Dear SaaStr: Funding Aside, What Are The Top 3 Things That Stop SaaS Companies From Growing From ~$25k MRR to ~$250k MRR?
Let’s step back. If you have gotten to $25k in MRR ($300k in ARR) … you have something. Real. It’s not big enough yet. But it’s real. So …
You WILL get to $3m in ARR ($250k MRR) from $300k ARR … as long as:
- you have truly happy customers (they can’t churn),
- keep hustling to get more of them (you found a way to get some already) and
- you don’t quit.
Period.
Happy customers will beget more happy customers. Not in 60 seconds, not even often in a month or two. But over time. It can take months for one paid customer to create another paid customers from word-of-mouth or other positive effects you get from happy customers. But it will happen.
It will happen much faster, of course, if you are growing 15% MoM vs. 7.5% MoM, but it will happen.
So my #1 suggestion is Triple Down on the Happiness of the Customers You Do Have:
- Measure NPS (Net Promoter Score) and CSAT — more on that here: I Was Wrong. NPS is A Great Core Metric.,
- Meet as many of your customers in person as you can, not just on Zoom
- Talk to as many as you can, and
- Make them Happy. Almost whatever it takes.
My #2 suggestion is Commit to Doing the Time.
You may be able to somehow grow faster than you already are, but my guess is at just $25k MRR … you aren’t sure how to. Even if you raised more money. Map out how long it will take you to get to Initial Traction ($1.5m ARR or so) and beyond, to your $3m ARR target. And commit to doing the time. Figure out whatever it’s going to take from a founders’ sacrifice, hiring, capital perspective … and plan on it.
My #3 suggestion is Don’t Chase the Shiny Penny.
I really give this advice more at the next stage, at $1m+ ARR. The fastest way from $1m to $10m ARR, 90% of the time, is to double down on what is working. That’s not always true a half-stage earlier, where you are — $250k in ARR. But at this stage, if you are growing 10% or more Month-over-Month … don’t start building new types of products, chasing new product segments you don’t have traction in, spending money on random initiatives. Double down mainly on what is working. Even if it doesn’t yet seem big enough. That will get you to the next level.
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Jason Lemkin, Khareem Sudlow
