[SaaS Club] Bootstrapping to Tens of Millions in ARR

Hey Reader

I hope you're doing well.

Here's a quick round up of what's been going on at SaaS Club:

🎧 Podcast

Bootstrapping a SaaS to Tens of Millions in ARR

In 2012, Alex and his three co-founders had just graduated from a university in Australia. While they were still students, they had built software to solve a pain they were experiencing.

Now, they decided to try and turn that into a business and gave themselves a year to generate sales.

By the end of the first year, they were making about $5K monthly recurring revenue (MRR). Although it was not a lot of revenue, it was enough to give them a reason to keep going.

It took the team another three years to hit their first $1 million in annual recurring revenue (ARR). During that time, they underwent a lot of trial and error, trying to find product-market fit.

The team got a big break when they built one of the first integrations with a leading SaaS product, which helped spread the word about their offering. Plus, they honed their inside sales skills and started closing more inbound leads quickly.

Despite their initial success, the team still faced many challenges. They operate in a highly competitive market with many big and well-funded competitors such as ADP, Workday, and UKG.

When Covid hit, they faced a major problem because half of their customers were in the hard-hit hospitality industry.

Despite all these challenges, they've been able to grow a SaaS business doing tens of millions of dollars in ARR, with over 7,000 customers, and a team of 150. Most significantly, the business is totally bootstrapped.

In this episode, you'll learn:

• How they found product-market fit after 3 years of trial and error

• The challenges they faced in the highly competitive software market (and still do) and how they have been able to compete with much larger, well-funded competitors

• How they have been able to drive growth through word of mouth, inside sales, and smart integrations

• How they weathered the impact of COVID-19 on their customer base and were able to come out stronger on the other side.

I hope you enjoy it.

Listen to the full podcast episode

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📗 Book of the Week

This week's book recommendation is from Alex:

In the Company of Giants: Candid Conversations With the Visionaries of the Digital World by Rama Dev Jager and Rafael Ortiz

🧠 Insights

Build a Great SaaS Product: What Exactly Does That Mean? 

Every SaaS founder knows they should build a great product.

But what exactly makes a product great? And how do you know that you’re building one?

I’ve looked at over a thousand SaaS products in the last 10 years. In this article, I’ll share the 5 success ingredients of all great products.

So, let’s dive in.


1. Solve a real problem behind the obvious pains

Good products solve obvious pains. Great products solve the underlying ones.

You’ve got to look beyond the obvious pains your customers have and uncover their underlying needs and motivations. Identify the root cause of their pains by asking better questions in customer interviews and surveys e.g. why does this problem exist, why is it important to solve, etc.? Keep peeling back layers of the onion until you identify the real problems to solve.

That’s how to create a product that truly resonates with customers.

For example, Trello didn’t just create easier-to-use project management software. By understanding their customers’ underlying needs and motivations, they fundamentally changed how people managed projects using visual Kanban boards and intuitive drag-and-drop functionality.


2. Continuously iterate with a feedback loop

A feedback loop lets you continuously collect customer feedback.

But it’s not enough to just collect feedback. You’ve got to prioritize and act on that customer feedback quickly to keep improving your product. You also need a way to measure the impact of the improvements i.e. do they actually benefit customers? One way to do that is with your Net Promoter Score (NPS) as it tracks the likelihood of your customers recommending your product to others.

Building a great product is an ongoing journey, not a destination.

For example, at Superhuman, they regularly ask customers how disappointed they would be if they couldn’t use the product anymore. The most important metric for them is the percentage of people who say they’d be ‘very disappointed’ and that’s the number they strive to keep improving through their feedback loop.


3. Create an outstanding user experience (UX)

Every SaaS product should focus on usability, design, and accessibility.

However, great SaaS products are created by continuously obsessing about how to improve every detail of the user experience. And if you’re a Product-Led Growth (PLG) SaaS business, then this is even more critical. Instead of just thinking about what new features to build, focus as much effort on how to keep making your product more intuitive, faster, and easier to use.

A seamless user experience can be the difference between success and failure.

For example, one of the reasons Slack grew in popularity so quickly was because of its intuitive user experience. The competing products at the time e.g. HipChat, Yammer, etc. had similar functionality but didn’t offer the same level of user experience as Slack.


4. Surprise and delight your users

Don’t just create a great user experience (UX), exceed customer expectations.

Great SaaS products often surprise and delight their users in unexpected ways e.g. unique features, personalized experiences, or unexpected rewards. Creating excitement and delighting your users leads to increased loyalty and word-of-mouth referrals. Have you ever used a product that didn’t just do what you expected, but went the extra mile to make your life even easier?

When you exceed customer expectations, you create raving fans.

For example, Canva surprises and delights its users by regularly offering new templates and design elements. And its user-friendly interface allows just about anyone to create great-looking designs which have helped grow a loyal following.


5. Provide exceptional customer service

While your product’s features and functionality are important, customer service can make all the difference when it comes to creating a positive user experience.

Many companies see customer service as a cost center and so make it hard for customers to speak with a human. They create a barrage of self-help resources designed to reduce costs. Companies with great products over-invest in customer service because they understand that it’s an important aspect of a great product. They also proactively communicate with customers to build trust and loyalty.

Exceptional customer service helps a product stand out and attract customers.

For example, Hubspot’s exceptional customer service is one of the reasons for its success. The company invests in customer success, community engagement, and personalized training, all of which help it stand out from the crowd.


I hope these 5 success ingredients give you some additional insights and help you create a product that your customers love and one that stands out from competitors. Good luck on your journey!

🌐 Around the Web

YouTube Channel

We've started posting daily highlight clips from interviews.

In this clip, Alex explains How a University Bar Led to a Million-Dollar SaaS Startup which now generates tens of millions of dollars in ARR.

Check out our YouTube channel here. 

😍 Let's Get Social
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Have a great week!

- Omer

Interested in sponsoring The SaaS Podcast? Learn more here.


P.S. whenever you're ready, here are 3 ways I can help you:

1. SaaS Club Plus: We're re-launching a brand new paid community for SaaS founders with an exciting new offering. Join the waitlist!

2. SaaS Club Launch: A 12-week coaching program to help you launch your SaaS and/or get to $10K MRR faster. 

3. SaaS Accelerate:  A private coaching program to help SaaS founders get breakthrough results.