Q; Dear SaaStr: I Just Received a $1M investment for My 3-year old Industrial SaaS Product to Scale. What Should I Do First?
You can’t. $1m isn’t enough to scale anything, at least not in the U.S., and probably not anywhere.
To hire a true sales & marketing team, you’re going to need about $3m-$4m. More on the math here: Why You’ll Need Just About $3,000,000 to Build Your First Real…
But … $1m can help you do what you are already doing that is working a little bit — and do that better, with less stress.
- You can hire a sales rep or ideally two to help you sell. To give you some leverage here. You just can’t hire a real VP of Sales yet, but you can afford 2 AEs at $100k, $120k, $140k, or whatever per AE. Because salary vests and bonuses are earned. If you are very careful, 1m will let you invest in your first sales team.
- You can keep investing in whatever small paid channels already work. You just can’t dump money into expensive experiments. And you probably can’t afford a VP of Marketing yet.
- You can pay the team. This is important.
$1m helps you fill up a small tank. It doesn’t let you truly invest. But if it helps fuel an engine that’s already just starting to work … that’s still magic.
Use the $1m as some extra fuel — to fuel what’s already working, albeit at a very small scale. Not to “scale”.
(note: an updated SaaStr Classic answer)
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Jason Lemkin, Khareem Sudlow
