The Patience
Taking an idea from an initial inkling of a thought to a full-fledged business enterprise takes time. It usually takes way more time than you expected, even beyond your most conservative estimates. The easiest part is generally when you are starting up, but as the grind and the daily ups and downs wear on you, questions and doubts start to surface. You find yourself asking the most annoying of childhood road trip questions, “Are we there yet?”.
Any startup takes time, but some have more visible markers and more prominent milestones than others. Consumer web and mobile apps and games garner much of the attention have the easiest path when it comes to early traction. The simple fact that the audience is consumer, which is large, diverse, and more flexible, gives those types of tech startups a leg up, and with the greater visibility of these apps and their metrics, much of the tech press centers on the consumer tech plays. This is by no means to say consumer is easy, just that the gains seem more tangible.
SaaS startups on the other hand have much different uptake. These companies sell to businesses and usually focus on a narrow segment of a market, such as construction or medical or legal. Businesses require a sales cycle, identifying budgets and buyers, navigating decisions by committee and internal politics, negotiating price and terms, and then delivering a solution that may require training, implementation, integration, etc. But before you get to any of that, you need to find customers to even validate whether you have a solution that both addresses a real pain point and solves it to an extent that the solution is significantly cheaper than doing nothing. Oh, and that product better be secure, available, reliable, and scalable, backed by a rigorous SLA.
Some SaaS startups thus attempt to short-circuit the enterprise sales and service process by targeting small and mid-sized businesses. They are generally less rigorous in the requirements, decision makers are easier to reach, the population of customers is greater, and these customers are also willing to pay for software. The challenge however is not so much finding willing customers. You see, you simply exchanged the problem of finding the right few customers to a problem of finding enough customers quickly enough. Because you cannot (generally) charge SMB’s what you would change enterprise customers, you need to close that many more customers to make up the revenue shortfall. Furthermore, SMB’s are much less inclined than consumers to try new software and want to see tangible benefits upfront before making a commitment.
Neither customer acquisition route in the SaaS world is an easy one. However the one common thread is that the process takes time. You cannot growth hack your way to logarithmic growth. The average tech startup takes over seven years to reach an IPO, if it does not flounder or get acquired before that. Workday, which recently had a successful IPO, was founded in March 2005. Jive Software was founded in 2001 and went IPO 10 years later. Cornerstone Ondemand took even longer. It takes time regardless of the company or the industry or the credentials. In the meantime, you are in what Ben Horowitz eloquently described as “The Struggle”:
The walls start closing in. Where did you go wrong? Why didn’t your company perform as envisioned? Are you good enough to do this? As your dreams turn into nightmares, you find yourself in The Struggle.
When I compare those founders that succumbed to the struggle to those that made it through, the one trait that seems to define the successful ones is patience. You look at great athletes perform and you will notice how they hold the ball of a half second longer or let the route go just a few yards longer or how the batter will hold back on pitches. They are not trying to rush to make things happen or getting panicked no matter what the game may be going. They stand firm against the odds and against the onslaught. They observe the situation and are constantly assessing their position, much like a great chess player, and figuring out their next moves. They have “The Patience”.
The same goes for great entrepreneurs. Patience was something Bijan Sabet mentioned and I expounded upon earlier in the year. Much of that post was focused on the comparisons with competitors and the fear of missing out. Patience however is more than keeping your head together when your rival lands a mega financing round or gets high profile tech blog coverage. It is the exhibiting poise in adversity and persevering through challenges. It is keeping cool when you probably have every right to freak out or get defensive. And most of all, it is holding on to one’s vision when your startup journey seems more like a war of attrition.
SaaS startups do not tend to receive the glitzy press coverage or widespread attention. They fly under the radar as they try to attain customers and find markets and iterate on product. As such, it becomes harder to recruit talent, harder to identify milestones worthy enough to celebrate, and harder to keep morale positive. At the same time, there is no magic solution for attaining customers. Some hire large telesales forces fed by VC rocket fuel, some play the SEO and targeted ads game, and yet others go the partner route. You are constantly moving all sorts of pieces and trying all kinds of strategies in order to find the right combination that will get you the proverbial hockey stick. But until that day happens, you better have the patience to get through today and prepare for the next.
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