6 bootstrapping strategies from CEOs who made it to $100M ARR

In the world of tech startups, bootstrapping has a special cachet. Bootstrapped companies that make it big—say, to $100M ARR—without relying on venture capital or angel investors are looked on with something like awe. (Note that relying is the key word here--some boostrappers may take VC money, but only after they don’t truly need it.)

The founders of such companies are the Yodas of the tech startup world, full of hard-won wisdom and quotable advice. They know what it takes to grow a company to profitability the hard way. Here are some concrete strategies the founders of MailChimp, Atlassian, and Tableau have used to maximize their margins and grow without VC.

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When (and how) should your SaaS startup build a product marketing team?

Ah, the old “what is product marketing” debate. And then there’s the product management versus product marketing dilemma, with the all too common tug-of-war struggle to divvy up areas of responsibility properly. Any way you cut it, product marketing is most often seen as something of a gray area, living at the intersection of your product, sales, and marketing organizations. And while there are plenty of good frameworks to help you figure out who should own what within your own organization, I often hear two questions from SaaS businesses that have started to scale...

  • When should we hire for product marketing?
  • How should we go about building the product marketing function?

This post aims to answer both of those questions.

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Customer success metrics: NPS and CSAT

If there is a single, essential factor for predicting the long-term survival rate of a SaaS company, it's the churn rate. Even companies with truly explosive growth aren't immune from the dangers of a steadily increasing churn rate. The greater the percentage of customers who decide jump ship every month or quarter, the bleaker the outlook becomes.

For SaaS companies seeking investment, a high churn rate can present a serious problem. Why should a VC firm take the risk on a business that can't even keep its own customers around? Is this a startup with a fixable problem, or is it a sinking ship?

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How to share financials with your employees

At my first startup, the CEO would run through financials at every other company meeting. She would tell us our revenue, how it was tracking to our monthly and yearly goals. She would remind us of standard expenses and highlight any major one-offs, like a move to a new office space or a big push at SXSW. The company had a profit share, so understanding the financials meant understanding how we could work harder and smarter to put more money in our pockets.

I had never worked anywhere where leadership shared financials like that, and it was exciting. It was easy for me to place my current projects and the revenue they were driving into the big picture. I knew exactly how valuable I was to the company, and I knew exactly how well the company was doing.

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Four cash management tips for SaaS startups

Cash is king. In business, everything stems from the cash you have, the cash you earn, and the cash you raise. You need it to run every part of your business. How much cash you have determines your company’s runway, and how likely you will raise the next round.

At Lighter Capital, we sometimes see great companies with promising traction, but the entrepreneurs are presented with less than ideal funding options because they didn’t fully understand how to manage their cash. To help you operate better and be in a better position for fundraising, here are four cash management tips we find most useful for tech and SaaS businesses.

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4 service providers early-stage startups can’t live without

While most SaaS startups are focused on raising funds and optimizing growth, there’s an equally important area that many entrepreneurs often overlook: choosing key professional service providers. Choosing the right people and understanding the value they bring can make a huge difference to your company.

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The pros and cons of transitioning from a service to a product company

It’s a common trend in the software world today: service-based consulting companies transitioning to subscription-based SaaS product companies. Sometimes founders realize that they’re essentially solving the same problem over and over again for their customers and decide to capitalize on that demand by creating a product solution. Other times, founders have a SaaS product in mind from the start, but decide to fund the building and scaling of the product by generating a steady stream of substantial income from consulting.

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Startup founder and recruiter-in-chief: Top 3 takeaways

Over the past weeks, we’ve discussed the steps involved in recruiting and hiring key employees for a startup. In the first three posts, I walked readers through the processes I followed when I made the all-important first two hires for my startup RecruitLoop. The first post focused on how to find potential candidates. The second post detailed our process for selecting the best candidates. The third post discussed the often-overlooked details of what happens after you decide on a candidate: negotiating an offer, hiring, and on-boarding. In this final post, I sum up my top three lessons learned.

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From service to product company: hear from the experts on how to do it successfully

Our team just got back from Dreamforce 15 in San Francisco. At the conference, our CEO BJ Lackland participated in a session with Jason Lemkin and Aaron Ross. Jason is the Partner of Storm Ventures, and founder of SaaStr. Aaron Ross is the author and Co-Founder of Predictable Revenue. Their discussion focused around funding and scaling SaaS businesses, and how to successfully transition from a service company to a product company.

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Entrepreneurs fess up: the key reason why their promising startup crashed

A few months ago, we published a post on five reasons why startups fail. People don’t like to talk about it, but startups, or early stage technology businesses are risky. Statistically, 9 out of 10 startups fail.

Of course, it is hard to pinpoint one specific reason or event that causes the failure, but recently we found CBInsights’ roundup of startup post-mortems very revealing. Plus, it’s always good to hear it directly from the entrepreneurs.

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