Never Quit If …
1. Never Quit If … You Have 10 Unaffiliated, Happy Paying Customers. And Aren’t Completely Out of Money. It’s almost impossible to get anyone to buy any new business web services. The last thing anyone needs is another CRM, another invoicing app, another quoting tool, another recruiting app, etc. You got 10 paying customers out of the ether, that aren’t your friends, folks that work at your old company, your old boss, etc.? And they are actually happy and love your product? That’s real. It’s not enough to pay the salaries and rent, not usually. But 8 times out of 10, it shows the earliest stages of real product-market fit, i.e., potentially having something. More here: If You Have 10 {Unaffiliated} Customers in SaaS — You Have Something.
2. Never Quit If … If You Were Doing 2x Better, You’d Actually Have Something. This is my big learning from my first year at Adobe Sign / EchoSign. It was a really tough year. We weren’t on a path to succeed. But we did have customers and customer growth (see point 1. above). I built a new model and realized if we could “only” grow twice as fast — we’d really have something. Because SaaS and recurring revenue compounds. And especially when you are in the sub-$5m range, you can almost will yourself to grow faster as long as you have some customers and some leads.
3. Never Quit If … You Can Get to $2m in ARR from Wherever You Are, Irrespective Of How Long It Will Take. $2m in ARR or so is Initial Traction, when the engine really will start working. Even if it’s not working now, if you can squint and see $2m ARR on the horizon, even if it’s all the way to the end of next year … don’t quit. What you are squinting at and seeing is the first time you’ll have a real company. Don’t quit now. More on this stage here: How To Know You’ve Hit First Traction In SaaS.
4. Never Quit If … You Are > $2m in ARR and Were Growing > 80-100% YoY Before All This. Just never quit. It may be tiring, it may be painful, you may lose members of the team. But again, SaaS compounds. Don’t quit, or probably sell, once you are finally compounding. And if churn has grown due to tougher times? It won’t last forever. Fight through it. You’ll get back to normal times. Maybe not this week, or this quarter. But you will. It’s the top-line engine and NPS that matter. More here: From Initial Traction to Initial Scale (~$10M in ARR): The Hardest Phase. But — The Cavalry is Coming.
5. Never Quit If … You Can See It. Even if growth is 0% now, even if it’s worse. If you can see how it all comes together, you have time. You have time to fill those product gaps. You have time for second order revenue to continue to kick in. You have time to work with those prospects. To upsell your customers. Things may have slowed down, and even gotten a lot worse. But if you have happy customers, you can get them again. Just bridge the gap. Somehow. More here: CLTV Isn’t The Whole Story. Don’t Shortchange Second-Order Revenue.
You can’t always make something out of nothing in SaaS. But true product-market fit is rarer than it looks. 10, 100, 1000 happy customers are not easy to find, service and make a success. Never quit if you really have something. Even if today, it’s just not quite enough. It will be later, if your team is strong enough, you will is there, and your customers believe in you.
(note: an updated version of a classic 2016 post)
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