Sales Funnel Fundamentals for the Lean SaaS Startup

As a member of an early-stage company, you wear many hats; in practical terms, this translates to having to occupy several roles. The following is a high-level breakdown of a user-centered design perspective on the sales funnel. It maps activities to specific roles in attempting to consider the functions in a growth stage company with greater access to resources.

Let’s jump in — The Funnel!

In evaluating the layers, it’s important to consider the goals of each role:

  • Marketing drives traffic and awareness.
  • Sales converts leads and prospects.
  • Product delivers value to customers.

Hopefully, these goals seem obvious. However, experience has shown me early stage companies often conflate the goals of the various roles. Map activities to roles to keep objectives clear.

“I’m wearing my marketing hat — how does this activity drive high quality traffic?”

Marketing generates awareness and drives leads

“The event being organized is intended to drive brand awareness with a target customer segment.”

Marketing experiments should work to raise awareness with a target segment. Who is your target audience? Ah — we’ll get there.

Early on cast a relatively wide net and then focus more as you learn. With my first company, the initial audience were lawyers. As we gained traction and learned, the target became lawyers in small and medium sized firms — those with less than 50 users.

Engaging the Audience

It’s a big world and a far reaching Internet. Let’s focus by asking a couple of key questions to narrow the scope of our efforts,

  1. Who is our customer?
  2. How, and where, do we engage with this target audience?

In thinking more specifically about “the customer”, let’s consider — who do we believe is the audience — those users likely to need the value we look to deliver? It’s very important to emphasize — the goal is to deliver enough value the customer is willing to pay you a monthly fee to tackle the problem your product solves. This community is your audience.

At my current company, we believe the target audience to be developers and systems operators. We have found Meetups to be a great place to engage with the community. As such, we organize various monthly events in key cities around the country, and even one in Berlin.

But, what about those leads

Awareness should drive leads, after all the end goal is paying customers.

There is a variety of criteria people use to classify someone as a lead. A main objective in this stage of our funnel is to begin being a little bit more quantitative in our approach. Track website traffic and also map some awareness activities like events. There’s a variety of measures and methods available for activities like events —e.g. attendance numbers, coupon codes.

Once on the website or a custom landing page, the goal is get the user to click on the famous CTA (Call-to-Action) button. With, the goal is to get the user to build a Kubernetes cluster — we want to show, not tell the user, just how easily it can be achieved using our web application. We want those leads to easily turn into prospects and opportunities.

Measuring leads — a quantitative approach

Set up Google Analytics — pretty low barrier for starting to gain insights. I look at traffic in aggregate and create notes which map to announcements or other key events.

The analysis — qualitative methods

The purpose behind mapping the announcements to the data is to see if any patterns emerge. Does an announcement on a certain day or topic drive traffic? How about the presentation or talk at the conference? Did the joint announcement and marketing activities drive traffic?

Login == Prospect

Some define a prospect as a lead who has initiated a dialog with an individual. This is appropriate for certain markets and their related sales cycles. For our early-stage context, we really want product feedback and learning to drive our up-funnel messaging and strategies. On login, is there any good reason not to initiate the on-boarding experience? Our goal is to reduce friction in the sales cycle.


“Friction is any variable, website quality, or user behavior trend that is slowing down (or entirely halting) the progression of your company’s sales cycle.” — Neil Patel

For additional context, here are a couple of recommendations which inform aspects of my thinking,

  • goal — reduce friction by allowing for free trials
  • goal — reduce friction through transparency; enabling users to easily try the actual application clearly sets expectations and provides an excellent opportunity to gather feedback.

Ultimately, reducing friction helps us increase the rate at which we achieve validated learning.

Showing > Telling

What is the absolute minimum amount of info necessary to begin the journey in demonstrating value to potential customers? Social Auth is an example of an opportunity to achieve this goal, and comes various additional benefits.

  • Users do not have to create a new account and password — let’s be honest; most of the time this sucks and provides the user a really good opportunity to pause, and not proceed.
  • Once users logged in, automatically add them to our MailChimp account and add them to the CRM — a prospect is born!

Milestone Alert!

This is a key early-stage quantitative measure to track.

Customers in the context of the funnel

Woo hoo — a prospect converts to a customer! Celebrate, but this is not where it stops. “Au contraire” — we have just completed an experiment successfully and it’s key to better understand how we achieved this impressive milestone … and yes, it’s impressive. As most entrepreneurs will tell you, finding a customer, someone willing to pay you money, for you product or services is something to cherish and value. The goal now becomes retention, really understanding how we made it happen and figuring out how to make the process reproducible.

Not all leads are created equal

As we begin to retrace our customer’s journey from the top of the funnel, we’ll begin to learn more about the channels which exist to those buckets of subscription fees. Knowing the origin story and beginning to quantify those costs will help us arrive at a CAC, Customer Acquisition Cost. Longer term, we’ll consider those against LTV, Lifetime Value — alas, that’s a story for another time (or further reading).

The Funnel in the Social Age

Once upon a time, there were limited media outlets available to execute marketing strategies — tv, print, radio. Today, there is an amazing amount of channels available for you to reach your target audience. This reality provides an amazing opportunity for companies to create new user journeys through the sales funnel.

Thinking about the narratives which will progressively convey value to your target user groups will help your acquisition efforts.

These possibilities are particularly interesting to me and something I wish to explore further. So, go forth and tell stories — and if you have some good examples, please share them.

Further Reading

Idea to Paying Customers in 7 Weeks: How (Buffer) Did It
You’ve likely heard about Buffer, especially if you’re focused on narratives for the Social Age. This is the story of their Lean beginnings, a personal favorite.

SaaS Metrics — Bessemer 5 Cs of SaaS Finance
Bessemer is definitely a firm which focused on “The Cloud” early and the metrics mentioned in the slide deck are a good initial set of quantitative measures to focus on.

About the Author

Ariel Jatib currently leads product, design and growth efforts at, a SaaS tool for deploying and managing Kubernetes clusters at leading cloud Infrastructure-as-a-service providers.

Ariel organizes various Meetups around the world, including the NYC Kubernetes and DigitalOcean NYC groups. A veteran of enterprise SaaS and design industry, he is an advocate for design systems, goal-driven software development and iterative methodologies. He’s the tall guy in the room and yes — he plays basketball. Find him on Twitter at @arieljatib and in the gym on weekend mornings working on his jump shot.

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