S4E8 – Learnings from a Second-Time SaaS Founder With Joe Lewin

Learnings from a Second-Time SaaS Founder With Joe Lewin

Learnings from a Second-Time SaaS Founder With Joe Lewin.

In the latest episode of the Grow Your B2B SaaS Podcast, host Joran engages in a candid conversation with Joe Lewin, founder of Foundy, an acquisition fundraising portal. Joe shares his entrepreneurial journey, offering valuable insights and experiences. His background includes the successful founding and subsequent sale of Swings, a tech company, providing him with a wealth of knowledge on building a successful business from the ground up.

Joe emphasizes the importance of validating business ideas early on. He advises aspiring entrepreneurs to ensure their market model and customer base are supported by real potential customers, not just friends and family. This validation can save time and resources by steering efforts toward viable opportunities.

The Importance of Validating Your Business Idea

Joe emphasizes the crucial step of validating your business idea. Ensuring that your market model and customer base are supported by real potential customers who are willing to pay for your product or service is essential. This early validation can save entrepreneurs from pursuing a path that might not be viable in the long run. Building a solid and lean team is another critical component, as a smaller, more efficient team can often achieve more than a larger, less focused one.

Foundy’s Origin and Growth

Joe’s journey with Foundy began in 2021, driven by his frustration with the antiquated and inefficient process of selling his previous company. He envisioned a modern, SaaS-enabled platform that could streamline the acquisition and fundraising processes for tech founders. Foundy has since grown significantly, boasting a community of 13,000 members and a pivot from a transaction-based model to a B2B SaaS platform, which now brings in significant recurring revenue.

Overcoming Challenges and Staying Resilient

The conversation delves into the challenges Joe faced, including moments of financial uncertainty and the overwhelming nature of managing multiple aspects of a startup. He highlights the importance of staying humble, being aware of risks, and maintaining a level-headed approach to problem-solving. Learning from these experiences has made Joe more resilient and better equipped to handle the ups and downs of entrepreneurial life.

The Role of Networking and Community Engagement

Networking and community engagement play a vital role in Joe’s strategy for growth. He advocates for the value of founder communities and learning from other entrepreneurs’ experiences. Surrounding oneself with supportive and knowledgeable peers can provide invaluable insights and opportunities that might not be accessible otherwise. This collaborative approach has helped Joe navigate the complexities of the startup world more effectively.

Embracing Automation and Efficiency

Automation and efficiency are key themes in Joe’s operational strategy. He has invested time in auditing and optimizing company processes, leveraging tools like AI and automation to reduce manual work and improve efficiency. This focus on streamlining operations not only saves time but also ensures that the business can scale effectively without becoming bogged down by inefficiencies.

A Blueprint for Aspiring Founders

Joe Lewin’s entrepreneurial journey offers a blueprint for aspiring founders. By validating your ideas, building a lean and capable team, staying resilient through challenges, engaging with the community, and optimizing for efficiency, entrepreneurs can navigate the startup landscape more effectively. Joe’s story is a testament to the power of perseverance, continuous learning, and strategic thinking in building a successful business.

Key Timecodes

  • (0:44) Introduction to Joe Lewin and Foundy
  • (1:21) Joe’s Background and the Inception of Foundy
  • (1:27) Motivation Behind Starting Foundy
  • (1:59) Foundy’s Start Date and Current ARR
  • (2:08) Business Model Pivot and Revenue Breakdown
  • (3:07) Current Team Size and Use of AI Assistants
  • (4:15) End Goal for Foundy
  • (4:48) What Keeps Joe Motivated?
  • (6:04) Early Stages of Foundy and Getting the Idea Validated
  • (6:54) Initial Uncertainties and Risks Faced
  • (7:29) Experiencing Rock Bottom and Overcoming Challenges
  • (8:43) Fundraising Challenges and Pivots
  • (11:08) Advice for First-Time Founders
  • (12:27) Key Growth Strategies for Foundy
  • (12:27) Importance of Referrals and Organic Content
  • (17:16) Processes and Frameworks Used in Foundy
  • (17:29) Deep Dive into Automation and Efficiency Tools
  • (19:02) Biggest Failures and Lessons Learned
  • (19:15) Importance of Pivoting and Refining the Business Model
  • (20:40) Foundy’s SaaS Model and Subscription Approach
  • (23:00) Optimizing for Profitability While Raising Funds
  • (23:12) Importance of Healthy, Sustainable Growth
  • (25:46) Advice for Growing from 0 to 10K MRR
  • (26:55) Importance of Domain Expertise and Problem Validation
  • (28:18) Advice for Scaling to 10 Million ARR


[00:00:00.000] – Joe

First and foremost, make sure your business, market, model, customer idea is truly validated and ensure that it’s not just your friends that are saying, Yes, go for it, but actually real potential customers figuring out, would they pay for this? I think building a solid team, a lean team rather than a large one, is obviously most important at its core. And delegating accordingly. I think there’s a lot of unknowns, a lot of risks. I think being an entrepreneur You have to have a level of naivety to all that’s there. But at the same time, I think remain humble and aware of the risks at play, I think is key.

[00:00:44.080] – Joran

In today’s episode, my guest is Joe Lewin. Joe is the founder of Foundy, an acquisition fundraising portal which helps you with the end-to-end process with either fundraising or acquisitions. Before this, Joe had another startup called Swings, where they had 80,000 customers at the time they got acquired, where he received some cash and equity for the new business, and where the acquisition process is one of the reasons why he now started Foundy. After the acquisition, he has been doing some angel investing on the site while growing also his second SaaS, Foundy. They now have a community of 13,000 members. Let’s just dive right in and get the story behind both SaaS companies. Welcome to the show, Joe.Thank.

[00:01:21.320] – Joe

You very much.

[00:01:22.750] – Joran

Cool. Let’s get right to the beginning. Why did you start at Foundy?

[00:01:27.270] – Joe

Yeah, for sure. I started the company because in the process of building, selling my previous tech company, I learned firsthand how incredibly antiquated and inefficient the process is to sell a company. I thought building this modern SaaS-enabled platform and then got to the point where selling it, we had to use more traditional advisors, lawyers, accountants, advisors. It was incredibly expensive, opaque, and I thought this needed to be modernized, especially for tech founders. So we founded Foundy, and we’ve grown quite a bit since and learned a lot in the process.

[00:01:59.940] – Joran

When did you start at Foundy?

[00:02:01.990] – Joe

In 2021.

[00:02:04.330] – Joran

2021. What is now your current ARR?

[00:02:08.760] – Joe

We’ve made a slight pivot. We were a marketplace platform, which is more transaction income. We’re now more of a B2B SaaS platform. Our new product is growing quite quickly. So we’re about 210K at the moment. But that’s expected to grow quite significantly actually over the next couple of months. I think revenue will double next month. It’s quite exciting.

[00:02:28.270] – Joran

Just because you pivoted from transactional to AR, it’s starting from scratch again.

[00:02:32.620] – Joe

Yeah, to a certain extent. Previously, we still have the marketplace that’s operating in parallel to founders to list their businesses for sale. But now we also have a B2B SaaS portal, like a deal management portal that’s on a recurring revenue. There is still some transactional income in there. But yeah, we’re really trying to scale up that predictable recurring income.

[00:02:52.470] – Joran

Yeah, because what would you say is the difference between service or transactional versus real SaaS MRR?

[00:02:59.230] – Joe

We’ve got about a third of our revenue coming from transactional income, and the rest can be attributed to recurring. Yeah.

[00:03:07.630] – Joran

And how many employees do you guys have right now?

[00:03:10.210] – Joe

We have three staff.

[00:03:12.630] – Joran

So lean and mean.

[00:03:13.780] – Joe

Yeah, we take I think it used to be quite glamourised to have quite a large team, but we’ve tried to keep it really lean. And I think I’ve created two AI assistants, so to speak, across different departments now, which has been pretty helpful.Nice..

[00:03:29.920] – Joran

We’re going to dive into that as well. Sure. In one sentence, how would you explain Foundy to people listening?

[00:03:36.210] – Joe

Foundy is an end-to-end digital portal to streamline the process to buy, sell, or raise businesses and raise capital as well.

[00:03:45.840] – Joran

We’re going to dive into the personal side.How old are you right now?28. So early in the game. Have you always wanted to be an entrepreneur?

[00:03:54.120] – Joe

Yes, absolutely. I think studying university, came out of that. I actually wrote my dissertation on Elon Musk. Whilst he was still that nerdy engineer, he’s now a popular, controversial celebrity. But I drew a lot of inspiration from his story and went and started my own company a couple of years out of university.

[00:04:11.390] – Joran

Nice. And do you have an end goal now defined with Foundy?

[00:04:15.650] – Joe

We would love to build a big business that’s optimized for scale, automation, and ultimately having a massive impact. But of course, I’d be lying if I didn’t say I had a goal to one day sell Foundy. I think, given the nature of our business model. So I think we have, hopefully, a viable opportunity with F&I utilizing our massive network of buyers later down the line.

[00:04:38.630] – Joran

Yeah, and when you said at the beginning big business, you don’t mean employee-wise, you mean a business who can make an impact with probably as least employees as possible.

[00:04:46.710] – Joe

Yeah, effectively. Yeah.

[00:04:48.540] – Joran

And one other personal question, what keeps you motivated? Because this is now your second startup, right? What keeps you going every day?

[00:04:56.110] – Joe

Yeah, I think I’m driven partially by impacts, but actually, I really enjoy what I do. It’s really fun. Even the challenges and the problems are actually quite fun to solve. And yeah, looking forward to building up the business, building up as many automations as we reasonably can, and it’s making everything flow. I think that’s the most satisfying thing when you see processes, users go from end-to-end and with minimal involvement, actually, from our human side, so to speak. That’s when you can build a scalable business. So yeah, that’s where I get motivated by seeing happier customers, This is actually working.

[00:05:31.200] – Joran

I think that’s always the most fun part. You have something in your mind and somebody else has to use it, so it has to be happy customers is a good way to go. I guess if we go a little bit deeper again on why you started Foundy. You explained at the beginning already a little bit, but how did you actually came up with the idea? Because you showed the other business, so you probably experienced some challenges, saw some things in there. Walk us through a little bit the early stages, getting the idea, getting people to actually try Foundy as well. Yeah.

[00:06:04.470] – Joe

The early stages were a lot of learning. I’m still learning to this day, making mistakes, pivoting here and there, even on a smaller scale. The idea fundamentally came about through building, selling my last company, just experiencing that pain and stress of how incredibly slow and inefficient that process was and just channeling that energy into building foundry. There’s proof points elsewhere in the world that a model in this space could work pretty well. And then since then, we’ve refined the model very slightly. Less of a market base, more of a deal management pool, which is proving really well. I’m pretty happy with actually how it’s all going. Requires a tiny fraction of the resource compared to our previous approach.

[00:06:42.360] – Joran

You’re growing now pretty rapidly, right? Did you know at the beginning because you had the issues yourself, but did you know at the beginning it was such a success? Is it going to be such success as it’s right now?

[00:06:54.020] – Joe

Not necessarily, no. I think there’s a lot of unknowns, a lot of risks. I think being an entrepreneur, you have to have a level of naivety to all that’s there. But I think at the same time, I think remain humble and aware of the risks at play, I think is key. No, I think, especially recently, I’ve been trying to keep my head to the ground, level-headed, and just keeping Optimizing for profitability, really. I think the business world has changed. I think a lot of these articles about aggressive growth at all costs has all come to an end, really. I think focussing on healthy, profitable growth is what we’re focussing on. So slow and steady.

[00:07:29.870] – Joran

Yeah, that’s the way to go. If you look at your journey, everybody hits rock bottom one time, either personal, financial. Can you tell a little bit about your moments and how do you get out of those?

[00:07:42.170] – Joe

Yeah, for sure. We’ve learned a lot, actually. So when we’ve had investors let us down hours before they were going to invest for corporate bureaucracies and working with big venture capital funds and the like, just learning a lot And it was really about the need to be able to optimize for profitability. Coming back to that point, we’ve basically learned not to raise venture capital unless it’s absolutely necessary. It was previously glorified. We’ve learned that firsthand. And we felt the utter pain, really, of that process. So we’ve had fundraising challenges, I think we faced head-on. And that’s when we pivoted. And now we’ve gone on to raise capital. Actually, we’ve got some of the same investors approaching us again, actually reaching out and asking if we could get this ball coming on this current round, which is quite nice. But yeah, it was a hard-knock lesson, by all means.

[00:08:43.520] – Joran

And how many funding did youWhat’s the take with F&E?

[00:08:46.040] – Joe

We raised over 1.5 million now.In.

[00:08:49.150] – Joran

How many rounds?Cross.

[00:08:51.520] – Joe

Two, two really. And we’re now seeking to raise, again, really just to optimize for growth, but hopefully, it will be profitable next month.

[00:08:58.320] – Joran

Yeah, so it’s interesting. You’re focusing on profitability and also looking to raise.

[00:09:03.960] – Joe

Yes, really to feel growth, really. Starting next month, hopefully, we’ll get into cash flow break even.

[00:09:11.630] – Joran

Yeah, and it’s a good position to raise as well. So that’s nice. And I guess you had that moment where people didn’t invest at the moment you thought they were going to invest, right? Are there any other moments where you’re completely in this shithole, where you’re like, How the hell do we get out of this? Besides the fundraising moment, are there any other moments in the journey? Maybe at Zwing’s, maybe now at Foundy.

[00:09:33.720] – Joe

Absolutely. Yeah, there have been moments definitely with Foundy. I think a certain time, it was very overwhelming with all that’s going on, as any entrepreneur, I’m sure, would feel. Managing multiple hats simultaneously across marketing sales, ops, finance. It can be quite stressful. But yeah, there’s Wings as well. My previous company, we faced the impact of COVID full on. Our manufacturer was out in China, and we put some money into buying some vehicles for our SaaS-enabled mobility platform. And we had a call and they said that this is about March, April, 2020. And they said that the vehicles were stuck in Wuhan, central train station of all places. That was one of the most stressful days in my life. And for an early-stays startup, that was quite scary. But we eventually got round that. But yeah, I think as a lot of entrepreneurs listening, they’ll probably agree, especially with a second company, You become a little bit more neutral with some of the risks and stress because that roller coaster journey is unbelievable. I think especially now, I’m a lot better at tolerating some of the pains and difficulties of running a business.

[00:10:42.830] – Joran

Yeah, because in the end, because you now are on your second journey, you already faced huge problems, you got over them. So now you think, Okay, nothing is going to… How do you say it? Whatever happens, we’re going to figure it out because you already did it in the past.

[00:10:58.480] – Joe

Yeah, absolutely.

[00:10:59.570] – Joran

And I guess then for the first-time founders, what can they do to get that mindset without having the experience you have?

[00:11:08.450] – Joe

I think obsessed over education and learning and just absorbing as much knowledge and information as possible There’s some incredible resources out there, and one of them being founder communities. We’re in the SFM community, Alex’s group. That’s fantastic. I learned a lot from you guys, the dinners and the events and stuff, surrounding yourself with other founders, and especially those that have been on to raise tens of millions or hundreds of millions in revenue. Some fantastic entrepreneurs at this event. So meeting people, learning from them, getting access to playbooks and templates is fantastic. Yeah.

[00:11:46.070] – Joran

Yeah, I can resonate to that because also part of SFM, I was in Morocco where I did the recording with Jamie and Michael, hearing those stories, and also on the podcast, of course. But if you go in a room with somebody and actually have a conversation with a coffee, with a beer, whatever it is, you can dive deeper pretty quickly, and they’re able to give you advice you might have never thought about before.

[00:12:07.090] – Joe

Absolutely, for sure. And you’ve obviously been on your own journey, and you’re doing some incredible things with Registus. So it’s inspiring to see.

[00:12:13.680] – Joran

Yeah, nice. When we go back to Foundy, what has been the biggest thing you’ve done, or maybe a couple of things to get Foundy to where it is today, like growing-wise, user-wise, getting people to actually use the product?

[00:12:27.080] – Joe

Yeah, I think referrals, organic content, which you are the master, of course, and it’s been really helpful. So a lot of our clients come through word of mouth, organic referrals. I try and post on LinkedIn as much as reasonably possible. You’re very good at it, much better than me with your content and the like. But that’s really one of the best ways, I think, to drive growth. I think you’re a lot more likely to be willing to purchase a product if someone, a friend or someone in the community is recommended. So we’re trying to lean off paid advertising. We’ve experimented with Google Ads and things, but And then driving more organic channels through a funnel.

[00:13:03.990] – Joran

Yeah. So if you now would describe, I guess, your go-to-market strategy, the paid ads are somewhat off, maybe still some were running, but it’s purely mostly organic.

[00:13:13.240] – Joe

We’re trying to. We’ve obviously refined the value proposition and really just create this funnel to channel people through, which is quite good and it works quite well. For example, we’ve got an educational course on how to buy a business or how to sell a business, step by step, quizzes with videos. And That is a nice revenue stream, also acts as a lead gen tool. There’s some paid ads coming through there. Ppc is quite good. Experimented with some meta-adds actually recently. A lot of people were on Instagram scrolling. You wouldn’t have thought, but apparently that works well. And then funneling them through education tool, the fundraising products. So to buy a business, you might need to raise capital, but there’s lots of other funding products in there. And then through into the marketplace or the portal, the deal management portal.

[00:13:59.880] – Reditus Ad

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[00:14:20.750] – Joran

You mentioned the course at the beginning, and you mentioned revenue next to it. You’re actually charging for the course?

[00:14:25.970] – Joe

Comparatively, if you go to a top business school, rather than Stanford or Imperial or something here in the UK, you’re looking at 50 to 100 grand for an MBA. There’s about 10 modules in there. So we worked out that the module on acquisition entrepreneurship, people are paying 7,000 pounds for this one module. Actually, we think we could commercialize it, but only charge, at least to start with, about £500. Okay, wow. We’ve learned all about these different courses and learned from experts in the field, and we’ve built this really, hopefully, well-thought-out education course. So it could be a nice revenue stream.

[00:15:03.600] – Joran

Yeah, it’s interesting because it’s almost like you want to become a thought leader, right? You have this course, but even often, which is you don’t charge for it.

[00:15:10.960] – Joe

It could be a free resource.

[00:15:13.270] – Joran

No, I’m not saying that’s the way to go. If people are actually willing to pay the money because I think it does add some credibility to it as well.

[00:15:21.010] – Joe

That’s interesting. Yeah, it’s a really good point to raise. I think to a certain extent, you could, in theory, offer it for free. It is quite in-depth. There’s 10 modules to it and it breaks down into lessons and ideas. But interestingly, applying a monetary value to a resource can, to a certain extent, make it more compelling because it shows it’s more of a premium. Pricing is It was a discussion, an entire discussion we could have. But yeah, the psychology behind it, I think.

[00:15:50.740] – Joran

Yeah. Often in a founder’s journey, you have pivotal moments, right? Or if I haven’t done X, I wouldn’t be here, or if I haven’t done Y, or if I haven’t reacted in a certain way at that time. Are there any moments like that in your journey which got you now here?

[00:16:07.360] – Joe

Yeah. Okay. I think creating your own luck and creating as many opportunities as you’ve recently can, it can be helpful. So reaching out to people on LinkedIn, engaging with one another, helping others in the community. The amount of times that someone’s message on LinkedIn to get feedback on something, I’ve never met them or anything like that, and then it should come full circle in a year’s time. And they’re doing this at the other and then go to an event, and they supply you a given service or product, or they become a client of yours. So just creating your own luck, helping one another in the community actually works quite well because it always comes full circle. So I don’t know if I answer your question directly. Is it even an English term, creating your own luck?

[00:16:49.230] – Joran

I never heard of it, but I like it because you’re helping others by creating your own luck because it’s going to come back at one point.

[00:16:57.060] – Joe

I think so. I always think of my younger self starting out and actually just thinking… Because that was a very lonely startup journey, not really knowing anyone or where to start. Yeah, having that early on, your support feedback system is quite important.

[00:17:11.760] – Joran

When you look at the company right now, two people, right?

[00:17:16.870] – Joe

Yeah, we’ve got a combination of consultants, a couple of employees, and then my AI agents.

[00:17:24.100] – Joran

Yeah, let’s dive into that. What processes, frameworks do you use to manage your company right now?

[00:17:29.620] – Joe

Good question. So I’ve become really interested in automation, templating, and delegation. There’s an incredible YouTuber called Matt gray, who I recommend checking out. And he talks about these three systems. And it encourages you to do a deep dive audit on your entire company processes. And you can apply it if you’re a freelancer or in a established company. And by considering what inefficiencies there are along your user journey and in parallel, what inefficiencies and challenges that are slowing you down with your customer journey, breaking it down, putting it into a diagram. Actually, it was mind-blowing to think, for example, everything from the mouth of brand awareness. So how are you generating brand awareness How can you put that on autopilot? How can you optimize for efficiency into the funnel? So it might be LinkedIn content, podcast, meeting people, etc. Making sure that they’re then channeled to the right page. And we’re using various tools. One I spotted yesterday called make. Com. And it is a bit like Zappia, but it helps you set up automations like data collection via clay, put it to Apollo, then they fill in a form, then it automatically sends them a free resource, maybe an event invite or something.

[00:18:46.790] – Joe

Then they’re into the newsletter. It’s all these steps that are tied together. Just means that there’s less manual work. But of course, being conscious not to automate too much, I think.

[00:18:57.200] – Joran

Yeah, I think that’s always a fine balance.

[00:18:59.100] – Joe

You need to maintain visibility on everything.

[00:19:02.390] – Joran

Yeah. Let’s talk about mistakes or failures, I guess. It’s always fun to hear somebody else’s failure, right? That’s what I’m going to ask yours. What has been your biggest failure in journey at Foundy or maybe swings?

[00:19:15.230] – Joe

Yeah, Question. There’s been a lot of mini failures, so to speak, and humbling lessons, definitely, across both businesses, for sure. I think it’s helped build character. Biggest one, specifically, I think with Foundy, Specifically, I think we should have probably pivoted slightly earlier with our business model. So previously, it was focused on pure success fee model to a certain extent. And that meant that revenue was less predictable. And rightfully, that was the feedback that we had from investors. We should have pivoted, I think, slightly earlier. But there are companies in US, Australia, they were doing thousands and thousands of acquisitions, automating, collecting success fees in short periods of time. But it Because that volume game, as with any marketplace business, really. To get to thousands of acquisitions would take a lot of money, time, effort, and people. So we pivoted. But yeah, I really wish that we pivoted the model slightly earlier, I believe, because we put a lot of hard work and effort into that model.

[00:20:17.890] – Joran

But yeah. Look at your business model, right? Because an acquisition of fundraising, you do it. I don’t want to say one-time fundraising, you do it multiple times, right? But I’m curious, what is the SaaS model behind it? Because you get access to the portal, but why would I be paying on a monthly level to get access to the portal? And I will churn probably after successful or not.

[00:20:40.060] – Joe

So Foundy is split between the end-to-end portal, which is a deal management tool. So one of our new investors that joined recently actually put it like this. One of our clients, actually, he said, It was as if Slack, Dropbox, and… Sorry. It was as if Slack, Dropbox, and… What was it? It was a data box had a love child, effectively. And it basically streamlines the process to due diligence, onboarding. So if a buyer is looking to buy their competitor, they’ll invite the seller into a family deal portal. It automates the collection of all the data, visualizes all the metrics, lays out a nice data room with all the templates there for them. Ai chatbot to effectively analyze everything and evaluate the business acquisition opportunities, sort analysis, effectively. There This is the legal AI tool as well. So effectively, you can draft a 50-page contract for a share per procurement. A lawyer would charge about $50,000 for that. And all of this can happen in this centralized platform, which we charge on subscription. So it’s a six-month subscription package. It then renews if the deal goes on longer than that. Actually, it’s the deal management portal, but then we have post-acquisition integration.

[00:21:55.020] – Joe

So once you’ve bought the business, you then have a very important and critical time where you need to Integrate everything, culture, assets, password, everything, really, of the two entities, and then grow the business. Actually, we’ve combined the two. It’s subscription of the acquisition itself, and then post-acquisition, integration and growth. So you can actually stay embedded in the portal as you grow this new business, post-acquisition. And there’s various different products in there for fundraising, legal AI, due diligence, growth. They can all be charged. Some on the success view with fundraising, but mostly on subscription.

[00:22:31.720] – Joran

I think a lot of founders can take learning out of this because it is somewhat of a trend, sexual moment. Something happens, but you guys work towards it. You help after there. You turn one moment, even though it takes a really long time, but You turn it into a subscription where the idea is we’re not going to have them churn because we’re not going to provide value before and after that specific moment.Correct..

[00:22:53.900] – Joe

Yeah, absolutely.Nice. So we really extended the LTV much longer than before.

[00:23:00.000] – Joran

So when we go back to what you said just earlier, optimizing for profitability, but also fundraising, I do want to dive a little bit deeper. What has led you to the decision of optimizing for profitability right now?

[00:23:12.310] – Joe

Yeah, I think actually meeting a lot of founders each week, and buyers actually, in learning a lot about buyer’s interests when it comes to an acquisition event, what good looks like. It’s mind-blowing to think, especially VC-back founders versus bootstrap founders and their perceptions towards towards profitability and how important it is. I think mindset has definitely changed, especially this year, about the importance of healthy sustainable growth and really not becoming reliant or continuing to be reliant on investors and actually becoming self-sufficient. I can’t reinforce how important that is, especially when it comes to an eventual acquisition. So that’s both for our internal learnings and for a future exit event found me, but actually for founders as well that might be listening and have an ambition to exit, which is probably most because I’ve never met a SaaS founder who wants to pass their business down to their grandkids. So optimizing for early profitability is as soon as possible, especially because if you’re doing less than really 2 million ARR, an EBITDA multiple is really one of the most common methods of buying a business as opposed to revenue multiple. Sadly, the times have changed.

[00:24:24.840] – Joran

You’re now working toward profitability. You’re going to raise, you mentioned before, it’s going to be for growth money. You also mentioned organic channels has our focus right now, playing a bit with ads on meta. If you’re going to get the investment in, where is the money being spent? What are you going to do growth-wise?

[00:24:43.570] – Joe

Yeah, it’s growth capital, really, because we’ve got a really nice niche and very few people are actually doing our models, so we just want to optimize for capturing market share. We’re going to hire a head of operations. We have quite a few candidates applied to that, but that’s a salary. And we’re going to funnel it into certain growth channels and vehicles, scale out our B2B affiliate side of things. I think that’s a good way. But again, that requires possibly one extra staff member. So Yeah, into growth and one or two hires. Yeah.

[00:25:17.940] – Joran

And if I can hear the answer, you’re going to probably experiment what the real channel is going to be. You mentioned two, but you’re probably going to play around, like what is actually working and then double down on the channel.

[00:25:29.880] – Joe

Absolutely. Absolutely, yeah.

[00:25:32.790] – Joran

Cool. If we’re going to dive into advice for SaaS founders, I always ask these two questions at the end. What advice would you give another SaaS founder who is just starting on their journey and growing from 0 to 10K monthly And the current revenue.

[00:25:46.180] – Joe

First and foremost, make sure your business, market, model, customer, idea is truly validated and ensure that it’s not just your friends that are saying, Yes, go for it, but actually potential customers, figuring out what they pay for this, run a deep dive audit on all of the various risks at play, Murphy’s law, whatever will go wrong, or can go wrong, will go wrong, and just preparing for that. And prepare mentally and physically because it’s going to be a difficult journey. But first 10K MRR is probably the hardest. 10k to 100, it gets a little bit easier, and then 100 plus. By then, you’ve got a lot of processes in place. I encourage any aspiring entrepreneur, just put in the work. Yeah.

[00:26:37.130] – Joran

You see a lot of founders either come from the agency side, for example. They had a consulting business or the EATC, they started their business or people who experience the problem themselves, including the both of us. Would you always recommend starting from that position where at least you already somewhat validated the problem yourself?

[00:26:55.720] – Joe

Yeah, I think domain expertise is very valuable, especially if you’re going to raise capital, but also just from a knowledge standpoint, you’re far ahead of game because you’ve worked with your future clients already, or perhaps the business that you’re in, a consultancy was or could be a customer or supplier or something. Yeah, knowing that problem inside and out often comes with domain expertise, but it’s not a requirement, so to speak. You don’t have to. And to a certain extent, tech entrepreneurs sometimes come in, solve a given problem with a SaaS platform, for example, and actually maybe they’re better off not having been inside that space. But having a co founder is often helpful.

[00:27:35.550] – Joran

Yeah, it’s a good point. Sometimes you don’t want to have the domain expertise because you’re going to lean into a certain direction, where from the outside perspective, you might be able to come up with a fresh idea. So it’s good and bad.

[00:27:46.500] – Joe

Because if you work in a big corporate consultancy and you’re used to those bureaucratic processes, you might subconsciously lean towards implementing some of those inefficient processes rather than modernize, disrupt, apply an AI model or something rather to solving it.

[00:28:03.470] – Joran

Yeah. If we go beyond 10K MR and you’re on the journey yourself, right? And this is going to be a huge step. What advice would you give founders growing to 10 million ARR? So your journey ahead, what would you recommend? Probably yourself here as well.

[00:28:18.040] – Joe

Yeah, absolutely. I think building a solid team, a lean team rather than a large one, is obviously most important at its core. And delegating accordingly. I think once move up into the seven-figure revenue range, founders take a step back. There will be an element of founder-led sales, of course, and being good at sales is one of the most important skills, I think, for a startup. But really being able to delegate to trusted individuals that are exceptional in what they do. That’s one of the most important.

[00:28:48.790] – Joran

The last question, is there any advice for other SaaS founders? You would say, Do this, avoid this. I guess things we haven’t covered yet, which you can give away to the audience.

[00:29:00.060] – Joe

Sure. Yeah, I think we’ve highlighted a few things: building our community, building out processes, systems, surrounding yourself with all the right people, hiring experts, staff, but keeping the team lean and optimizing for profitability. There are some of the key things we’ve highlighted today. But in other areas, I think just enjoying what you do and actually just drawing a lot of passion from it, because if you’re working 70, 80, 90 hours a week consistently, it could get quite draining, I think, if you don’t absolutely love what you do. Making For sure, if you are early stage, especially picking a business idea market that you love spending time on, for sure. Focusing on execution, I think, is key. Consistency with every part of the business is good. Not neglecting certain departments, even if they’re really boring and tasks are administrative. It’s all very important stuff. Yeah, I think that’s a big learning, I think, going from one business selling it to the next. Nice.

[00:29:56.850] – Joran

If people want to get in contact with you after this interview, how can they do so?

[00:30:00.350] – Joe

Yeah, happy to. Feel free to find us on LinkedIn. But it’s jojoe@Foundy. Com. We’d be delighted to help anyone if they’re seeking to build a business. We’d be happy to help anyone that might be interested in building a business and then exiting. And similarly, if you’re looking to acquire a business, one of your competitors, then feel free to reach out. We’re happy to streamline your end-to-end process to buy or sell a company and raise capital as well. So the fundraising tool is proving really popular, in fact, just in the last couple of weeks We’ve had about £12 million of application comes in. But yeah, get in touch, jo@Foundy. Com or find us on LinkedIn. And yeah, we would like to see the ball.

[00:30:40.260] – Joran

Cool. Yeah, so what we’re going to do is I’m going to add your email, LinkedIn, and the site so people can actually find you. They don’t have to listen to the spelling, and then from there, they can contact you and go from there.

[00:30:50.420] – Joe

Thank you, John.

[00:30:51.520] – Joran

If you are listening to the episode, we are going to add a poll to this, and we are going to ask a question. So if you leave a comment, let us know what you a lot about this episode with probably live music on the background now at SaaSter. So thank you for listening.Thank.

[00:31:06.110] – Joe

You very much. Really good speaking. Cheers.

[00:31:07.610] – Joran

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

Joran Hofman
Meet the author
Joran Hofman
Back in 2020 I was an affiliate for 80+ SaaS tools and I was generating an average of 30k in organic visits each month with my site. Due to the issues I experienced with the current affiliate management software tools, it never resulted in the passive income I was hoping for. Many clunky affiliate management tools lost me probably more than $20,000+ in affiliate revenue. So I decided to build my own software with a high focus on the affiliates, as in the end, they generate more money for SaaS companies.
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