Bootstrapping a B2B SaaS to 20M ARR in revenue without significant external funding is challenging. Even though it might seem extremely difficult, you can do it using solid processes, having skilled people on the team, and the founder staying motivated and focused on the goal. This big goal is doable and possible with the right plan and determination.
In this episode of the Grow Your B2B SaaS Podcast, host Joran Hofman interviews Emeric Ernoult, Co-founder of Agorapulse, a social media management software. Emeric shares his experiences and insights on growing a bootstrap SaaS to over 20 million ARR and the lessons learned. Emeric Ernoult co-founded Agorapulse, a social media management software company. Before entering the SaaS industry, Emeric worked as a business lawyer and launched a social network. He is passionate about growing SaaS companies and has valuable experience mentoring and advising other founders.
What is Bootstrapping, and why did Emeric not raise funding?
Emeric explains that bootstrapping a SaaS business means growing the company without raising external capital. It involves relying on customer payments and cash flow to fund the business’s growth rather than seeking significant investment.
Emeric shares that Agorapulse did not raise outside capital for two primary reasons. Firstly, during the early stages of the business, they faced challenges in securing funding. Secondly, after achieving profitability and positive cash flow, they did not see the need to raise external capital as they could sustain growth without it.
Common Mistakes Bootstrapped Founders Make
Emeric highlights that one common mistake bootstrapped founders make is getting too concentrated on the business’s day-to-day operations and needing more time working on the company. He also emphasizes the importance of thinking big, even as a bootstrapped founder, and not limiting one’s vision due to resource constraints.
Strategies for bootstrapping a SaaS to 20M+ ARR
Emeric further elaborates on bootstrapping, emphasizing that it involves growing the business primarily through customer payments and cash flow without relying on significant external capital.
Emeric stresses the importance of establishing an operating system for the company, including setting goals, creating accountability, managing tasks and projects, and running effective meetings. He recommends implementing a comprehensive operating system, such as the Entrepreneurial Operating System (EOS), to manage the business.
He also emphasizes the significance of offering unique features or solutions that distinguish the SaaS product from competitors. He advises founders to identify what makes their product or service stand out and leverage that uniqueness to tell a compelling story to potential customers.
Recruiting and Managing Talent
Emeric emphasizes the need for founders to prioritize recruiting, managing, and retaining top talent, regardless of the company’s funding status. He highlights the importance of clarity in defining success for team members and investing in mentoring, coaching, and peer groups to support high-potential employees. All these aspects are fundamental to building a great company culture.
Advice for SaaS Founders
Emeric emphasizes the importance of maintaining passion and energy for the problem the business solves and the target market it serves. He encourages founders to stay committed to their vision and navigate the inevitable ups and downs of the entrepreneurial journey with resilience and determination.
In conclusion, Emeric shares his thoughts on the challenges and rewards of building a successful bootstrapped SaaS company, emphasizing the need for passion, a robust operating system, and a commitment to continuous improvement. He encourages founders to embrace the journey with optimism and perseverance.
- (0:40) Show and guest intro
- (1:18) Why you should listed to Emeric Ernoult
- (2:39) What is bootstrapping?
- (3:34) Why Emeric Ernoult never raised any outside capital
- (5:33)The most common mistakes bootstrap founders make
- (10:31) The ideal processes or strategies recommended to bootstrapped founders?
- (15:38) How to keep people accountable on certain set deadlines?
- (17:54) Reasons behind the rapid growth of Agorapulse
- (21:55) Advice on how to recruit, manage and keep talent in a bootstrapped SaaS?
- (26:36) How to invest in talent?
- (30:19) How to grow towards 10K MRR
- (31:09) How to grow towards 10 million ARR
- (33:51) Emeric’s crucial advice to SaaS founders
- (36:46) What Emeric wishes he knew 10 years ago
[00:00:00.380] – Intro
Welcome back to the Grow Your B2B SaaS Podcast. In this podcast, we cover all topics related to growing a B2B SaaS, no matter in which stage you’re in. I’m Joran Hofman, the host of the show and the founder of Reditus, 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 that I’m going through the exact same journey as you are, experiencing the same issues and having the same questions. And this is the reason why I started a podcast, getting advice from industry experts on a specific topic. If you like this content, make sure to follow, subscribe, review the show so we can help as much founders as possible. Let’s dive in.
[00:00:40.540] – Joran
In today’s episode, we’re going to talk about growing a bootstrap SaaS to 20-plus million ARR and the lesson learned along the way. My guest is Emeric Ernoult. Emeric is the Co-founder of Agorapulse, a social media management software. Before going into SaaS, he was a business lawyer and launched a social network. Next to building Agorapulse he helps other founders by being a part of Plature, Club, Bootstrap, and he’s doing one-on-one mentoring.You could say he’s addicted to growing a SaaS company, but I can tell you one thing, he’s even more addicted to kite surfing and sailing. Without further ado, welcome to the show, Emeric.
[00:01:15.680] – Emeric
Thank you, Joran. That’s quite a comprehensive introduction.
[00:01:18.390] – Joran
Well, people are not convinced yet after this introduction. Why should people listen to you today?
[00:01:23.080] – Emeric
I guess your audience is made of people who want to start a business in SaaS or people who have started a business in SaaS. If that’s what audience is made of, the reason why they should listen to me is because I did start two SaaS businesses in the past 23 years. Each of them pivoted several times, 2-3 times, and I eventually made one work, the second one. The first one got failing, didn’t never work, and the second one eventually worked. In a range of 12 years, actually, we grew from zero to over €20 million, or €21 million now. We did that without raising money or raising so little money. I think it’s 250,000, something like that. When your competition is raising 265 million, you don’t mention the fact that you’ve raised 350K from Business Central. Without raising money, and that makes us unique in a way that nobody in our industry has ever passed the 10 million mark without raising money. We’re the only one. We have learned things that very few companies have learned, because most bootstrap companies don’t pass the 10 million mark. When you grow a business, bootstrap, you learn is very different from when you grow a business with big funding.
[00:02:36.840] – Emeric
It’s why people should listen to me.
[00:02:38.830] – Joran
Maybe a real basic question, I guess, but what does bootstrapping mean for you? You already explained a little bit, but can you go a bit more in-depth?
[00:02:46.170] – Emeric
If you haven’t raised capital to grow your business, or if you’ve raised capital anymore, it’s BA type, like hundreds of thousands, maybe 100K, 200K, maybe 300K if you’re lucky. But you have not raised the two, three million. It could be a seed sometimes, depending on who you are and where you live or Series A. Basically, the quasi-totality of how you grow your business is through customer credit cards and customer payment, not through external capital that you throw at the problems that you have. That’s what bootstrap means to me. You’re going to grow your business with a cash flow.
[00:03:18.010] – Joran
I guess for many of the podcasts, I recorded drive value for the customers, and then from there you can drive business growth. It’s in that case that simple, I guess. You mentioned it in your intro, you’re competing against really big ones in your market. They all raised a lot of money. Why did you never raise any outside capital besides that small round you just mentioned?
[00:03:38.690] – Emeric
Two answers to that question. Answer number one, which is the early days of the adventure, because nobody would give me money. We tried because it’s very hard. It’s the hardest way to grow a business, especially in a competitive market. Having some cash makes your life much easier. It dilutes your ownership of the company, but it makes your life easier. We tried, and we tried too late, too little, not in the right country. For many different reasons, we were not able to raise. Later on, the reason we didn’t raise money was because once we got to profitability and positive cash flow, we basically kept adding cash in the bank without really knowing what to do with the cash in terms of how can we use that cash to grow faster? I don’t know. So why would I take external capital if I can’t even use my own cash to grow faster? If that makes sense. And obviously also, when you’re bootstrapped, you’re not wasting your cash. And the bootstrapers or among the listeners will probably relate to that. When you’re bootstrap, you don’t waste your cash. So if you have two millions in the bank and you’re not 100 % sure that throwing 500K at Google Ads is absolutely going to boost your growth, you’re not going to do that because you’re going to feel like it’s wasting 500K.
[00:04:49.440] – Emeric
So you’re going to test Google Ads with 25K or 30K, and if you see no result and it doesn’t seem to be working, you’re going to stop it. You’re not going to waste those two million. So basically, the second answer to your question is, after we got to profitability and cash flow profitability, we never really found anything that was worth throwing money at, so we didn’t raise, that’s the answer. It doesn’t mean that we’ll never raise money. If I find something that’s really working and not generating growth that is worth burning cash for, I would definitely raise money. I have no religion on raising money or not raising money. It’s not a philosophical choice in my part. It’s really a business choice.
[00:05:28.180] – Joran
Yeah, you need to have a place where you can spend the money. I think we’re going to dive deeper into that really soon. What is the most common mistake bootstrap founders make?
[00:05:37.890] – Emeric
What I’ve seen bootstrap founders not do is they get lost in the weed of working in the business way too much because we’re strapped no means, no team, no cash. So you’re doing a lot of stuff yourself, but you tend to forget to work on the business. I’ve seen that mistake again and again. I’ve made that mistake again and again myself. You have so little time and so little resources that you’re going to work in the business, like doing running campaigns, doing demos and providing support, but you’re not going to do enough for working on the business. That’s definitely one thing I’m seeing doing a lot. Apart from that, specific mistakes that they may do, maybe sometimes they don’t think big enough because they feel the constraint of not having a lot of cash and resources, and that creates limiting beliefs in their mind could be the second thing. I think even if you’re bootstrap, you can still think big. Maybe you’ll had a couple of years into achieving your goals and your dream outcome. If you want to build a meaningful business, you can definitely have big dreams. It doesn’t mean that because you’re bootstrap, you shouldn’t.
[00:06:43.420] – Joran
Yeah. Is that a different case with raising funding? You have to have a really clear vision. Otherwise, you probably wouldn’t get the money with bootstrapping. You’re just growing the business and you don’t have to have that big vision because you don’t have to sell it to somebody.
[00:06:56.110] – Emeric
Yeah, you don’t have to sell it to somebody. You don’t have to sell it to investors because you’re not trying to raise money, but you still have to sell it to employees or prospective employees for that matter. You can grow to a certain point without having that vision, but very quickly you’ll get to a point where if you want to attract the right talent and you want to have the right positioning on the market and the right place for you, your company on the market, you need to share a vision that people are excited about. If you’re leading a company, you have to excite the people who are wanting to join it and the people who are already working for it. If you’re not create that excitement, you’re not going to have the level of talent that you need. That’s definitely something you need to be working on. In the early days, because we were bootstraps or your question is relevant there, I was not having any vision because I was in survival mode. I was basically, Oh, are we going to pay the salaries next quarter? How are we going to go through that next hurdle and the next obstacle?
[00:07:51.960] – Emeric
Having a big vision that everybody was excited about was not my concern, my concern was survival. I got to a point where survival was not at stake anymore. We would survive because we had a broke event. Then I realized that people kept asking me, What’s the vision? Where are we going? What’s the direction? What are we aiming for? I was like, Well, we want to be an amazing social media management software. What else? That’s the vision, right? Isn’t that enough for you? We survived. It’s incredible. We’re still here. We are 2 million AR. Why more do you want? I’m happy enough with that. It’s one thing that you, as a founder, are happy enough with the fact that you survive and make 2 million AR and are break even. But your team still needs the direction, the vision, somebody’s exciting to go with you. That’s where I started struggling with this because I’m not the visionary type. When I say I’m not the visionary type, I’m not Elon Musk. I want to conquer Mars. I want to put life in space. I want to revolutionize the car industry by inventing a new concept with a flying car to avoid traffic jam.
[00:08:50.030] – Emeric
I’m not that guy. I’m very down to earth, pragmatic. What is the problem we want to solve? Okay, is that problem big enough? Is that problem meaningful enough? Let’s solve it the best way possible so people are impacted by what we do. That’s why I build B2B SaaS software because it’s very aligned with a B2B mindset. You’re here to solve problems and business problems for many companies. I had a hard time coming up with that vision, but I eventually read a book called The Vivid Vision text that explains really well that a vision is simply where you see your company in three years. What does it look like? How many employees do you have? What customer do you sell to? What countries have you established a presence? In all these things that you can actually visualize, you know where you want to be and how you want to look like, the office you want to be going in the morning in three years, all that stuff. That is a vision, eventually, and that people can adhere to that because they can see what you can see. The problem usually is founders have that in their mind.
[00:09:46.410] – Emeric
They say they have not shared how they see the future. It doesn’t have to be conquering Mars or reinventing the car industry. It can simply be the picture of how amazing your company would look like in three years if you achieve all the goals that you have in mind right now. That changed my perception on vision. Since we’ve had that vision that we build according to the Vivid Vision framework, we’ve been able to attract much more better talents. They’re actually excited by what we show them of how we see the future. That’s a very important tool for HR and for talent and recruiting.
[00:10:18.360] – Joran
It’s not that big vision or North Star metric or real long term. It’s within three years where do you want to be really practical, as you mentioned. You being a pragmatic guy, this is going to be a fun one. What are some processes or strategies you would recommend to other bootstrap founders?
[00:10:36.720] – Emeric
One thing that’s been a struggle for us for a long time was basically what’s the operating system of the company? When I say the operating system of the company is how you set goals, how you create accountability around the goals, how you manage the tasks, the to-do’s, the projects around those goals, how you run the meetings around those goals and around the priorities that you’ve set, all that stuff, which would be the operating system of the company. If you put it to simplest expression, the operating system of the company is a bunch of people having different types of jobs, were coming in together, working on stuff to advance the company towards certain goals that you want to measure. You need a scorecard to measure everything and priorities to understand what you need to work on before everything else. You need a system to glue all that together, which is usually made by meetings and goal settings and accountability tracked along the way quarter. For a long time, we tried OKRs, we tried many different things to try to get an operating system in place, and we were not successful. We eventually settled in an operating system called EOS, Entrepreneurial Operating System, that you can learn from in a book called Traction.
[00:11:46.260] – Emeric
We implemented that. It is not perfect, but it’s very helpful because it’s a comprehensive operating system for the company. Again, you have, how do you run your meetings? How do you set your priorities? How the priorities get stuck into the meeting? Every meeting is a way to look at the priority and see where you are, how you create accountability around that using scorecards, i. E, measuring. You can measure to basically see progress towards your goal, and how you run planning, quarterly planning, annual planning. It’s all thought through in the operating system in EOS. That’s been very helpful. That’s one process that I would highly advise founders to look at. How do you run the business? How do you operate the business? Just looking at executive meeting agendas, we’ve tried dozens of different types of agendas. We’ve changed them again and again and something always felt off and always thought, It was not 100 % constructive. It was not 100 % productive. I don’t feel amazing about this meeting. What else can we change about it? So EOS has been pretty helpful. You can add your own sauce to it, which we’re doing as well. Eventually, one day, maybe I’ll create my own operating system that I’ll build a software on top of.
[00:12:52.220] – Emeric
But yeah, that’s definitely a big one. Because once you have nailed that, things become a repetition. You’re in a process, basically, that’s what processes are for. You don’t have to think about, Oh, what should be on the agenda, the exec meeting today? What should be on the agenda of that project meeting today? On that product leadership meeting, whatever, because this has been processed. That’s one thing that’s really helpful. In terms of other processes, if we think about becoming an expert, the learning process of growing a business, getting a better product to the market, understanding what the market actually needs, all these different things that eventually create a successful business, they’re awfully slow. Entrepreneurs are usually very impatient. They want everything yesterday. They want the success they’re dreaming about in three years. They would actually like to have it in one year if it’s possible, impatient. Which is an engine at the drive, because we are impatient, we keep pushing. We keep saying, No, it’s not okay to be late. No, it’s not okay to not achieve our goals because of that impatient. If you were very patient, Yeah, you missed a deadline. That’s fine. No problem.
[00:13:59.240] – Emeric
Let’s push it two weeks. You’ve never heard a founder say that, did you? That’s coming from our impatience and our willingness to go fast and go faster. But the important things are still going to take a lot of time, and the way you’re going to learn about them is still going to take a lot of time. The other thing I would say is you may stay impatient because that’s a drive and that’s a thing—but be aware of the need for time to go by for the important stuff to happen and to be done well. In order to deal with your impatience, have the plan for and the roadmap. Okay, the ultimate goal, we need to do it by X. These are all the things along the way to X that are going to tell me that I’m moving forward in the right direction. I don’t feel I’m wasting my time and I will never get to X. Number one and number two are going to give me that feeling of progress that’s going to make my impatience a little lower. I can deal with my impatience if I feel there’s progress towards the goal. I have a very hard time dealing with my impatience.
[00:14:56.980] – Emeric
If I see no progress, I have no idea if we’re going to make the goal or not. We’re mid quarter and we set goal X for the end of the quarter and we have no clue if we’re making progress towards X, that’s a very bad place to be in. I would say make sure you have a process to understand the time it takes, but at the same time, track improvement and track results along the way as you’re getting to your goal.
[00:15:18.560] – Joran
Yeah, that’s just going to give you the information you need that you’re on track and make sure you actually get there based on the goal. That’s nice. I guess maybe one question regarding accountability, because I think everybody, founder, even impatient or not, will have it that deadlines are not going to be made, as in you said something and then they’re not being reached. Is there anything, any advice you would give on accountability? How to keep people accountable on certain deadlines set?
[00:15:45.460] – Emeric
Yeah. First of all, that’s a very important topic, and that’s a very hard topic at the same time. It’s very important because as a CEO, as a top leader, you don’t own or hold your teams accountable. Nobody else will. That’s totally setting example. You have to be an example of accountability yourself and for your team. If you don’t do that, nobody else will do that. Because the human tendency is not to hold themselves accountable. Think about going to the gym and becoming fit and healthy. Think about the amount of brain, power, and energy that takes. If you don’t have a system of accountability, the first evening we’re like, I’m tired tonight. I’m not going to go to the gym. Then the second, I’m tired too. Let’s watch Netflix. Then done, it’s through the trash. There’s no going to the gym and there’s no getting healthy. It’s the same for a business. You have to be the strong accountable person in the team. That’s number one. That’s hard, and I was not doing that for many years. The second thing why it’s hard because when you’re holding people accountable, you’re not their friends, you’re their boss.
[00:16:44.040] – Emeric
When you tell someone, Hey, Jaron, you told me that you would record that podcast on November 15 at 10:00 AM. Here we are, it’s 1:00 PM and we’re three hours late. That is not okay. Jaron, you committed to 10:00 AM and you pushed it to 1:00 PM. That’s not going living by your commitment. What explanation do you have for me? When I say that to you, you feel a little bit uncomfortable. I did something wrong, and I know it, and I don’t feel great about it. I have to be someone that puts you in a place of discomfort, and that’s not easy to do. Being willing to pay the price of being that person because it’s important that your team feels that those accountabilities are here for a reason is also something that’s very important. Finally, what I would say about accountability, you need a system. You need Asana, Monday, or whatever. A system that helps you keep track of what is being promised by when and how it should look like, and you can actually track it. Because if your system is your freaking memory, forget about it. You’re never going to be able to remember everything that people should be accountable for.
[00:17:48.080] – Joran
Yeah, and it’s a lot easier to keep them accountable because things are on paper or I guess on digital paper, you can just reflect to it. When we zoom out again, you’re growing at Goro Pulse in a really crowded market, right? Is there any specific reason you think why you’re able to grow it already the way you grow it until.
[00:18:04.500] – Emeric
This point? Number one, there’s a timing component to everything. We started coding Agorapoles in 2010, end of 2010, and we released the first version end of 2011 and I would say that if you had done that in 2014, it was too late already. There was no way you could make it. There is a question of timing in a competitive market, but you cannot be the last one after 10 others have done the same thing, arriving in the market by doing the exact same thing that than others are doing. That’s number one. Always think about the timing and do not underestimate the timing because the timing will kill you if it’s really wrong. That’s the first thing. The second thing is you have to create something that’s unique. You have to have something product-wise. Your product has to do something that nobody else does in a manner that’s 10X better, really much better. The one thing that we did very early on was we, in 2014, and I’m not taking from 2011 to 2014 because our growth back then was tiny, small. But in 2014, we invented what we call the social media inbox. We basically invented the fact that everything incoming messages from social media, whether it’s a comment, a private message, a review, or anything, would go to an inbox, an email inbox-like inbox.
[00:19:20.190] – Emeric
At the time, the competition was mostly made of, call it, dozens of call-ins sometimes, and every Colin was one item coming from one social profile. A Twitter DM would be for that Twitter profile would be one call-in. Twitter DMs for that other Twitter profile and another call-in. Twitter mentioned from the first profile another call-in, and so on, and so forth. That was highly extensively messy. We saw that and we thought, That’s not great. People know how to use emails. Let’s turn this into an email-like process basically in the product. That was the first thing. The second thing we did then in 2020, we invented a system that allows to measure the return on investment of social media. What is the ROI that you’re generating from your organic social media efforts? We actually patented it in the US. We did a lot of product work and legal work around it, but we invented something that’s very unique and unique to us, and we protected it. That gives us a story to tell to the market that we’re different. Yeah, we do all these amazing things that they do too. The color is a little bit different, the way it’s being done is a little bit different, and all they seem like a commodity because we all do them.
[00:20:28.020] – Emeric
I get that. But there’s that one thing that we do that none of them do. You have to find that thing for you. It could also be going after a vertical very strongly. It could be social media management for lawyers or social media management for accountants or whatever. I’ve seen some companies do that and find those couple of features and couple of workflows that are specifically designed for those verticals and the specific needs that you’ve identified for those verticals. But there has to be something that makes you, Oh, yeah, we’re like them, but for X. Or we’re like them, but we’re going to make your incomingmess, your chaotic incoming message is much easier to handle. Instead of taking you three hours, it’s going to take you one per week or something like that. That’s the only key. Otherwise, there’s no way you can survive in a competitive market. You don’t have enough cash.
[00:21:13.780] – Joran
I really like it because the product is going to be really relevant towards that target audience. Plus, you have a really marketing advantage. It’s the same what we’re doing. We’re purely targeting B2B SaaS on somewhat crowded market. But we have a really unique message where we can just say we purely focus on B2B SaaS. That’s the only thing we do. This podcast episode is sponsored by Reditus. Reditus 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 getreadytas. Com. I think in the journey you had so far, I think talent and team is going to be a big one. Do you have any advice in how to recruit, manage, and keep talent in a bootstrap SaaS? Because you’re going to compete, of course, with the VC-funded ones as well.
[00:22:10.230] – Emeric
That’s a great question. First of all, do not think that because you’re bootstrap, you don’t have to hire, manage, and keep great talents. You do, like everybody else. It’s not because you have not raised money, you don’t have a ton of money in the bank that you’re not also obliged to get the best people in your team. That’s number one. Number two, back to the vision I explained earlier, you have to excite them with something if you want them to join you. Get back to what I said about the vision and work yours out. It may take five or six months, but it’s totally worth doing if you have not done that already. If you don’t have that documented somewhere that you can share with prospects and new employees. Number three, you have to somehow measure the talent density that you have in your company. The way we do that, we didn’t invent that, we stole it from Netflix. It’s called the keeper test. Basically, it gets asking every manager, every time they do a performance review, we do them twice a year on the scale of one to five or one to four or one to three, whatever the scale is.
[00:23:09.250] – Emeric
We had a debate about do we do a scale or do we do a yes or no and we’re still with a scale, but that may change. If that person was to leave your team, how hard would you fight to keep her around? That’s the question that every manager have to ask themselves for every other team members. We do that reverse as well. In a scale of one to X, if we were asking you to change your manager, how hard would you fight to keep him or her as your manager? So our question goes both ways, and it allows us to evaluate the quality of our management framework and our management structure and the talent density of our teams. Let me tell you, we’ve had a 1:5 ratio. At one, we basically have to let them go within the next 30 days. There’s a big problem with that. Basically, one means I’m going to have a party if you leave my team. I would be so freaking happy that I’m going to crack champagne bottles and do a party at the office. That is really bad. Those people, you want them gone very fast because that means you’ve made the wrong hire or you’ve let something go on for way too long in your team.
[00:24:08.870] – Emeric
Two would be, yeah, that would be a good opportunity to get a better person in the role. That’s not good either. Two, you got to have a conversation and say, I’m not happy. This is why I’m not happy. This has to change really fast, because if it doesn’t change within the next 30 to 60 days, I’m not going to be able to be able to keep in the team. At three, so in the early days, I had an HR person who I said, Oh, yeah, three is okay. It’s average. I said, No, I’m not okay with average. That’s not fine. I don’t want average. I don’t feel I am average. I want people to be the same, go beyond what they could be and become the best person for themselves. That’s not average. I said, We need to get fours and fives and threes are not okay. So if we get threes, we have to show them what it takes to have a four. It’s all about measuring, of course, so having an idea of measurement of what’s the talent density and how do we see it. But it’s also to create clarity with our team members about what success looks like, how amazing they can become, and what they need to do to get there.
[00:25:10.040] – Emeric
It’s a combination of the two that I think is really important. I think a company where manager would rate their people 1, 2, 5, and say 1, 2, and 3, but had created no clarity about what success looks like for the team member would be a horrible company to work for. The company I want to have, I want to own, and I would want to work for would be a company that does measure talent density because I believe I have talent and I want to be surrounded by talents as well, but also tells me and tells everybody else this is what success looks like in your job. This is how we’re going to measure your talent. Did that make sense? At a GorePulse, we write documents for everyone that are called what success looks like in your job. We basically try to explain in the clear way possible to everybody. This is how we’re going to determine if you’re successful or not. These are the things, the behaviors, the achievement, the goals of where you get to these that we’re going to look at to decide if you’re a four or five or not. That gives people the opportunity to be very clear on what’s expected from them.
[00:26:09.820] – Joran
Yeah, and I think indeed, getting the expectations out there from the beginning, then they know exactly what they.
[00:26:15.250] – Emeric
Need to do. A lot of work. I’m redoing the ones from the marketing team now because I’m managing the marketing team temporarily, and every single one is a good two hours, a good two hours for what success looks like for every team member. I have four to do, so it’s going to take me almost a day. And finding that time is hard. I absolutely have to do it. It is tremendously important that I give them that clarity.
[00:26:37.010] – Joran
Yeah, and I know as well as you mentioned before, I listen to some of your presentations already. I know you also invest quite a bit in high potentials and you even use a framework for that. Could you maybe explain a little bit like how you invest in talent?
[00:26:50.690] – Emeric
The first step is the clarity on what’s expected and what success looks like. That’s the very first step. Once you’ve done that, there are always areas in there that are not yet achieved and that are not great. For those, you have to create coaching, mentoring, and sometimes external training and peer groups and put them in peers where they can weave other peers, ask questions and grow with other peers who are facing the same challenges. Ideally, everybody should have a mentor within the business that is helping them learn from them. The difference between mentoring and coaching is mentoring is someone who’s telling you how to do the thing, and coaching is someone who is asking you questions. You define and you get to how to do the thing on your own, get your own realization. Ideally, every manager should be a coach, which trust me, is not the case. There’s a great book, by the way, The 7 Coaching Habit, that is absolutely amazing that every manager should read. I created a training on that book to explain to them what are the 7 Coaching Habit and how they can embed those coaching habits in their practice as well.
[00:27:52.840] – Emeric
Having mentoring, one mentor for everybody, we had a mentorship program for managers at some point, and because of all the mess here in the department, we couldn’t maintain it. But if I can put it back on track, I will definitely put it back on track. So having a mentor, training every manager to be a coach, basically, being a coach is knowing what question to ask. That’s what it is. If you summarize being a coach to its simplest expression, being a coach is not telling people what to do. It’s the opposite of being a mentor. It is knowing what question to ask. They ask themselves the right question, and they get to the conclusions. Everybody is hard, but at least the leaders and the managers to part of peer groups that are going to help them learn from those peer groups. I definitely do that in my team. I’ve done that with each of my team members 100 %. But ideally, I would like that to go down in the company structure and be available to more and more people. I know, for example, we have sales and marketing people participating to communities like Pavilion. I don’t know if Pavilion rings a bell, but that’s the stuff we invest in for them.
[00:28:52.450] – Emeric
Yeah, if I had to give a framework for that is have a mentorship program for the people who have high potential and you want to train your managers to be coaches more than mentors every single time. Learn, teach them to ask the right questions instead of giving the answer upfront. Identify peer groups where your people can learn and invest in that, pay that for them. If you can build in-house training, do that. I see too many entrepreneurs come to me and say, Oh, what training can I buy for my manager or for my this or for my that? Most of the time, those trainings are not great. The best trainings you can do for your own manager is your own because an external company is not going to know how you manage. You have to create a training that explains to your manager how you manage in your company because we’re all doing that differently. We all have our thing. Getting an external answer and throwing money at it is usually not the right answer. Yeah, these are all the things.
[00:29:46.210] – Joran
I think it’s really good. You have to invest yourself into make sure that works for your employees and make sure that you set them up for success basically by connecting them with others and create coaches of them.
[00:29:57.330] – Emeric
Again, takes a lot of time. That’s why it’s hard to do it because you’re stuck into extinguishing fires and those big important principles, they’re hard to stick with.
[00:30:07.410] – Joran
Yeah. I love what you said and it worked well for you. In some cases, didn’t work well for others. I think that’s always going to be the case, where there’s no one size fits all in a way. We’re going to come to the final four questions. When we talk about bootstrapping, what advice would you give somebody who’s just starting out and growing to 10K Monday with current revenue?
[00:30:26.630] – Emeric
The first 10K of MR, they’re just working 15 hours a day, weekends included. That’s what I did. There’s no exception to that. If you are fooling yourself with freaking work-life balance, don’t do that. Don’t start a business. Don’t aim to go to 10K MR. It’s not going to work, especially if you’re a bootstrap and you and your co-founder are just figuring it out and you don’t have money and you’re not sure what you do. There is no shortcut than working for the first year or two. No shortcut. That’s my only advice. So be aware of that. Be aware that you’re going to make great sacrifices. You’re not going to see your friends. You’re not going to be there for your family as you would love to, and your vacation are going to be two weeks a year. So yeah, be aware of the amount of sacrifices that you’re going to have to make. That’s my only advice.
[00:31:09.780] – Joran
When we talk about getting past 10K MRR, and we are going to make a big step, what can’t have advised would you give somebody who’s growing towards 10 million ARR?
[00:31:18.870] – Emeric
Find what makes you unique. Find something that allows you to tell the story that makes you unique. Think about this. If you are like many other solutions and you get on with what you’ve done, you’ve worked your ass off to get to 10K. You’ve created some lead generation and you got a lead coming in and they come to your demo and they ask you, Oh, I’m comparing you with X. Let’s say X is your wealth-funded biggest competitor. I’m comparing you with X. What makes you different? If you don’t have a compelling story at that point to tell, you’re probably going to lose the deal. Because at the end of the day, they want to be able to go with the biggest, the safest, the ones that everybody recognizes as the market leader. It’s much safer to choose X as the market leader than you, the small bootstrap company that’s struggling to put your place in the sun. I would say, Oh, yeah, we’re like X, which is going to make X win at the end of the day, if that’s all you have to say. But if you say, I’m like X, but I’m cheaper, it’s not enough.
[00:32:12.600] – Emeric
Or the customers you’re going to have are not going to get the best customers, ideally. You can start there. I’m cheaper. It’s a first level of differentiation. We’re much more affordable. Why not? But be aware that you shouldn’t keep that as the differentiatings. If you want to go to 10 million, that’s the question here, not 10K, 10M. If you want to go to 10 million, you have to be more than just pricing. It has to be something unique that makes your story more appealing than the next story. One unique thing that you have or you offer, and nobody else does, I think that’s really important if you want to go to 10 million, because otherwise you’re not going to go to 10 million. The third thing I would say, I’m just thinking out loud, is you have to have a go-to-market that you master and you’re really good at. Go-to-market means you’ve defined a niche you’re going after or market segment. For example, if everybody in your industry does mid-market and enterprise, but nobody does SMB, maybe SMB is your way to go to 10 million, right? If everybody does SMB, but nobody does mid-market really well, then maybe mid-market is your way to go to 10 million.
[00:33:11.330] – Emeric
Enterprise, I don’t think so because it’s so hard and takes so much cash that I don’t think… You know, every time you’re in a bootstrap company, you can easily go to price. But it is to me, that’s what it would take. There is a segment that you can use and you have a go-to-market. You’re really good at SEO or you’re really good at Google ads. You have something in that range that makes you above the crowd, that makes you really better than the other alternatives out there. That’s going to take you to 10 million. Then obviously, if you want to go to 50 million, then it’s a whole other story. But you can’t be like everybody else with no real different and no real way to get to the market in a way that you’re really good at. That’s where you are you’re not going to get 10 million.
[00:33:48.850] – Joran
Yeah, makes a lot of sense. If we zoom out, do you have any general advice towards other SaaS founders who are on the journey right now? And it can be anything.
[00:33:58.940] – Emeric
If you’re a SaaS founder just getting started, or if you’re going to be a SaaS founder, you’re thinking about it, or you’re a SaaS founder, you’ve already achieved one or two million or 10 million, the advice would be so different. The only one piece of advice I could say that will work for everybody is, be passionate about what you do. Be passionate about the problem you solve and the crowd you’re solving it for. Have a level of inner passion for what I’m doing every day makes me happy, gives me energy, and gives me motivation to get out of bed and go do something about it. Whether you’re going to start or you’ve just started and it’s going to be hard and you’re going to have to sacrifice everything, or you’re at 10 million and you want to go to 50 or whatever. If you don’t have the passion for what you do, you’re done. That’s it. Because the energy you put in the thing is everything. If you don’t have that inner energy, nobody else will. The most energized person about the problem you’re solving should be you. That’s my high-level advice. If you don’t feel that, try to understand why.
[00:34:54.790] – Emeric
What’s broken? What’s not there? If you don’t feel that in the beginning, don’t even begin because you’re going to fail, guarantee. But if along the way you lose that, you had that in the early days and you lose it, try to understand and figure out what went wrong. What did I lose? You’re going to have waves of that. You’re going to have moments where you’re going to feel amazing because there is some level of success. Traction is there. The go-to-market works perfectly and you feel amazing about the journey. There will be time where you’ll feel like shit about the journey. Your CMO just quit, your CTO doesn’t want to work with you anymore, your VP of product is not to the level it should be, whatever it is. Whoever, it will happen in your life and you’ll have to deal with it like a fireman. The company is going to be struggling because it’s the recession or it’s COVID and you’re gym or whatever it is. In those moments, you’re going to be feeling weak and unsuccessful, and the life is going to feel really hard. And you’re like, Why am I doing this to me?
[00:35:50.380] – Emeric
Why is this so hard? Why is the hard never stop? Guess what? Hard never stop. It’s always hard. But you become the person who can deal with hard more and better, and that makes you the right person to run the business and take the business to the next step. But it’s absolutely normal to go through those ups and downs. Absolutely normal and expected. Think about, When you’re down, okay, what can I do to get back up? And what is the process there? When you’re up, enjoy and always be aware of the energy you have about the problem you solve and what you need to do to keep that energy high. I think that’s the only general advice that I can give that’s meaningful for everybody, and that has been meaningful for me as well.
[00:36:33.380] – Joran
I think it’s really good general advice because I think no matter which challenge you have currently, which problems you’re trying to fix currently, once you fix them, there’s going to be new challenges and problems. So you have to be passionate about what you’re doing. I love it. Final question. What is one thing you wish you knew.
[00:36:49.400] – Emeric
10 years ago? It’s an interesting question because actually, I don’t think 10 years ago I should have known what it would like, what it would feel like. Because if I had known 10 years ago that it would take me four years to get to 50K MR, and I actually wanted that to be one year and not four. I probably would not have done it. I would have given up. I think to a certain extent, you don’t want to know… It’s going to happen to you. You don’t want to know because most of the time it’s going to be harder and it’s going to take more time and it’s going to be more depressing and it’s going to be more difficult in general. You probably don’t want to know. You want to stay stupidly optimistic of the early days. We are going to conquer. The world is going to be super fast and my product, everybody’s going to love it. That’s about what you need to know 10 years before. It’s probably good that I didn’t know what would happen next. Trying to think about if there’s one thing that I wish I knew. Because the problem when you get asked this question is there are 187 things that you wish you knew 10 years before.
[00:37:52.000] – Emeric
That’s why I keep telling founders, You’re not the right person to take your company to the next level, but you have to become that person and be committed to it. That commitment makes you learn all these 187 things that along the years that you need to learn. But if there’s one big thing is having an operating system for the business earlier, having a way to set goals, create accountability with scorecards, have a meeting agenda set that’s going to help with the accountability and the goal setting and making sure the goals are happening. Having quarterly planning meetings that are set with a set agenda, annual planning that are set. All that operating system is probably the one thing I wish I implemented earlier, and I was aware earlier. That’s probably the one thing I wish I knew if I’m thinking really hard. Because the earlier you have a process to run the business and you feel comfortable that the process is actually helping you make progress towards the goal, the better you’ll feel about the hard things that you have to go through. Because okay, it’s hard right now, but I know I’m following the process, and I trust the process.
[00:39:00.740] – Emeric
I know it’s eventally going to work because I’m doing the right thing and I have a system to track that versus, God, this is really hard now. I don’t know what I’m doing. I don’t know where I am. I don’t know what direction I should be going to. I actually have no framework to think about that and to define that. So that’s a much harder place to be in.
[00:39:20.420] – Joran
Yeah, once you have the operating system, you can always fall back on that. And indeed, as you mentioned, trust the process of it. Cool. We’re going to link towards your LinkedIn so people can contact with you there. That’s probably the best way to do it.
[00:39:33.130] – Emeric
Just add a message to the invitation and say, Hey, Emerik, I heard you in the Azure and Spotcast.
[00:39:39.220] – Joran
I love the conversation. So we’re going to link also towards the books, Vivid Vision, Traction, Seven Coaching Habits. We’re going to add a link towards The Keeper Test. And we’re also trying something new. If you’re listening to Spotify, make sure to reply to the poll we have or the question we have in there. I’d love to get everybody’s feedback. Thanks again, Emerik, for coming on today. My pleasure. Cheers. Cheers. Thanks again for listening to the Grow Your BDB SaaS Podcast. If you found value in today’s episode, please leave us a review, follow us, thumbs up. You know what to do. If you want to sponsor the show to reach SaaS founders, just ping us on LinkedIn. And if you’re experiencing any specific challenges right now, let us know as well. We’re always looking for topics to cover in our show. For now, have a great day and keep growing your BDb SaaS.