The Perfect Startup

#SaaS #CEO #Growth

An interview with five startup heroes giving tips and reflections on how to get your SaaS (software as a service) startup off the ground.
by Morten Sørdahl, Co-Founder getleap.io
 (5 min. read)

Introduction

Starting a company has never been this easy – or this difficult. So how do you make it and set yourself apart?

We have gathered a dream team of passionate individuals from the Danish startup scene, each with an amazing track record in each of their fields. Look at this as your “advisory board”.

They all received the same framework, to ensure the feeling of collaboration. They had to imagine they were part of the founding team of a SaaS company and answer questions related to 3 stages in the first year of the company's existence. They wouldn't be able to read each other's work but rather give personal input from their work-life and previous mistakes.

We would like to thank all five for helping out with this content piece, and to give their work the maximum limelight, we have decided to split this content into five-pieces.

I hope you'll like it and feel free to reach out if you have any feedback.

Quick disclaimer: No company is the same, and our goal is not to give you a fact sheet to work from. On the contrary, we want to entertain and hopefully, on the way give you some valuable takeaways.




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👋🏻 The Team

CEO

Lars Ettrup is founder of Linkfire. His passion lies within tech, data and the future of creative industries. Linkfire is not his first rodeo building a business. Lars was also Co-founder of Curious who got acquired by Patchwork in 2015.

Initial phase
How would you move from an idea to a business, and how would you make sure you have a product-market fit?
Team-Market fit

For lack of better wording, team-market fit is by far the most important measure of success early on. Ask yourself the following questions:

  • Is this the team that can bring a prototype to the market?
  • Do we have the skills to move forward 12 months?
  • Are we aligned on the mission/sacrifice/personal investment?
  • Could I spend 5+ years with these people?

Success should be measured in the ability to launch some kind of tangible prototype, but really it should be measured in emotions, alignment and team spirit! Is there agreement on the vision? And the mission?

In Linkfire we went through 5 co-founders early on because we did not have this under control. We wasted time on team challenges and lost momentum.

Product-Market fit

Everyone in the team should understand the value proposition to the market.

At Linkfire we created a simple, simple prototype and tested the prototype and our value proposition within different verticals. We did not know ANYTHING about the music industry but got in dialog with a team of student assistants at Universal Music. We spent several weeks iterating with them and co-developing the initial prototype and finetuning the value proposition. In many ways, we were just executing what they told us about their pains and the potential solution. 

I would obsess over understanding our value proposition to the market. Test it out. Ask questions to potential clients. Challenge it within the team. Avoid BUILDING before asking critical questions.
Addressable Market

Ask yourself the following questions:

  • Is there a business here?
  • What’s our potential business size here?
  • And what are we going for initially?


Get started adding some numbers to this. It will make you smarter once you start hitting go-to-market, scale and fundraising (if you need investment).

I took us about 3 years to create our first credible addressable market estimate. I wish we had been clearer about this earlier on. But we were inexperienced on this front. We came from a marketing background and did not fully understand why and how we should use this in our business model and go-to-market strategy.

Now it’s a critical part of our strategy, quarterly targets, etc.

Launching the first product
How would you scale the business during the first product launch?

The important thing here is to NOT go abroad for the sake of going abroad. Obsess over early success indicators around your value prop. MAU’s, DAU’s or whatever you use to determine stickiness, engagement, and retention.

Start understanding your market, new markets. Understand your CAC, LTV. Get them inline. Build the foundation for your repeatable machine.

Create your north star. The one metric that matters. At least for this period.

At Linkfire we obsess over “Daily Visitors”. It’s part vanity metrics, part directly contributing to our revenue.

Scaling the business
How would you scale this company globally, and at what point would you seek funding?

Deploy the repeatable machine. If you don’t have the repeatable machine. Wait. Get it in line. It can take years!

If the numbers don’t lie, and growth rates works, then deploy most resources into sales. As much as possible. If in doubt whether to spend money on sales or product. ALWAYS sales. If you ever need to raise funds topline performance beats product performance any day.

Make your repeatable machine flexible. Adapt to market conditions. Evolve it. Stay very close to your clients. Watch your growth metrics but MOST importantly watch your engagement and retention metrics.

Why a SaaS Startup?
What, in your experience, makes SaaS Startups exciting, complicated, or challenging?
Metrics

I’d say the “easy part” of running a SaaS business is that you pretty much get handed your metrics on a silver platter. If you don’t know what you should measure, you’re running the wrong type of business.

Tools

There is no shortage of tools for SaaS business, so you most likely don’t have to “build” much initially. Stack it into a product.

Sales & Support

This is where most go wrong. You cannot over prioritize sales.

Extra
Which three vital 3rd party solutions/products would be most important to you/the team?
  • Amazon Web Services
  • Slack
  • Keynote and Google Sheets
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