Ok, so I am starting a saas business that I need to grow to £2M ARR.
Why?
This is my number that if I hit it I can sell it for between £4-8M and basically retire/ do whatever I want…
My time limit for this project is 10 years.
My time limit for zero traction is 24 months (sounds like much less time when you put it like this than 2 years!!!)
My intelligence – average
Experience? I have some in what I want to do, so that’s a half tick
But here’s the thing-
I have no idea what I’m doing…
So I kinda thought because I am quite lazy and I am scared I’m gonna quit this saas biz the moment it gets hard (quite typical of me – more on that later) I am going to document my journey in the hopes of:
- Finding and connecting with people in this space much smarter than me that I can learn from
- Keeping myself accountable – basically it will be extra embarrassing if I quit in front of everyone for some bullshit reason so making this blog will keep me more motivated
Oh yeah and also I would like to make enough money from this blog to quit my day job.
So yeah that’s the plan… sounds simple enough but I bet once we get into it there’s gonna be a ton of challenges and things that make this way harder than initially it seems.
From all the youtubers and the saas books, folks like rob walling, the folks at ycombinator (both of whom I deeply admire) my first million – love those guys too, but they all seem to make it seem so straightforward.
“yeah just talk to your users man!”
“figure out the problem you’re trying to solve!”
Ok yes, but is it really that simple?
My guess is not.
But f*ck it let’s try it anyway.
So that has been basically my mindset since starting this saas business. Unfortunately you are not joining me at the VERY VERY start, you’re kind of joining me let’s say a couple months down the road where I’ve now found my co-founder we have been somewhat spitballing ideas and this ai chatbot for ecommerce idea seems to be sticking (somewhat- we still are looking at a ton of things but this seems to be the main one we keep circling back to).
So yeah – that’s where we are at – we basically have an idea to do something that has already been done and just ALSO do that thing – how innovative lol.
But I don’t really care – my goal is to get to £2M in ARR not £2B in ARR – so I don’t need to reinvent the wheel for that… I hope (famous last words).
So how are we actually going to get to £2M ARR what’s our initial thought process?
Well there’s kind of two ways I like to think about it…
- What fundamentals such as skills experience etc do we have going for us that will make it likely that we will hit our goal
- What’s the actual tangible strategy/ step by step of how we will get there
So to address number 1 first…
I think we have pretty good experience as I eluded to before – I have been in the saas martech space for 3 years as an sdr and product marketer and my co-founder has been in the ecomm space consulting and running ecomm teams for 15 years.
So we have a bit of know-how that’s for sure.
What else?
Well I was pretty good as an sdr for companies I have worked for – booked lots of meetings some of which led to super easy closes – so we already know realistically whatever saas biz we do a core component of it is going to be outbound marketing based on my experience.
My co-founder has some useful contacts in the industry so that’s also good – not sure exactly how just yet but maybe for initial customers or for advice or something – we’ll figure it out
Then the only other thing I can think of at this moment is I’m pretty comfortable financially – I am living at my parents rent free so its pretty chill in that regard.
So that’s what we got for number 1 and then for number 2 here’s what we are thinking:
- Understand the chatbot ecomm market – what problem does it solve, to who, what do they like/ dislike about current solutions
- Understand the competitive landscape – how are other people solving it today what features do they have, pricing, positioning, messaging and is there product unbelievably good or do we have a chance against them basically
- Then we’ll build an mvp
- Then we basically will just sell that mvp and see what happens
So as much as that sounds a simple plan of course as I am sure you will agree – reality will be much more complex than that.
For example I basically started at 2 rather than 1 for research so I am currently focused on doing a load of research into competitive solutions to try get some initial understanding because one of the main challenges I am having with doing number 1 is that I don’t really know how to lead a meaningful customer interview and I don’t want to waste my chances with these folks reaching out to them just because I feel I should from lean start up and all these Jason Lemkin type folks. So what I’m gonna read this week is “the mom test” as I’ve heard that is THE book to help run a good customer interview.
So yeah that’s where we are starting off.
But I also feel like I’m not quite sure what I want to get out of these interviews, because for the market we are serving it seems like the product market fit is already there really- ultimately these ecommerce folks often struggle to keep up with support tickets, keeping response times high but also resolving the problem quickly so we automate some of the simpler support tickets so reps can spend more time on the complex stuff and for the complex problems we provide more data into the customer so that they have better awareness to diagnose and ultimately resolve the customers problem… whew that was a mouthful.
Felt like I was almost in an ad for my product then.
But yeah minus all the buzz words I feel like we already know the problem and solution.
I think what we want to get out of these interviews is really more what’s wrong with current solutions like Zendesk, gorgias etc.
Sidenote: reading this back I think there is still value in better understanding the problem because we are not just selling to rip out a competitor we are also selling to businesses that have never used a chatbot before and therefore we need to understand the problem as if we were the only solution as we may be the only folks in the room for some of these smaller businesses
I anticipate there wont be a whole lot wrong with these other competitive solutions other than support, ironically, and maybe price but still it will be good to find out from the horses mouth.
So we need to do some customer interviews for sure and so next week I’m gonna read the mom test and understand what I actually want to get out of the interview and how to conduct the interview.
So that’s point one to put a pin in for next week.
The other thing I am currently working on is competitor analysis – im actually nearly finished on this as a first attempt so that’s been good and it has really helped me better understand the market and key themes between all the products. I haven’t necessarily spotted any huge gaps other than some solutions are definitely more feature rich than others but it has helped a ton in understanding.
For those of you that may find this useful I am gonna share my process and findings – if not just skip to the next section:
So how I went about this and why – well first lets start with the why because it may seem a little odd to start with competitor analysis as one of the first things you do to start a biz and I think its fair to say on reflection I have been way too obsessed with competitors and specifically in thinking we will never win a deal because anyone we speak to will always want to speak with Zendesk or gorgias or some of these big sexy solutions that have way better feature sets, product design etc and its true especially if we are in a deal worth over £1k ARR it probably will have some competition but here’s I think how we will win:
- Buyers still don’t have perfect information and most buyers are not experts on the ai ecomm chatbot space so they don’t know of every solution anyways – so not every deal will have the same competitors
- With smaller companies we might be the only ones bothering to actually give them a face to face human interaction so that will also help – so basically we can differentiate in our sales experience
- These bigger solutions are trying to cater to too big an audience so what we can position ourselves for is a much more specific use case – I am already thinking as companies that just want to automate their most basic support tickets so that reps can get on with the more complex tasks – if we just focus on solely being the best to solve for that use case then I think we may be in good stead – other solutions seem to also look at how they can start acting like a salesman on the shop as well but that’s not our lot I don’t think and with this extra focus I think our message will stand out more
Of course, its probably going to take 100 sales meetings to land one single paying customer this first year but you build from there so im not too concerned.
But anyways so aside from the why which was basically just – I need to get a feel for this space and customer interviews I don’t wanna waste them and it takes too long to get people to jump on a call via reaching out (though I did do some cold calling for customer research couple evenings ago which went ok but more on that another time), let me show you the how for doing competitive analysis:
So first thing I did was watch some really useful youtube vids on product positioning and messaging by TK Kader and Anthony Pierri. Now you may think well why didn’t you just watch something on competitor analysis and it was actually because I was originally trying to understand how best to position my product and sort out messaging so I could start selling but very soon I realised I cannot even have a position in this market yet if I don’t know the positions others take. But still what I found from these vids is you basically create a big table of features, pain points they are solving for, key benefits, target persona/ market, pricing and then positioning. The last one is a bit harder to grasp and sometimes not super obvious but if you go on the homepage for a website it often should be the big idea in the hero or it should be pretty obvious – if not they probably have pretty weak positioning.
Sidenote: someone on youtube mentioned the other day positioning is basically what your customers think you are when they come to your website – so they think “oh you’re kind of like a Zendesk but cheaper” or “oh you’re a chatbot that’s built specifically for heads of ecommerce in fashion space like me” etc. I thought this is a useful way to think about the goal of positioning
Anyway, this whole process of analysis is defintiely more an art than a science but just start going on their website reading all the content on their home page, feature page, pricing page, maybe go on shopify app, g2, trust radius etc as well and start reading positive and negative reviews to see what customers are complaining about. Have a quick scan of customer case studies as well to see what kind of use cases they are focused on and then boom you have a decent understanding of that competitor – now do that 4-5x over for 4/5 other competitors and boom your done.
But just before I get into the next section what ill say is take screenshots of what you see don’t just right it down – this helped a bunch and then group similar things thematically – (similar things is intentionally vague here as you don’t want to force groupings it should come natural otherwise just leave it) so for me for example for this one competitor lets call them competitor x – they seemed to have a lot of features that when I dropped there features into the respective section I started to notice they all seemed related to this idea of making it easier to manage their inbox. They had this “task ai” feature which supposedly makes it easy to jot things down on a to-do list from busy customer conversations to follow up with afterwards, they also have a way to automate tagging support tickets in a rule based way so “if customer mentions word return in the message auto tag for x support rep or assign return tag and put in x inbox” things like that – and there were a few others but it seemed they were focused on inbox management as one key facet of their product. Whereas, another competitor lets call them joey from friends ai they had a few interesting features on their chatbot that basically meant when you clicked on the chatbot it pulled up a menu of all the different typical questions people ask and then also a track and manage orders section and when you click into the track and manage orders you can do the whole track and ordering process without ever even speaking with a support rep it was all fully self serve and it didn’t require a chatbot either it was just a portal – quite interesting and not something I had seen elsewhere. But this portal of different features really tied into a theme of self-service for example so yeah just another example of how you can spot themes.
From here what I am doing now is pulling together all the common themes and starting to see a couple things:
- All solutions use AI either to automate customer support or improve the quality of response
- All solutions have live chat with features to make it easier to understand who should be dealing with which ticket, who internally can help (human or data) and reporting to keep track of performance to improve in the future
- They all offer quick responses – basically a rule based approach of “if customer asks this then say this”
- They all unify communications in one channel for the support rep
So from this I am seeing two key underlying themes:
- The problem is support can often be across multiple channels which makes it hard to keep track of
- The problem is support reps are doing too much grunt work which should and can be automated away
- The problem is keeping on top of your inbox when you have tons of support tickets and responding to the ones you should and doing so quickly is hard especially when you’re manager might not be there immediately or it takes a ton of time sifting through data to diagnose/ understand the customers problem
I’m definitely gonna ruminate a little tomorrow on these points and make sure they are tightened up but so far it seems like some of this can definitely be used in marketing/ messaging or at least to see if it resonates in the interviews we conduct soon.
So finally to wrap things up for next week what I wanna do is the following:
- Read and finish the mom test and then know how to do customer interviews properly
- Start reaching out and interviewing customers and begin having some initial conversations
- Go a little deeper on competitor analysis – I did a lot on features but not so much on their positioning, I also want to do maybe 1 more competitor
So that’s it for now!
I will be back next week with another post and let you know how things have gone.
See ya