The Perfect Startup

#SaaS #Sales #CCO

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
 (10 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.




Read more

👋🏻 The Team

CCO

Hakon Junge has recently started as CCO at Capdesk, but you have probably seen him putting Pleo on the map through his impressive amount of inspiring Linkedin posts from 2017-2019. Hakon lives and breaths Growth and Value. Something you won't be in doubt about listening to his new podcast Unsung Heroes.

Initial phase
How would you structure a new sales flow?

My interpretation of early “sales flow” is a lean sales process geared towards closing (the right type of sale) as efficiently as possible. 

Simple is always better starting out! 

I’m a big fan of doing things that don’t scale from the outset (you learn more with the right people). These are things like going to meet all prospects initially (first 25 or 75) and getting someone from product or engineering to join you at early prospect meetings to hear first hand and see first hand how prospects interact with your MVP (invaluable)!  

For the first 25 to 75 customers, I wouldn’t invest heavily on, a.) tools, and b.) building scalable processes for several reasons. 

  • You are still searching for even a sniff of something that could be product-market fit
  • Execution trumps strategy and process early on
  • Working hard first will show you the gaps where you can shift to working smarter

Pre 3-months - Discovery Meeting (intro’s / investor referrals) > Feedback/Implementing Meeting > Closed won / Closed lost)

What’s the focus at the very beginning, and how would you prepare for the first customers?
At the very beginning, you need founder-led sales! 

DO NOT HIRE salespeople right away.

The founders need to be in the field, getting all the feedback first hand as they are fully invested in the survival and strategy of the business.

Founders can also typically leverage network and investor contacts (if you’re lucky) to get early meetings (your first 25 or 75) so you shouldn’t have to do serious outbound sales at the outset (this takes a lot of time to get right).

The focus would and should be on learning fast, failing fast and acting fast on feedback to pivot, adjust and or tweak then rinse and repeat. 

Founders are best positioned to do this as they can keep running costs low by bootstrapping and or sacrificing salary for a few months. 

In terms of preparing for your first customers. I do think most startups should invest earlier in great Customer Service (CS).

I would say one of the first hires (excluding engineers) should be a strong CS rep that can take everything you handoff as founders so that you can focus on new business but being assured that customers are getting great service and also CS is doubling down on feedback post-sales.

Don’t be cheap here it will bite you later!
Launching the first product
How do you see the perfect combination of sales and marketing?

Such a great topic and I would argue at this stage 3 to 6 months in it’s not thinking about the combination (there might just be one person doing both or just one doing each) but aligning expectations and focus around a simple goal.

I’m a big fan of pooling together Marketing, Sales and Customer Success under the umbrella of the Commerical team that are all aligned around a simple north star metric (REVENUE)!

Revenue at this stage is such an important metric (just to stay alive) but also a pure metric to measure (Monthly Recurring Revenue ) that each of these teams can contribute towards and should.

Marketing might be focusing on the top funnel, lead generation, and content, Sales will be focused on closing deals, and Customer Success might be focused on support, nurturing and upselling.

It’s not always easy pricing your product – how would you go about this?

Keep pricing simple early and use any competition that exists to find a starting reference point (don’t be afraid to change pricing frequently and often at the beginning - just grandfather customers in).

If you’re selling on value and doing a great job at this you should be able to quickly figure out the buyer’s pain, how much time they typically spend addressing that pain without your solution and how much this factors into the price point they are willing to pay to get rid of it.

However, I also like playing by the rule that you should be losing 20% of inbound leads that are fully bought into the value and prepared to buy your product but still find it too expensive.

If you are closing 100% of prospects in the funnel detailed above, I would argue you are too cheap and an upward adjustment could and should be considered depending on strategy. Do you want a land grab and upsell approach or revenue-generating from day 1?

Looking at the current climate and how investors are now taking a much finer microscope on unit economics, I would currently lean towards the later.

When launching a product, what should sales focus on?

Traffic! 

Sales with Marketing are like the war drum; they should be well connected on social (or trained to be) and huge natural evangelists of your product, service and or brand.

From the outset, sales should craft with marketing a compelling story about the product, why now, why me? Storytelling in sales is an art form and so underplayed especially for great products. 

Just check out Andy Raskin and how the greatest sales teams on the planet pitch, it will make you think twice.

In more practical terms though sales should focus on building early relationships with prospects and customers even when it’s not scalable. But investing in your early adopters to your product, meeting with them to gather feedback and also let them take part in your journey as a company is special and rewarding and should compound later with referrals.
Scaling the business
How would you prevent churn?

Leaning back on my earlier point about preparing for your first customers, an amazing customer service team that truly cares about making your customers successful will help you fight fires here.

Churn can happen for many reasons, but you should be tracking NPS scores and have a strong pulse or at least gauge on customer health early on even if you aren’t using tons of data to track this yet.

I remember early on at Pleo how religious we were about this and when we got an NPS score that wasn’t a 10/10 how much of an impact it had and how CS would jump on cases to support, help and uncover why we didn’t get a 10 but then address them proactively (obviously this isn’t scalable in the long term but would love for it to be).

That kind of focus early on is a culture breeder and sets an enormous president towards your customers that you care, you are superhuman and that you will stop at nothing to solve a problem.

Which factors or KPI’s would you look at, as an indicator of sales performance?

Pre 12 months I wouldn’t get overly caught up in specific KPIs however there are always the basics to follow, and that can and do give you a strong indication of what is working and what is not.

In no particular order:

  • Referrals as a KPI – yes, I think this is an interesting one that few startups do early on. How much are we pushing for referrals from customers that are enjoying using your service? I would love to see more commercial teams in a clever not pushy way sourcing more referrals as a KPI related as a measure of the service they are providing in their sales process to prospects who then convert to customers (trust me it will stop sales overselling).
  • Response time to inbound leads - This one is a sin if not done well when you have a product that can generate inbound leads and or marketing is doing well at driving inbound. Those prospects should be engaged quickly and if you’re taking hours to get back to them your fighting a losing battle and it’s a poor reflection on sales.
  • Low Churn - qualifying leads or prospects is a really great skill and pushing prospects or overselling them on features and benefits can sometimes lead to a quick win for the very short term but it will and can also lead to a quick churn as they are not a great fit for your product or service, I would love to see a KPI linked to churn rate in first 3 to 6 months as a direct reflection on sales reps.
LEAP beta — Early access

Get ahead of your competition

Want to join our platform for a peek behind the scenes and collaborate on our next-generation marketing platform? We might have a spot left for you
Note: we have limited seats per month
Queue up →