Did you know that 90% of SaaS startups fail within the first 48 months? This staggering statistic makes a startup founder stop and ask, “Am I really ready to take the necessary steps to make my company thrive?”
Generating revenue in your first 90 days is critical for a few reasons:
- It provides essential cash flow to pay employees, invest in new R&D, increase marketing and advertising spend, and
- It allows you financial freedom to hire top talent in sales, development, and leadership.
- It shows investors that there is true market demand for your product – and shows them they can expect a positive ROI from any capital injection.
Are you brainstorming ways to maximize generated revenue in the first 90 days? We’ve helped dozens of top SaaS startups grow from GTM strategy to 9-figure acquisitions. Here’s what we’ve learned along the way and how you can generate significant revenue in your first 90 days in the marketplace:
Position Yourself Where There’s True Market Demand
The number one reason why most SaaS companies fail to generate revenue in the first 90 days – and fail completely? No market need! Can you imagine spending three to four years building your startup, regardless of funding levels, and realize at the end there was no market demand for your solution? Even startups that are heavily backed by VC’s fold due to lack of market demand.
Harvard Business Review says:
“A forecast of total-market demand won’t guarantee a successful strategy. But without it, decisions on investment, marketing support, and other resource allocations will be based on hidden, unconscious assumptions about industry wide requirements, and they’ll often be wrong. By gauging total-market demand explicitly, you have a better chance of controlling your company’s destiny.”
The first step for any startup is conduct market research to confirm there is a demand in the market to appropriate budget towards a solution like yours. If not, you’ll be spending thousands (or millions) marketing a product no one wants.
Your Company Will (Probably) Not “Go Viral” – Invest In Good Marketing and Sales
Everyone, I repeat EVERYONE, thinks their startup is going to revolutionize the marketplace. And this is a good thing. I love the passion startup founders and core teams bring to work everyday. But it’s important to remind ourselves – just because I think my product is utterly life changing doesn’t mean everyone else will. Don’t get me wrong, your product needs to have a significant value-add to your buyer personas. But no one will experience the value of your product if they don’t know it exists.
What does matter is getting your solution in front of as many eager, qualified buyers as humanly possible. As fast as possible. In our opinion, investing in good marketing and sales is the first thing you should do with any capital remaining after R&D:
- Invest in email automation and lead prospecting software that empowers your sales team to reach thousands of pre-qualified prospects on a daily basis.
- Partner with multiple agencies who are specialized in their specific marketing channel. We highly discourage full-service agencies, as these companies add “full service” services like SEO services and email marketing as upsell opportunities vs. being actual experts in these areas.
Megethos Digital – Paid Advertising (PPC, Social, Display, etc.)
Victorious (that’s us!) – SEO
- Hire GOOD SALES PEOPLE. Do not skip on this. A great Account Executive can return 10x ROI within a year. At Victorious, we heavily recruit the best of the best reps. They are the front line of your business and are the first impression your potential customers have of your SaaS startup. Make sure it’s a strong one.
Track User Activity From First Exposure to Closed Revenue
The progression of marketing automation, user tracking, and marketing funnel analysis has been astronomical. Software can now track not only visitor activity like total visit time, bounce rate, and total sessions. But also time spent reading an individual email, how many times a prospect has opened/read/forwarded an email, and where their eyes look first when visiting your site.
Tracking the user activity, lead progression, and conversion of prospects is extremely valuable in the SaaS business model. 40% of marketers say proving the ROI of their marketing activities is their top marketing challenge in 2017. Why? If you are able to track all activity and find out that leads from SEO convert at a 50% less cost-per-acquisition, you can objectively optimize your marketing budget by moving money to the channel that generates more revenue.
Do you have your own ideas or theories for how Saas startups 2018 can generate more revenue and increase company valuation? Share them below!