, their momentum. Then many think, and I think rightfully, about selling because it’s, of course, the dream of a baby founder to make a company bigger, but then many of them actually struggle.

[00:18:54.570] – Tim

They’re like, This is now a lot of management. I need to do things I really don’t want to. I want to go back to building. Also, a company, the longer you have it, the less it’s about building, the more it’s about maintaining things, about selling more of an existing things, about add-ons, as opposed to really revolutionizing something. And very often, new people can rekindle the spirit of a company. And the same person who is great for zero to one is not the same person from one to 10. Because, again, you need very different skills. And that’s very often when they come to us and, Hey, I’m not enjoying it in the same I’m doing. I really love this company. I want to have it in good hands. And that’s also, of course, what our promise is. But it’s okay, how can I grow it? And that’s then very often when we take over and it starts, very often as changing the founding team in a way. Finding often a different role for the founder. Sometimes the founders want to be purely product-focused and have someone else run the day-to-day management. In other cases, it’s really stepping out completely.

[00:19:55.520] – Tim

There are many cases where the founders are tremendously successful in building something from zero to one. We are the right ones then to take over and really grow the legacy of the founder. Because I’ve always learned is like, as the companies I started myself, when I sold, it was really important for me also that the company lived on and that it’s not just closed and that I can still be proud 10 years later of what I’ve started. I think that’s really what we’re trying to really be, that acquirer who genuinely promise and executes on that promise.

[00:20:28.470] – Joran

Nice. And just to be clear, if you say from zero to one, do you mean from zero to one customers or from zero to one million?

[00:20:34.900] – Tim

It’s not literal. It comes from the book zero to one. And it means it could be like one million, not zero to one customer. One customer is not scaling something. One customer is customer development. A million can be a good benchmark, but it could also be less. Usually we’re buying companies that have more than a million revenue. But for example, the before mentioned rewardful we bought when it just had a couple of hundred thousand revenue and have grown it a lot since then. Million in revenue, I think is a good benchmark because it means you’ve got something scalable.

[00:21:07.430] – Joran

You mentioned founders need to have different skills along the way, right? You talked about zero to one. And then after. What are the stages of founders have to go through? I guess first zero, then zero to one, then after, and what skill sets do they need in every stage?

[00:21:23.110] – Tim

That’s a great question. They need very different skill sets. In the early ones, they need to be particularly builders. That’s why we like developers. Generalist developers who are also strong with products and someone with customers to do the early stages. And that goes all the way until a couple of million in revenue. And even then, they are very often the fundamental strategy part of the company. But you need to add something on the mix At some point, you need marketing skills because no matter how good a product is, you need to sell. You need operational people who just to also manage other people who do also take care of things like customer service, customer success. Also look at the finances because there’s really a lot which people are leaving on the table. I’ll give an example of another company we bought many years ago. It was a company called Prerender. It’s a JavaScript pre-rendering service. Another great company, great founder with bootstrapper mindset, again, was one guy running it. He had everything super efficient except for one thing. That one thing was that he said, I’m alone, so I don’t want to take care of service, which is understandable, and I’m going to put everything into AWS.

[00:22:31.580] – Tim

Fair enough, a lot of companies do that, and very often, AWS is a negligible part of the cost. In this case, phobias, prerendering big websites requires often sites with millions of URLs requires tremendous amount of requests and also traffic. It wasn’t the right setup. He did 2 million in revenue and 1 million he spent on AWS per year, so half of his income, which obviously was a good deal for US, but we said we should just put one SysAdmin there and 300 bare bones servers. That’s going to be the much cheaper solution because it’s also not time-sensitive. It doesn’t matter if you render now or you render 2 hours from now. It’s not something we need 99.9% uptime. We changed that. It was a migration project. We wrote an article on this and how we changed the costs from a million to 200,000, and that included the CIS admin. It was 100,000 for servers, 100,000 for CIS admin, 200,000 $400,000 where before we had a million costs. Of course, for that, you needed to change the entire setup. You needed to suddenly have someone you need to manage much more high maintenance, but makes total sense from a business standpoint.

[00:23:42.150] – Tim

But if you don’t think that way, if you think really just about automating, and not the same, the sense of automation versus cost, then it doesn’t occur to you as a founder, that could be an issue. And so that was one of our first steps we did. In addition to marketing sales internationalization, the usual thing, the company is very strong. These These days, it was a really good acquisition, good product. We developed the product quite a lot further. But the cost reduction was instrumental because also it increased the margin, which of course means you can spend some more money on sales and everything. Then if you have a gross margin of only 20%, which would be low in software. That would be one prime example why it also is worth looking into things like costs.

[00:24:23.780] – Joran

I think both of the examples you mentioned are developers. They went from zero to one, and in this case, like actual millions, where they were only with one person. They really are efficient. I think it’s a typical developer thing to really make sure everything is automated, everything works smoothly, so they don’t have to worry about the manual tasks. This is also the downside. You see that they don’t want to do the operations, they don’t want to do the marketing. At one point, they’re stuck, where maybe some other founders like myself, which are not developers, are the other way around, where we do too many manual tasks and we’re maybe good at marketing, but we should focus more on the other side as well.

[00:25:02.620] – Tim

Yeah, I think we always appreciated both sides. Company needs great technical people, but it also needs great marketing salespeople. The best is always if you bring the two together and they work side by side, which isn’t always easy. I’ve seen companies get into fights because the business side and the technical side really don’t see eye to eye. But that always needs to be the goal that they really work in Zyck and the best companies do.

[00:25:30.560] – Joran

That’s why you mentioned keep your founding team as a mix of skills while you’re growing so you can always maintain that. Is then maybe your advice as well to have multiple founders or is a solo founder also great?

[00:25:44.870] – Tim

It depends on what you want to reach. Generally, having a team, I think also statistics say that it’s superior, but it’s often easier to get it off the ground with just one founder, especially if you tackle a niche product and you have a strong development founder, then I think one founder can absolutely do the job. But as always, it only gets so far to provide the team. But that person you bring then, he or she doesn’t have to be a founder, just someone you work with. Cool.

[00:26:11.090] – Joran

Before we dive into the advice questions regarding revenue stages, The people are listening, they now know what the SaaS Group does. Why should they consider selling it to a company like yourself? Even maybe a better question, when to also think about it?

[00:26:26.670] – Tim

I think it’s important that people think about it as option and also one option all along the way. I think there’s no right or wrong in terms of you have to sell, you have to continue on. I think it’s best if people listen to their self and be, Okay, would it make sense for me personally to sell, to regain some freedom, to be able to build MVPs again, to take some chips off the table, to basically take some money and do something privately with it. I don’t know, buy a house for the family or do an extensive travel or something else I always wanted to do. If one of the questions to this is yes, you should really consider it because there’s no point in just running a SaaS company, break even for 20 years If you rather, A, want to build something completely different, or B, you really would like somebody to use it privately, and you can always start a new company. Too many founders cling to their company, even though they really also in some cases, not enjoyed it because they really much rather tackle a new problem and tackle a new challenge, opposed to always doing the same thing.

[00:27:39.910] – Tim

While for someone else, this thing, what they’re doing is super new and exciting and something they really enjoy. So I would always ask that. And if you enjoy doing things and you don’t need the money, then continue running it and just go on. But I think it’s important to think about the personal side. The other side is, of course, would you enjoy being positively challenged and working with someone who can fill potential missing gaps? I think there are a lot of founders out there with whom we talk. They’re like, I built this credit product and got it to 2, 3, 4 million revenue. But for some reason, I really would like people who really can do marketing really well or who just challenge me in certain things. Some have VCs, and not all of those are always helpful. Some have no VCs or angel at all. They really just constantly thinking about those things themselves. They really would We’d like to have a partner. Then again, I think companies like SaaS Group are great partners to take a company to the next level in a really founder-friendly way, not in a way to just kill the company or the brand, or integrate it as a feature like many others would do.

[00:28:45.180] – Tim

But really, Okay, let’s take the company and let’s together take it to the next level. That’s really what we’re doing.

[00:28:50.780] – Joran

Cool. Let’s dive into the final questions. When we talk about growing in B2B SaaS, specifically revenue-related, what advice would you give a founder who’s just starting out and currently going to 10K monthly recurring revenue.

[00:29:05.370] – Tim

Oh, to 10K. That’s super early. That’s like the first couple of customers. Then it’s the classic do things that don’t scale advice. You talk to customers, you build things individually for customers based on their request, but always in mind with what other customers also like this feature down the road. But it’s really a lot about individual outreach, individual listening. You do everything yourself. You do customer customer, service yourself, you do customer success in sales, you do everything yourself, and you really try to get to those first couple of customers. It depends, of course, on the customer size, 10K. That might be just one customer, it might be 10 customers, it might be a thousand customers. But you get to that really a lot of individual work and a lot of really listening to which pain are you solving, and you really need to solve the pain. You should never be a vitamin, but you should always be a pain killer. Listen to the pain of the people and how you can really solve it. Once you’ve found those first 10Ks, then I think you’ve at least found initial product market fit.

[00:30:10.080] – Joran

Nice. Then let’s assume we pass the 10K MR and we’re going to make a huge jump right now. We’re going to go towards 10 million ARR. What advice would you give SaaS founders here?

[00:30:20.530] – Tim

Ten million is a great range. You’ve built a real organization. I have a few companies which also I’ve started originally that are way beyond that. Phase Ceto, my original domain marketplace I started, that one was about 100 million. I. O, which is the company behind ad blocking, is also about 100 million in annual recurring revenue. I’ve gone through it through a few times. After 10, that’s really when things change from something you manage in a small group. Ten million, you can manage with 20 or 30 people if you manage well. But you grow from a family to a real tribe. That means you need people in every function that are on the same level as your specialty, but in the end. What I mean is if you’re a tech person, and I consider you’re probably a top-notch tech person because you got this to 10 million with a good product, then you need someone equally good on marketing and equally good on operations, which is hard to judge if you’re a technical person and vice versa. But you really need a functioning team, at least consisting of those three functions. Tech product, go-to-market side, and the operations, which includes finance, HR.

[00:31:31.360] – Tim

Of course, it also gets more granular. I will really see that you Excel in all those areas. Bringing in the best people is probably the single most important thing.

[00:31:41.410] – Joran

Let me try to summarize. To start off, a bootstrapper mindset is really being customer-focused, which pays the bills. So have an obsessive mindset over clients. You guys analyze thousands of SaaS companies. The common mistakes are overspending and having liquidation preferences when you are VC-funded. So avoid that. Keep track of your expenses. Try to cut, automate, decrease where possible. Check out benchmarks on ChartMogel, PADL, Profitwell to compare things against each other. I will ask Dirk to get templates as well for this. Build a product which has an immediate wow effect, plus a value add effect. Plg is going to be great for scalable marketing first. You can go enterprise after. If you are considering enterprise, try to do it with 1KMOR plus. If not, consider PLG again. How to find low hanging fruit. Look at your entire funnel to see where people drop off. Keep your founding team a mix of skills, but make sure you keep enjoying the ride. If you don’t enjoy it, consider selling it. If you’re growing to 10K MR, be a cane killer. Try to really solve their pain. If you’re going to 10 million ARR, you need equally good people in all teams, and especially tech, GTM, and operations.

[00:32:50.670] – Tim

Well summarized.

[00:32:52.090] – Joran

Perfect. If people want to get in contact with you, Tim, how can they do?

[00:32:57.140] – Tim

Either email, tim@s sas. Group. Very easy. Same applies for LinkedIn. That’s probably the one platform I still use. And of course, our website as well, www. Sas. Group.

[00:33:11.220] – Joran

Cool. We’re going to add everything in there. So we’re going to add your LinkedIn profile, the website. And I don’t know about the email because it will get scraped, but definitely the LinkedIn.

[00:33:19.470] – Tim

It gets scraped anyway. These days, it’s really impossible to keep email secret. And then you have all those automated AI SDRs and BDRs which keep spamming you. It’s getting really annoying.

[00:33:34.150] – Joran

Exactly. If you are listening, a reminder, please leave us a review if you don’t follow us. We’re going to add a poll to this podcast as well on Spotify. Let us know what you thought of this so we can keep improving the content towards you. Thanks again for coming on, Tim.

[00:33:48.350] – Tim

Thank you for having me.

[00:33:49.780] – Joran

Thank you for watching this show of the Grow Your B2B SaaS podcast. You made it till the end, so I think we can assume you like this content. If you did, give us a thumbs up, subscribe to the channel. If you like this content, feel free to reach out if you want to sponsor the show. If you have a specific guest in mind, if you have a specific topic you want us to cover, reach out to me on LinkedIn. More than happy to take a look at it. If you want to know more about Reditus, feel free to reach out as well. But for now, have a great day and good luck growing your B2B SaaS.