4 life stages that you will go through as a SaaS founder

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I was confronted with a cold truth recently when I posted to a Facebook group for startups. A friend asked me, “How do you know when you’re not a startup anymore?”

I knew what he really meant was: “You started a European SaaS company 10 years ago – aren’t you just a company now?”

In a way he was right. We are definitely not the same startup we were a decade ago. Ten years in, I’ve witnessed the development of multiple versions of myself as an entrepreneur as well as my company, MeisterLabs, where we developed our first SaaS, MindMeister. Fortunately, I’ve weathered each storm and at every plateau discovered ways to breathe new life into the business and my approach to it. The common denominator at each of these crossroads was our choice to invest in growth.

I doubt that I’m unique in that sense. In my experience, every new business faces comparable challenges, the solutions to which are, in one way or another, always to continue growing. So I want to share these moments of evolution and how I weathered them. Maybe my experiences will help future SaaS entrepreneurs navigate these same transitions more smoothly.

Evolution 1: You won’t always be flavor of the month.

One of the best things about launching a new startup is the free media attention you get. My co-founder and I got the most recognition by far when we launched – innovation awards, people talking about us, etc. We assumed this is how it would always be.

Eventually, though, everyone who’s going to write about you has already written about you. The press attention slows down and you’re no longer the hot young company of the year. This can be jarring for founders, but it’s not all bad news.

The upshot is, once you’re no longer the flavor of the week, it forces you to really start to invest in creativity and attention-grabbing work. Fewer calls from journalists should never be used as an excuse to take a step back. On the contrary this is the moment to lean in and commit to growth. It’s best if you learn early on that when your hotshot supernova phase begins to fade, growth is a remedy for many of the challenges you’ll face.

Evolution 2: Your staff won’t always be a bunch of single 20-somethings.

There was a time when pretty much everyone at our company was between 25 and 28. Most people were single (if not, well, there weren’t kids around) and we spent our free time together hanging out at pub quizzes and over the weekend. This type of setup has been part of startup mythology since The Social Network – a work hard, play hard group of young people creating the next big thing.

It can be a fun and productive way to work, but even if your team starts out fitting this startup stereotype, it won’t always be that way. Team members get married and family inevitably takes center stage in their lives. Before you know it, 6PM Friday drinks in the kitchen becomes booking happy hour into your calendar three weeks in advance.

You might sometimes miss the early days, but this evolution is both inevitable and good. Your team members are growing and, hopefully, your company is growing with them. We found that our company and our staff matured together.

It’s still possible to preserve that youthful energy and excitement, however. Ensure that there’s always an inflow of new blood by hiring firecrackers who will reinfuse the company with a fresh dose of excitement and impatience. For the veteran team members that do stick with you, nine years in a company can create moments where motivation is flat and inertia takes over. Work through these flat periods by giving employees the freedom to build their skills in new parts of the company while developing professionally. These senior team members that know your tools inside and out can be priceless, so you’ll need to work out ways to keep them engaged and on board.

Evolution 3: The coast can kill you.

Sometimes when an entrepreneur has a booming startup, they think they’ll be able to coast, to pull back on effort, take a bit more revenue out of the company, or buy a vacation home in the Caribbean, if they’ve been particularly successful. For instance, I was traveling a few months back and talking with other entrepreneurs. One guy had been with a company for seven years. It was so successful that the founder was now nowhere to be seen – always jetting off to a new destination.

While my co-founder and I can understand the temptation to take the foot off the acceleration and do this, resist it at all costs. This behavior sucks the energy and talent right out of a company. When the visionary who built a place from the ground up bails, it takes the wind right out of a team’s sails and stagnates the team’s drive.

We went in the complete opposite direction. Our original product was successful and growing and we felt as though we had pushed the creativity as far as possible. Instead of bailing, we doubled down and launched another product, MeisterTask. This second product breathed new life into us as founders, as well as the company as a whole. Developing a new product also inspired us to think about new avenues for our first product, MindMeister.

Here again, even though we had one successful product, growth was the secret sauce that kept MeisterLabs fresh and successful.

Revelation 4: Competition exists (and it may speed by you).

There are now over 1.5 million tech startups in Europe alone. This inevitably means some entrepreneurs are going to have genius ideas and move at warp speed – faster, sometimes, than you.

I know some young guys that launched a startup right out of university. Of course, doing this doesn’t always take you where you hope it will, but these guys got it right, and at the right time. The company is growing rapidly and the founder is loving life in the limelight.

They’ll probably go soaring past us in terms of users or revenue in the near future and although the tool isn’t a competitor of ours, once upon a time that would have bothered me. When we first started, I’d see competitors’ sites and start running nightmare scenarios: “These guys have thought of everything we missed! What’s going to happen to our market share?” This can be depressing, if you allow it to be.

But these days I’m used to competition. It’s a valuable skill to cultivate. And as we say in German – at the end of the day, we all cook with water. The healthiest way to see competition is as an inspiration to improve your own tool. We solved our panic and jealousy by putting that energy into our own tools and focusing on growing at a speed that worked for us. I believe other founders would save themselves a lot of stress and unhappiness by doing the same.

If the common theme running through all these four key stages of our company’s evolution isn’t obvious at this point, let me say it plainly growth is the solution to the obstacles standing in the way of building a successful SaaS company. Startups are like sharks: if they stop moving, they die.

That’s why, even after ten years, my co-founder Till and I have plans in our books and tricks up our sleeves to continue growing our business and providing new ways for teams to improve their productivity. We’ve learned that evolution, while sometimes difficult, is the only way for a company to continue to thrive.

by Michael Hollauf, Co-Founder of MeisterLabs, @mhollauf

 

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2 comments

  1. MRPEasy Ltd

    Very good article, Michael!

  2. Myla Mercer

    Thank you for this article – very insightful!

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