Halfway to inevitable: 7 things we learned growing to $5M ARR

It’s taken us about 4 years, $1M in financing and countless errors along the way to achieve a $5M ARR run-rate at Uberflip. My co-founder and I often talk about how we could do it faster and smarter next time. These are the lessons learned that I hope you can leverage in your startup.

1 — Early on, get whatever revenue you can, but beware of technical debt.

Your first customers are a blessing and a curse. The fact that they’re paying attention, yet alone paying you money, will feel like a miracle. Keeping them happy is critical, and that will probably mean building features that satisfy their specific needs. While this is the cost of doing business in the early days, you’ll want to adjust this mindset as quickly as is feasible. Custom development can be a deathtrap for SaaS businesses. You need to build for the your entire user-base, even if it means saying no to some of your earliest adopters. Technical debt is extremely difficult to pay off.

2 — Identify your personas and build for their future needs.

You’re a fortune teller. You can’t play chess one move at a time. Having a roadmap that’s only 6 months out just doesn’t cut it. We made that mistake for years where we kept building what we thought was cool at the time, without thinking of how the collective pieces fit together. Part of the problem was not truly understanding who our audience was, and what they would need 2 years out. Identifying personas may seem like just a marketing exercise, but it’s absolutely critical to designing your long-term roadmap.

3 — If you’re defining a category, or even a sub-category, don’t try to sell to SMBs.

Oh man, I wish someone beat us over the head with this years ago. We saw the shiny lights of what companies like Unbounce or Freshbooks were able to achieve in the SMB market — no salespeople! Just marketing!!

Unless you’re selling a (better) version of a product people are already actively searching for, where no education is really required, don’t bother with a low price point. By the time you’ve educated them on why your solution is a better way of doing things, and by the time you’ve successfully onboarded those brave souls who decided to invest in you, your CAC/LTV ratio will be abysmal.

If you’re defining a category, or even a sub-category, you’re selling to Enterprise (or at least MB + Enterprise). Hire a great sales leader as early as possible.

4 — Build a framework for your vision.

This may not apply to everyone. But at Uberflip, we’ve found it really difficult to explain why other “content marketing platforms” like Kapost and Newscred are not our competitors. As it turned out, it wasn’t just potential customers that needed education, but also potential investors, who even with their keen knowledge of our space, still needed a clearer way to understand how we saw the world. So we created a framework for how to think about content marketing software which very clearly explained our thesis. It also serves as a guiding light for what product lines to expand on, which to tap into via integrations, and which features are clearly not for us to tackle.

5 — Invest in your culture from very early on.

We did this late. We were about 25 people before we created a formal set of cultural values. We should have done it at 5, or even 2. The result of not having cultural values is you are hiring new teammates without a set of guiding principles on which to measure them.

Having your culture defined, in a document and plastered on your office walls, will give you the lens you need to hire people — both for you and them. It will give your growing team a shared sense of community and family. They will invest more of themselves in your company, and in turn you in them. If you haven’t already, it’s not too late — do it today. You can checkout Uberflip’s culture hub to get some ideas.

6 — Build a sustainable business.

Many VCs will want you to grow at all costs because in many markets, winner takes all. I compare it to racing to outer space. If it’s the first startup to reach outer orbit that wins, then grab the duct tape and patch up those holes in your rocketship. If you blow up in mid air, well at least you gave it your best shot. Right? Well, not always. It’s your startup, and sometimes growing… uhh… “less fast” means you get to outer space later than you may have liked, but in one piece.

I’ve watched several of my peers blow up in midair.

Because we haven’t taken institutional funding to date, we were forced to grow at a more modest clip, and as a result we built a healthy business, that we can now scale more effectively with capital. That doesn’t mean we don’t burn. This is SaaS — there’s always burn. But if we had millions in the bank, we probably would have hired more sales reps before proving out our model, and as a result probably built product to support a customer base that wasn’t quite right. I’m not against raising capital, in fact we’re considering growth capital options now, but I always caution to take only what you have a solid plan for spending.

7 — Enjoy the ride.

It should seem obvious, but to me it wasn’t always. Not achieving what you want, when you want it, is not failure. It’s education. And when you do achieve your milestones, you only really celebrate them briefly. It’s the collective experience that is the true reward. I’ve only come to realize this recently, and as a result I now value every experience — whether a win or a setback — as another valuable step in the journey.

Here’s to our next milestone of becoming inevitable.