S4E1 – How to bootstrap two SaaS companies to a combined $10M ARR With Michael Kamleitner

How to bootstrap two SaaS companies to a combined $10M ARR .

In the Season 4 opener of the Grow your B2B SaaS podcast, host Joran Hofman talks with Michael Kamleitner, CEO at Walls.io and Founder at Swat.io. He is currently in the works of bootstrapping two successful SaaS companies to a combined $10 million annual recurring revenue (ARR).

Bootstrapping a SaaS is almost the hardest thing you can do, so learning from someone who has taken on the challenge twice is invaluable. We will talk about the different challenges of the growth stage, finding the right people to fill key positions and everything around it.

Michael made the transition from an agency business to a SaaS model with SWAT.io, he shares his learnings and mistakes with this transition.

Listen to the full episode:

See below the big topics we covered.

Challenges in Building a bootstrapped SaaS Company

The main challenges we discussed building a bootstrapped SaaS:

• Finding the right people for key positions
• Having the right Go To Market Strategy in different phases of growth
• Finding partners which have a similar audience
• Going against Funded startups

How to Achieve Product-Market Fit

Michael shares insights on achieving product-market fit quickly as a necessity, especially when considering transitioning from an agency to a software product. The importance of customer feedback and adaptation in reaching this fit is emphasized.

• How To Navigate Challenges in Growth

Michael discusses the challenges faced in scaling a SaaS business, particularly in differentiating the product in a competitive market landscape. The episode sheds light on the strategies employed to overcome these challenges and sustain growth.

• The Importance of Adapting to Market Changes

The conversation delves into the impact of external factors, such as changes in social media platforms’ API costs, on business operations. Michael shares the experience of adapting to unexpected costs and restructuring pricing models to mitigate the impact.

• The Evolution of Sales Strategies

The journey from inbound marketing to a more sales-driven approach is explored, highlighting the significance of adapting sales strategies to drive growth beyond specific revenue milestones.

• The Importance of Community and Support

Michael underscores the value of building a support network within the SaaS community to share experiences, seek advice, and collaborate with like-minded entrepreneurs facing similar challenges.

• How to do  Outbound Sales

The episode touches on the transition to outbound sales strategies and the learnings derived from external agency partnerships in establishing effective sales processes within the company.

Lessons learned / Advice for other founders

Michael reflects on the evolution of both his companies, emphasizing the importance of being bold, adaptable, and open to learning from new experiences and challenges encountered along the entrepreneurial journey.

Lessons on Leadership and Team Building

The discussion highlights the critical role of leadership in building a successful company, emphasizing the need to delegate responsibilities, trust in hiring decisions, and nurture a strong management team for sustained growth.

Advice for SaaS Founders at Different Stages

As a SaaS company transitions from the initial stages to achieving significant milestones like reaching 10K monthly recurring revenue and beyond, the focus shifts towards establishing solid processes and structures that support sustained growth. At this stage, founders must prioritize building a strong management team and implementing efficient processes to drive the company forward. Embracing a culture of continuous improvement, adapting to market trends, and staying agile in response to changing customer needs are key elements that can propel a SaaS company towards the coveted 10 million ARR mark.

Along the journey of scaling a SaaS company, founders are often presented with pivotal moments that test their resilience and decision-making skills. It’s essential to cultivate a supportive network of like-minded individuals, whether through local SaaS communities, virtual networking platforms, or industry events. Engaging with peers and seeking advice from experienced professionals can provide valuable insights, fresh perspectives, and a sense of camaraderie in navigating the complexities of growing a SaaS business. By leveraging the power of community, founders can exchange ideas, share best practices, and find inspiration to overcome challenges and drive continued success in the competitive SaaS landscape.

Key Timecodes

• Show intro – (0:00)
• Introduction of Michael Kamleitner – (0:28)
• Founding of SWAT.IO and WALS – (1:09)
• SWAT.IO as the first startup – (1:24)
• Entrepreneurship aspirations – (1:32)
• End goals for both companies – (1:39)
• Motivation behind running two companies – (1:48)
• Current ARR of both companies -(2:14)
• Total number of employees – (2:31)
• Funding status of the companies -(2:38)
• Decision on bootstrapping vs. funding – (3:04)
• Ideation process for startups – (3:53)
• Importance of agency experience in product ideas – (4:30)
• Achieving product-market fit – (5:05)
• Transition from service model to software – (6:18)
• Challenges of transitioning from agency to SaaS – (7:28)
• Go-to-market strategy evolution – (8:08)
• Shift from sales-led to product-led growth – (8:51)
• Importance of content marketing and SEO – (10:36)
• Challenges with differentiation and pricing – (14:08)
• Handling unexpected costs in business – (19:42)
• Lessons learned from Twitter API cost incident – (21:32)
• Advice on hiring and building a strong team – (29:20)
• Importance of networking and community support – (31:18)

Transcription

[00:00:00.000] – Show intro

For both of my companies, the biggest underlying challenge always is to find the right people into the right positions, in the right places, especially on the leads, on the management level. There’s a few things that I look at when looking at the new part of them that is mostly, are we compatible in terms of our go-to-market, in terms of our target, our target ICP or target audience. There were different stages of the companies, different aspects and different key elements that allowed us to grow.

[00:00:28.790] – Joran

We arrived What is that? Season 4 of the Grow Your B2B SaaS podcast. We’re going to start in style, live from Morocco. In season 4, we’re going to focus a lot more on founder-to-founder learning. Diving into the founder journey, challenges, mistakes, things went well, of course. You can avoid these mistakes or copy the things they did well. We’re going to kick off withMichael Kamleitner. He’s the two-time founder, and as he says it himself, he lives and breathes SaaS. He founded SWAT. Io in 2013, where he’s now out of the day-to-day being a board member, and he founded WALS after in 2014, where he’s now running day-to-day as the founder and CEO. Welcome to the show, Michael.

[00:01:09.210] – Michael

Hi, Jordan. Thanks for having me.

[00:01:10.850] – Joran

Nice. We’re going to dive into it right away. A bit of a different setup in Season 4, so I’m going to just fire off 10 questions to get to know you and to get to know the company. Was SWAT your first startup?

[00:01:24.790] – Michael

Technically, no.

[00:01:26.410] – Joran

Okay.

[00:01:27.120] – Michael

Short enough?

[00:01:27.990] – Joran

Yeah, we’re going to dive in later. Have you always wanted to be an entrepreneur?

[00:01:32.940] – Michael

No.

[00:01:34.040] – Joran

Interesting. Do you have an end goal defined for both companies you have right now?

[00:01:39.750] – Michael

Yes, let’s say yes.

[00:01:41.400] – Joran

Okay, I will come back to that. You run two companies or one day-to-day, one as a board member. What keeps you motivated?

[00:01:48.130] – Michael

The daily challenges that are like, not any day is the same like the day before. It’s always something new, always a new challenge, always something new to learn, always a potential to grow myself and my team.

[00:01:58.990] – Joran

Nice. And a personal question, what is your age?

[00:02:02.280] – Michael

46. I got 46 a month ago, something like that.

[00:02:07.110] – Joran

Nice. I guess five questions regarding the company. Normally, I would ask, what is your current ARR? But I guess in your case, it’s a double-sided question.

[00:02:14.760] – Michael

Yes. I do currently not disclose each company’s ARR, but I’m proud and happy to report that both companies combined did cross the 10 million ARR threshold quite recently.

[00:02:28.460] – Joran

Nice. Congrats. I guess then in total, how many employees?

[00:02:31.530] – Michael

In total, that’s about 65 now.

[00:02:34.460] – Joran

Sixty-five? Yeah. For either of them, have you taken any outside funding?

[00:02:39.290] – Michael

No. Both companies have been bootstrapped. Actually, they have been bootstrapped out of my first company, and That answers your first question about whether Swadre was the first company. No, actually, my first company was an agency business. Out of that agency business, me and my teams, we spun out and bootstrapped the two companies, the two products SaaS companies, yes.

[00:02:57.770] – Joran

Nice. Would you do it similar again? If you’re going to start the third venture or the fourth venture?

[00:03:04.270] – Michael

You mean would I do the bootstrapping again versus the funding way? You’re going pretty much in the deep water now, right? That is a difficult question to answer. When I did found the first company, I didn’t make a conscious decision regarding bootstrapping or funding or taking on funding. I was in a quite naive position. I didn’t even believe that Swadre would become its own company at one time. I just thought it’s maybe a side project that I can sell to 5 or 10 customers. Then it grew a little bit, and then it grew a little bit more. Then it was already a profit-generating business. Then the question basically already was answered for me. Would I do it again that way? I think that’s a very personal decision for each founder, which way to fund and build a company fits you more, fits you better.

[00:03:46.040] – Joran

Makes sense. You mentioned it already, you started from an agency. How did you came up with, I guess, the ideas for both startups?

[00:03:53.910] – Michael

No big founding myth here or anything, to be honest. It’s actually quite boring. But for both companies, the ideas for the product actually came directly from customer side, from the agency customers that we were having. We were building custom social media software, marketing software for our customers. Just from watching them, how they were managing their social media channels, their customers’ channels, and so on, we generated the first idea for us, Wateropen. Really just by looking at what our existing customers, what pain they had in their daily lives.

[00:04:24.700] – Joran

Yeah, I think you hear it a lot, right? If you start from an agency, you already have clients, you’re already fixing problems.

[00:04:30.190] – Michael

Yeah, that’s a very natural way to come up with a business or a product idea, I think. Even if you don’t have this big eureka moment where you come up with a crazy new idea, it wasn’t necessary in my case. But just from learning the industry, that’s also a very positive aspect of doing an agency. They’re just forced to learn everything about your specific industry, and that makes it then much easier to come up with something that actually someone will pay for.

[00:04:56.340] – Joran

Yeah. Is that been pivotal or crucial in for you to achieve product market fit, to already have clients who already had that agency?

[00:05:05.440] – Michael

I would spin it around. I would say reaching product market fit very quickly was, of course, a necessity because someone had to pay for this thing as soon as possible. Because we, at this point, always had the question, or I personally always had the question, should I continue the agency business? Should I go all in with the SWadio? In that regard, I guess I was risk averse in my decision. Actually, it took me quite a long time to make that leap and say, Okay, now I’m stopping the I’m phasing it out slowly. I’m moving all my engineers to the product. I only did that when I had a feeling that we had achieved this early product market.

[00:05:38.780] – Joran

At one point, you completely shut down the agency to fully focus on?

[00:05:41.790] – Michael

Yes. But again, I think other people, other founders I would have maybe been bolder and quicker with that decision. It took me more than a year, almost two years, to really mentally get the idea, Hey, Swadeo can be its own self-sufficient company. It took me one or two years. Then after one year, I started simply to take on new customers with the agency, try to find the replacement or hand over the existing ones. Then after about two years, it was over.

[00:06:12.200] – Joran

Was that your first SaaS, where you went from a service model to software?

[00:06:18.320] – Michael

Yes, it was, but I didn’t know the term SaaS back then. That was around 2013. Of course, SaaS was a thing back then, but I didn’t know about it at all. Before that, it was only custom software development, and then Swadre was the first productised SaaS model and product.

[00:06:34.040] – Joran

I can imagine it’s scary because you have, I guess, big contracts with the service business, with the custom development, and then you go towards SaaS.

[00:06:42.250] – Michael

Yeah, it’s a leap of faith. Of course, there would have been, or theoretically there is alternatives. I could have tried to keep the agency business, but then I would have needed to find someone who operates the agency because I don’t think it’s a good idea as a CEO to do the two things at the same time. You need to focus. That was also one of the biggest learnings in the first year of doing Swadio, we didn’t have dedicated engineering resources, so that meant there was two guys working on Swadio, let’s say, and anytime an agency customer was coming with a new project and we thought the dollar bills, we had to move the engineer from Swadio to the agency project, which of course meant that Swadio didn’t progress at all. Only when we made the choice to say, Okay, now we really have dedicated engineering team, only then we got some momentum into the product development.

[00:07:28.040] – Joran

Yeah, it’s interesting because I think I have a friend who has an agency and he really wants to build his own sauce, but he has this same model or same problem where you go for the money and not the long term.

[00:07:38.660] – Michael

And understandably, and sometimes you just need to go for the money. But that is difficult. I’m grateful and happy that we could make the transition and survived it as well. I’ve seen other people fail with that. It was very similar. It’s a very common thing, of course, that you generate a product idea out of an agency, but very often, unfortunately, it goes wrong.

[00:07:59.590] – Joran

Yeah. I guess after you chose to go all in, what has been your… Besides your client from the agency, what has been your go-to-market strategy?

[00:08:08.470] – Michael

For Swadio, again, I didn’t think about go-to-market strategy. I was super naive, didn’t really consult anyone, unfortunately. Naturally, we gravitated towards a more sales-driven model. It was basically me, of course, in the beginning doing founder sales, reaching out to existing agency customers, asking them for referrals, and like that. This way we found our first, I don’t know, 10 or 20 customers. Until I, of course, realized that I’m not founder sales is one thing, but you need someone else doing it. Then I actually hired my first salesperson relatively early.

[00:08:42.550] – Joran

I guess after those 10 clients, you hired your first salesperson, what has been your strategy afterwards? Has it been fully sales-led?

[00:08:51.590] – Michael

Yeah, we were sales-led for many years, and we were growing the company sales-led to, I would say, 5 plus million ARR, something like that. Only then we introduced product-led notion as well and opened up a self-service side to the business. That was just, I think, two years ago, something like that. Of course, the majority of the business is still sales-driven. But of course, we see the product-led side of the business growing, which is good because it will hopefully allow us to enter new markets and also be active in customer segments where we haven’t been before. Now we see that as a complementary thing.

[00:09:24.740] – Joran

I think a lot of companies are struggling with this, what you currently have been doing, going from sales-led to product-led.

[00:09:30.920] – Michael

Yeah, so that’s definitely not easy. I think in both directions, it’s not easy. Interestingly, and maybe we talk about it later for VASI or the second company, I chose the other way around and started with being a product-led business and then only later added a sales team to that company. I’ve seen it two times from two different directions. I think neither and neither one is easy, to be honest. But both can work.

[00:09:53.600] – Joran

Both can work. You did them both then, right? I guess if you could do it again, what would be then your strategy technology?

[00:10:01.540] – Michael

That depends a lot on the type of product you’re selling and the type of customers you are selling to. I think in general, the general agreement, I think in software, in business software, specifically, is that the product led is a big part of the future and that how people are buying software, how they are buying business software has changed in the last 5 or 10 years. The product-led aspect will probably be the more dominant in most industries, in most businesses.

[00:10:27.760] – Joran

We look at both companies or individual. What is one thing or what is the best thing you’ve been doing to grow them to where they are today?

[00:10:36.670] – Michael

If there was a silver bullet in this one thing that helped me grow both companies, I would not tell you. I would charge consultancy fees to tell other people, I don’t have the silver bullet. There were different stages of the companies, different aspects and different key elements that allowed us to grow. I would like to focus on the second business on VASIO now. As I said, started to be product-led, and there was a lot of organic growth, which was driven by great content marketing and great SEO. That was in the beginning. In the early years of the company, it was basically the only reason we were growing. We were really early in the market with our product idea. We didn’t have a sales team at all, but we had quite good content. We did good SEO, and suddenly we were seeing our customer base being, I don’t know, 50% from the States, where we haven’t done anything other than publishing content, really. In this At the stage of the company, that was the key driver. Later on, we started a partner program, for example, and that is currently one of the biggest drivers of our growth.

[00:11:39.700] – Michael

Being integrated and having partnerships with a lot of relevant players in our industry helped us grow. Even since the pandemic, we’re doing this, and it was a key element for us to keep growing during those years.

[00:11:51.230] – Joran

Nice. How do you pick those partnerships? Because I know a lot of companies are starting with that as well.

[00:11:55.930] – Michael

We did, too. We made a lot of mistakes. There’s a few things that I look at when looking at the new partner that is mostly, are we compatible in terms of our go-to-market, in terms of our target CP, our target audience? If we are partnering with a company who is selling enterprise tickets for €200,000, and we want to be that €50 add-on. There’s a big gap here, and it probably doesn’t work, or the other way around. That’s the price is also a theme. In many partnerships, it’s important to position yourself correctly so that you are perceived as an add-on, for example. If my solution is 10 times more expensive than the partner platform solution, that’s very often not going to work. If the partner is having a premium model, it might be good if we also have a freemium model, things like that.

[00:12:41.190] – Joran

Is it purely at the partners, or do you also have affiliates, resellers?

[00:12:45.860] – Michael

There’s different shades here, different shades of grades. It usually starts with the product integration that is very important to us. That means that our software, Valser is a social media widget, basically, so we can integrate into CMS platforms, into digital signage platforms. A lot of platforms that can consume our widget. The first step really is to get our widget into their product, into their marketplace, if they have one, and make the technical integration work. Then on top of that, we can then do the second step is like co-marketing, joining our marketing forces, doing customer showcases, press releases, interviews, whatever we can come up with. Then, of course, the sales integration and that can go both ways. We do have with large enterprise partners, we do have reselling agreements which work very well. But we are also doing like, referrer agreements with smaller ones where they’re just handing us over our customers for a commission.

[00:13:42.950] – Joran

Yeah, nice.

[00:13:44.420] – Michael

We don’t have technically an affiliate program yet. Who knows? Mostly because we are concentrating on a smaller number of partners where we can reach really high volumes.

[00:13:54.710] – Joran

You said a crucial thing, like they need to have access to your ICP, and that’s going to be the most important.

[00:13:59.850] – Michael

Yeah, there needs to be a good overlap here. Exactly.

[00:14:03.230] – Joran

If we talk about walls, what has been the biggest company challenge you had so far?

[00:14:08.290] – Michael

The biggest keys to growth, the same answer with challenges. There’s just so many that it’s hard to pick a single one out. The challenges also morph every year. Actually, that’s true for both of my companies. The biggest underlying challenge always is to find the right people into the right positions, in the right places, especially on the lead, on the management level. I think that is something that nobody teaches you at university see how to find the right people and how to effectively manage them. I think this is an underlying challenge that I’m still struggling with, honestly, and then still need to improve on day-to-day. That is something that will probably never end. I think in specific challenges we do in both companies, but especially now with VASIO, I can do see a lot of challenges coming from our competitor side. Differentiation is a big issue, and I think that’s true for many SaaS products, B2B SaaS products, that the software we are building for the customer, for the purchaser, it’s very hard to differentiate. You look on feature lists, you look on the pricing page, and it’s really hard. Everything looks the same. Unless you really test a lot of products in parallel, it’s very hard to see which actually is the better solution, which means, yes, price sensitivity plays a role, especially in economically more challenging times.

[00:15:21.190] – Michael

I guess we are seeing in the last few years, competition versus differentiation versus pricing. This is a challenge that we see quite a lot in the recent years.

[00:15:30.720] – Joran

Yeah, because it’s a lot easier to start as SaaS nowadays, and you have all these templates.

[00:15:35.200] – Michael

That’s true. Of course, the cost to start a software product have decreased, so there is also more competition. That’s true. Also with both my companies and social media marketing software in general, of course, when we started more than 10 years ago, this was a nest and new place, something where you could really innovate and be on the forefront. Of course, fast forward 10 years now, the software category is super established, I would say almost saturated many aspects, so that is going to be more harder. Of course, at this point, there is, of course, a little bit of a disadvantage for the bootstrap company, which naturally follows a rather organic, steady, but growth trajectory like this, but definitely not like this. Of course, if you’re competing with companies at this point who are much, much bigger than you or maybe have a lot of more funding than you, of course, they have other possibilities to counter that challenge. They can go into other verticals, they can extend the product to be a suite of several products, stuff like that. Things like these are very hard to do if you are on the bootstrap trajectory.

[00:16:39.000] – Joran

Yeah, you just have less money to experiment and it will go a bit slower probably.

[00:16:44.020] – Michael

Yeah, or I don’t know, maybe you would like to acquire another company to drive your growth. Makes sense. Probably not as easy to do if you are a bootstrapper. On the other hand, of course, maybe never say never. You can be a bootstrapper for a long time and then think about funding. If you have a smart idea, for example, to acquire a customer, a company, maybe you find funding for them.

[00:17:05.920] – Commercial Break

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[00:17:22.930] – Joran

I have one follow-up question on the first thing you mentioned, finding the right people. You mentioned you still struggle with that. I guess if you can give a piece of advice to other founders, do you now still go for your gut feeling? Do you have some process you go through to find the right people? Even though you still struggle with it, you probably have something.

[00:17:41.080] – Michael

Yeah. In the end, the gut feeling is the final judgment for me still. If at all, my mistake was more often to not trust my gut feeling, that was more my mistake. That has been more regularly my issue. I don’t have a big process here, but I have a sounding board of people who I bring into these decisions and let them also have discussions with a candidate. I’m talking about the top-level management positions that I have to fill. Of course, not for everyone, but for those, it really makes sense to spend a lot of time and share this decision with other people.

[00:18:14.020] – Joran

I think it’s nice that you have indeed that board of advisor or these people you can chat with.

[00:18:18.460] – Michael

Exactly. That’s just really a very small group of people who I learned to trust over the years, and that helps a lot.

[00:18:25.690] – Joran

We’re going to really dive into the founder journey. I think everybody hits rock bottom in any way, financially, personally, do you have a moment which you can share you hit rock bottom and how did you survive that moment?

[00:18:38.560] – Michael

Yes, I can share one moment, a relatively recent moment. That was in 2023. Three, actually. It must have been February or something like that. Look, both of our companies, we are social media products. It means we are heavily dependent on social media platforms and getting data out of those social media platforms. We are consuming through the official APIs content from Facebook, Instagram, X, and so on. We are, of course, dependent on that. Our business model wouldn’t work without that data. For the most part, this data is openly available through APIs. You have to go through approval processes, everything that’s fine. But it’s usually even free of cost. Of course, the dependency is something you are aware of if you’re building a product on top of those platforms. But after 10 years, you tend to forget to think about it. Then in February last year, suddenly it was still called Twitter back then. Elon Musk introduced the API cost structure that was almost killing us. They were announcing, Hey, guys, we are going to be closing our open API and we are going to start charging. We don’t tell you how much we charge. We have to wait for that.

[00:19:42.450] – Michael

Typical Elon Musk styles. Then it took a few weeks of waiting for the price tag, and then actually the price tag was $42,000 for the month. That means half a mil just for API cost on Twitter or now X. That was a moment where I did definitely hit rock bottom because it’s, of course, with a relatively company like Valsvia, very hard to find a way to swalve that cost, that unplanned cost.

[00:20:05.150] – Joran

Yeah, because it’s something which was normally free, I guess was a given, suddenly became like half a million per year.

[00:20:12.220] – Michael

You can’t prepare for such things, right? Don’t get me wrong, in general, I think it makes sense to pay for data. It’s not like I’m completely against the debt. Actually, I would prefer to have solid contracts with all social media platforms and pay them reasonable, but 500K a year, I don’t see as very reasonable. Luckily, that thing hit us when we were already a healthy, profitable company. Part of that cost we could simply swallow, but of course, it ate into our profits. What we did after a few weeks of being shell shocked, we started to restructure our pricing system, pricing model. On the other hand, we did heavily invest into engineering and optimization of how we consume content through the Twitter API. The second part, of course, to be honest, we could have done earlier and should have done earlier because we were everything that’s free, you tend to be a a little bit too wasteful, and we have been. There was a lot of potential on the engineering side to bring down our consumption. Like I said, on the commercial side, on the business side, we restructured our pricing model, which we have planned for way too long anyway.

[00:21:13.370] – Michael

At that point, we were suddenly forced to do something about it. That’s what we did, and that helped us to at least partially balance out that additional cost with additional revenue.

[00:21:24.120] – Joran

Nice.

[00:21:24.660] – Michael

But I would be lying, it’s still a net negative in 2023, the whole API cost. That’s still work in progress.

[00:21:32.870] – Joran

Yeah, because in the end, you have to make up for the cost and you can’t indeed, as you mentioned, charge everything to your clients. That’s not-Yeah.

[00:21:39.410] – Michael

Then we are going back to the previous challenge I mentioned, competition. From an outside perspective, I would have loved to, I don’t know, write a white paper about this thing because, of course, you could have thought, what if all the players on the market, all the social media tools out there, collectively would have decided to not buy to this enterprise API subscription? Instead, just said, Okay, let’s just not have Twitter content. Theoretically, that would have been an interesting move, but of course, it doesn’t work like that. There will be always one competitor who pays the 500K. At this point, a competitor suddenly has a huge advantage over you. It’s interesting that you have almost no choice than to buy in. In fact, a few months later, when we looked into the market and we were watching our competitors even more closely than normally, We did find out that most of them did buy in. In the end, that was the right decision.

[00:22:35.730] – Joran

Yeah, because I can imagine, I guess if clients rely on Twitter, they’re going to churn if you don’t offer it. So you had to probably.

[00:22:43.190] – Michael

Exactly. There’s regional differences, of course. In the last 12 months, the relevancy of X or Twitter in Europe seems to have decreased. It’s really hard to say, but when looking into our data, yes, there seems to be a small decrease. But in the US, that’s not the case. In the US, it’s as important as relevant as before. Exactly, we also was a social media aggregator, so we promised to collect and aggregate social media data for your brand, your company, your hashtag, whatever. We can’t just leave out X content from that. We really didn’t have a choice. A customer would immediately go to a competitor if we would drop Twitter support. It was a frustrating situation. Yeah, you don’t feel good.

[00:23:23.050] – Joran

I can imagine. You can imagine it once already. If you could go back, you probably did have done things differently with the free data, not consumer as much. If you could go back in time, are there any other things you would do differently, looking now back in hindsight with building the company in general?

[00:23:39.420] – Michael

I have to say you need to be a handle. For me, it worked out twice, like building two, bootstrapping too profitable and still growing companies is not something you have to take for granted. Actually, it would be almost foolish to say, I would do everything completely differently. Coming back to what I mentioned before, I think I, quote unquote, wasted I spent quite a lot of time in the early years of both products, of both companies, because of being, let’s say, insecure or not committed enough to go all in. I could have definitely moved the products, the businesses, faster if I would I’ve been able to make the mental switch. Now I am a SaaS company quicker and earlier. It is what it is, right? I think many things happen for the reason, and I think the path has proven that it’s working for me. But that is maybe something I would tell my younger self, be more bold and go all in earlier because really there’s not so much to lose. The agency business that I had was not huge or anything, right? It was like a tiny boutique software agency. It’s not like I was making millions and I was risking too much.

[00:24:45.620] – Joran

You’re now growing the second company, right? Are you using any processes, strategies to grow the second company which you learned for the first one?

[00:24:53.920] – Michael

With was, the biggest part of our growth right now actually is the sales side of the business. While Well, in the early years, and we were product-driven and very much marketing-inbound-driven, but nowadays we see the most part of our growth comes from the enterprise sales team. The strategy for our growth is to enforce that and to double down on that. That felt a little bit unintuitive for me at first, because you grow and grow for many years and you don’t have many salespeople at all, or just one, maybe, I don’t know. Then suddenly you have to think about, Oh, maybe we are plateauing maybe and we need to do some other stuff. The partner integrations were one part of our growth in the last few years, true. That helped us overcome the plateau. But there’s still more to do. I think doubling down on our sales notion is the second part of our growth strategy. Suddenly, you think I never did outbound. I never did outbound at all. In both companies, in what they are doing now, but during the time I was running, it never did outbound. That’s, again, something new we have to explore.

[00:25:55.060] – Michael

That’s also what makes it so much fun, that you have something new to try and master. Every year, it’s changing.

[00:26:02.560] – Joran

Yeah, because there was a question I wanted to ask because you said sales, right? But sales can mean many things, I guess selling to enterprise. But you’re now probably going outbound. Yes.

[00:26:10.990] – Michael

Since it is one plus year, something like that.

[00:26:15.210] – Joran

When you started doing that, how long did it actually take you to become successful? Because they always say it takes a certain wrap-up time, right?

[00:26:22.240] – Michael

Work in progress, I would say. That’s also interesting question. We decided to first work with external help as an agency, an outbound company. I guess there’s different ways to see that. Some people would say, Okay, that’s just wasting time because in the end, you need to have these functions inside the company, and I would agree. But for us, it was a good way to just explore and learn from them. We had this one year contract with this agency. Not cheap, to be honest. It was quite an investment. But during this year, we tried to copy or learn and adapt as much of their processes as we could. I think that helped us to then set up the same process in-house.

[00:27:01.830] – Joran

It seems like you’re getting in the help you needed with hiring people, with setting up sales. Is that your process where if you don’t know something, you will get in the proper help? Yeah. Try to see if you can get the knowledge from them.

[00:27:16.030] – Michael

Yeah, exactly. That’s the idea. Exactly. If you have never done it before, of course, you could also try to hire a new VP of sales or someone who has done it before. That’s, of course, also viable, but maybe harder to afford. And especially when you’re bootstrapping. Big hire is sometimes just not something you can afford. Yeah.

[00:27:38.510] – Joran

Nice. Let’s dive into the final three questions. This is going to be per stage, and this could be really general, but what advice would you give somebody who’s just starting out as a SaaS founder and growing to 10K monthly recurring revenue?

[00:27:50.660] – Michael

I would say be as close to your potential or existing customers as possible. You learn so much from them. At 10K, you didn’t achieve product market fit yet. Being close to your customers, learn how they use your product, what their real pain is, and how you can improve your product to ease that pain. I think that’s the single most important thing at this stage.

[00:28:10.060] – Joran

Is what you did really found the lead sales?

[00:28:12.580] – Michael

Yes, I would say so. Especially with the first company, with Swadeo, that was absolutely key.

[00:28:19.010] – Joran

When we go past the 10K MRR, and this is going to be a big step towards 10 million ARR, what advice would you give here?

[00:28:26.760] – Michael

I think that’s really quite a stretch from 10K to 10 million. Like I said before, both of my companies are not there yet, so we are on this journey still. It’s only combined that we can claim we have crossed that threshold. I think, especially if you’re, let’s say, let’s put it like that, if you reach the million ARR at that, You can fake it easily until that point. And fake it, maybe you don’t have a good process, maybe you have not enough people on your team or the wrong people on your team or not experienced enough people. To one million, I guess you can fake it. If you have a proper product, I think you will get to that. But after that, I think you really can’t neglect the things anymore that I mentioned, good processes and having really good management team. That is the most important thing. If you want to have a chance to get towards 10 million, have a good management structure and find the right people into the right seats.

[00:29:20.090] – Joran

As you mentioned, make sure you hire the right people by trusting your gut feeling and also getting other people toExactly.

[00:29:26.210] – Michael

Because, of course, like I said, as a CEO, founder CEO, you You will do so much yourself. You can make up for a lot of things that you don’t have in the team for a while, but at one point, you just don’t scale that much anymore, and then you need those people.

[00:29:39.620] – Joran

Because I think a lot of founders struggle with that. Is that a hard moment where you have to decide, Okay, I’m not going to do this myself anymore. I’m going to find people who can do it for me?

[00:29:48.290] – Michael

Yeah, it depends on the personality, but I guess for many of us, it is hard to give a responsibility away and to also accept. You will never find someone who does the task or the function production 100% like you. They will always do it differently. Maybe if you’re really that good, if you’re certain of yourself, you might say, Okay, they can maybe only do 80, 90% of my quality. Then the challenge is to learn to accept that, that it’s okay even. Of course, there will also be people who do certain things much better than you. On average, you should be fine with that.

[00:30:21.190] – Joran

Exactly. You can’t be good in everything, even though you did everything before. Really general final question, what advice would you give other SaaS founders who are now on their journey anywhere in the revenue phase?

[00:30:33.080] – Michael

Something that I also neglected for too long, or what I did for many years in the beginning, is to not have a good support network for all these types of questions. Only around the middle of my journey, I got more involved in the local SaaS community, which is quite… It’s not huge in Vienna, but still there is a meet up there, which I then started to attend. And of course, also things like the SaaS Talk community, the SaaS Talk founder-Foundership, founder-Membership, which we are part of and which brought us here, basically. This helps so much to have a group of like-minded people who probably have faced all the challenges or are facing the same challenges because it’s not so special. Most of us go through the same things and having the right people at the right time where you can ask and bounce ideas off and do some support sessions that is really helpful.

[00:31:18.710] – Joran

Yeah, I think that’s for me, it’s crucial as well. I use the podcast and do it right to ask the questions, but now everybody wants to start a podcast. Getting a community like this where we are right now or a community in your own neighborhood, local environment.

[00:31:33.680] – Michael

That’s also something being a guest on podcast can also help tremendously to create a good network of people who you can share stuff with.

[00:31:43.120] – Joran

Yeah, nice. If people want Can we get in contact with you, what would be the best way to do?

[00:31:48.070] – Michael

Of course, you can find me on LinkedIn. Michael Kambleitner is my name. You can also email me, michael@walls. Io.

[00:31:53.350] – Joran

Nice. We’re going to link back to your LinkedIn profile because it is going to be in German, Austrian name. Yes. It It’s going to be a bit difficult for people to announce. We’re going to also link back to SWOT and Walls. If you’re listening to on Spotify, make sure to follow, subscribe, and leave us a review here. Thanks for coming on, Michael.Thanks, Joran.

[00:32:13.420] – Michael

It was fun.

[00:32:14.260] – Joran

Likewise, and now we’re going to enjoy the sun.

[00:32:16.300] – Michael

Yes, we will. Cheers. Thanks for watching everyone. Thank you.

[00:32:21.280] – Outro

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