why saas companies fail

Our Startup’s Wins, Fails and Lessons From the Last 6 Months

We’re halfway through the 12-month growth strategy we released in June of 2014. Here’s how things are going.

We’re halfway through the 12-month startup growth plan we released in June of 2014. Here’s how things are going…

Six months ago, we made Groove’s one-year growth strategy public.

We opened up about our approach to marketing, our top-performing channels and the tests and tactics we planned to execute on over the next year.

But in business, plans are rarely, if ever, set in stone. The best plans are fluid and adapt to results and feedback throughout the process. A 12-month plan shouldn’t be evaluated in 12 months; it should be reviewed and adjusted far more frequently to make sure you’re going in the right direction.

So while we’ve been tweaking and adjusting as we’ve gone, we’re halfway along now, which I think is a good milestone to step back and truly reflect on our big-picture progress.

Just like our original strategy document, this was an internal process that I’m sharing because I think it’ll be valuable to other businesses working to execute on their own plans.

I hope you find it helpful.

A Bit of Background

Our strategy was built on three pillars — our key objectives — for the company:

The Three Pillars of Our Growth Strategy

1) Leadership in the SMB Market

We’ve gotten here by serving small businesses and entrepreneurs. Unlike some of our competitors, we’re not going to move upmarket. Our product, our blog and our other efforts have all helped SMB’s grow, and we’re going to keep doing that. As you’ll see below, we have plans to increase — by a huge margin — the amount of value we’re delivering to our community. Our mission is to become the preeminent resource for small businesses when it comes to support, growth and business strategy.

2) Building the Groove Brand

As we’ve seen many times in the SaaS space, a good product isn’t enough for long-term growth. We need to build a lasting brand that people love to do business with. We’ve begun to do that with the 100K blog, but there’s a lot of work left to be done.

3) Becoming Even More Data-Driven

There’s no doubt that collecting, analyzing and using the right data can help us make smarter business decisions about our time, our budget and our roadmap. We’ve seen it with our own successes. We need to do a better job of this. We need to get to a point where we can treat our efforts — marketing channels, product features, team hours and focus — as levers; when we push or pull one, we know what result to expect. We can’t depend on luck; this will be the only way to make our growth systematic.

Everything we included in our plan had to pass a simple test: does it move us closer to one of our three objectives?

Below, I’ll review what we’ve done, what’s worked, what hasn’t worked, and how our plans have changed.

Overcoming Growth Challenges

In June, we identified four key concerns and challenges that stood in our way. Here’s where we stand on those today:

Building the Right Team

Being a remote team, we’ve had our own challenges with collaboration and growth. We’ve had to figure out how to overcome them, but doing so prepared us for our next hires, which joined us from halfway around the world.

In the last six months, we’ve hired two new developers (Matt, who lives in Berlin, and Ryan from Cape Town, South Africa), and Serg, our St. Petersburg-based front-end developer who had been with us for several months, joined us full-time.

Our team is stronger than it’s ever been, but now our challenges are new and different: the skills you need to go from zero to $100,000 in MRR are different from the skills you need to go from $100,000 to $1M. Figuring out what new roles need filling, and finding the right people to fill those roles, will be our next step.

Doing More Faster

Six months ago, I had some concerns that we weren’t moving fast enough on the development front.

To address that, we implemented systems for tracking and handling bugs that help us prioritize better and lose less time from being disorganized. And of course, having three more full-time developers helped us in a big way.

I’ve been giving a lot of thought to Gary Vaynerchuk’s approach to hiring ahead of your needs. Skip to 3:44 in the video below to see what I mean, but the short version is: as long as you can financially swing it, always be hiring for people who will help you down the line, even if you don’t need them right now.

This is one of the lessons I hope to apply more over the next six months to help us meet our goals even faster.

Bugs and Infrastructure Debt

Our infrastructure had been weighed down by technical debt for some time. It caused user experience issues, bugs and left us exposed for catastrophic meltdowns.

Much of the first half of last year was dedicated to resolving those issues, and by the time we released our 12-month plan, the app was sound and many of them were gone. However, some still lingered, and that was unacceptable.

We’ve done well, though, in tackling them over time. I’m happy with the performance and stability of Groove, but keeping it stable will always be a priority.

How We’re Doing on the Execution of Our Growth Strategy

In June, our goal was to have 5,000 paying customers at the end of 12 months.

Six months later, we have 2,900. That’s 1,100 more than when we started executing on this plan.

why saas companies fail
Paying Groove Customers

We won’t hit 5,000 at that rate, but our new signups per month are steadily increasing, so 5,000 is well within reach as long as we don’t slow down.

Here’s how our various growth efforts are going:

Content Marketing

This is where the bulk of our focus has been for the last six months. It’s also where the bulk of our progress has been made.

In September, we launched our new customer service blog, which quickly grew to more than 10,000 subscribers (some of whom opted in from this blog’s list). This has been huge for us, as the readers of the support blog convert slightly faster — and at a slightly higher rate — than readers of this blog. It’s an addition to our content offering that I’m really excited about.

We also hit a fork in the road with this blog when we hit the $100K MRR milestone we started out aiming for. The milestone gave us the opportunity to make some changes to the blog, including resetting our sights on a new, bigger ($500K) milestone and introducing guest content. Plus, we’re launching an interview series; our first interview post, with Hiten Shah, is in editing now, and I can’t wait to release it. I think it’ll be incredibly valuable for any entrepreneur.

While we’ve made a lot of progress in content, we also have big goals, including doubling our subscriber base to 60,000 this year.

To accomplish that, we’ve got a few things in the works:

  • Testing new signup forms and channels.
  • Even more guest blogging.
  • Valuable opt-in content. While this blog will always be publically available for everyone, we’re working on some high-value resources for entrepreneurs, marketers and customer service folks to incentivize sign-ups.

In fact, we’re starting today, with one of our most-requested content pieces ever: a collection of every win, fail and lesson we learned on our journey from $0 to $100,000 in monthly revenue.

We’ve edited and put together every post into an easy-to-navigate eBook that you can download and read anywhere. If you’re interested, grab it here:

Social Media

This is one area where things haven’t gone quite as planned.

After a lot of thought and internal discussion, in October we deleted our Facebook page. It simply wasn’t a high-ROI channel for us, and we didn’t want to waste any more of our resources — resources that could be going toward things like blogging, that we already know to work — on it.

With that said, we’re not abandoning social media. We’re working now on recalibrating where we’re going with social, and plan to put together a new, more focused strategy in the coming months.

While from a goal-achieving standpoint, this part of our strategy has been a fail, I think it’s more valuable to be brutally honest with ourselves and admit that than it is to pretend things are great. Social has been a weak point for us, and we need to get better.

Organic SEO

In the original post, I wrote:

[Alex note: to date, we’ve largely ignored SEO. While it’ll never change the way we write, it will help us figure out the best ways to add value in ways that more people are looking for.]

Since then, we’ve made a far more conscious effort to be mindful of SEO. While I admit I was once scared of it — thinking of it as a spammy marketing tactic — I’ve learned a lot about how ethical SEO can actually help you write more valuable and more interesting content.

Many of those lessons are in this post: How We Got Over Our Fear of SEO and Improved Conversions 20% in the Process

We’ve gone from not even considering SEO to ranking high for many of the search terms we’ve tried to optimize for, so SEO has been a win for us. However, we’re still very early along in the process here, and we’re working hard to get more sophisticated and smart about how we approach SEO.


If we’ve failed (or at least not yet succeeded) at anything thus far in the execution of our plan, it’s social media and referrals. We’ve failed to do anything at all on this front. This remains high on our list of development priorities, and I’m itching to attack it in the next few weeks.

Expanding Integration Partnerships

With an expanded development team, we’ve been able to aggressively build partner integrations and grow the footprint of Groove. In the past six months, we’ve integrated with Slack, Olark and SnapEngage, all of which have been valuable partnerships for us.

We have more than ten integration releases planned for Q1 of this year, and while I can’t say anything just yet, we started beta testing an awesome new integration today — our biggest one yet — that’ll open the door for Groove users to enhance their help desks in a massive way.

Product Improvements

In addition to shoring up the performance of the app and building new partner integrations, we’ve hit a lot of our product improvement goals over the last six months:

  • We removed the Live Chat feature, freeing us up to focus on core features that we can do better than anyone, while letting our users get amazing chat products from dedicated vendors like Olark and SnapEngage.
  • We released our Developer API to let anyone build Groove functionality into their app. More than two dozen teams are already building on it.
  • We’ve made core improvements to Reports to help customers better measure customer service performance.
  • We’ve pushed big user experience improvements to core ticketing (with a slicker New Ticket form) and search (replacing our old search function with responsive ElasticSearch).
  • We’ve added spam management to keep user’s inboxes clean and block unwanted senders.

These are just a few of the ways we’ve made Groove better. As any tech team can attest to, this is an area where the work is never done.

Improving the Marketing Site

Another area that I’m very satisfied with our progress on.

Since June, we’ve:

We’ve also seen marked upticks in conversions from our new product video.

New Product Video

The Next 6 Months

Looking back, we’ve done really well at some of the things we set out to do.

We’ve also completely failed at some of them.

But that doesn’t upset or alarm me. For one thing, the health of the business, overall, has benefited tremendously from us setting these goals and using our strategy roadmap as a guideline.

why saas companies fail
Monthly Recurring Revenue

Reflecting like this has helped us plan better for the next six months, and after this exercise, we know squarely where our priorities lie.

How to Apply This to Your Business

Just as I hope our post on growth strategy helped you create a plan of your own, I hope that no matter what your strategy is, this post serves as a reminder to step back, assess and recalibrate your planning and execution as you go.

It was a valuable exercise for us, and I think it can help anyone as they look forward to a successful 2015.

Grow Blog
Alex Turnbull

Alex is the CEO & Founder of Groove. He loves to help other entrepreneurs build startups by sharing his own experiences from the trenches.

Read all of Alex's articles

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