How to start a SaaS company without technical skills

Fun image & caption I found online. Thanks for the wisdom (a year late) Seth!

My name is Kameron Kales and I am a cofounder at Glance. We are a top of the funnel recruiting tool that helps recruiters eliminate bias & be more efficient. I have learned a lot over the last year starting my company and thought I could provide some thoughts on product & marketing spend pre-launch. This will also be posted on LinkedIn, Facebook & the SaaS Growth Hacks Medium Publication (Thanks to Alexander Kehaya for inviting me to contribute).

Everyone wants to start a company. And a lot of people should! There are thousands of products to be made that will improve the way people live, businesses function and a few that will radically change the world.

Most are familiar with how this group radically changed the travel industry without ever owning a hotel.

I recently read a post about balancing a tight budget on product and marketing spend. I intend on answering a few questions asked based on my experiences over the last year.

We will answer each question one by one and add some additional comments on why I believe that to be correct.

Feel free to disagree with me. We all benefit from critically thinking through these steps.

From a high level perspective if I could start over I would interview 100 potential customers and find such a big problem 5 will pay upfront for the solution (cc. your attorney to figure out the right legal way to do this for your business). This forces you to solve something very real for your customers.

Not an actual interaction with my attorney — but you get the drift.

There are some businesses to be started that will not have customers willing to pay upfront (one that comes to mind is DeepMind- a general artificial intelligence company. They are still 20 years away from solving the problem they were founded to solve).

However, this is general bad practice and I would strongly suggest n0t taking this approach. This is an absolute wrong move for first time founders.

This is what DeepMind does. In general I’d say don’t do stuff this hard.

Summary: Talk to 100 potential customers. Find 5 that will pay you for the product upfront.

The statements and my responses are below! Feel free to leave a comment or suggestion below. The original post appeared here.

My question is — would you spend the entire (20k) budget on product development and later rely on the word of mouth (because your product is awesome), or you would split up the budget between development and promotion?

I personally wouldn’t rely on the word of mouth.

Even if your SaaS (software as a service) product is very good you can not scale word of mouth so you should save some money for marketing.

Find early adopters who are dying to pay to have their problem solved. Hopefully customers run to you with multiple 100 dollar bills in their hands as well.

Worrying about scaling before having a product and sales is irrelevant. No matter how much you think you know about your vertical customer buying decisions will be different. Worry about getting 5–10 people to pay you $$ to alleviate their problem. You can figure out how to scale this later. (cc. this is a very good problem to have)

#2. Your company will not be able to grow steadily without a clear marketing strategy.

Let’s take Groove as an example. The company received traffic when they got news coverage, but it came in small and uneven amounts. When the company decided to start blogging, activity on their website grew from 100 people per day to more than 1,000.

Find the early adopters. Cash in the door from day 1 puts you way ahead of the curve.

In early stage ventures you need to find the 2.5% of the market who are early adopters. This can be done with a lot of emails and phone calls. Marketing strategy is great. But don’t use it as an excuse. Plus, if you can find 5–10 people to pay you upfront what is stopping you from finding another 10 and using that cash to hire a great marketing person??

#3. An awesome product is not enough to draw investors’ attention.

Investors won’t lend money to a company that relies only on word of mouth. If you want to draw their attention, you must have a clear marketing strategy.

Skip raising money until you get more Doritos. Or until you have a lot of $$ customers. Either one.

You don’t build a company to attract investors. You build a company to provide value to customers. And chances are if you provide enough value you can skip the typical seed round dilution and raise a series A with very real sales (if that makes sense for your business desires…. I strongly encourage anyone interested in this topic to read this blog. Its from the founders of Basecamp. They never raised funding and have a great business).

But don’t worry about investors right now. They are not worried about you.

#4. It is more expensive to build a company just with a great product, than with a great product AND marketing.

Development and support of your product requires a lot of money, but a proper marketing strategy can help you find the best way of distributing your product from the very beginning.

Do this twice. And don’t look so creepy while doing it.

This surely is true. However, none of this matters now. Find 10 people who will pay for what you want to build and then map out what common traits they have and rinse/repeat. This is the only way to grow while being conscious of burn.

#5. Marketing matters for the most successful companies

Think of Salesforce. This enterprise spends about half of its budget on marketing. Even more interesting is the fact that, despite these already large figures, its annual marketing expenses are actually rising each year.

Salesforce is great. But don’t try to be like them. Just general good advice to follow here.

Salesforce is such an outlier. I don’t mean this to discredit marketing. I mean this in a sense of basing your business decisions on what one of the most successful startups ever did is not smart. Find some local startups that are doing well and ask them their strategies!

Considering everything above I believe this entire article can be summarized into the following steps:

1. Talk to 100 potential customers.
2. Find 5 to pay you upfront for what you want to build.
3. Do not worry about scaling right now. Worry about sales.
4. Talk to more potential customers to find another 5 buyers.
5. Figure out what your 10 buyers have in common.
6. Find more people like them.
7. Do not think about investors.
8. Repeat step 6.
9. Build product.
10. Repeat step 8.

All in all I’m about a year in to my company and was so dumb when I started. I’ve learned a ton in the last year and would entirely find some problem that hurt so bad people would pay upfront to have solved before I wrote any code (and I am a developer!).

I fully believe this learning process can be accelerated by following the above steps and I hope these comments help anyone thinking about starting a company!