What does Jason M. Lemkin want everyone to know when starting a SaaS company? originally appeared on Quora - the knowledge sharing network where compelling questions are answered by people with unique insights.
Answer by Jason M. Lemkin, founder-VC; founder, SaaStr; ceo/co-founder @ EchoSign, on Quora.
I've said each before individually, but let me throw 'em together:
- It may well take 24 months to get to true product-market fit and Initial Traction. If you budget any less, you probably will fail. This isn't B2C and virality won't accelerate the process. More here: If You're Going to Do a SaaS Start-Up ... You Have to Give it 24 Months
- You will almost die somewhere between $2m-$10m ARR because there is too much to do and not enough people to do it. You will have a Year From Hell here. Finally you have great customers and traction -- but you can't afford to hire all the people you need to meet their needs. This is actually the most exhausting phase. More here: From Initial Traction to Initial Scale (~$10M in ARR): The Hardest Phase. But -- The Cavalry is Coming and here:The SaaS Year of Hell. And Then - Reignition.
- It takes 7-10 Years in SaaS to Get Anywhere. Even outliers like Slack, really, started much earlier. And 99% of SaaS companies will need 7-10 years to get to $100m ARR and beyond. If you can't do the time, don't do the startup. More here: TAM is Great. But What Really Matters is That You Believe You Can Hit $100m ARR in 7 Years.
- You have to love, or at least commit to, recruiting constantly. You have to hire so many functions in SaaS - VPS, VPM, VPP, VPCS, VPE, etc. If you're not willing to constantly recruit cross-functionality ... you'll never attract the talent. True in B2C too of course. But the founders and CEOs need to attract even more types of managers, earlier, in SaaS. More here: Post-Traction, You Need to Spend 20% of Your Time Recruiting
- It actually never gets easier. Every month, the Net New Revenue dial goes back to $0. But. You do get better. Much better. You may not be great at all that much at $500k in MRR. You'll be great at so much at $20m ARR. More here: SaaS Start-Ups: Buck Up - It Really Does Get Easier.
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