In October 2018, Chris and I spoke on the Growth stage at SaaStock 2018, an annual gathering of SaaS business leaders in Dublin, Ireland.
We have both been regular attendees of SaaStock events in past years, and the annual “festival” has always been a great few days. We were honoured to be invited to present in front of so many other businesses we respect and enjoy following.
The following is a written account of the talk we delivered, including slides. It covers our experience in building up a 50 person SaaS business over the last five years. Hopefully it might provide value to other early stage founders on their own journey.
Build. Break. Fix. Grow. Repeat.
When it comes to SaaS, most of the coverage you’ll see and hear is about the ‘unicorns’, the businesses experiencing explosive hyper-growth. However for the vast majority of SaaS startups and scale ups, including ourselves, the journey is more like this: we build something, we grow a little but noticeably, something breaks, we fix it, then the cycle resumes again.
Who we are & why we put this talk together
The two of us (Chris and Andy) founded Akkroo five years ago, whilst attempting to fix a problem which we had been experiencing ourselves when exhibiting at events.
Today, we sell a universal Marketing Tech solution designed for mid-market and enterprise organisations who regularly exhibit at all sorts of events. Akkroo streamlines the way leads are captured face-to-face using our mobile apps, before processing them through to Marketing Automation and CRM software, replacing the reliance on manual, antiquated processes traditionally used at events.
We’re now a growing 50 person SaaS business based in London (plus our first few hires in the US), and Akkroo is used by over 200 organisations all over the world.
What follows are the five most important learnings from our own experiences of growing a team from scratch.
1. Remember to match the right advice with the stage of your business
As a team we attend a lot of SaaS industry events including— and in the past few years we’ve read a huge amount of advisory SaaS content online. One of the things we love about SaaS is how willing others are to share their stories, successes, failures and advice!
However, we’ve also learnt the hard way that content is often shared without quite enough stage-specific context (or it assumes you know the full context). If you’re not careful, this content can be detrimental when the advice is applied unwittingly.
If you’re a 5 person, bootstrapped startup trying to figure out early Product/Market Fit reading advice that’s most relevant to a Series B $M scaleup, you have to be mindful and wary of how the advice and ideas do or don’t apply to you.
We made this mistake in our early days: we’d read an article recommending the hiring of salespeople in pairs to create competition and speed up revenue. So we hired 2 inexperienced graduate salespeople way before we were really ready. 9 months later they had moved on and we were left scratching our heads.
We realised that advice was aimed at SaaS businesses much further on than us. What we should have followed is that the founders have to sell first, and only once you’ve got a process that’s remotely repeatable should you think about new sales hires.
So, our first suggestion is to make sure you take extra time to validate advice before applying it, and understand if it’s truly intended for your specific stage of your journey.
Given this post could be viewed as advice, here is some background about our own business so you can see how similar/different your own journey is to ours:
- We a B2B business (not B2C)
- We are first time SaaS founders
- We’re a mid-market to enterprise business (not SMB)
- We are in the £1m – £10m ARR bracket (not PMF stage, not hypergrowth)
- We’re in an emerging space/category (not one where all solutions are already known)
All of these factors influence the relevance of advice — for example businesses selling B2C software to SMBs are very different to us — so take care to validate with others what is likely to work or fail, given the variables in your own business.
2. Managing Timing & Balance
When you’re leading a growing SaaS business, a key responsibility is to keep all the various parts of your evolving business running smoothly together at a similar pace.
We often use the analogy of a set of escalators side by side, where each one represents a functional part of the business. You want to avoid situations where one part of your organisation significantly lags behind the others, to ensure you’re running a balanced operation and don’t become affected by bottlenecks in your processes.
One mistake we made was finding the time when, as a founder, you can safely step away from the hands-on part of the sales process. It took us a couple of attempts to get this right, so our advice is to extract yourself cautiously, otherwise the impact can be frustrating to rectify.
Another good example would be demand generation and sales. One feeds the other. There’s no point hiring a bunch of salespeople if you haven’t built a demand generation engine capable of delivering a reliable flow of leads. Focus there first, then sales hires can follow.
Finally, we’d like to suggest that for any SaaS business, the methodologies of Winning By Design are well worth the investment (this is not a paid endorsement!). We’ve found real value in their approach to building a sales team.
3. Nurture company culture much earlier than you probably think
When you’re a really small team of 1 to 5 people, it’s easy to assume that because you are good people with good intentions, you will grow a good business.
The received wisdom we’ve often heard is that you should really start to think about company culture when you get to around 20, 30 or even 50 people – and if you don’t, you’ll spend a lot of time correcting the problems that emerge from that situation.
Our suggestion is not to wait anywhere near that long. In our experience, the earlier you can invest in deliberately shaping this important aspect of your business, the better.
In the early days at Akkroo, there was a high degree of friction between some individuals inside the business. Andy found himself clashing with one team member frequently, and feeling angry – not his natural state.
Not long afterwards, he spent some time with his friend (and Akkroo investor), Joel, the CEO and co-founder of social media management software, Buffer. After Andy ran through the challenges, Joel stopped him and said if he saw that behaviour in his own team, it would be a red flag. The conversation moved to ways to resolve this, and back in the UK, Andy and Chris conducted our first ever exercise to develop a set of shared team values for Akkroo.
The whole team was invited to contribute ideas for the short list. In the end we produced a list of 10 values, which have become the backbone of our approach to business ever since.
What about the people who didn’t submit their ideas? Quite tellingly, it was those who the clashes had been with, and we decided to go our separate ways less than a week later.
We revisit this values exercise every 18 months or so, and our current list of 5 values is a shorter, sharper version of the original 10. While it’s hard to measure the impact exactly, we’d suggest that our Glassdoor reviews speak for themselves. Our team retention rate is also incredibly high (although this isn’t an entirely useful metric, so treat with some caution). We’ve added 35 people in the three years to December 2018, and our retention rate is near 100% (excluding those who didn’t leave voluntarily).
Ever since we spoke with Joel and first ran this exercise, the key markers we look out for when we’re concerned about values fit are: misalignment, defensiveness and a sense of entitlement.
If you are a leader and see these behaviours exhibited in your own organisation, and you’ve not done a values exercise yet, we’d highly recommend it.
4. Finding Product/Market Fit
Christoph Janz from Point Nine Capital suggests that the path to achieving Product/Market fit is not linear at all, but a messy one – and a moving target at that. Some days your PMF gets stronger, and some days it slips away.
We’ve found this to be particularly true when you’re creating a product in an emerging category. In this world, you are constantly defining solutions to the problems you’re uncovering through research – with no playbook or competition to go out and copy.
One technique we used over the years to help us along that path to Product/Market fit was to cast a wide net, then draw it in over time.
In the early days we applied our technology to all sorts of data capture use cases, and we generated revenue from all manner of customers, but over time we became more and more focussed – shedding those customers who didn’t fit a particular customer profile, where the problems were most acute and a good number were willing to pay well to solve the challenge. We cast the net wide, drew the net in to focus on lead capture at events, and then again later pulled it in around the specific challenge of B2B events (as opposed to B2C).
This may be a useful technique if you are going through that product/market fit discovery yourself.
5. Fill the gaps with people, especially Customer Success
In software and SaaS, people are likely your most expensive asset. Deploying them wisely is a very high leverage activity. We took great inspiration from an early Jason Lemkin piece along the lines of – “if you can only over-invest in one area, make it Customer Success.”
This particular problem-solving team has allowed us — especially in an emerging market and during the search for product/market fit — to help deliver a great customer experience, even when the product hasn’t quite been there (which invariably it won’t be during this period).
CS people can fill these gaps until the product catches up. It also can be a great engine for customer research and development, where lessons are learnt fast and be applied to the roadmap to capture that new value.
We think about and structure our CS team today as follows; where each works at a difference cadence.
- Account Management own the commercial relationship with our key customers and operate on a quarterly cadence, focussed around the quarterly review and stakeholder success.
- Customer Success Management works on a more regular cadence, helping the customer prepare and work event to event.
- Customer Experience & Support reacts, day to day, responding to tickets as they come in.
Bonus suggestion: remember to enjoy the ride!
Building any kind of business is full of challenges and is tough. Don’t forget to take the time to reflect on your successes as well as the failures in your work. We both feel guilty of not doing enough of this from time to time, and it’s important to remember we are working in an incredibly exciting industry at a really important time!
On our journey, we really enjoyed reading these two books. We would particularly recommend them to anyone working in a space where there isn’t a well defined category already:
- Crossing the Chasm — Geoffrey A Moore
- Play Bigger — Al Ramadan, Dave Peterson, Christopher Lochhead, Kevin Maney
That brings our list to a conclusion. If you’re interested, Akkroo is based in London, UK, and we’re currently hiring here and for remote roles in the US. Find out more about our current roles, and joining us on the next leg of our journey.