$0–$1mm ARR: How to sell your SaaS product early on without funding
In my experience helping build two SaaS companies, I’ve gone from low six-figures to $3mm ARR as a sales leader with one company, and $0 to low six-figures ARR with my own startup. At this point I’ve experienced every step from zero to a million. During each of those experiences we’ve received no outside funding during my tenure. Every step was a grind and each had it’s own challenges. One thing that’s been clear is that selling a product in the early days is very different than selling post $1mm in revenue, and it typically requires a very different person. Here are some tips for those of you who are selling or hiring sales folks at an early stage SaaS startup.
Sell vision and transfer belief
The best sales reps sell vision instead of features, and that’s even more important at an early stage startup. Your MVP/early product will be lacking in features, especially as it compares to your competitors. That’s okay. Sales has never been about features anyways. You have to sell a vision of where your going. Customers aren’t just buying a product for what it offers them now, but also what it will offer them in the future. No one wants to have to go through another buying process and implementation of another product a year from now. That’s a huge cost to their business.
Selling vision doesn’t mean lying. It means transferring belief in your solution, how it solves their problems, and how it will solve their problems in the future. Don’t make promises about certain features or timelines. Focus on high level value and how your planning to get there. Show your prospective customers how your customers are a partner in that vision (customers driving product vision). My wife, Tonni, spoke about this at a recent conference (She’s taken a VC backed company from $0 to ~$15mm ARR on the sales side):
Bring value to your customers or prospects any way you can
Your value to your customers shouldn’t just be your product. If you know your market really well, you can help your potential clients in many other ways. One of the best ways to gain a prospect’s trust is to offer them something of value that doesn’t benefit you in any way. A true partner will help you in any way they can. Here are some examples:
- Product or service recommendations: Prospects often bring up needs that you don’t have an offering around, however you may have heard from other customers that they’re using a product that they love for that same need. I’ve had first demos that started with “We’re not really in the market for your product.” I asked them about their biggest priorities and something came up that I had some recommendations around (things I had heard from my customers). This helped me gain their trust and they ended up being a pretty big customer of ours down the line.
- Intros: Most people love meeting and sharing insights with peers in their space. As a SaaS vendor you typically work with people that are mostly in the same line of work. This can be a great opportunity for you to make intros between prospects and customers.
- Hiring: Again, your customer base and audience are probably similar in many ways. If you hear that your prospect or customer is hiring, offer to share the role within your network (ie LinkedIn). I’ve had customers hire people that applied based on seeing my social media post. Whether they get any applications from this or not, this effort won’t go unnoticed by your prospect or customer.
You’ll notice on my LinkedIn profile that I have recommendations from customers/prospects, not from people I’ve worked for (what people typically do). Here’s an image of them below.
All of these guys were customers first, but have become great friends because I wasn’t out to just sell them a product.
- Matthew: I intro’d someone to Matt who helped them with some key hires they were searching for back in the day, as well as an intro to someone they wanted advice from.
- Shaun: I shared new tech I’d run across in the market. In our first meeting/demo I told him about my Nissan Leaf and all the tax incentives you could get with it. The next time I met with him, he had bought one, and loved it.
- Edwin: He needed another player for the baseball team he owned, so I volunteered and played for 3 months (I played ball in college). I’d like to say I brought some value there but you’ll have to check the stat sheet 😜
Notice a theme? Partner. Knows the market. Up-to date on other tech. You want to be known for helping your customers in any way you can, not just with your product.
Customer-first as a feature
Customer support/success is so important to success in the early days. Engagement with the first customers/prospects that have given you a chance is where you can make it or break it. Early adopters can:
- Be your biggest advocates and refer other potential customers
- Offer you invaluable feedback to drive product prioritization
The first thing you need to do is make it easier for customers to engage with you. We’ve always used Intercom (in-app chat, Knowledge base, in-app communication triggers, and user data hub), but there are other similar technologies. Used correctly, and your customers will love engaging with you via chat (you will love it too). It’s more human, and gives a true sense of partnership (what you’ve been pitching). Customers/Prospects will talk to you as if you’re in the room, offering you feedback and showing you how they’re feeling at the time. These real-time conversations will go deeper than some email ticketing system or form fill.
Selling vision and showing your customers they’re leading that vision, doesn’t stop after the sales process is over. Make it simple for your customers to engage in your product development process.
You can pitch this as a feature that your competition likely doesn’t offer. Show examples of how you’ve engaged with customers on their feedback/requests, how you manage that feedback, and proof that that has led to new products/solutions (customer stories). I can’t stress how effective this is for potential customers to see, and how important it is that you actively do this with your customers.
This was something I built into the sales process early on at Rigor, and you can hear Stephanie (Sr. Enterprise AE, Rigor) discussing this in a must listen podcast episode (skip to 18:40):
Again, she’s not pitching features. She’s pitching vision and what it’s like to partner with her company in the long term. That’s one of the reasons why she’s the top sales rep in the org and that’s the kind of thing that got Rigor off the ground in the early days when the product couldn’t possibly have all the features the competitors had (our competitors consisted of either companies that had 20 years on us, or companies that had raised $50–$300mm in funding).
Grit
When you boil it down, the one thing that separates those that can sell at this early stage and those that can’t, is grit. I was talking to an entrepreneur the other day and he was saying that after he launched the MVP, he just wasn’t sure that they could build a business because they weren’t closing tons of deals immediately. I told him that 99% of potential customers will tell you no. Honestly, why should they say yes? If you shipped it fast enough, your MVP will likely be incomplete and basic as it compares to alternatives. But you just have to take the punishment. The insights you receive in those no’s will help you figure out what feature or iteration is necessary to add next. A logical person doesn’t want to go through this process, and who would blame them. It takes grit.
Early stage growth (especially if you’re bootstrapped) feels a lot like one step forward at a time. This can feel deathly slow. One product iteration here. One small new customer there. It will feel like you’re not making any progress. Have faith. If you’re taking one step at a time to solve important customer challenges, you’ll get there. It just takes patience, and most of all, grit.
As you start gaining some steam, you still need grit. At Rigor (around $500k), our tiny sales team of 3 went up against competitors with 40, 80, 100+ reps with more feature rich products (the functionality we did have was super solid, but there was no way to ‘out-feature’ the well funded competition). You have to love being the underdog. You have to have a giant chip on your shoulder, because the odds are certainly not in your favor. We used to write down how many reps each of those companies had vs our 3 on the walls and windows of our office. That drove us and gave us a sense of pride in each one our accomplishments and milestones.
In the old days, we also used to write down every customer logo on our wall to give everyone a sense of the great progress we had made over the years and the impact we were having within our market (it ended up taking up the whole wall over the years).
Well funded partner companies and execs would come in all the time and stop to stare at the wall. Then they’d turn around and look at our tiny, non-VC backed company and our young sales team with a perplexed look. They’d always say:
“How the hell did you land all those amazing brands/logos!?”
Answer was always simple.
Grit.
