SaaS Interviews with CEOs, Startups, Founders
How we bootstrapped to $60k MRR with no product team
20 Nov 2022
Chapter 1: What insights were shared from the Founder 500 event?
Hey folks, hope your Q3 and Q4 is off to a good start. We just wrapped up Founder 500 in Austin, Texas. Hundreds of bootstrap founders showed up. It was an amazing time. I loved meeting so many of you.
This interview today is a recording from that session, which you're gonna love because now we have visuals, we have the founder teaching, and I made every single speaker include their revenue graphs and real artifacts in their presentations. Without further ado, let's jump in.
You are listening to Conversations with Nathan Latka, where I sit down and interview the top SaaS founders, like Eric Wan from Zoom. If you'd like to subscribe, go to getlatka.com.
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So if you read in the order of schedule, you see the original title before Nathan affied it with this more click-baity title. But in any case, I'm going to share how we got to 6K of MRR without a product team. So I'm Rory. I'm the founder and CEO of Trust Keith.
We help start-up and scale-up businesses become and stay data compliant with global data regulation, and we adapt by combining access to a dedicated expert who acts as their data protection officer, and our SaaS platform where they operate and maintain all of their data protection in one place. Now, if you're thinking why Keith The inspo for the name is actually from a Family Guy reference.
The quote is, what is the most unattractive male first name in the English language? It's Keith. And to me, it personified the stereotype of compliance and everything that we wanted to mix up. So I'm going to share that story.
This is kind of particularly relevant for early stage bootstrap founders who are kind of early on in their product journey or even more established businesses who are thinking about ways to take product to market really leanly. So I'm going to share how we uncovered our market pain, what we chose to go after and go and solve, how we validated that proposition, and how we won our first 10K of MRR.
Then going to talk through how we built our MVP without a product team. And then finally, how we view our next phase of scale as we approach sort of a million dollars of ARR and beyond. It's a quick snapshot of our revenue. It always looks nice when we switch it from pounds into dollars. Unless you look at the exchange rate at the moment. I think last year it was 1.36. I think today it's 1.16.
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Chapter 2: How did the founder identify their market pain?
Ultimately, any persona that you want to speak to is on LinkedIn. We're all on LinkedIn, whether it's a compliance manager, a marketing associate, you can find those roles there. But in terms of enticing them onto interviews, that's where we got a little bit cheeky. And I would just send you a cold outreach and say, hey, can I drop you a bottle of wine for a 20-minute phone call?
And naturally, that had quite a high conversion rate. But it's useful. It's super scalable. And if you power out 40 or 50 of these invites, you're going to get five or 10 interviews. So it's pretty straightforward.
Then the final thing, and actually the most important thing, and it's actually something I discovered via the product consultant we worked with, was a product methodology called Jobs to be Done. Now, jobs to be done, for those who are unfamiliar, is really a means to pull out, in the customer language, what they're looking to have solved.
So it's really important at every stage, in your business right now, of working out, what is that core problem we're actually solving? Because anything you go on to build... It's basically an iteration of, okay, that's the problem. Here's how we've planned to solve it or how we're iterating how we're solving it.
But at any point, really staying true to what is that customer problem at its very core is really, really important, particularly as we work back from any kind of product market fit. So an analogy might be the problem the customer wants is, I need my grass cut. Ultimately, there's tens of ways you can solve that, whether it's a lawnmower or certain types of seeds or lawn care and stuff like that.
We're not worried about the solution yet. We're worried about understanding that core pain. So for us, this is what the ultimate workshops and all the research we did came together to. So this is our jobs we've done. 2019 is actually filled in. And I know the template for this is in the pack after this. But the things that stand out are, one, it's all in the custom language.
We were able to pull everything from this into our initial marketing messaging, which is really straightforward. And it was as unbiased as possible because it was led by an external third party who ran this. So for us, in the custom language, we're hearing about companies want to comply with data regulation so they don't get fined.
And things like that, just really good soundbites that we knew we could then go and take to them with a draft solution and see if that worked. So this is, you get a copy of this afterwards if you need it. But it's one of these things where I wouldn't take a new product to market without having done this.
And it's worth the time to move slowly to get this right, because then you can sprint later when you've worked out what you actually are going to build. So at this point, we've done the customer research. We've got the jobs to be done lens. We're now ready to start iterating on some potential solutions we're going to try and sell.
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Chapter 3: What strategies were used to validate the business proposition?
So this is where our first 10K of MRR came from, the majority of which came from my personal network. I think personal networks are something that probably all underutilize. But that's where it came from. Here's your first shiny check down there. So when it comes to the person, there's something I really wanted to get right. It's something I was really focused on even initially. So what ideas?
I basically mapped out maybe three or four people in my network, one of which was my business coach and three or four friends, let's say, who I knew would be up for making intros. And I went in LinkedIn and I filtered on secondary connections of them. I basically trawled through them.
Chapter 4: How was the MVP developed without a product team?
It's not very scalable, but pulled out a handful of contacts. I was like, they're ICP, they're ICP. Hey, can you make an intro? I put it into a G-sheet, made it really straightforward for them, drafted them the email, kept it quite like a casual intro kind of vibe. And that's where we got a lot of our initial leads and ultimately customers.
And it's something that we still do as like a dedicated channel today. So at this stage now, we've uncovered our pain. We validated our solution. We now won our first 10K of MRR. It now gets a second bit I'm going to talk about, which is building our MVP. So much like the kind of theme I'm talking about in the early half, it kind of continues around focusing on the validation.
So we were more concerned at every stage around validating the price point and things like that. So when it came to building a solution, we weren't really concerned about scalability initially. We were more there about validating the value, even if it was very manual, just to kind of validate it first. So that led us down the road of no code.
And ultimately, a lot of our initial solution was built on Notion, G Drive, Zapier. very kind of hustled together, but ultimately it had SaaS mechanics underneath it who were paying on a headcount banding. We had other modules we could upsell. We knew we'd validate that, okay, we can make it all shiny later, but at least we've got it in their hands.
And ultimately, I think that's one of the more efficient ways of moving towards any semblance of product market fit. So now we had something in our customer's hand, we knew that we needed to kind of continually improve it as we iterated toward assemblance and product market fit. So for us, that was getting customer feedback.
So this is a initial look at our first customer roadmap, which we then kind of littered with feedback opportunities to really understand what our customers were thinking. So initially we did that with embedded forms. So that was, you know, you've just had a response from a support query. Hey, how was that? Or we've just implemented our learning management system. Hey, how was that?
But what we found is quite similar to NPS, just like the response rates weren't very high. And often it's quite rare for someone to really give kind of like a deep, insightful bit of feedback. So the next thing we iterated in something we lead a lot more with today is verbally captured.
So actually, whenever our customer success was on a call with a customer, you know, we'd have one or two questions at the end. And that enabled us to actually go a bit deep on that feedback and really pull out like, okay, that's actually what you mean, or it's just a lot more long form, which ultimately is not as scalable to capture.
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Chapter 5: What role do setup fees play in the bootstrap business model?
But it was still so early stage, we're not worried about scalability yet. We're just worried about getting the facts and the data so we can solve those. So the next bit is just thinking about ultimate gross margin. So this again is just thinking of that commercial lens in mind and managing the unscalable with the scalable. So we were happy to have
unscalable, more manual processes and lower gross margin on day one, knowing that we can go and scale and solve for that later. So at every point on our metrics at the moment, we catch a gross margin on a monthly basis, and certainly before we hire anyone in the delivery team. And we have a plan of how and when we're going to achieve the gross margin that we want to do.
And I think it's one of these metrics that I don't think gets enough airtime. It's certainly not really a vanity metric people shout about, but particularly as a bootstrap business, net profit, gross margin, this is really the quality of your business.
So keeping that front of mind is really important or else you're just going to get a nasty surprise if you've made certain assumptions, you scale up and you realize, oh, we can never achieve that gross margin. So that's the end of the second part. The third part is just really talk through how we're viewing scaling moving forward as we approach the middle of ARR and beyond.
So we have a belief in, finally, this again is like an extension of our commercial lens, that we'd rather have fewer customers paying us a lot more than thousands of customers paying us very little. And I have friends who run tax companies. Maybe they have 10,000 users paying $4 a month.
And I'm thinking, what's harder as a business to scale or to acquire customers, going after 50 enterprise accounts, ultimately, that are going to pay 100K a year, or acquiring 10,000 businesses? It's just very different models. And obviously, a lot of this is going to depend on your own go-to-market experience. But for us, we're more used to SMB and enterprise sales anyway.
Now we're starting to solve from how do we move our ACV from circa $25K a year to $100K. So we're going back into our top accounts and saying, okay, where can we add more value? What do we need to do to be able to charge $8,000 a month, et cetera?
And this is the route we've chosen because it's not very ā none of these routes are straightforward, but it just feels a little bit more tangible to us. We don't have to ā
suddenly achieve some kind of unicorn sort of growth channel we really can just keep grinding what we're currently doing it feels more within the realms of possibility which for us internally just feels a lot more motivating So the next thing is then thinking about how we're iterating our product. And again, I've spoken before, and up until recently, our product's been very kind of MVP.
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