S2E15 – How to plan, predict & prove your Go To Market plan? With Mark Stouse

The most listened-to episode of Season 1 is still about how to go to market with Andrew Davis, and for this reason we are going to dive deeper into this same particular topic on How to plan, predict and prove your Go To Market plan. Our subject matter expert is Mark Stouse, CEO of Proof Analytics, an AI-powered platform for GTM.Mark’s has 30 years in marketing, He was CMO for 10 years, now CEO at Proof Analytics. 

Crafting a successful Go-To-Market (GTM) plan requires a strategic approach encompassing planning, prediction, and validation. Begin by meticulously planning each phase, outlining key objectives, target audience, and messaging. Leverage market research to predict trends and customer needs, ensuring your GTM plan remains adaptable to dynamic market landscapes. Implement analytics tools to measure and prove the plan’s effectiveness, tracking key performance indicators (KPIs) such as customer acquisition cost, conversion rates, and revenue growth. Regularly reassess and refine your strategy based on data-driven insights to stay ahead in a competitive market. A well-structured GTM plan, grounded in foresight and substantiated by measurable results, is the cornerstone for achieving sustained market success.

Why Listen to Mark:

• Critical thinking about Go-to-Market (GTM) strategies.
• Emphasis on evidence-based insights and testing against business principles.
• Marketing scientist perspective, using analytics to lead GTM operations for 20 years.

Defining Go-to-Market (GTM)

Go-to-market (GTM) encompasses everything influencing customer buying decisions and relationship renewal. It extends beyond marketing and sales to include customer success, product development, services, contracting, and more. Understanding how these elements work together in the marketplace is crucial for creating a cohesive and effective strategy.

Role of AI in GTM Strategy

Proof Analytics uses AI to expedite and simplify the modeling process. Automation and AI work together to enhance analytical capabilities, making marketing mix modeling more efficient and time-saving.

Marketing Mix Modeling (MMM) Explained

• MMM or GTM mix modeling is multivariable regression analytics.
• Multivariable regression’s role in understanding the interplay of factors affecting outcomes.
• Historical and forecasted insights, updating regularly to align with business decisions.

Common Mistakes in GTM Strategy

Treating GTM as solely a marketing or sales strategy is a common mistake. There is a need for a unified business strategy that is operationalized through various functions. Understanding customer perspectives and adapting strategies accordingly is crucial for success.

Building a GTM Strategy From Scratch

An outside-in approach involves understanding customer values through surveys, conversations, and focus groups. Defining the Ideal Customer Profile (ICP) is a crucial step for targeting the right audience. Implementing a weighting system for different business aspects based on customer needs and journey stages ensures a more tailored and effective strategy.

Orchestration Across Functions

• Real orchestration involves coordination across functions.
• Importance of having an “air traffic controller” system to oversee the entire GTM process.
• Emphasizing the need for orchestration beyond individual campaigns.

Customer Conversations

• Different tools for customer conversations: surveys, interviews, focus groups.
• The effectiveness of extended conversations for gaining in-depth insights.
• The critical role of correctly defined Ideal Customer Profile (ICP) for focused targeting.

Go-to-Market Strategies and Challenges

Understanding the core questions for go-to-market strategies is essential. There are significant challenges in channel selection and the inside-out approach in marketing. Common obstacles in taking a product to market include market timing and achieving product-to-market fit. Valuable lessons can be learned from Proof’s early experience, where they were three years ahead of the market, highlighting the importance of timing in strategy execution.

Know when to pivot

Recognizing whether a startup is too early or needs to pivot is a significant challenge. Market responses can be unpredictable, making it crucial to be prepared for complexity. The willingness of founders to pivot and adapt based on market feedback plays a vital role in navigating these uncertainties and steering the startup towards success.

Growing from $0 to $10K Monthly Revenue

• Advice for startups targeting $10K monthly recurring revenue.
• Emphasizing the importance of building relationships and offering attractive early deals.
• Stressing the need for a good product and its value proposition to early customers.

Building Trust Beyond $10K MRR

• Beyond $10K MRR, the focus shifts to a confidence and trust game.
• The correlation between trust and deal velocity, and the impact on deal expansion.
• Addressing the issue of distrust in SaaS and the consequences of unmet customer expectations.

Advice for SaaS Entrepreneurs

Focusing on customers and team members rather than exit strategies is crucial for long-term success. Prioritize shareholders over customers and team members can lead to detrimental outcomes. Emphasizing the value of learning, humility, and continuous adaptation is essential in the startup journey, fostering a resilient and customer-centric business.

Lessons from the Past and Moving Forward

• The significance of learning from past mistakes and adapting strategies.
• Specific lessons learned, such as the value of excellent legal support and timely decision-making.
• The inevitability of challenges in startups and the need to navigate through chaos.
• Acknowledging the perpetual nature of startup challenges: “Every startup is either in trouble or dead. Those are your only two choices.”

Key Timecodes

• (0:29) Show and guest intro
• (1:14 ) Why you should listen to Mark Stouse
• (3:28) What is Go to market? 
• (5:19) What kind of role does AI play in a go-to-market strategy?
• (6:44)  What is marketing mix modeling?
• (11:02)   Common mistakes companies make while building their go-to-market strategy
• (12:07) Mark’s process for market strategy from scratch.
• (17:23) Things successful companies have in common in regards to to go-to-market strategies
• (18:39) What Common challenges are faced when taking your company or product code to the market?
• (21:18)  The right timing to pivot? 
• (22:54) Advice on how to grow to 10K monthly recurring revenue.
• (25:44) How to grow towards 10 million ARR
• (30:42) What Mark wishes he knew 10yrs ago

Transcription

[00:00:00.000] – Show Intro

Welcome to Growing a B2B SaaS. On this show, you’ll get actionable and usable advice. You’ll hear about all aspects of growing a business to a business software company. Customer success, sales, funding, bootstrapping, exits, scaling, everything you need to know about growing a startup. And you’ll get it from someone who’s going through the same journey. Now your host, Joran Hofman.

[00:00:29.040] – Joran

Welcome back to the Grow Your B2B SaaS podcast. The most listened episode of season one is still about how to go to market with Andrew Davis. And we’re going to dive deeper in season two on the topic, how to build a go to market strategy for your SaaS. We’re going to do this with Mark Stouse. Mark is the CEO of Proof Analytics, an AI power platform that enables you to plan, predict, prove, and pivot your DTM investments. Before this, he was in marketing for 30 years and a CMO for 10 years prior to starting Proof. Next to his CEO role at Proof. He’s a partner at a family office, a chairman, a member at different organizations. I think he’s the perfect guy to discuss this. Welcome to the show, Marc.

[00:01:08.540] – Mark Stouse

Thank you so much. I’m glad to be here.

[00:01:10.620] – Joran

Nice. I’m going to start with a really Dutch blunt question. Why should people listen to you today?

[00:01:16.260] – Mark Stouse

First and foremost, I think that there’s so much out there that’s opinion that you need to be thinking critically about anything and everything that you hear about go-to-market, or for that matter, the rest of life. So just because I say it to you doesn’t mean that you just need to accept it. So check it out. Check out what I say vis-a-vis certain immutable principles of business and marketing, go-to-market, why physics, whatever is relevant. I try really hard to only say those things that I can prove. I think that’s actually one of the things that makes me somewhat different than a lot of people. I have actually a very not that great opinion of thought leadership, because what it usually means is somebody says, I think I see something. I think I have an idea about how this works. And they go immediately from that to writing about it or speaking about it, and they don’t ever test it. Among other things, I’m a marketing scientist. I don’t know if I necessarily call myself a data scientist, but I can certainly play one on TV. And so I look at this very much through a math and science lens.

[00:02:34.420] – Mark Stouse

So I have also done it. If there is a reason at all for you to care about what I have to say, I have used analytics to lead go-to-market, large go-to-market operations for 20 years, particularly in long cycle, complicated B2B type companies. Honeywell would be one. Hp is another one. Bmc Software is another one. So I would say that the number of of B2B CMOs who can say with high credibility that they have stitched it all together, that they’ve connected all the dots on what moves the sales needle and the business needle from the marketing side, and does so to the satisfaction of the C-suite and the board is, unfortunately, still a very short list. I’m on, proof is on, a mission to make that a much longer list.

[00:03:27.420] – Joran

Nice. You already discussed go-to-market, GTM. If we go to the real basics, how would you explain it in your words?

[00:03:34.880] – Mark Stouse

Go-to-market really is everything that ultimately makes a customer buy from you, provably, or renew the relationship, deepen the relationship. Classically speaking, people tend to think about go-to-market as marketing sales, customer success, and product. I think that though it’s very dependent on the situation and the company and their customers, I have seen I have seen services included in go-to-market. I have seen contracting included in go-to-market. I’ve definitely seen accounts receivable collections put in there as well. One of my customers, one of the reasons why we were brought in was they lost a $30 million a year customer because one guy in accounting was enforcing a really rigid definition of accounts receivable terms. And after a while, he just alienated the company, the customer company so much that they said, You know what? If that’s what your company is all about, then we’re done. That’s rare. It’s not an everyday thing, but it does go to show you that there’s so much that’s involved in go-to-market. And ultimately, if you don’t understand how all of these things work together or sometimes work against each other in the context of everything that’s happening outside the company in the marketplace.

[00:05:00.800] – Mark Stouse

It’s all the headwinds and the tailwinds, the wave that everyone is seeking to serve. If you don’t understand that, if you can’t calibrate that, you don’t have a cohesive go-to-market program. You just don’t.

[00:05:13.000] – Joran

And you guys use AI. I think that’s when you go to the site, that’s first thing you say, AI power platform. What role does AI play in a go-to-market strategy?

[00:05:22.720] – Mark Stouse

In our particular case, we use AI primarily to make the modeling process faster and easier for whoever’s doing the modeling. There’s also a lot of automation. Some people will say that automation is increasingly a subset of AI. I would say the way that I’m more comfortable wording that is that every part of AI has automation, is enabled by automation. Otherwise, it’s manual, and thus it’s not AI.

[00:05:51.840] – Joran

Yeah. In the end, that could make things easier and probably save a lot of time by automating.

[00:05:57.180] – Mark Stouse

Yeah, no. Because at the end of the day, the math to do marketing mix modeling or go-to-market mix modeling, that’s increasingly known today, is known math. This is not anything new at all, and that’s not where the magic is. The magic is in operationalizing the analytics, any analytics, so that it’s relevant to the decision making that’s happening. That means it’s happening at the clock speed of the business. If business decisions are made daily, then the analytics need to be updating faster than daily. That is entirely dependent on the reality of your business. Honeywell Aerospace, it’s monthly recalculation of the model because anything faster than that is just not worth talking about.

[00:06:44.170] – Joran

You already mentioned marketing mix modeling. Could you explain to the audience what it is?

[00:06:50.060] – Mark Stouse

Sure. Or go-to-market mix modeling. It depends on whether you want to stay with the older terminal or the new one. It’s still the same thing. It is multivariable regression analytics. So multivariable regression is the number one analytical tool, the algorithm, the approach. It’s used to answer 80, 85% of the world’s questions. It has a really super heavy role to play in things like climate change study or modeling epidemics and pandemics. It is the cornerstone, mathematically speaking, of the scientific method of inquiry. One part of an algorithm that’s in proof was actually originally authored by Aristotle. So that gives you a sense of how long it’s been around. Marketing mix modeling has been around in the modern era for about 40 years. Proctor and Gamble originally made it a fate, I guess, would be the way you’d have to put it. They called it econometrics at the time. It’s still called econometrics in Europe and Great Britain. It is all about saying, okay, that we live in a multivariable world. There’s lots of factors that come together. They conspire together to create a particular outcome. And there’s a lot of time lag and different time lags in those relationships.

[00:08:13.780] – Mark Stouse

And so in order to understand the impact that you’re having, you have to be able to use regression to say, Okay, I want to look at how everything I’m doing and then all of these things that I know about that I don’t control out there in the marketplace, I want to look at how all of that is coming together to create faster deal velocity. So the regression model is fairly straightforward, and you arm it with the data that’s relevant to the question that you’re proposing, and it starts to compute it, and ultimately it will give you the following components. It will give you a historical staff rank of the most powerful piece of that all the way to the least powerful in terms of influencing this outcome. It will then give you a forecasted view into the future about what that’s likely to look like at different times, given increasing or decreasing headwinds, tailwinds in the marketplace, different environmental factors that come into play. At the end of the day, it operates actually a lot like a GPS on your phone. It’s saying, this is where you are, this is your goal, this is where you want to go.

[00:09:23.100] – Mark Stouse

It’s going to give you that forecast. And then in proof, it’s going to recalculate those forecasts automatically on a particular cadence. And so it will reveal to you very quickly if you are on track or whether you are diverging your actuals or diverging from the projected performance. And if they are diverging, it will allow you, if they’re on the same screen, to explore new mixes of your marketing and sales to get back on track and speed up or do whatever you need to do.

[00:09:54.450] – Joran

I think that’s a really nice conclusion as in it’s not just showing you where you are and if you’re hitting the numbers, but also showing, are you on the track to actually hit the goals longer term? So actually showing you what the future is going to bring.

[00:10:06.780] – Mark Stouse

The forecast is the critical component. This is why data by itself isn’t enough. It’s crucial. It’s to make gasoline, you have to have crude oil, okay? But you cannot put the crude oil in your car and run the car. That’s not happening. The same thing is true when you’re talking about understanding go-to-market. If all you have is data, because data is only about the past, and past is not prolog. If you can’t go beyond that and put all the data into an analytical model to show you a forecast, but then you can update regularly really where you are. If you don’t have that, you don’t have anything.

[00:10:45.820] – Joran

That makes a lot of sense. You have a lot of companies come to you who already are doing GTM. You already have a lot of companies, of course, as clients who are also having their own strategy. As we say here in the Netherlands, you looked into a lot of kitchens, I guess. You know exactly how companies are doing things. What are the most common mistakes a company make while building their go-to-market strategy?

[00:11:07.100] – Mark Stouse

They think of it as a marketing or a sales strategy or something like that when the reality is there’s only one strategy, and that’s a business strategy. And that business strategy is executed. It’s operationalized through the various functions. That’s key. That’s really key. As a marketer, you don’t get to have your own marketing strategy. You are operationalizing business strategy through marketing tools. And so the same thing goes for sales or IT or it’s any of the functions this is true for. So I think that number one, you have to say, what are the business objectives that we have? What are we really trying to accomplish? And you have to work back into the functions, so into the operational layer, and then further back into the tactics. Everything has to be unified against that outcome. That strategy is It’s all about winning the war. It’s not about the individual battles. I’m giving it to you in a simplified high-level view.

[00:12:07.190] – Joran

It was actually going to be one of my questions. If you can build a go-to-market strategy from scratch, what would be your process? You’re already saying look at the business objective and work your way backwards. But if you indeed dive a bit deeper, what would be your process strategy. Which departments would you involve? Any frameworks you would use?

[00:12:26.720] – Mark Stouse

Yeah. So number one, I think that you have to look at it 100% outside in. So that means talking to your customers. What parts of your business do they value? What parts of your business do they touch? What parts of your business touch them, either for good or bad. You have to really build your go-to-market structure through their eyes because the only way that you’re going to deliver a go-to-market structure that gives you the business outcome that you’re looking for, the success that you’re looking for is that first it has to be successful with the customers. Let’s just say that at the end of those customer conversations, you have six areas of the business that everyone says they really care a lot about. Let’s just say it’s the six that I enumerated earlier. So you’ve got marketing, sales, customer success, product, and then you’ve got contracting, and then you’ve got collections, payments. Then you’re going to have to say, Okay, based on what they’re saying, what’s a weighting system? How much weight do we put on each one of these? What are the ones that are the most important over time versus the least important over time?

[00:13:40.160] – Mark Stouse

What you’re going to find there is that the answer depends on where the customer is. If they’ve already done the deal with you, then they’re going to care a lot more about things like customer success, the reality of the product, and collections. Then they’re not going to care about marketing at that point. Not that much. They don’t ever stop not carrying totally. But this is a journey that they’re on, and what they care about the most changes during the course of that journey. So I would say that’s number one. Number two, you’ve got to have a mechanism, got to have the analytics so that you really understand how this is all working together or not. Another analog here is that you’ve got to have an air traffic controller, not just the people, but the system, so that you can see where all the planes are at any given and avoid the collisions and ensure safe takeoff and landing and all that stuff. Orchestration is not about making sure that everything in a campaign launches on the same day. That’s really super basic illustration of orchestration. Real orchestration is, Hey, this is how it’s all being seen by the marketplace and by our customers, and we have to make sure that it all comes together in exactly the way everybody at any given moment.

[00:15:01.900] – Mark Stouse

That’s real work street. That is not something that happens only within a function. This is happening across functions, and I think that’s super important.

[00:15:11.810] – Joran

It ties back in what you said at the beginning, have those customers conversations so you can map everything out what they’re looking for. Would those be interviews? Would you actually interview them with a set of questions, or would that be conversations where you would talk with them, or would you interview them?

[00:15:30.000] – Mark Stouse

I think that there’s a lot of different tools. The survey still helps in some ways. Having really extended one to two hour conversations where you take a lot of notes is really effective. Sitting in a focus group is also really effective. But what is ultimately effective is being able to take all of or most of those perspectives and put it all together into a cohesive portrait of your ICP. The ICP to me is having that correctly defined is almost like the most important thing because there’s only about 4, 5, maybe 6% of your total addressable market, the TAM, that’s actually in the market for your product at any given time. So people are moving in and out of your ICP all the time. So you need to be really focused in terms of what are the big characteristics of the people that we that want to hear from us, that we should be talking to. And so I think that is absolutely a huge part of what we’re talking about here.

[00:16:42.960] – Speaker 3

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[00:17:22.980] – Joran

Any other things successful companies have in common when you look at go-to-market strategies, like are there any channels, data, KPIs, data track, anything?

[00:17:32.610] – Mark Stouse

So all of that, they’re all derivatives of much more core questions. What channels you use is largely based on where your customers are and what are you trying to achieve? That’d be one example of that. I think that we tend to build marketing or go-to-market programs bottoms up. We start inside our company as we talk to all the business leaders of the different divisions We find out what they need and want, and we build it that way, and then we hope like hell that our audiences resonate with it. And I think that is absolutely inverted 100 %. And everyone is tempted to do it. I’ve done it that way, meaning the inside-out approach. And you learn serious lessons when you do that stuff because you may luck out. You may be just in this perfect situation where the marketplace responds favorably to what you’re serving up, but most of the time it won’t. You’re talking about what you want to talk about, not what they want to hear.

[00:18:39.320] – Joran

When we talk about challenges, when I go to market, especially when we say high level, it sounds easier, but it comes with a lot of challenges and often common challenges. Can you name a couple of common challenges you will have when taking your company or product to the market?

[00:18:55.980] – Mark Stouse

I think that some of the biggest challenges are the ones that, honestly, you can’t really do anything about. Market timing is a huge one. When I look back on proof, we were probably about three years early to the market. The first three years, we used them pretty wisely, I think. We had about 20 customers that were essentially our very first customer base. They weren’t paying us very much money at all, but they were paying us a lot in terms of market feedback and product feedback. But there wasn’t an ICP that had really coalesced at that particular moment. There was just a TAM. And so we were marketing to the total addressable market, but who cares about that? And so it was difficult. It was discouraging. But a big, huge part of it, we had no control over. Market timing and product-market fit, those are two issues where you don’t really have a way of knowing it ahead of time. It only becomes real when you’ve actually stepped into the pool of water. And at that point, it’s, Okay, you’re all wet now, and now you’re going to find out what’s really going on. I think that you have to be prepared for things to take a lot longer and be far more complex than what you thought.

[00:20:20.030] – Mark Stouse

I think one of the challenges that a lot of founders have is that you wouldn’t be a founder if you didn’t feel like that you had a unique view of something that really mattered. At the same time, you have to be willing to listen to what the marketplace tells you about your ideas, about your product, and pivot, change. A lot of founders either aren’t willing to do a lot of pivoting until they have essentially no choice or they just take too long. I personally think that this whole issue of timing and fit, problem market sit and product to market sit is the reason why a lot of companies run out of money. They burn out. There were times when I was really worried about that with proof. I’m just being radically transparent here. I think that if founders aren’t transparent at the end of the day, it’s all bullshit. I’m not talking about things that I have never experienced. I have lived all this.

[00:21:18.200] – Joran

It’s an interesting topic, though, because you mentioned you were too early. Saas founders stick maybe sometimes too long. They don’t pivot quick enough. I guess it’s always an interesting topic. How do you realize you’re early and you just have to stick with it for a bit, or you have to pivot because things are taking too long and people are not… Or the marketplace is wanting something else, basically.

[00:21:40.250] – Mark Stouse

Yeah, and it also works the other way, too, by the way. You will feel like nothing is happening. No one cares that whatever you’ve built, it just isn’t connecting, it doesn’t have a future. And then all of a sudden, sometimes it feels like in a very short period of time, Half the world turns around and wants to talk to you. And that is a great example of time lag because you’ve been marketing to the marketplace for what feels like an eternity with nothing or very little coming back the other way. And then all of a sudden, things will happen in the lives of all these people and all these companies that you’re marketing to. That makes them go, What was that company? Their boss Their CEO, whatever, has said, Look, if you don’t start proving marketing’s impact on sales, I’m going to cut your budget in half and I’m going to fire you. That motivation did not exist a month before. Now it does. Now they’re seriously motivated in a way that they weren’t before. You can’t control that part of it.

[00:22:49.980] – Joran

Makes sense. We’ll come down to the final four questions. When we’re going to talk about go-to-market, what advice would you have for somebody who’s just starting and growing to 10K money-earned revenue?

[00:23:03.060] – Mark Stouse

We’re talking about an enterprise B2B SaaS product or service, to give you a product, because that’s not a lot of money, but you got to start somewhere. I would go to companies or people in companies that you have a relationship with and say, Hey, we really think we have something here. We’d like you to sign up. We will give you a hugely attractive offer. What we’re really looking for more than money is feedback on the product. Help us make it better and better. In our case, we were very blessed. We had really top-tier brand-side customers and agency-side customers, consultancy-side customers that took us up on that offer. We were absolutely at that level of ARR that you’re talking about, or MRR, in year one. But it’s not a lot of money. If you’re not actively raising money in some way, it’s going to be very difficult to build build a business on 120,000 ARR. It’s just going to be very tough.

[00:24:06.280] – Joran

Nice. But you need, and then that’s what you mentioned, build a product with people like, but you have to have people use your product. So get first people in, make sure they use your product, have them give you feedback, and then from there, you can start growing and-Yeah.

[00:24:19.770] – Mark Stouse

Look, it’s predicated on you’ve got to have, even in the early days, you’ve got to have a really good product. They have to be able to see that using even your early stage, your V1, V2 product is going to help them. It’s going to be worth their time. Forget the money. The real cost is their time. So it’s got to be worthwhile for them on that one. If then it really pans out and delivers a lot of value to those teams, then you’re home free because they’re not going to want to give it up. At some point, you’re going to say, Look, you know what? You helped us so much. We need to start charging you more for this, but we are so thankful, and so we’re going to give you a special early bird only deal. You’re going to get essentially one-third price for the next 10 years or something ridiculous like that. And that way, they don’t feel taken for granted. They feel rewarded. They’re very likely to say nice things and talk publicly about it and privately about your product. That’s what you want. At the end of the day, you’re building awareness, confidence, and trust in the marketplace.

[00:25:32.280] – Mark Stouse

That’s brand. Psychographically speaking, that’s brand. So that’s what’s greasing the skids for your growth.

[00:25:39.220] – Joran

Exactly. And that’s a really good foundation to have and also builds a bridge to the next question. When you’re past 10K money recurring revenue, what advice would you give SaaS founders here when they grow towards 10 million ARR?

[00:25:52.680] – Mark Stouse

At that point, it is totally a confidence and trust game. If you want proof of this, just look at your average sales What happens? About halfway through, they stop asking you all kinds of investigative questions, and they move entirely into risk mitigation and due diligence. They’re also not really talking to you nearly as much as they are third parties that might have point of view on you. Because what they’re really trying to assess is all that stuff that the vendor told us, is that true? Can we count on that? And the The more the answer is yes, so the more confidence they have, the more trust they have in you, the way that manifestsests, analytically speaking, company after company shows this. You get bigger deals, so you get a lot of deal expansion going on when they have more and more confidence in particular. Trust is the governing factor on how quickly they close deals with you. So your average deal velocity, the relationship between average deal velocity and trust is off the charts. So if you have low trust, they’re going to take a lot longer to do the deal.

[00:27:06.260] – Joran

Yeah, and this is where the advice of the 10K MR comes in. Make sure that you treat your customers so they start talking about you. And also that way you can build trust with future prospects.

[00:27:15.970] – Mark Stouse

And unfortunately, what you see today in SaaS, all SaaS, is a lot of distrust. This is my personal view. I don’t think that most SaaS companies decide to deceive their customers. I do I think that what happens is that they are startups for the most part. They are aspirational. They have dreams about their product. They talk aspirationally about their product so much that they forget that a lot of what they’re saying is not yet real. Yet they are talking about it with such conviction that the customer believes it is real. And then when all of a sudden, Forrester, by the way, has a ton of data on this exact dynamic, then the customer buys the product, they start to operationalize the product, and they’re like, Hey, where’s this feature and where’s that function? And, Oh, that’s all still on the roadmap. That’s a shock because the way you were talking about it was so convincing that they thought it was already part of what they bought. And that there, when that happens, that really hurts the relationship. And so this is why you get a lot of churn? Lots of churn. Churn is the number one thing that kills SaaS startups right now, regardless of what part of the market they’re serving, churn is the thing that just absolutely kills them.

[00:28:35.480] – Joran

Yeah, selling to the clients, as you mentioned, with the ICP and giving their expectations has definitely gone to save a lot of churn.

[00:28:42.980] – Mark Stouse

No. Look, this is the way I would look at it, ultimately. You can either enforce your ICP upfront, which means walking away from certain deals, or you can have a really bad experience later.

[00:28:57.720] – Joran

Exactly.

[00:28:58.920] – Mark Stouse

The difference is that the really bad experience later, the churn, not only hammers your profitability, but it creates a reputational problem that becomes visible to the marketplace if it happens enough, and it makes it harder for you to close your next deal.

[00:29:15.360] – Joran

It’s going to take you a lot more time as well. Selling to the wrong people is just going to open up support tickets, and it’s just going to create a lot of frustration internally and externally. Final two questions. We are coming to the end. Any advice or encouragement that you want to give to other SaaS entrepreneurs out there?

[00:29:33.280] – Mark Stouse

Don’t be afraid to be wrong, and don’t focus on your dreams of exit or your shareholders’ dreams of exit. You need to be focusing constantly on two things, your customers and your team members. Those are the two groups that are going to ultimately make you successful or not, make your exit valuable or not, make your shareholders happy with you or not. Too many CEOs, too many founders care way too much about shareholders. This is one reason actually why we don’t have any VC investment in proof. We did not want to open ourselves up to fun and games that go with that. Particularly now in this marketplace where everybody, where all of us are, I am so thankful that is the case because the last thing you want is a VC trying to tell you how to run your business or forcing you to sell your business or whatever.

[00:30:32.310] – Joran

We interviewed Nathan Latka in our previous episode. He does none dilutive funding for bootstrappers, so I would definitely recommend listening to that episode as well. Final question, what is one thing you wish you knew 10 years ago?

[00:30:46.480] – Mark Stouse

Every year, after the holiday, I will sit there for about three days, and I will really meditate on the past year and the year to come, and I will identify and write down things that I desperately needed to know a year ago and didn’t know, but learned during that year. It is a very humbling experience. It’s a very useful experience, but it’s very humbling because no matter how smart you are, no matter how experienced you are, there is always something, and usually more than one thing, that is on that list. When you think about everything that you should have known before you founded your startup, that you you didn’t know. It’s going to scare you to death. That said, you won’t ever get there. So you have to be comfortable with the fact that this is a journey. It’s the oldest saying in the book, everyone uses that phrase. It’s just overused to death. But there’s a reason for that. It’s because that’s exactly what it is at the end of the day. It is a journey. So you have to be willing to take things as they come, realize that you’re going to, particularly as a founder, particularly as a CEO of a company, you’re not ever going to step off the learning wheel.

[00:32:06.140] – Mark Stouse

You can’t afford it, and you’re never going to arrive. Just be okay with that. Be okay with the instability that it brings. Be okay with the fact that you will guarantee not only make mistakes, you will make big mistakes. The thing to be grateful for is when you make those big mistakes and they’re not fatal, be thankful for that because for a lot of people, those big mistakes which are fatal. I would just say there’s not one thing you can say. Yeah, so one of the things I’ve learned, for example, is the value of great legal is immense. Whatever you have to pay within reason for first-class contracts, you pay it because it’s like an insurance policy. You will need it sooner or later. I’ll give you one very specific. I’m the leader who always… I can see the value of every person and the potential of every person. It’s just a gift, for lack of a better way of putting it, that I have. So what I had to start learning even before I was CEO, back earlier in my career, is I was making mistakes with team members in terms of giving them way too much time to get themselves straightened out.

[00:33:24.440] – Mark Stouse

And it was costing the rest of my team a lot. My delays in essentially letting someone go were placing a huge burden on the rest of the team. That’s not fair. And when I finally really saw that clearly is when I started to really change. But even then, it took me a while to really recalibrate that. Like, how much time is enough time? Today, it’s a lot shorter than it was even five years ago in my mind, because we can’t afford people who can’t step into a role and do it well, almost immediately. We can’t afford that. We’re paying people top dollar, so they need to be able to do that.

[00:34:12.720] – Joran

As you mentioned, it’s not fair to anybody. I think through your first story, I think Patrick Campbell summarized it really well in the podcast, caught up with the chaos. There’s going to be a lot of things happening. There’s going to be a lot of things on fire, and you just have to go through it.

[00:34:27.180] – Mark Stouse

Let me say this. It’s one of the oldest sayings business of startups. There’s only two kinds of startups, one that’s in trouble and the other one is dead. Think about it for a second. We think about in trouble as having a very specific definition. But I know $100 million companies that are in trouble. So revenue from a certain perspective, and I get it, I’m not being cavalier, but there’s that old saying that revenue solves all problems. No, it doesn’t. It solves the problem problems that go with not having enough revenue. But as soon as you do have enough revenue, then you get a whole new set of problems. So you have to always think about it that way. So every startup is either in trouble or dead. Those are your only two choices.

[00:35:16.520] – Joran

Yeah, because there are always going to be problems, that’s for sure. Thank you. Thank you, Mark, for coming on. If people want to get in contact with you, what would be the best way to do so?

[00:35:26.260] – Mark Stouse

Linkedin. I’m very active on LinkedIn. I don’t don’t really sell on LinkedIn. I’m there to help. I’ve learned a long time ago that I either have to be on LinkedIn to help people or to sell. I can’t do both because if people are expecting me to sell to them, then they’ve got their guard up and they can’t hear me help them. So I made that choice a long time ago. Feel free to send me a LinkedIn message or comment below one of my comments or something like that and say, Hey, I’d love to talk to you. I’m happy to talk to you. The whole conversation will be about you and where you are, not about proof. Unless you want to do it about proof, in which case, I’m happy to talk to you about proof.

[00:36:05.660] – Joran

Exactly. Like any CEO, of course. Not selling, but if you want to buy, then we’ll definitely give them.

[00:36:11.920] – Mark Stouse

Yeah, absolutely. Yeah.

[00:36:14.820] – Joran

Nice. We’re going to link to your LinkedIn profile for people listening. You say Mark Stoos. If we say it here in Europe, it’s Marc Staus, but that’s the wrong pronounced nation. But we’ll link it in the show notes. Thanks again. Thanks again for coming on, Marc. It was a pleasure.

[00:36:29.500] – Mark Stouse

Hey, Thank you so much.

[00:36:30.900] – Show Outro

You’ve been listening to Growing a B2B SaaS. Joran has been ahead of customer success before founding his own startup. He’s experiencing the same journey you are. We hope you’ve gotten some action possible advice from the show, and we hope you had fun along the way. We know we did. Make sure to like, rate, and review the podcast in the meantime. To find out more and to hook up with us on our social media sites, go to www.getreditus.com. See you next time on growing a B2B SaaS.