How to grow to 50K MRR in 100 days. Some insights, some learnings.
Yes! We did it. Last month we hit our 50K MRR milestone for our Persuasion Profiling SaaS offering at Crobox. We broke ground on the market in January ’15. It took us a year to go from 0 to 10K MRR, but 100 days grow from 10K to 50K MRR.
I would like to share the learnings so it might be of use to you.
Quick side note — these are personal learnings and applicable for our business (SaaS with a focus on midsize to enterprise deals). However, as not all SaaS companies are the same, some advice might not be applicable to yours.
It is all about the right preparation and planning … and some patience
Last year May we decided to get angel investors on board for a small seed round. Revenue was growing and we needed more people on the team to maintain high quality standards for our offering and deliver top customer service. As with all rounds raising money, you got to have a plan for certain revenue growth and how you want to achieve this. So did we.
However, as we projected a much higher MRR end ’15 — beginning Q2, just after the fundraising, we decided to stop with a focus on new business. One simple reason: Our product just wasn’t ready and good enough. So we adjusted planning. We decided to focus on product in Q3&Q4. No new business as it would distract the team operations. So we organically grew to 10K MRR.
Plan, execute, iterate, repeat. And do not hesitate to hold for growth. You need a stable product and team to manage growth.
Spend time and love in customer success.
It sounds like a cliche, but make your customer successful. Customer Success is the one of the most underestimated pillars within a startup. Listen and observe carefully to them, their feedback is what your product has to be. We’ve learned most when we’re open and honest with our customers how they are using (or not) our product. It guided us, to a product what it is today.
But, listen to the ‘right’ customer. Especially when you’re starting out and haven’t found your ideal customer profile, focus on this first. Then iterate towards making this ICP (Ideal Customer Profile) successful. We nailed it down for Retail, Fashion and Telecom customers during this year. Travel was not our game (yet), so we decided to put this on hold. Focus creates that you will iterate faster towards a ‘product fit’.
There is no fast track to growth.
Our strategy is to focus on 1 acquisition channel and nail it until CAC (Customer Acquisition Costs) is efficient and stable. We started with direct sales by the founders, me in this case. I was iterating the sales pitch with the other founders. Over and over again. We have currently over 80+ versions of the sales deck, continuously improved, slide by slide. Once we got confident with the pitch it was time to bring in direct sales team members from outside.
In December, we hired our first sales/new business director, Patrick, with quite some experience under his belt. Do not start with a rookie, there is too much ground to cover in this phase. Once onboard, we optimised the direct sales process further with this key hire. Patrick was ramped up within two months until closing his first deal.
We already optimised the pitch, created sales onboarding documents, and knew what was working and what wasn’t. We are still optimising the pitch deck (as the product evolves as well) and we do a lot of role plays. We keep practicing every week.
Second to that, we started to optimise lead generation. Now with sales onboard, we had to speed up leads. Inspired by the Predictable Revenue theory, we applied some tactics to our own lead gen process. We also started to test selling over Skype. We can do up to 6 Skype presentations a day, instead of 3 physical. First deals are flowing in with a third of the acquisition costs.
Now we feel confident with direct sales as an acquisition channel, we can scale the sales team and start testing and experimenting with another acquisition channel.
Increase your ARPU. Expansion MRR is the best.
At first, our focus was to get as much new business in as possible. It resulted in a lot of new great customers. However, the customer success team got stressed out as they had to serve these customers to the highest degree of service and onboarding. Our deal size was not supporting this.
So we made a few decisions to make it more effective for ourselves.
- Focus on bigger deal sizes. We changed our pricing for this as a start. We had a monthly fixed fee based on monthly visitors. We changed to a price per visitor. This way we could triple our prices.
- We moved more upward towards mid-size and enterprise. We have a tag solution for eCommerce and as we can bypass IT, the sales cycle is not as long as with other applications and software. However keep an eye on your sales velocity, do not only focus on the big deals. Mid-size market is great and decisions are made much faster.
- Last but not least, start up-selling on your customer base as soon as you are ready. It is the easiest sell there is. You already are in touch with the customer and you can sell formed towards his/her challenges. It is called expansion MRR.
We asked money for our product from day 1 as we needed to pay the bills, but also to create the right value perception. The next step for us is to increase ARPU and to upsell wherever we can. Contract length (2 yrs instead of 1), premium features or integrations(which we can reuse and productize later for our Marketplace)
In December ’15, exactly after twelve months, we hit 10K MRR. It was 70K MRR lower than we projected… But we already knew in Q2 we were not going to hit this milestone and had to improve our product.
We were happy and knew things would grow quickly soon. From January ’16 to April we were applying and harvesting our seeds and lessons as described above. It took us to 50K MRR and will double within the next 100 days. New challenges arise when you hit this 50K MRR. But we’re ready.
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Rodger is co-founder and CEO at Crobox.
Reach me at firstname.lastname@example.org