S3E19 – How to build a billion dollar business within a year With Adam Robinson
Is it possible to build a billion-dollar business within a year? Well, the answer is YES! In this special episode of the Grow Your B2B SaaS podcast, recorded live on stage at the SaaS Open event in Austin, USA, show host Joran Hofman sits down with Adam Robinson, the founder of retention.com. This episode covers the critical factors and hacks to building a billion-dollar business within a year. Adam’s RB2B companies focus on identifying website visitors on a personal level, with Retention targeting e-commerce and B2B. Adam is striving to bootstrap his company to unicorn status and has a TV series called The Billion Dollar Challenge. Previously, he bootstrapped Rob Lee email marketing to an eight-figure exit as co-founder and CEO.
Adam shares his experiences and insights on bootstrapping startups, the meaning of building a billion-dollar company, and the importance of radical transparency in business. He also discusses the challenges of scaling a business, the role of product-market fit, and the value of a founder brand. Adam emphasizes the need for financial discipline, focusing on product-market fit, and leveraging social media to spread awareness.
How to Build a Billion-Dollar Business
Adam shares his journey towards building a billion-dollar business in a year. He emphasizes the importance of honing in on the ideal customer profile to address churn issues and achieve rapid revenue growth. While his company did not reach the billion-dollar mark, Adam views unicorn status as the pinnacle of success in the startup world, akin to an Olympic gold medal for entrepreneurs. He aspires to bootstrap $100 million in ARR, valuing sustainable growth over rapid valuation spikes.
The importance of Radical Transparency and Founder Branding
Adam discusses his strategy of radical transparency and founder branding on social media, inspired by the book “Founder Brand” by Dave Gerhardt. By sharing his company’s numbers, successes, and setbacks, Adam aims to connect with his audience on a personal level and build trust. He believes that sharing financial data and losses, along with wins, creates a unique bond with followers and establishes credibility in the B2B market.
Challenges Faced and Response to Competition
Adam reflects on challenges faced, such as revenue fluctuations and increased competition, leading to introspection on effective strategies. He addresses concerns about sharing success metrics attracting competitors, balancing it with the benefits of increased visibility and market positioning. Adam believes that transparency and authenticity in storytelling can outweigh the risks of attracting competition in the long run.
Lessons on Monetization and Market Domination
Adam shares insights on monetization strategies, emphasizing the importance of delaying revenue focus to maximize user base growth and market dominance. By offering core services impossible to compete with and providing value upfront, Adam aims to secure a dominant market position and disrupt traditional revenue models. He highlights the power of exponential user growth and market leadership in creating a sustainable and valuable business ecosystem.
How to Navigate Revenue Fluctuations and Competitor Challenges
Adam discusses managing revenue fluctuations and increased competition, acknowledging the impact on employee morale and strategic decision-making. He addresses the balance between transparency, competition dynamics, and maintaining a competitive edge in a fast-evolving market landscape. Adam’s approach involves leveraging market dominance and user affinity to navigate challenges and drive sustained growth.
Sales Pipeline and Churn Management
Adam delves into the importance of generating a robust sales pipeline to counteract churn rates and sustain revenue growth in the SaaS industry. He emphasizes the need for effective pipeline management, lead generation, and churn reduction strategies to drive business success. Adam’s focus on aligning pipeline growth with churn mitigation reflects his strategic approach to sustaining business growth and market relevance.
Radical Transparency and Brand Affinity
Adam elaborates on the impact of radical transparency in building brand trust and affinity among customers. By sharing authentic insights, including financial data and challenges, Adam connects with his audience on a deeper level and fosters brand loyalty. He underscores the value of transparency in establishing credibility and differentiation in a competitive market landscape.
Strategies for Scaling and Monetization
Adam outlines his approach to scaling and monetizing his businesses, emphasizing the importance of product-market fit and differentiation in driving growth. By focusing on underserved markets and crafting unique value propositions, Adam aims to build sustainable businesses with high growth potential. He highlights the significance of strategic decision-making, revenue optimization, and market domination in achieving long-term success.
The Importance of Process-Oriented Leadership
Adam acknowledges the importance of developing effective processes and organizational frameworks to support business growth and scalability. He shares insights on implementing a structured approach to leadership, including OKR frameworks and executive team alignment. By prioritizing process refinement and accountability, Adam aims to enhance operational efficiency and strategic decision-making within his organizations.
Lessons from Operational Challenges and Crisis Management
Adam reflects on past operational challenges and crisis situations, such as database failures and revenue fluctuations, highlighting the importance of resilience and adaptive leadership. He shares experiences of overcoming critical incidents and managing high-stress scenarios, emphasizing the need for proactive crisis management and strategic decision-making in navigating unforeseen challenges.
Embracing Mentorship and Executive Coaching
Adam discusses the role of mentorship and executive coaching in enhancing leadership skills and organizational effectiveness. He underscores the value of external guidance and peer support in driving personal growth and professional development. By seeking mentorship and coaching, Adam aims to refine his leadership style, improve decision-making, and foster a culture of continuous learning within his organizations.
Strategic Focus on Market Positioning and Differentiation
Adam emphasizes the importance of market positioning and differentiation in driving business success and competitive advantage. By focusing on unique value propositions, product-market fit, and brand affinity, Adam aims to establish a distinct market presence and build customer loyalty. He highlights the strategic value of differentiation in sustaining long-term growth and market leadership.
Importance of Financial Discipline and Sustainable Growth
Adam stresses the significance of financial discipline, resource allocation, and sustainable growth strategies in building a resilient business ecosystem. By prioritizing cash flow management, revenue optimization, and cost-effective growth initiatives, Adam aims to secure long-term viability and profitability. He underscores the value of prudent financial practices in navigating market uncertainties and driving sustainable business growth.
Founder Branding and Thought Leadership
Adam shares insights on leveraging founder branding and thought leadership to engage with target audiences and build brand credibility. By sharing authentic stories, industry insights, and strategic perspectives, Adam aims to establish himself as a trusted authority in the B2B SaaS space. He emphasizes the power of storytelling and personal branding in connecting with customers, fostering brand loyalty, and driving business growth.
Mentorship and Peer Support for Entrepreneurial Growth
Adam advocates for mentorship, executive coaching, and peer support as essential tools for entrepreneurial growth and professional development. By seeking guidance from experienced mentors, coaches, and industry peers, Adam aims to enhance his leadership skills, decision-making capabilities, and strategic vision. He highlights the value of external perspectives and collaborative learning in driving personal and organizational growth.
Strategies for Content Marketing and Audience Engagement
Adam shares insights on content marketing, audience engagement, and social media strategies for building brand awareness and customer loyalty. By leveraging platforms like LinkedIn, Adam aims to connect with his target audience, share valuable insights, and foster meaningful interactions. He emphasizes the importance of content authenticity, audience relevance, and engagement metrics in driving successful marketing campaigns.
Learn how to leverage SEO as a B2B SaaS with Maeva Cifuentes
Reflections on Entrepreneurial Growth and Personal Development
Adam reflects on his entrepreneurial journey, growth milestones, and lessons learned in building successful businesses. By prioritizing continuous learning, strategic decision-making, and personal development, Adam aims to drive business growth and innovation. He underscores the value of resilience, adaptability, and self-awareness in navigating challenges and seizing opportunities in the dynamic startup ecosystem.
Growth Strategies and Industry Leadership
Adam concludes with insights on growth strategies, industry leadership, and the importance of differentiation in driving business success. By focusing on market positioning, customer value, and
brand authenticity, Adam aims to lead his organizations to sustainable growth and market dominance. He emphasizes the value of strategic vision, operational excellence, and continuous innovation in achieving long-term success in the competitive B2B SaaS landscape.
Key Timecodes
- (00:00) Introduction and Background
- (01:24) The Quest for a Billion-Dollar Business
- (05:46) Founder Branding and Social Media
- (08:38) Different Approaches to Scaling
- (11:05) Balancing Revenue Goals and Free Strategies
- (12:29) Navigating Revenue Plateaus and Competition
- (15:22) Lessons from Rock Bottom Moments
- (20:06) Lessons from Past Mistakes
- (22:04) Implementing Processes and Accountability
- (25:30) The Importance of External Moderation
- (27:24) Advice for Bootstrapping Founders
- (30:18) Advice for Scaling to $10 Million ARR
- (32:42) The Power of Founder Branding
- (35:00) The Journey to Understanding Product-Market Fit
- (37:24) Reflecting on Past Mistakes and Learnings
Transcription
[00:00:00.000] – Show Intro
Welcome to the Grow Your B2B SaaS podcast. In this podcast, we cover all topics on how to grow your B2B SaaS, no matter in which stage you’re in. I’m Joran Hofman, the host of this show and the founder of Ready Test, which is a B2B SaaS that helps other B2B SaaS companies to set up, manage, and grow an affiliate program. Being a founder myself means I’m going to the exact same journey as you are, experiencing the exact same issues, and probably have the exact same questions. And this is why I started the podcast in the first place. Get advice from industry experts on how to grow my B2B SaaS. So if you like this content, make sure to subscribe, follow, give it a thumbs up. Let’s just dive in.
[00:00:37.250] – Guest Intro
In today’s episode, we’re going to talk about how to build a billion dollar business in a year. My guest is Adam Robinson, the founder of retention. Com. Our B2B, both are focused on identifying website visitors on a personal level, where retention is focused on e-commerce, or B2B is focused on B2B, as the name is already indicating. Adam is trying to scale and bootstrap his company to unicorn in public, and he even has a TV series called The Billion Dollar Challenge. Before retention. Com, he bootstrapped Rob Lee, email marketing to an eight-figure exit as co-founder CEO. So without further ado, welcome to the show, Adam.
[00:01:11.560] – Adam
Thank you for having me.
[00:01:13.190] – Joran
Nice. I’m going to start with a Dutch blunt question. Why should people listen to you today?
[00:01:17.930] – Adam
That’s a great blunt question. I think people should listen to me because I’m now currently launching my third bootstrapped startup. And once you’re lucky twice, you’re good. I’m not even sure. We don’t know what the third one is going to be yet, but I think that’s a pretty good reason.
[00:01:33.930] – Joran
Yeah, so third time lucky charm?
[00:01:35.830] – Adam
We’ll see.
[00:01:38.000] – Joran
You’re trying to basically build a billion-dollar company. What does it mean to you?
[00:01:42.960] – Adam
That’s an interesting one. I was very convinced, 16 months ago, that by honing in on the ideal customer profile at retention. Com, it would eliminate this churn problem we had. And we were in a position to do something similar to what this company I was sharing in my office with, Jasper AI, had done over the course of the year and really get revenues to explode in 12 months. I wanted to make a docuseries about it because I was like, either this is going to go great or horribly wrong, I want to capture it. It was just a catchy title to call it a billion dollar challenge. It didn’t actually get there. But it doesn’t really mean much to me other than unicorn status is like an Olympic gold medal of startups, in my opinion. For my ego as an entrepreneur, I would love to bootstrap 100 million ARR at some point. I don’t have any timeline about that. I don’t really care if it happens or not. It would just make me feel really validated. So that’s the same thing as a billion dollar.
[00:02:42.000] – Joran
You can say even because evaluation is something somebody else puts a value on the company, where you probably want to go for the ARR, which is something you can measure, control yourself.
[00:02:51.850] – Adam
There’s ways that I wouldn’t want to do it. I wouldn’t want to take a bunch of VC money to then be told that my company was worth a billion dollars. I wouldn’t be willing to do that in service of evaluation. It really doesn’t mean that much to me. It’s just a word that gets attention. For a good reason, maybe, but that’s what it’s all about.
[00:03:11.240] – Joran
I think you get quite a bit of attention. At least I see you all the time on LinkedIn. Even to quote you, you go for radical transparency. Why? Why did you take this approach?
[00:03:21.820] – Adam
So 18 months ago, I mentioned earlier, I was like, We have an opportunity to make a unicorn. At that point, we had six employees. I had never done any marketing. My co founder was doing the sales, and she had this five person operation in the Philippines that was doing lead gen and just sending email manually. And the product was so good that between that and word of mouth, that was what we were doing. When we thought that this audience that we had focused on, which is like the top 1% of the Shopify ecosystem, was very large, and Klavia was doing really well, and there were a couple of other very large companies that were serving them. By the way, as I mentioned before, I had been sharing an office with the Jasper AI guys two years before they started that company. They were going through this radically transformative phase. They raised $200 million. They hired all these amazing VC-type people. Long story short, thought the opportunity was much bigger than it actually ended up being. But at that point, I’m like, I have an awareness problem. We have no competitors in this market. If every one of these stores knew about us, they would use it immediately.
[00:04:26.740] – Adam
What’s the quickest way to spread I had awareness. I read this book called founder brand by Dave Gerhardt, which I would highly recommend if you’re a CEO type. I talked to a bunch of people, and I thought that growing a personal profile on social media was the fastest way to generate awareness. Because someone said this to me, and I believe it, people are on social media to connect with people, not brands. I had never done anything like that, but I had seen a few work in public efforts done. The main one, Nathan Berry. I was in this email newsletter space, and this guy was growing this company called ConvertKit, and blogging very transparently about it. I knew how interested I was in the information, and so I knew that thing would do well. That’s part of it. It’s like when you’re creating content, being shocking is always a plus. I don’t necessarily understand why, but nothing shocks people more than sharing your numbers. It’s two things for me. It’s sharing the numbers and sharing the losses. The combination of those two things are a from sharing things that are not your numbers and your wins.
[00:05:34.240] – Adam
Because that’s what every company does.
[00:05:36.770] – Joran
Yeah. At any end, people want the transparency to figure out, Can I do the same? Where is he actually at? Because when you talk about numbers, I guess you mentioned at the beginning we’re not there yet. As in, where are you now revenue-wise?
[00:05:48.680] – Adam
21.5 million ARR. Four months ago, we were 22. We’ve been shrinking a half % every month. It sucks.
[00:05:53.840] – Joran
Yeah, and I guess this is what you get when you’re radical transparent. You also have to share if they’re not going well.
[00:06:00.160] – Adam
It really sucks from an employee perspective. It’s not what you want to share. We have five competitors now. We had zero 18 months ago. There’s one side of the argument that the reason so many people have come into the market is because I was sitting there yelling about how hard we were crushing it. I think it’s another reason. I think it’s like these people found the problem we were solving in a different way. They realized the problem they were solving, actually, they could bolt on a solution that would solve the problem we’re solving, and it made their product way better. I think they would have gotten there anyway. But that’s certainly a fear that people bring up all the time. If I share how well I’m doing, a bunch of other people are going to start doing it. I believe that is offset by the velocity of growth and the amount of awareness that you get from it. In other words, we wouldn’t be where we are now. We may have less competitors, but we would be a fraction of the revenue that we have now had I not done that.
[00:06:55.120] – Joran
Yeah, so in the end, the benefits will outweigh the downsides of getting more copycats.
[00:07:00.380] – Adam
That is my belief. You can’t quantify it. There’s no way for you to ever tell how being radically transparent on social media would or would not have affected competitors showing up. But my belief is that I just see the benefit of the awareness, right? Because it’s not only the way that I’m telling our story right now, it is not only that’s being shared. It’s not just these emotionless pieces of information that are getting thrown out in the world. This is a weird thing to say. I’m making this content that is making people think that they are my friend when they have never met me. That’s something very different than just throwing out information about your financials. It’s something much more powerful, in my opinion. I believe this is a future of brand. I sell sketchy products. Nobody is questioning using our B2B. I think a big reason why is because I’ve built this trust over the last, specifically the B2B market in the last seven or eight months. That needs to be weighted also. There are unmeasurable things about the type of affinity that can be created through this founder brand.
[00:08:08.940] – Joran
I agree. It’s interesting because we have somewhat the same. We are in affiliate marketing. If people think about affiliate marketing, BTC, they think of all these shady things. And we do the same where I go out there. There’s a face behind the brand. There’s a face behind what we do. So you build more trust. Yes. You already did an eight-figure exit, planning to build a nine-figure company right now? What are you going to do different?
[00:08:32.180] – Adam
The eight-figure company did not have product-market fit, and it was in a super-commoditized, highly mature space. Both of my companies now, when I started, retention. Com, it’s called Get Emails, no one had ever heard of anything like it before. It was in a fringe market that had zero competitors. That’s a big differentiator. I want to operate in places where there is not competition for reasons that I understand. I also want to craft core offers that are fundamentally impossible to compete with to try to create a moat, which is this free thing that I’m doing with our B2B. People can’t even believe it. What do you even mean it? It’s free forever, and you’re going to just pump leads into my slack for as long as I want to? It doesn’t even make sense. But in doing that type of thing, I know for a fact, there’s this guy Chris Walker, who I know who’s an influencer on LinkedIn. Somebody went to him, they’re like, I want to compete. They didn’t say for RvB. They’re like, I want to compete with Adam Robinson in person-level identity. I just have no idea what to do because he’s giving it away for free.
[00:09:30.190] – Adam
That represents the arc of my point of view on all of this stuff. Now I’m playing, it’s like, I thought retention. Com was going to be a unicorn. It is not. It is now great cash cow. It’s going to make our founders $7 million this year. Now I’m trying to play for this total market domination and worry about revenue and monetization later.
[00:09:51.920] – Joran
Yeah, because there are two sides, right? You’re going to give away a lot for free, and you want to get to that revenue goal.
[00:09:58.080] – Adam
Yeah, I think the longer you can to hold off on prioritizing monetization, the more you will be able to monetize when the time comes because your user base is just growing exponentially. So assuming that you can monetize at some % on some multiple of whatever you’re charging, it’s whatever. If you wait, in extreme case, 10 years, you’re going to have 10 million people. If you wait five years, you’ll have 1 million people. If you wait two years, you’ll have 100,000. So whatever that multiplier is, it just gets so much more powerful when it comes. I believe that even if we didn’t charge a dollar for this product, if we had 80% of the TAM using it, that’s a billion-dollar company in itself. Because people would know that the day you flipped it on, A, there are no other competitors that will ever enter the market because you are synonymous with this. It’s like Google, right? They’re getting some competition out, but they had a long period of time where there was nobody. Then once you flip it on, the multiplier on that user base is just so profound that there’s just tremendous value to just having the unquestionably dominant market position within a valuable term of anything.
[00:11:05.150] – Joran
You mentioned as well, like your revenue is flattening, right? To call it like that. What is the goal for you on a monthly level? Like the number of signups, is that where you currently-So there’s two separate businesses, right?
[00:11:14.640] – Adam
The The e-com business and the motion and the metrics, they have nothing to do with this B2B thing. The e-com thing, I thought it had 100 million ARR potential 18 months ago. I do not think that anymore. I think that it can get to 25, maybe 30, if we’re lucky, but it is a high churn product and a high churn buyer persona, and we can reduce that. But no matter what we do, it’s not going to look like a CRM from churn characteristics or an ESP like Klaviyo from churn characteristics. So knowing that, I’m going to try to extract every dollar possible and not plan to get some exit on that because it’s a high-growth machine. That allows us to do very different and crazy things with this new company. On a monthly basis, we’re evaluating It’s tough, because I don’t know when that’s going to start growing again. There are some issues that we need to clean up, and we need to refine the pipeline generation and reduce the churn or whatever, because that’s really what SaaS is at the end of the day. It’s, can you generate enough pipeline to outpace churn? If you can, it’s going up.
[00:12:14.700] – Adam
If you can’t, it’s going down. Then the other business, it’s been around for 28 days. We’ve had 3,000 people sign up in 2,600 install our script. How are you supposed to evaluate what’s going to happen next month? I don’t know. We have 28 days of history. Thank God bootstrapped. If we had taken Growth Equity a year and a half ago, sold this stream to people, I don’t think I would even be offered the opportunity to pursue the B2B opportunity like we’re doing. I would certainly have people breathing down my neck, demanding for answers on the D2C side, which I’ve mentally all but… I don’t think about it anymore. My co-founder, Diana, runs it. We have once a week meeting. That’s it. It’s cool. Is it still going to crack out seven million bucks this year? Okay, fine. I’m happy.On to here.Interesting..
[00:12:57.910] – Joran
In the end, you can take the free strategy strategy, as you mentioned, because if you had free fees, then they would probably ask you to charge.
[00:13:04.230] – Adam
I would just think that it’s just not aligned with how they are forced to look at the world. They need stacking revenue history with low churn that creates this narrative that it’s going to continue forever. It’s not what I think the optimal go-to-market for the long term is for this product. But it’s amazing because no other company with institutional funding could ever do something like it. They just can’t allocate resources that way.
[00:13:30.580] – Joran
Yeah, and in the end, you have a really comfortable position. Company one generating money, so you can focus on that. Make it sound easy, but you probably hit rock bottom one day, either financially, personally. What was your moment where you just hit rock bottom?
[00:13:43.140] – Adam
I had a few of them. I’ll tell you a couple of stories. The first startup that we sold for $10 million, we got it to $3 million through this data mining strategy. It was pre-built with, pre-data-nice, and we were just like… It was in the email newsletter space, and we were figuring out who constant contact customers were calling them up and just pitching them 50% more opens for half the price or whatever on a $45 subscription. It was terrible. I had a list of 250,000 leads, and then I had a list of a couple million from a different part of their website that was of inferior quality. Meaning I had a list of who we knew to be their paying customers, and then we had this much larger list that was much less detailed of people that signed up for free trials. The paying customer list converted great. The metrics on the sales people were excellent. Then I tested the free trial list with my best people. It looked like it was going to work. Ramped up the sales force. Then I had 38 people calling the second list, and people were not even picking up the phone.
[00:14:41.950] – Adam
It wasn’t a matter of, Oh, could we tweak some things to make the economics work? It’s like the fundamental list was totally broken. Luckily, I had been in the game for a few years. I had fired people. I had realized that never in my career, the saying is always, I’ve never regrettable firing somebody. I’ve just regrettable not doing it sooner. It was like, It was my fault. It was terrible. It was stupid. I don’t know how I would have done it differently, but I got in this position where this didn’t work. You can’t just keep doing something on that type of scale that didn’t work. I had 25 people in a room. I was like, If you are in this room, you no longer have a job. This is how I fucked up, whatever. Then he gets slammed in my glass door. That was a horrible day. It was bad for a little while. There were a couple of situations I felt really bad about. We brought a recruiter in to help scale the sales work. She was a foreign national. It was a visa problem. It was a fucking disaster. That sucked. That was a low point.
[00:15:32.850] – Adam
There was another point two weeks before we sold the business, where we had these developers in Argentina, and our tech was put together with string and bubble gum, like very cheaply. Things always crash, database has always froze. There was a normal crash. In this AWS instant, there’s a drop-down menu where you can restart a node or you can stop a node, and they’re right next to each other. These are people that don’t speak English. In a distributed database with four nodes, if one goes down, you’re fine. If the second one turns off, your whole website’s gone. If he hit restart on the first one, that would have been fine. But instead, he picked stop, and then it caused a second node to freeze, which he also stopped. Whole database is gone. Then we went to the backup, and in order to save money, my CTO was rewriting the backup as a work in progress, so we did not have a complete backup. This was two weeks before we were supposed to get $10 million wired to us. I was walking around Austin with my dog for eight hours. I found out about this was 10:00 in the morning, walking around with my dog for eight hours, trying to internalize that it was just money.
[00:16:44.740] – Adam
I had a better business that was coming. I would make money in the future. That’s all that this was. It took till 04:00 AM the next day. Somehow, these guys were able to dig into this broken backup file and restore 96% of the website or whatever. The buyer never found it. I actually think we had to disclose it. But yeah, I mean, that’s the most intense thing I’ve ever been through with respect to my job.
[00:17:11.950] – Joran
I guess one question regarding the first thing you mentioned, the layoff. You mentioned it was hard. How did you deal with it? Because it’s not easy to stand in a room of 25 people and say, You don’t have a job anymore.
[00:17:23.660] – Adam
A pretty close analogy is if you walked outside right when you woke up and it was freezing cold and you had to get in a 37-degrees cold plunge, you just have to fucking do it. You know what I mean? There’s no other way to describe it. I’ve had to fire senior people, and it’s been just as bad. The anxiety going in the conversation and the anxiety during the conversation is even worse because you’re just dealing with one of them. If you haven’t really telegraphed it well, it just sucks. It’s one of these things in life that you just have to… Breaking up with someone you’ve lived with who’s a partner, I don’t know if you’ve ever done that, that is even worse. It’s this It’s the unfortunate, it’s the worst part of the job. You just have to do this to people every once in a while in service of your company, and it fucking blows. There’s no other way around it.
[00:18:10.570] – Joran
I think when you compare Europe to US, I fired some people in my previous job. Europe is easy because you know exactly that they’re going to be taken care of. The government is going to do things. But in US, it’s just the next day you’re on the street, and if you’re living in the wrong state, you wouldn’t even get anything from the government.
[00:18:26.350] – Adam
It’s really hard. So this guy, Dave Cancel, who is the CEO of Drift. You may have heard of that company. I don’t know who it was. He did a podcast interview a few months ago, small ones, guys came in Salmon City, and he was talking about how he was basically put in a position after 9/11 in New York, where he had to fire people, and they had families, and I knew they weren’t going to get another job for a year and a half. I was 23, but our whole business went away. There’s no option. We had to get down to three people to break even. There was no funding solution. As a mid-20s person, having to just fire someone who was 35, lived in or outside of Manhattan, had kids, had a life, and I knew they weren’t going to get a job for a year and a half. I wasn’t in that situation. I knew these people were going to walk right out and go get another sales job. We have a really smile and dial low-end sales job that basically the companies who do that are willing to take a shot on almost anybody because it’s so hard to tell who’s going to Excel and not shop to shop.
[00:19:30.590] – Adam
But yeah, America is gnarly in that way.
[00:19:34.250] – Commercial Break
This podcast episode is sponsored by Reddit. Us. Reddit. Us helps B2B SaaS companies to set up, manage, and grow an affiliate program. In short, it means you’re asking other people, affiliates, to promote your SaaS. You would only pay the affiliates a kickback fee when they deliver you paid clients, making it a very cost-effective and scalable way to grow your MRR. See more at getredditus. Com.
[00:19:58.440] – Joran
Let’s zoom out, I guess, a little bit again. Let’s go back to you wanted to build a billion-dollar company, right? As mentioned, you didn’t make it. I guess if you could do things all over again, I guess from the beginning, what would you do differently? How would you approach things?
[00:20:12.440] – Adam
I got pretty carried away in… We were very cash flow positive at six people, and then we ramped to 55 pretty quickly. The ramp wasn’t what ate up all the cash flow. It was spending on, if you call it third-party spend, sponsoring trade shows and podcasts and newsletters and this and that. I had this feeling of FOMO that is very unbootstrapper. I like making financial decisions in business that make sense from a $1$1 at perspective. I’m willing to take Yos on unmeasurable things that I think are helping in ways that are unquantifiable. But I would categorize how I was behaving as very financially irresponsible and very much a, We just raised $50 million. I’m like, We need to go as fast as possible way. I don’t like running business that way. I hope that I’ll never get punch drunk again like that and do that. But that’s the one thing that I would have changed. I’ve never done anything in a state of FOMO, I don’t think, that ended up being the right thing, because that’s what FOMO is. It’s a bunch of idiots who are caught up in euphoria, who are right at the top.
[00:21:30.140] – Adam
Going for everything. The SaaS bubble was on the way out, and I was in the last ending, trying to really go for it. So I would have liked to have not lost my principles as a bootstrapper.
[00:21:43.880] – Joran
Yeah, I like it. I think you always went the VC route. You just treated money as free in a way where you just went all in. If you look at how you do things right now, maybe do you have any certain processes? I guess this is like a strategy, but do you have certain things which really are the red line within the company where you follow them and you try not to deviate too much from them?
[00:22:06.670] – Adam
It’s really interesting you ask a question about process. If you ask my COO, this guy, Santos, what my shortcoming as an entrepreneur is, he would say, one thing, process. I love 5-8 people, very early stage. Everyone’s very highly productive. Everyone is doing. I like to understand exactly how these other people That’s just not how you run a company that has 50 to 100 people. You can’t do it that way. So literally in the last 60 days, I found… The intention wasn’t even for this, but I found a CEO mentor who’s also an executive coach. The intention was I’ve read the book The Great CEO Within, several times on my journey, and something resonates with me differently every time I read it. Most recently, I’m in the scaling phase. 20 million ARR is a scaling company. You’re not scaling anymore. Guys, at some point, the emotional burden of scaling a startup is going to be substantial. It’s not really fair to just share that burden with your spouse. It’s not really effective burden sharing in the co founder circle because you’re all living it. It’s not actually sharing it. It’s just whatever. He’s like, You should get a therapist, a mentor, and a group of peers.
[00:23:24.360] – Adam
Found a therapist. It’s been great. She’s like, You don’t need it right now, but I’m like, I want to be preventative. We just talk about everything I’m grateful for, really. Then I found a mentor CEO coach, and then I’m working on the group of peers thing. It’s a 2024 goal. That was why I was seeking the CEO coach and mentor in telling me what he does, the lack of process thing came up, and he’s, I work with entire executive teams, and I can help you roll out. Because I’m like, We tried to roll out the OKR framework three times last year. It didn’t work at all. I told him that, and he’s, I can pretty much work with your whole exec team, and I can get this rolled out and hold you guys accountable to doing it the right way. This EOS, entrepreneur. It’s a more sophisticated OKR thing. Last week, we were in Vegas doing our first quarterly VTO session, came up with our Rocks, all this stuff. And that is happening right now. We’re still very much in the honeymoon phase of it. I have a high degree of confidence that it will stick for two reasons.
[00:24:24.890] – Adam
One, the executive team is so bought in this time, and it’s so rigid what you to actually do. This guy is running the L10 meetings for the first several months, and he’s going to pass it on to the implementer in our company. That is the first time that has really happened. What is non-negotiables? Now I can say that we will be evaluating people in their behaviors on core values and behaviors related to those core values. Some of them will be non-negotiable. We had done really poorly Not really at expectation setting within roles in our company until now throughout an entire history. That doesn’t really matter when, again, you’re five people and they’re super productive and you know what to expect of everybody. That doesn’t scale. So expectation setting and delivery part of our organization will very soon become. The line that whether you want to be here or not is defined around.
[00:25:24.440] – Joran
Do you think that having, you mentioned already, but having somebody outside of the company, run the meetings, set things up, keep everybody accountable, is that going to be crucial for the success of the implementation?
[00:25:36.250] – Adam
For us early on, absolutely. For us, even to get through that two-day off-site, having someone keeping us focused. We’re so not used to staying on track, separating idea generation from relationship conversations, from decision-making conversations, from we’re going to process these issues into action items. It’s imperative for us, at least, and I think probably for most young executive teams who are not experienced in execution, to have a moderator who is literally just keeping you to the agreement that you made about how you are going to do things at the beginning of the conversation. I think in three months, this girl Kelly, who’s going to eventually be the implementer on all different business lines, she will be able to run it like him. But we all have the bad habit right now. It’s like we need to develop the muscle that’s the new habit.
[00:26:28.630] – Joran
I think a lot of people have a mentor or pay a group or maybe not a therapist, but at least they have two of the three things you have. But I guess they would never have an actual implementer who can keep everybody on track because it’s nice to have a mentor, but it’s also easy to go back in old habits.
[00:26:43.110] – Adam
That’s why I’m feeling very grateful for this situation. It’s like somebody pitched us 50 grand to roll out eight OKRs and that’s it. This guy is going to end up being a little more, especially if you just keep seeing everybody every other week, eight people at 6:15 hour. But for the first 50 grand, we’re getting so much more than just this implementation. It’s like he’s coaching all of our inexperienced managers into being more effective executives at the same time and holding them, everybody accountable for rolling this out. It’s a great situation. I don’t know if that’s normal, if there’s just executive coaches out there that you end up liking and they’ll work with everybody on your squad or whatever, but it’s great for us. Nice.
[00:27:21.500] – Joran
We’re going to go to the final four questions. If we just zoom out again, if we talk about bootstrapping, what advice would you give a SaaS founder who has just started their journey in trying to grow to 10K monthly recurring revenue.
[00:27:35.020] – Adam
Everybody in the beginning does not realize how precious money is, right? When you’re trying to bootstrap, and especially when you raise like angel or whatever. When you’re trying to bootstrap, regardless of whether it feels this way right now, there will be a point in the next 12 to 18 months where you’re like, I am down to my last dollar. Trying to be aware of that and not spend money before you absolutely have to is critical to success. Because ultimately, my interpretation of being an entrepreneur is like, you’re just trying stuff, and when it works, you have a company, and when it doesn’t, you’re burning money. Now I have this cash cow that is allowing me… I tried six things last year. We’re pursuing two of them in a major way. But when you’re bootstrapping, it’s hard because you only have whatever is in front of you. Oftentimes, your intuition is a very bad indicator of market viability. You have to, and software is very It’s expensive to develop also. It’s having this attitude towards money that is very scarce until you really have something. Then I think shifting to the abundance mindset, but still being disciplined on what you’re spending on is the most critical thing.
[00:28:45.360] – Adam
Then the other thing would be read about what product market fit actually, what signs of it are. Until you have it, don’t focus on anything else except for product market fit. Don’t hire a sales guy, don’t hire a marketer, don’t try to do Facebook ads. Nothing is going to fucking until that product is incredible. The more incredible the product is, the easier it will be for you to do everything else.
[00:29:07.780] – Joran
Maybe then one follow-up question here. How would you define product market fit then?
[00:29:11.970] – Adam
I think product market fit is very closely related to very strong word of mouth. If you’re doing nothing to promote this product, it’s getting pulled out of you on its own, and it’s growing. That is the best first sign. Then I think our free product right now has very good product-market fit in this audience of people who are going to continue to use it for free. We can’t charge people for it yet. We don’t have the features to serve the larger company that would pay for it. If you’re getting over 50 leads a day, sitting in a Slack channel trying to sort through them doesn’t work. You need to filter down to the three that matter and then push those somewhere. We don’t have the capability to do that yet, but it serves the free guy who’s getting five a day very well. They’re very excited about seeing who’s on their side or whatever. Yeah, that’s all I would say about that.
[00:29:55.510] – Joran
To go back to the final four questions. So the second one, if we just passed a 10K MRR and we’re now growing towards 10 million AR, so it’s a big step. What advice would you give SaaS founders here?
[00:30:05.660] – Adam
If you can hold on, it’s going to be so tempting. You’re going to start getting 10 emails a day from institutional investors. If you’re still a bootstrapper at 10 million, There are so many different types of people that want to give you money. I would say don’t take it. I think there is a beautiful point that I’m very close to reaching. Maybe some would argue I’ve reached it, where you are making a lot of money every year. If you’re lucky enough to take chips off the in this round that you do, I think that’s the motivating factor for most people to do it. From what I understand, they don’t provide that much value. I think at best, they can be not a part of your world, and at worst, they can ruin your life. It’s like this pitch of, Oh, we’re going to give you go-to-market advice or whatever. You don’t need it. They’re not really going to help you hire that much. I would say, Man, if you can just kick that bootstrapping thing down the road a few more years, you could get to this dream world where there’s a lot of revenue, the business is substantially de-risk, you’re paying yourself a lot every year, and if you hit 10, you’re on your way.
[00:31:06.940] – Adam
At the end of the day, the potential business growth of a SaaS is related to churn rate. I don’t know what the numbers are, but you got to have pretty high churn to stop out at 10. If you don’t, definitely don’t raise money. If you do, you’re probably not going to be able to raise money anyway.
[00:31:23.590] – Joran
Nice. If we zoom even further out, would you have any general advice towards a SaaS founder who’s now on the same journey as are?
[00:31:30.410] – Adam
I am dumbfounded by the effectiveness of the founder brand content that I’ve been creating on LinkedIn. It’s been a long journey. It didn’t really start working until one year in, but I can’t believe how effective it is. It requires a ton of time, a ton of energy, a lot of money, but it’s the most effective vehicle I’ve ever seen for spreading awareness and incredibly capital-efficient. Again, it’s just so specific to author, platform, reader, fit for the content. But if you are your ICP, meaning your ability, which a lot of people are because they solve problems for eat your own dog food type thing, you have this opportunity to become an influencer in that space. Then instead of sponsoring conferences like this, you’re getting asked to speak for free because you are the ICP. I’m talking at 9:00 AM tomorrow. Everybody in the audience, after my speech, will sign up for my free product. Why wouldn’t It’s made for them. There’s this incredible power with the way the world’s set up now with social media, where if you are your ICP, you can do this. If you are, I would encourage you to investigate it.
[00:32:42.320] – Joran
That’s my advice. I think we’re somewhat A bit of an example. We’re both here on stage. I got invited to do the podcast here on my own target audience, Save as You. I guess it works. You’re now at 70,000 followers, LinkedIn. I’m at 15, so what?
[00:32:56.410] – Adam
Yeah, I was at 15 eight months ago.
[00:32:58.330] – Joran
Exactly. So you have to start somewhere. You mentioned from year one, it really started working.What did you do?
[00:33:04.140] – Adam
After year one. It took me 12 months of banging my head against the wall. There were some fundamental issues. I was conflicted about, for what I know that I am good at as an entrepreneur, I really understand that. You know what I mean? I understand what I’m effective at, and I get what I’m not good at. If I think about what I’m good at now versus before I had 11 years of experience as an entrepreneur, it’s like a professional athlete versus someone who’s a middle school athlete. It’s that much improvement in just the understanding of what I’m good at. Eighteen months ago, before I made a social media post ever, and I wasn’t on social media in my personal life, I was literally where I was 11 years ago as an entrepreneur in my understanding. I decided to commit to it. Some people helped me with it. But still, throughout the first nine months, I did not have an understanding about why I was doing what I was doing. That felt wrong to me. It felt like I was just with my eyes closed, throwing darts out, and then I’d open my eyes and see if they I didn’t get anything close to a bullseye.
[00:34:01.840] – Adam
Then I didn’t know why, because I was throwing darts with my eyes closed. That’s one expression of a reason that I felt wrong about it, and it wasn’t really working. The second was, I was trying to attract e-commerce founders to my content in order to generate leads for my business selling to e-commerce founders. I’m not an e-commerce founder. Why the fuck would they want to listen to me about anything related to e-commerce when I’ve never sold a product in an e-commerce environment in my life? There are plenty of other people making content for e-commerce people about e-commerce that they would rather listen to because they’re in the game. The same reason people want to hear me talk about bootstrapping SaaS. I’m in the game every day. That was a problem. I was very conflicted about it. I didn’t know how to resolve it other than to just talk about my own business, which that’s interesting to an e-commerce guy, but it’s much more interesting to a SaaS person, especially when I start talking about issues related to sales and marketing in a bootstrap SaaS. That becomes what people actually want to consume who are in sales and marketing and working in SaaS.
[00:35:01.340] – Adam
That’s the big thing. In the story about when I really knew it clicked, so the peril of the billion-dollar thing not working out was like, we ran our Salesforce way too much, and then it just wasn’t working, and our VP sales quit, and we went from 20 to four salespeople in one day. So the second time, we got a mass layoff. And I posted about that on LinkedIn. And after I posted about on LinkedIn, a bunch of people, investors, SaaS founders, whatever, they were coming to me, and they were like, Man, I don’t know what our outbound is doing right now. Because SaaS was slowing down, the Fed rates were high, people were being told it was told not buy SaaS, whatever. They’re like, And automation tools, AI, everything. It’s making it much harder to do this job of generating demand from outbound sales. Predictable revenue model is dead. People start talking to me about it in every way, shape, or form. Basically, the summary was people had either already cut their entire BDR team or they were thinking about it and wanted to because they knew it was the most unproductive thing they could see to get a lot closer profitability.
[00:36:07.290] – Adam
I wrote this post, and I posted it, and it was 100 times more engagement than I had ever gotten. It was basically like, I spoke to eight BDR managers, and here’s the 10 things that they said. It was being very clear that everyone is thinking about chopping these guys. I was like, Wow, that’s interesting. Then I remember clearly, I was on vacation in Santa Fe with my friends. Guys, I got to write three LinkedIn posts, and I wrote them. I was like, If these three posts crush that last one, then I understand this machine. If they do not, then I don’t. I’m still in the spot that I was before. Crush, crushed. From Then on, I was like, I know exactly what to write to crush on LinkedIn. But that took 12 months. I had a consultant, I had a ghost writer before. It’s just he got. A recommendation that I would make is if your audience is not on LinkedIn, don’t do LinkedIn. If we hadn’t pivoted to this B2B thing or started a new business, I was going to focus on how to be good at Twitter, which is much harder than LinkedIn, just the supply demand of the content and the creators and consumers.
[00:37:15.130] – Adam
That would have been terrible, but I would have tried. But yeah, that’s it.
[00:37:20.100] – Joran
Nice. I guess the final question, you mentioned you didn’t know things 12 months ago, but what is one thing you wish you knew 10 years ago?
[00:37:29.590] – Adam
Ten years ago? I would have been basically starting my first company. I didn’t have this. I was a credit default swap trader. I worked at Lehman Brothers for 10 years. It’s nothing to do with SaaS. It couldn’t be far. There are very few transferable skills between the two. And this notion that I said, when you asked me, what would you recommend any entrepreneur? This notion to try to have an understanding of what product market fit is and pursue that, it was the farthest thing from my radar that you could have ever imagined. I was just trying to… This product we were selling was an email newsletter app, literally just copied Mailchimp, and we’re trying to steal constant contact customers, which, by the way, is fucking stupid because you should have copied constant contact to steal constant contact customers, which we ended up building. That was the mindset that I was in at the time. Oh, yeah, we’ll just copy this UI and get these people to switch over. I think the opposite now. I’m like, How can I be more different than anything that has ever existed in the world. Totally focused on that, in that alone.
[00:38:35.920] – Adam
Everything that I do, because I believe that is the most effective marketing. It’s whatever. You’re in the milk out. It’s like milk, not milk. What do you focus on? The not milk. Yeah.
[00:38:44.800] – Joran
Yeah, That’s the approach you have on LinkedIn where you go full transparency or radical transparency, as you call it. Yeah.
[00:38:50.050] – Adam
And if everybody starts doing that, which they will not for reasons that they can’t, then I will figure out something else to do that no one else is willing to do, basically. No. Nice.
[00:39:00.960] – Joran
And if people want to get in contact with you, I can imagine they can’t connect with you anymore on LinkedIn.
[00:39:05.040] – Adam
It’s the place where I’m spending most of the time. But you can email me at adam@retention. Com also, and I’ll respond to that.
[00:39:11.660] – Joran
Cool. Live from Austin. Thanks for coming on to this show. We’re going to put a poll, and We’re going to put a question at the end of the podcast. So if you are listening on Spotify, check that out. Leave a comment, and thank you for coming on.Thanks.
[00:39:22.560] – Adam
For having me.Cheers. Cheers.
[00:39:24.980] – Show Outro
Thank you for watching this show of the Grow Your BDB 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 where it is, feel free to reach out as well. But for now, have a great day and good luck growing your B2B SaaS.
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