One decision that led to 400% growth in SaaS revenue
I had a mind-blowing chat with a SaaS CEO last week.
He grew his European startup by 400% by entering the US (which now represents 75% of $13m ARR). He also slashed overheads 40% by offshoring successfully to India, and overhauled his entire product via acquisition.
Here are my 5 takeaways:
#1. Startups are 90% go-to-market. Mathias didn’t have the best product on the market, but had the best go-to-market motion. Luckily churn was under control and they had some excellent relationships with some major clients. This enabled them to raise money (see #2).
#2. Many startups fail, despite having a great product. Buy them. Mathias realised that funding was available. Investors agreed that their superior GTM and existing client base was more important than having the world’s best engineers. They backed Mathias’ vision to acquire competitors with superior product but inferior GTM.
#3. To win with overseas talent, you need first-class communication. Mathias and his team decided to reduce cost by offshoring and discovered that as well as saving money, this move also dramatically increased productivity and pace. The secret to their success, he believed was having an insider, who could recognise and bridge cultural differences, and ensure they proactively solved for any potential communication blockages.
#4. If you want to change a company, you need to change its people. Mathias has learned that a company is the embodiment of the people that work in it. If your company is underperforming, so are at least some of its personnel. You can’t just change the CEO. He reviewed every position, asking: what does the individual in each role need to achieve? Are they up for it? If not, he would help them find something else.
#5. Get into the U.S. as early as possible. Mathias puts a lot of Apica’s success down to their decision to enter the USA, which is now 75% of the business. You need to have a presence where your ideal customers are based. He believes that many founders, especially in Europe and APAC, automatically expand to markets adjacent to their home market. But these may be just as tough to crack as big markets like the US, but without the upside.
☝️ Loved this.
Thanks to Mathias Thomsen for sharing, Bird and Bird for hosting, and Henry and Shwetank from Leo Capital for organising a great event. If you’re a SaaS company in Europe looking for investment, these are the good guys!
Hope it’s useful.
(Note: on point #5, several companies in my private portfolio have tried and struggled in the US. Focus on 3 things: win a beachhead client, put a senior member of the team on the ground, and give them time to succeed.)
