1. Skills acquisition. You can learn most of what you need on the fly but the two non-negotiable skills are product development and marketing. You have to know how to build a quality product and you have to know how to get it in front of people.
2. Get a founding team. A good duo might look like a technical founder and a marketing professional. If you’re adding a third, the “pessimistic accountant” would be a good choice. Everyone after that should be focused on product so that you can deliver quickly. Side note: Find a technical co-founder. The amount of dead SaaS companies holding source code developed by an agency is a mountain when compared to the companies that broke $1M ARR and have no internal development.
3. Find a problem to solve. Your chance of success goes up radically if you’re solving a problem you’re already familiar with in a vertical market you already know. This gives you the ability to add the nuance which will make your SaaS special.
4. Building MVP. Build a minimum viable product, sometimes call the minimum lovable product. This doesn’t have to be pretty but it needs to demonstrate the value you’re providing and it has to work.
5. While you’re building your MVP building audience. Make sure you get this right. Not just any audience will do. Speak to your problem. Attract the people within the vertical market you’re targeting. This audience will help you gain insights and provide a good source of leads when you’re ready to launch.
6. Sell 20 subscriptions. Get 20 paying clients. Pay attention to them and get as much feedback as you can. Make sure they don’t churn. This will help identify product-market-fit and let you and potential investors you have something interesting.
7. Scale. Between 20 and 50 clients you have a SaaS company that investors would be interested in but you could also reflect on the audience and MVP and realize you can bootstrap.
The goal would be 2,500 clients averaging $100/month. That’s 3 million ARR. If you can get your gross margin above 70%, that’s a 15 million company.
Winning/Losing with AI
Let's talk about the difference between startups that will win using AI and companies that will lose using AI. 1) You will lose using AI if you're simply improving upon current limitations. If part of your IP is extending context length or building out a serial...
