How in the world do you take a company with no revenue and no prospects to a million dollars in ARR?
We don’t have any silver bullets over here at ilos, for us it was a matter of leveraging our network, building a (business development) BDR process, and taking some shots down field.
Start talking to customers, even if you’re not sure who they are.
From day one we believed that you had to get in front of folks early and often. The easiest way to do that is to leverage your network, look for prospective buyers, or look for people that can introduce you to them. Those are the people you need to have conversations with. Odds are that you’ll find a couple of buyers that get excited about your idea and want to get started right out of the gate. We leveraged the Techstars network to help us get in front of several buying groups and to learn a ton about our customers.
What did people say about the product?
From working with your network you’ll have a few data points to help point you in the right direction. w long did it take them to make a buying decision? What prices could they have approved on the spot, and what required further approval? It might seem like you’re well on your way but you currently have a big problem. All your customers/prospects know you or someone in your network. They aren’t unaffiliated.
Selling a can of coke to your uncle may count as making $1 but it certainly won’t help you scale.
Now that you have ideas on who you want to get in front of, it’s time to put rubber to the road. We used an outbound Business Development Rep process (as seen in Predictable revenue by Aaron Ross). The big thing to note here is that you need a founder sending the emails, making the dials, and doing the demos. As a founder, you need to hear real prospect feedback. This is hyper learning time for your company. You’ll learn which titles are decision makers and which one’s are NINAs (no influence, no authority). You’ll also learn what their pain points are. This exercise is where you really learn the value you provide to your customer and really even what your company does.
See at some point it doesn’t matter how much it makes sense on your whiteboard. The customer decides if it’s right or wrong. Talk to them.
From here, after some tweaks ilos was doing about 25-30k per month. We picked a specific industry to target and started hiring for it. Pretty soon we had a BDR process, a qualification process,weekly sales goals, and quota for the team. In fact, that same sales development team is now growing to 7 team members.
In addition to building a scalable repeatable process we also tried taking some longer shots.
Partnerships: Most partnerships do not work out for early stage companies. They are just flat out difficult to get right. We learned that unless the partner was really pushing your product it was hard to get anywhere. In the early days, we had several partner agreements, half of them not worth the paper they were printed on.
One of our most successful was with Lessonly who we shared 40+ customers with when we broke a million in revenue. Even with that success, partners were still a much smaller piece of the puzzle than our BDR process.
Enterprise Deals: The easiest way to $1Million is with a $1Million dollar deal, right?
Not that there’s anything wrong with elephant hunting in general but at this stage without getting feedback from smaller players a deal big deal can shift your company. Combine that with their average time to close and the card game that is your day to day startup life starts to feel less like betting on the river and more like drawing dead.
Instead of treating big companies like big companies we treated them like small ones. We worked with departments and teams that had open budgets, avoiding year long buying cycles, and let our product grow organically (starting small then selling accounts a higher subscription when they needed more users, or more features).
RFPs: Request for proposals are a shiny object for B2B startups. Here you have a customer that has flat out told you they are looking to deploy funds on your kind of solution. Unless you were involved in the drafting of the RFP it usually was written for someone else. We learned to prioritize them only if we had an existing relationship.
So, whether you have the same success we had with networking, building a BDR process, or another tactic for your SaaS business, the biggest question once you have 12 unaffiliated customers really is “Do you want it?”