A SaaS Startup’s Journey
to $100,000 a Month
That damn dangling carrot … Always in sight, never within reach. Until now.
My last company, Bantam Live, was acquired early on, before we had a chance -- or needed -- to truly scale our business. Those early acquisition offers can be damn tempting, and I don’t fault any hustling entrepreneur for jumping on one.
But this time, things are different. With Groove, I want to build something bigger. Not a quick exit. Not a VC-driven feet-to-the-fire sprint to the finish. This time, I’m in it for the long haul.
The game I’m in is maximum happiness for the maximum amount of time. What I found is one of the things that makes me really happy is to work on stuff that I care about with people I really like working with, with the independence of nobody telling me what the fuck to do.
David Heinemeier Hansson, Creator of Ruby on Rails, partner at 37signals
That’s not to say the temptation isn’t there. I wasted six months entertaining offers to buy Groove while we were in beta. It was a distraction, and it was a failure on my part to ignore the bigger picture. It wasn’t our first fail as a business, and it won’t be our last. But failures are a huge part of the startup journey, and that journey is what this blog will be about.
Are you working your ass off to grow your startup?
This is the blog I wish I had read the first time I started a company. It’s going to cover the lessons we learn from our own experiences, including our tests, our wins and our fails, backed up with real numbers. Everything from design, development, strategy, marketing, sales, growth hacking, hiring, fundraising, culture, customer support and more.
Now, I’m not saying that there aren’t any good places -- online and offline -- for you to learn about these things. There are tons of amazing resources out there. More successful entrepreneurs, smarter analysts and better writers. I know, because I read as many of them as I can, and I’ll be sharing the best of what I find. But what we’re going after with this blog is a different perspective. A view from the driver’s seat, with actionable takeaways that you can put directly into your Basecamp project or Trello board to test in your own startup. You won’t find any armchair analysis here; everything we write about will be hard-earned lessons from our own experience, as we learn them on our way to $100,000 in monthly revenue.
Why $100,000 in Monthly Revenue?
Because goals matter. And big milestones like that one give our whole team a massive red bullseye to aim for, every time we look at our roadmap.
One of the biggest (and most counter-intuitive) lessons I’ve learned as an entrepreneur is that just about the hardest way to make more money is to try to make more money.
Confusing, I know.
Rather, the easiest way to make more money is to provide more value. Our customers don’t care that we want to make more money, nor should they. Our customers do care that we want to improve their lives, help them to do their jobs better, and make their businesses succeed. And that, they’re willing to pay for.
Where Our Journey Starts
We’re in the same place as a lot of you: in transition. We’ve been developing, designing and just barely starting to promote. As Marc Andreesen puts it, the life of a startup can be divided into two parts: Before Product/Market Fit, and After Product/Market Fit.
When you are BPMF, focus obsessively on getting to product/market fit. Do whatever is required to get to product/market fit. Including changing out people, rewriting your product, moving into a different market, telling customers no when you don’t want to, telling customers yes when you don’t want to, raising that fourth round of highly dilutive venture capital — whatever is required.”
Marc Andreesen, VC
We launched to the public about 11 months ago, and the story up until recently has been one of focusing obsessively on getting to product-market fit. We’ve redesigned, redeveloped, restrategized, and apologized for hiccups more times than we can count.
Then, a couple of months ago, something awesome happened. The feedback became more positive. We were getting more and more emails from customers who loved our product, and fewer complaints about bugs and UX issues.
We ran the Product/Market Fit survey pioneered by Sean Ellis, and the results confirmed what we suspected:
If you find that over 40% of your users are saying that they would be “very disappointed” without your product, there is a great chance you can build sustainable, scalable customer acquisition growth on this “must have” product.
We were on our way to product/market fit.
Finally, our customers were proud to share Groove with their friends and coworkers. Word of mouth began to spread, and new users started to sign up at a pace we hadn’t seen before; first at a steady trickle, and now at a strong, healthy clip.
What You'll Learn
Starting with our next post, we’ll outline how -- exactly -- we got to where we are today. We’ll talk about the strategies and tactics we applied, and the lessons we learned, including:
- How we got 1000+ private beta signups in just 7 days, without getting Crunched.
- Why we passed on a $5 million raise from VC's 6 months in.
- How we wasted $50,000 designing the wrong website (and how you can avoid the same mistake)
Fair warning: there are over a dozen “big lessons” like the ones above that we’ve learned up until now. This next post will be very long. But it’s going to be packed with detailed explanations, and I’m not exaggerating when I say that if I had this information before we launched, we’d probably be at $100,000/month by now. If you get even a fraction of that benefit from reading it, I’ll be happy.
After next week’s post, we’ll shift to a more real-time perspective on our mission. We’ve got hundreds of tests we’re going to run, and whether we win or lose, we’ll be sharing the results with you. And if all goes well, we’ll continue to share our insights and lessons all the way to $100,000 and beyond.
So What’s Next?
Hopefully, you’ll join us on our journey. It’s totally free, and you don’t have to be a Groove customer (though you’re more than welcome to sign up for a free trial here).
We’ll be releasing a new post each week, starting with the one outlined above. To get each post emailed to you as soon as it’s published, sign up for the $100K mailing list below.
See you next week. Have something you want to learn more about? Let me know in the comments below or hit me up on Twitter.