AITookMyJob

Growing an early stage B2B startup in 2024

It's 2024. B2B sales buyer behaviour is changing rapidly. Most companies are dropping their SaaS subscriptions left and right. Inboxes of decision makers are cluttered. Industries are becoming saturated with similar undifferentiated software that have unclear value prop.

If you had to grow (or already are growing) your early stage B2B SaaS startup 10x in 2024 to $100K ARR, what would you do?

9mo ago

Gems_Bond

Stealth9mo

Interesting.

What does your SaaS do and who the TG is?

AITookMyJob

Startup9mo

This is just a hypothetical question. Let's say it is a fintech SaaS, TG is US-based small and mid-sized companies, has $10K ARR from TG, provides time-saving and cost-saving value but has recently begun exploring revenue-increasing featurs too.

Gems_Bond

Stealth9mo

Okay, while these things require in-depth understanding of product, customers, overall market, and few other elements as well.

On the surface level, I'd do the following:

Double down on customer support and listening to customer advice. Aim should be below industry standards customer dropout.
Introduce referral program for existing customers.

When they refer a new client to us, they and new client, both get at least 1 month of service free or they can even choose to encash it.

Since we're just at $10k ARR, I believe we don't have deep pockets for paid marketing.

So, invest all energy on SEO and content marketing. Be aggressive on these 2 front.

Indusplateau

Stealth9mo

The market is bad for US MSME. Even they are having a K Shaped growth, with ENT growing and muted growth in MSME.

You have answered in your question, you need to create a value prop if not in features then in pricing.
Under such conditions, the buyer focuses to retain must have vs good to have tools. See if you can provide must have tools so that you don't lose existing customers.

Given the muted growth, see if a usage based pricing works to attract and retain new users, let them know your tool will support them in tough times. Focus on building steady cashflow & distribution vs 10xing growth.

It doesn't make sense to go guns blazing if the market forces are bad. Have seen this in previous startup, all types of initiatives lead to waste of money and people start blaming people when it was the market.

Indusplateau

Stealth9mo

Just the question you need to think of :

Why would someone tell others about your product in one line at a crowded, noisy party?
What will someone tell about your brand in one line at a crowded, noisy party?

AITookMyJob

Startup9mo

That makes sense @Indiecrypto! Must-have offerings, favourable pricing, cashflow and distribution over 10xing growth.

The only caveat with cashflow over growth is that it might lead us to the end of our runway as growth is usually required for the next round.

What have you experienced previously that made you prefer consolidation of cashflow and distribution over growth during tough times?

StrangeBulk

Stealth9mo

You may want to focus on ICP with higher ACV. If you have a segment with ACV north of $6000+ then a great customer success / support function drastically increases the odds both from conversion and retention standpoint. It decreases the risk from the buyer standpoint also and differentiates you in a commoditized space.

In addition focusing on product improvement to deliver and own more value ( revenue attribution, productivity impact, cost savings etc. ) will ensure that the chances of churn are lower.

Tactically if customers are still churning then apart from taking feedback and trying to win them back using discounts - you should move them to annual contracts with monthly pricing post negotiation. As long as your product is solving a real problem, this will ensure that a new exec getting hired or fired at your customers company doesn't lead churn on your end.

AITookMyJob

Startup9mo

This is great feedback! Moving upmarket to $6000 ACV has been touted to be difficult, we're more in the $2000 to $3000 ACV range. What would you recommend to move upmarket? Build more impactful (revenue, cost, efficiency) features?

StrangeBulk

Stealth9mo

The answer to this question will depend on customer discovery. Talking to your top 20-25 customers should start giving insights. That along with your gut / reading of the market should help you.

What I have seen so far wrt moving ACV higher is definitely things around revenue attribution help. Other times it may be things around data privacy, integration with their core software so that you seamlessly become part of their workflow eg: Google data warehouse. Again $6000-$30000 ACV is still a SMB / mid-market buyer in US/Europe.

Increasing pricing is generally easier than we think. You will have to change the framing of your prospects from selling a product to solving a problem. Initially just layer - do it for you migration with a private slack channel - may help you charge a one time $1500 or so for a quick win.

ValKilmer

SaaS9mo

What industries do your clients belong to? Churn levels are running high as operating coats keeps increasing without any significant rise in their margins. Atleast that's what we have observed. You have to sell the right product fit to your customer and increase the pace of deployment.

Also a lot of what you mention here are actually customer success activities (please correct me if I am wrong), they need to get more proactive at maintaining retention

AITookMyJob

Startup9mo

I see. Does "increase the pace of deployment" mean client user onboarding?

Also, yes. Much of it is customer success but that also has implications for sales.

Cancelling subscriptions - Customer success Not buying new subscriptions as you're already in cancelling model - Sales

ValKilmer

SaaS9mo

If you have an immediate cancel model, without a 15-30 day notice where something mutually can be worked upon then I highly suggest reworking of the contract terms. And usually something agreeable can always be reached unless your product or customer experience is really bad. But why should that be the case all the way in the end?

Either they provided inputs that they are not receiving the value from product due to not understanding the product properly or from slow response to their queries from product team due to backlog in other accounts. If the product wad a right fit during pre sales/demo discussions then this shouldn't be the case. Or then the sales didn't do a good job in explaining what the product can do - cannot do - or may do. Something may have slipped in the stakeholder communications.

By deployment I mean client specific customization that would be critical to their business needs for which they might have identified the product to use - but may the TAT in that exceeded the regular limits

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