Bootstrapping lessons from SaaStr Annual 2019
Catherine Daly, Content Strategist, TIMIA Capital Corporation
SaaStr Annual was filled with great examples of SaaS companies that grew their business in a purposeful and sustainable way.
Guest speakers at our #BestInSaaS Breakfast, Trevor Johnston and Alison Taylor, co-founded one such company—Jane Software, a health and wellness practice management platform. The co-founders never exchanged equity for venture capital; they simply reinvested revenue from paying customers to grow their business from $0-7M in ARR.
“We’re so fortunate that we work in the SaaS industry,” said Alison Taylor, co-founder of Jane Software. “We can launch a product to market without spending a ton of time on R&D or a ton of money on FDA approval processes, etc. In this way, we can test our product-market fit and grow our business in a scrappy but sustainable way.”
How Jane Software grew their business using customer cash
Jane founders focussed on building a great product and delivering value to their customers. They never sought seed or Series A rounds, they just reinvested revenue from paying customers back into the business.
“Usually, SaaS companies do the friends and family round and then seek venture capital, said Jacco van der Kooij, Founder of Winning By Design—a consultancy practice that helps SaaS startups to design, build, and scale their growth. “It’s so refreshing to see Jane Software servicing their customers and using their profits to grow their business.”
Once you have happy customers, you can grow your business sustainably based on your run rate. “You can scale your business without debt,” said Taylor. “Look at your projections and spend sensibly, filling the gaps and plugging the holes with the highest priority.”
Sweating your core competencies
While having two CEOs in early startup models is generally discouraged, the co-founders of Jane Software have made it work.
“I used to say we were two-halves of the same brain—I’m all customer and Trevor’s all product,“ said Taylor, “But now I realize we’re two-fifths of a brain. We don’t have sales, marketing, or finance—we’ve grown through referral because we have a really great product and really awesome customer support.”
Alison continued, “We’ve met startups who’ve grown similarly to us but with a sales-focused co-founder and a tech-focused co-founder. They’re selling product as fast as they can and building the product to meet the promises made to their customers.” Alison described this as a different recipe for the same cake. “We’re all just playing to our own strengths and making it work.”
The lesson here is to sweat your talent. Make it work for you. Double down on what you’re good at—as long as it’s working—and fill in the gaps when you can afford to.
According to Trevor Johnston, co-founder of Jane Software, this approach leads to natural growth, “It fosters an environment where leadership is based on expertise rather than hierarchy. This the unique thing about a scaling company—rather than fill job roles based on canned job descriptions, you get to craft roles that fit the people you actually have and always make the most of your current resources.”
Scaling a business deliberately and purposefully, while focusing on the needs of the customer—now there’s a novel idea!
Interested in watching the entire #BestinSaaS session with Jane Software, hosted by Jacco van der Kooij? Check it out here.